Eye on the markets: Plastic problems

First, the price of oil. Historically, recycled plastic is closely linked in price to virgin resin, and with current oil prices at an all-time low (who could have imagined that today oil would sit at around US$50 a barrel?), recycled plastic is temporarily unable to compete on a cost basis.

But whilst many are quick to panic, and rightfully so in cases where recycling companies fall by the wayside, the whole supply chain must understand that this current low- priced fossil fuel is unsustainable.

Unfortunately, in these times of austerity, economics threaten to erase environmental concerns, and the current situation is testing the moral compass of Britain’s big brands. Do they do the right thing and maximise the country’s existing resources while growing Britain’s circular economy? Or do they choose materials on price alone – with virgin plastic winning?

Now more than ever, we need to ensure we stay focused on long- term goals to protect valuable green assets. We need to do this through the tough times to ensure they are there in the good times, to allow us to process material once known as ‘waste’ and now known as ‘resource’. 

As for regulation, cycles and shocks are a normal part of international economics, but government should see the need for urgent action on fiscal and regulatory measures to reward industries and brand owners that choose environment over economics. The plastic recycling industry has called for, on numerous occasions, a system that rewards responsible brand owners actively supporting the circular economy. We could start by reforming the current outdated regulatory system such as the Packaging Recovery Note (PRN) and go further to reform the entire producer responsibility system. Many brands participate in the circular economy, but sadly a majority give

it nothing but lip-service. The soon- to-be-introduced plastic bag levy is a great example of how government has had to force a move from lip-service to action. Perhaps something similar is the only option for bottles? You just have to look at the aisry industry, which continued to set the standard for carbon reduction through recycled content; this behaviour should be promoted and rewarded through fiscal reform, As I write, negotiations are occurring to save the Dairy Roadmap, which is threatened by the temptation to go with lower-priced virgin resin. I truly hope that we can think long term and stay the course.

This article was taken from Issue 80

In addition to new regulatory measures, greater enforcement of existing legislation should be high on the government’s agenda. The Environment Agency (EA) has recently been given an extra £5 million to enforce trans-frontier shipment (TFS) rules and the problem of illegal waste exports, which, if carried out effectively, should be positive for the UK market.

We have seen a number of operations recently by the EA and by SEPA in Scotland where a huge percentage of containers opened for inspection were found to be illegal and were turned back due to excess contamination. The EA has stated that contamination levels need to be around two per cent to allow a shipment to meet TFS rules, but it is common knowledge that many shipments leave the UK with very high levels of contamination.

Quality also continues to be an issue. Traditionally, the higher quality the recyclate, the higher its value. It is said that collection systems are crucial to this outcome, and in recent years the UK has seen many sorting centres constructed that produce very high-quality material. However, others focus on evading landfill tax with little regard for quality. Again, greater enforcement of existing regulations would put paid to the poor-quality issue that is the bugbear of the UK recycling industry.

It is only a few years back that government spent millions of pounds of taxpayers’ money to save the British banking industry. It will be interesting to see what price we as a nation place on the UK green economy and environment.