The Waste and Resources Action Programme (WRAP) is financing work to improve the efficiency of PET reprocessing.
Only 15,000 of the 200,000 tonnes of PET plastic bottles produced in the UK are currently collected for recycling.
So experts from UK universities and European recyclers are working with Closed Loop London and London Remade on the project to increase the viability of the market.
Closed Loop London managing director Rob Pascoe said: "The average cost of reprocessing plastic waste into food-grade recycled plastic is £400-£600 per tonne.
"This project aims to reduce this cost by approximately 20%, making it a more viable market for the UK."
There are hopes that the trials, which end in May, could help secure a food-grade plastics recycling facility for the UK.