Missing Pieces: Aligning European Plastics Policy, Bio‐Based Materials and Sustainable Business Model Innovation in the Toy Value Chain

Toys are among the most plastic-intensive consumer products, yet European Union policy has regulated them for safety rather thanfor circularity, and the regulatory conditions under which toy manufacturers can innovate their business models remain unexam-ined. The problem is that the most visible response of manufacturers, replacing fossil-based with bio-based plastics, may not byitself change how firms create and retain value. This study examines whether existing European Union regulatory instrumentssupport sustainable business model innovation in the toy value chain, and which challenges and solutions value-chain actorsassociate with the adoption of bio-based plastics. A qualitative three-phase design combines a structured review of 26 EuropeanUnion plastics-related instruments with five semi-structured interviews with toy manufacturers and a multi-stakeholder focusgroup and compares what legislation requires with what actors believe it requires and experience during compliance. The find-ings show that the instruments most relevant to business-model change, notably Ecodesign requirements and Extended ProducerResponsibility, exist in horizontal form but have not been activated for toys. Manufacturers face limited feedstock availability, atwo- to fourfold cost gap, unverified bio-based claims and no dedicated end-of-life route, so that business-model change remainsconfined to material inputs, whereas safety rules were not perceived as a barrier to novel materials. As a solution, the paperproposes toy-specific Ecodesign requirements, an European Union framework for toy Extended Producer Responsibility withdesign-based eco-modulation, a digital product passport extended to material composition and end-of life information, and thelinking of existing bio-based content standards to product claims. Theoretically, the toy sector is framed as a negative case for thecircular ecosystem perspective, from which three testable propositions on the regulatory conditions of sustainable business modelinnovation are derived.