An eye on the markets: PET projections
Martin Hargreaves, Managing Director of Plastipak Europe, gives an update on the recycled PET plastic market
Plastics, like many substrates, have had a turbulent time over the past decade in terms of recycling, sales and use of the resultant product. In recent years, the incidence of major reprocessors entering administration has been high, with the failure of high profile companies such as Evolve Polymers and Closed Loop Recycling.
There have been several reasons behind these market failures: lack of industry investment, the low price of virgin material and corresponding higher comparative price of recycled material, all in an age of post-recession austerity, leading to each part of the plastics value chain being examined for cost reduction.
However, 2017 proved to be a turning point in the history of plastics recycling in the UK. Driven by NGOs like Greenpeace and the Ellen MacArthur Foundation, along with British media and the Blue Planet II documentary series, a wave of anti-plastic sentiment has swept the country and Europe.
Simultaneously, Westminster and the devolved administrations have been conducting their own audits and consultations about reducing littering and increasing recycling rates, with a particular emphasis on PET beverage bottles. Ironically, other forms of beverage packaging such as cartons and pouches appear to be overlooked.
In September, Scotland announced its intent to launch a deposit return scheme (DRS). The recommendations of Westminster’s Environmental Audit Committee published in December included a DRS as well as a minimum level of 50 per cent rPET content in all beverage bottles. Wales will publish the results of its consultation in February, and is expected to announce its intention for a Welsh DRS. Taxation on single-use plastics, as well as a long-awaited reform of the UK PRN system, are also in the offing. Although it may take some time for these initiatives to be pushed through the legislative systems, there is significant political will to drive change.
In July, Coca-Cola European Partners announced its target to include 50 per cent recycled content in its PET plastic beverage bottles by 2020. Already a leader in the inclusion of recycled and bio-based content, its announcement sent a shockwave through the UK beverage market, which has rushed to investigate the use of recycled content.
So environmentalist pressure, government intent and Coca-Cola’s announcement have combined to cause an increased UK demand for food-grade rPET (recycled material sufficiently purified that it can be included in new beverage bottles). It seems that the tide of fortune may be finally reversing for PET reprocessors. However, there are many challenges ahead.
With potential legislation stipulating a minimum of 50 per cent rPET content in beverage bottles, there is insufficient PET reprocessing capacity in the UK to meet the forecast demand. Significant industry investment will be required to produce both the quality and quantity demanded by the UK market.
This leads to the issue of post- consumer feedstock supply. With the collection rate of PET bottles currently estimated at 57 per cent, the UK would need to dramatically increase this to satisfy future rPET demand. However, quantity is not the only challenge; quality of feedstock is also a critical issue, with improvements in collection and sorting very much needed to improve the PET yield from bales.
Whilst the implementation of a DRS may be an answer, other options are also on the table, such as education and communication campaigns combined with the implementation of an on-the-go collection infrastructure that may augment collection rates. Common collection policies and the elimination of co-mingled collection would also improve bale yield.
Additionally, there is much competition for rPET from other single-use applications such as pallet strapping, fibres, textiles and films. More rPET needs to be diverted into bottle-to-bottle closed-loop recycling, so the PET material can be reused time and time again.
Various trade associations, such as the British Plastics Federation and the British Soft Drinks Association, have called for PRN reform to incentivise the reprocessing of plastic waste in the UK. They claim the current system, which encourages the export of waste for recycling, has long held back the development of the UK plastic recycling industry. Even with China no longer accepting the world’s waste, our plastic waste is still exported to other areas such as Turkey, Eastern Europe and Asia. However, the Chinese ban will undoubtedly cause short- to medium-term pain.
Plastipak, through Clean Tech, remains committed to PET recycling in the UK, and welcomes initiatives that will both increase and improve the supply of clean, baled PET for domestic reprocessing.