Energy crisis will have ‘disastrous’ impact on European recycling ambitions

Plastics Recyclers Europe (PRE), an organisation representing mass reprocessors of plastic across the continent, has warned of the risks the ongoing energy crisis will have on the transition to a circular economy.

In particular, it points to the impact soaring energy prices will have on plastic recycling facilities. As a major running cost of plastic recycling facilities, with plants running 24 hours, seven days a week, energy utilities usually equate to 15 to 20 per cent of total operational costs.

Following a 400 per cent increase in energy prices, they now look to represent up to 70 per cent of operational costs, according to an internal survey from PRE. Ultimately, the body states, this makes it difficult for recycling companies to break even, with some looking to close if help from the European Commission is not provided.

For example, Italy’s National Association of Recyclers and Regenerators of Plastic Materials (ASSORIMAP) announced this month that 40 per cent of recycling activities across the country have already been suspended as a result of the crisis.

With plastics recycling having the lowest carbon footprint compared to other waste management options, such as incineration or landfill, PRE says it is central to Europe’s net-zero ambitions. However, impact from the ongoing fluctuations in energy prices are hindering the EU’s investment in the continent’s plastic recycling capacities.

Ton Emans, President of Plastics Recyclers Europe, said: “Stopping the recycling activities will have an immediate, negative impact on the plastic waste management in Europe. If we want to drive a circular economy in Europe, plastic recycling must be considered a key industry sector to be targeted by Member States’ efforts to protect from the impact of high electricity prices” .

Rising Energy Prices

Due to a combination of factors – such as increased demand leftover from the pandemic, extreme weather creating problems with supply, and Russia’s invasion of Ukraine – energy costs are reaching unprecedented levels across Europe.

In response, the European Commission announced this month a package encouraging member states to limit electricity consumption. Further, it hopes to generate €117 billion for member states to support households and businesses when facing these costs, through the redistribution of surplus profits of energy companies caused by the shift in the market.

Elsewhere, the Commission also looks to utilise alternative energy sources to that which Russia offered before access to its Nord Stream 1 pipeline was cut off following its invasion of Ukraine. To further stabilise the market, the body set an EU-wide cap of €180 per MWh on revenues for electricity generators, hoping to curb rising costs for customers.