Of Mass And Merchandise

Transparent plastic bottle made from 100% recycled plastic

In the coming years, the global consumption and production of plastics will increase strongly. What share of this demand will recycled plastics have? At present, the production and consumption of virgin material still very clearly exceeds the use of recycled materials in plastic products. To shed light on the various reasons, the Polyproblem editorial team spoke with Peter Börkey, Circular Economy Lead of the OECD Environment Directorate.

[New vs. Recycled] The Relation Is 90 To 10

In 2018, 390 million tonnes of plastic were processed worldwide. Of this, 360 million tonnes, or more than 90 per cent, was newly produced plastic, so-called virgin material. Processed recycled plastics used were only 30 million tonnes. This corresponds to a share of 7.6 per cent of the total quantity produced. However, a total of 50 million tonnes or 20 per cent of the 250 million tonnes of plastic waste generated in the same period was recycled. The difference results from average process losses of 40 per cent.¹

“Due to the lack of waste management structures in the Global South, efforts to collect and also recycle high-quality material have so far been very limited. However, it must be noted that due to the very low wage levels in many countries, the informal sector is very active in waste collection, sorting and recycling. Unfortunately, it is difficult to collect data on this: There is no registration of informal waste recyclers. It could therefore be that some emerging countries actually have high recycling rates, they are just not officially recorded.”

(Peter Börkey, Circular Economy Lead of the OECD Environment Directorate)

The absolute and relative share of plastic waste that is fed into the recycling process varies greatly between different parts of the world (see Table 1 below). Not surprisingly, it is apparent that — taken relative to population size — the amount of plastic waste generated is particularly large in the countries of the Global North. In the countries of the Global South, where waste management systems often are not or only insufficiently developed, people consume far less plastic. On the other hand, a higher proportion of it ends up in illegal landfills or in the environment.

table: plastic waste and recycling in 2018 by world region in million tonnes

[Regulations] Politics And Civil Society Are Exerting Pressure — Mostly In Europe

“Most regulatory measures for the market of recycled plastics are initiated within the context of the European Union or by its member states.”

(Peter Börkey, Circular Economy Lead of the OECD Environment Directorate)

Already in 2018, the European Commission adopted a directive on recycling quotas for packaging waste. According to this directive, member states must recycle at least 65 per cent of their packaging waste by 2025. By 2030, the mandatory quota increases to 70 per cent.² The following year, another directive was introduced requiring member states to recycle 25 per cent of beverage bottles (PET) by 2025 and 30 per cent by 2030.³

In addition, the EU Commission, together with the Circular Plastics Alliance⁴ it initiated, has set itself the goal of using ten million tonnes of recycled material in plastic products or packaging by 2025.⁵

With the new Packaging Act (VerpackG) of 2019, the recycling quotas in Germany for plastic packaging were raised from the previous 36 per cent to 58.5 per cent and to 63 per cent by 2022.⁶ However, the Packaging Act does not provide quotas for the use of recycled material in plastic products.

As recently as the middle of 2020, the upper house of the German Parliament again rejected such deployment quotas. The reason given: The free movement of goods in the EU should not be impaired and there is an insufficient supply of recycled plastics to meet the necessary quality requirements in the first place⁷. In France, the Waste Control and Circulation Act of this year goes even further: A recycling quota of 100 per cent is planned by 2025 and by 2040 single-use plastic packaging is to be banned entirely.⁸

The Plastic Pacts initiated by the Ellen MacArthur Foundation also play an important role in promoting the use of recycled materials. They pursue the goal of bringing together local companies, governments and NGOs to work towards a functioning circular economy for plastics. Besides France, five other European countries (the UK, Denmark, Portugal, the Netherlands and Poland) have already introduced national Plastic Pacts. They are joined by the US, Chile and South Africa.

Depending on the country, the signatories of the Plastic Pacts commit to a recycling rate of between 33 and 70 per cent and a recycled content in packaging of 30 per cent by 2025.⁹ Canada, which has not yet introduced a Plastic Pact, is also aiming for a minimum target of 50 per cent recycled content in plastic products and packaging by 2030.¹⁰

[Goals] Private Sector Reacts With Self-Commitment

The devastating environmental impact of the global flood of plastic can be seen everywhere. Against this background, social pressure on the consumer goods industry has increased enormously in recent years. Increasingly, companies are therefore responding with voluntary commitments. A large number of these companies are also signatories to the New Plastics Economy Global Commitment and — with a few exceptions — are aiming for a 25 per cent share of recycled plastics in packaging by 2025. This is also the target set by the Ellen MacArthur Foundation, initiator of the New Plastics Economy.

However, studies show that many of the signatory companies are still far from achieving the targets they have set themselves: The percentage of recycled materials used is still mostly in single digits.¹¹ These companies’ voluntary commitments also has to be assessed particularly critically in light of their geographical focus. For the most part, they only apply to the European market. In the Global South, where companies are increasingly seeing growing markets, such voluntary commitments usually do not apply.

[Markets] Supply And Demand Of Recycled Materials Are Not Developing Harmoniously

In view of the regulatory measures and voluntary commitments to increase recycling and the use of recycled materials in plastic products, it can be assumed that the supply of plastics processed for recycling will continue to increase. This raises the question as to whether the market for secondary plastics will be able to cope with this growth at all.

“It is evident that in the global North, especially in the European Union, a lot is being done to boost the demand for recycled materials. But in emerging economies in particular, more work is being done to introduce instruments such as Extended Producer Responsibility (EPR) in the packaging sector. All this will lead to a further increase in the supply of recycled plastics.”

(Peter Börkey, Circular Economy Lead of the OECD Environment Directorate)

Currently, the market for post-consumer recycled materials, i.e. plastics that are recycled after use, is expected to grow globally from 15.5 billion US dollars in 2020 to 18.7 billion in 2025.¹² This corresponds to an annual growth rate of 5.7 per cent. Due to a growing population, increasing gross domestic products and rising incomes, the Asia-Pacific region in particular is forecast to become the leader of the market in recycled plastics in terms of both value and volume by 2025.¹³ Assuming that mechanical and chemical recycling continue to increase, forecasts indicate that, in terms of volume, one-third of the demand could be met by the use of recycled plastics as early as 2030 — and as much as around 60 per cent by 2050.¹⁴

In view of the stricter legal requirements of the EU, the recycling quota for Europe should almost double. However, to realize this, the production capacity of the recycling industry in the EU would have to more than double from the current five to eleven million tonnes per year.¹⁵

Consumer pressure could also increase, leading to increased demand for recycled plastics. A global survey shows that every second consumer would already be willing to buy goods made from that material.¹⁶ According to the Gesamtverband Kunststoffverarbeitende Industrie e.V. (GKV — General Association of the Plastics Processing Industries), it is assumed that the public debate on plastics in the environment will result in an increased demand of 51 per cent.¹⁷

“In the last 30 years, people have really only been concerned with expanding the market for recycled plastics. But no one has been concerned with how strong the demand is.”

(Peter Börkey, Circular Economy Lead of the OECD Environment Directorate)

It seems all the more astonishing that currently the industry’s demand for recycled plastics to manufacture new plastic products is actually developing rather hesitantly. Compared to the 11 million tonnes of recycled plastics that would have to be processed in the European market by 2025 if the quotas were to be met, the recycling industry has so far been assured purchases of no more than 6.4 million tonnes.¹⁸ While demand has more than doubled across Europe — from 2.8 million tonnes in 2015 compared to today, numerous factors continue to hamper the growth of the market for recycled plastics. First and foremost, these are the price and the quality.

[Side Note] The Situation In Germany¹⁹

In 2019, around 14 million tonnes of plastic were processed in Germany. Of this, 12.3 million tonnes were virgin material and 1.95 million tonnes were recycled plastics (13.4 per cent). The plastic waste collected in the same period was around six million tonnes; about half of this (3.1 million tonnes) was packaging with a short life cycle. Overall, more than 99 per cent of plastic waste was processed, about 47 per cent of this was recycled (mainly mechanically) and almost 53 per cent was incinerated.

Recycled plastics are now used in almost all market segments. The largest quantities of them processed in 2019 were in the construction (43 per cent), packaging (24 per cent) and agriculture (11 per cent) sectors. In terms of plastic processed in each sector, the share of recycled plastics is particularly high in agriculture (36.5 per cent), construction (23.3 per cent) and packaging (10.9 per cent).

Overall, the use of recycled plastics in Germany increased by around ten per cent between 2017 and 2019. This increase is almost exclusively due to an increase in post-industrial waste. In the same period, the processing of virgin materials has decreased by around three per cent.

Sources

[1] Conversio Market & Strategy GmbH (2020a). Global Plastics Flow 2018. (accessed on 29.10.2020)

[2] EUR-Lex (2018). Directive (EU) 2018/852 of the European Parliament and of the Council of 30 May 2018 amending Directive 94/62/EC on packaging and packaging waste.(accessed on 29.10.2020)

[3] EUR-Lex (2019). Directive (EU) 2019/904 of the European Parliament and of the Council of 5 June 2019 on the reduction of the impact of certain plastic products on the environment. (accessed on 29.10.2020)

[4] The Circular Plastics Alliance is an initiative under the European Strategy for Plastics based on voluntary commitments from companies with the aim of promoting the market for recycled plastics in Europe.

[5] European Commission (2019). European strategy for plastics — voluntary pledges. (accessed on 29.10.2020)

[6] Packaging Act (2019). German: Verpackungsgesetz. (accessed on 29.10.2020)

[7] newsroom.Kunststoffverpackungen.de (2020). Die Zukunft von Kunststoffverpackungen ist zirkulär — auch ohne Quoten und Verbot. (accessed on 29.10.2020)

[8] Légifrance (2020). Loi relative à la lutte contre le gaspillage et à l‘économie circulaire. (accessed on 29.10.2020)

[9] Plastics Pact (2020). A network of national and regional initiatives working towards a circular economy for plastics. (accessed on 11.11.2020)

[10] Canadian Government (2020). A proposed integrated management approach to plastic products. (accessed on 29.10.2020)

[11] Changing Markets Foundation (2020). Talking Trash: the corporate playbook of false solutions to the plastic crisis. (accessed on 29.10.2020)

[12] ResearchAndMarkets.com (2020). Post-consumer Recycled Plastics Market by Polymer Type, Service, Processing Type (Mechanical, Chemical, Biological), End-use Application (Packaging, Building & Construction, Automotive, Electronics, Furniture, Others), and Region — Global Forecast to 2025 Report (accessed on 29.10.2020)

[13] Ibid.

[14] Hundertmark, T., Mayer, M., McNally,C. et al. (2018). How plastics waste recycling could transform the chemical industry. McKinsey (Hrsg.). (accessed on 29.10.2020)

[15] Umweltwirtschaft.com (2020). Kunststoffrecycling in Europa muss massiv ausgebaut werden. (accessed on 29.10.2020)

[16] Neue Verpackung (2020). Rezyklat — Ein neues Leben für Verpackungen? (accessed on 29.10.2020)

[17] Kunststoffe.de (2020). Kunststoffverarbeitung 2019 mit Umsatzrückgang. (accessed on 29.10.2020)

[18] Mittelstandsverbund (2019). Verwertung von recyceltem Plastik: Noch immer Schere zwischen Angebot und Nachfrage. (accessed on 29.10.2020)

[19] Conversio Market & Strategy GmbH (2020b). Stoffstrombild Kunststoffe in Deutschland 2019. BKV, Plastics Europe, AGPU et al. (Hrsg). (accessed on 29.10.2020)

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