2019 was a challenging year for the plastics recycling industry. The US/ China trade war, stricter legislation and other global political issues combined to create a climate that may well lead to a recession.
The many uncertainties in 2019 meant a drop in confidence in the economy, which has led to a global reduction in demand for commodities. A recovery in that demand was anticipated for some of our materials after the holiday months but this turned out to be much weaker than had been hoped. This put great pressure on prices, which fell by between 30% and 50% for general commodity plastics and engineering plastics.
Last year, many other Asian countries joined China in halting imports of plastic waste, leading to a drastic decline in exports and a significant drop in prices for these qualities. For many businesses, this has meant that it is no longer worth separating materials and a great deal of plastic is now going to local incinerators.
Owing to the stagnation of the Chinese economy, sales of European recycled material into Asia are under pressure, resulting in relatively large stocks for recyclers within Europe.
The European automotive industry is also in a bad way, with production of new cars thought to have dropped to their lowest levels since 1997. This malaise has put many suppliers of recycled material under increasing pressure because the recycling industry is a major supplier to the automotive sector.
As discussed in detail at our meeting in Budapest last October through our guest speaker Rob de Ruiter of TNO, chemical recycling is the new hot topic – especially for petrochemical companies. Following Sabic’s announcement of a venture in the Netherlands, a desire to develop chemical recycling projects has also been confirmed by BASF, Dow Chemicals, Petronas and LyondellBasell. Most virgin resin producers are conducting work in this field but they still have to demonstrate viability in terms of economics and industrial scale-up.
We witnessed the development of several new trends in 2019. For example, large European waste collectors have been taking over many recycling companies in order to process their own collected plastic waste. In addition, these companies have been looking to collaborate with the plastics industry to bring new circular products into the market. Meanwhile, European recycling companies have been investing heavily in washing and extrusion lines.
The increasing interest in recycling taken by major multi-nationals was illustrated at our meeting in Singapore last May where Unilever’s Aurore Belhoste spoke about her company’s initiatives in its pursuit of deriving 25% of its plastic packaging from post-consumer resins by the year 2025. Some of its products are already in packaging with a 100% recycled content and the plan that others will follow.
Partly in response to the tidal wave of anti-plastic sentiment, many consumer product companies have started up their own programmes for incorporating more recycled material into their products by means of a circular concept. Also on a positive note, they have been forced to think about the recyclability of their packaging as early as the design stage.
The plastics recycling market is currently in a transition phase where the existing linear business approach is being replaced by new circular
models. We will have to accept that old models are no longer sustainable and that the shipping of large amounts of plastic waste may cease to happen in the future. But this transition from the comfort zone of the familiar towards the less familiar must not paralyse us as an industry; there are opportunities galore for us to become part of a new circular economy. One of the key ingredients for the development of the circular economy is collaboration – no single government or business is large enough to operate alone in this transition phase.
At first glance, some of the developments seen in 2019 may not seem to bode well for us, but we must surely dwell on the positives and on the opportunities that change brings. Price fluctuations and cooling economies have always been with
us: there is nothing new about them. What is new, however, is that the recycling industry is taking on its role in the circular economy and is co-operating with the producers of finished products in order to create new value chains, thus offering us huge potential as an industry.
So our new mantra should be: Think Global, act Local.
Available today in many shapes and forms, plastics have become part of everyday life. However, their popularity and almost endless applications present a series of challenges for the recycling industry. Certain post-consumer products contain as many as 20 different types of plastic material. This widespread use of all kinds of plastic makes it difficult to collect large enough quantities of certain types to render recycling viable. At the same time, each variety has a particular molecular composition and, as a result, a different recycling process must be employed. Identification and separation technologies are crucial for efficient and effective plastics recycling.
Recycling helps to reduce energy consumption, air/water pollution and also the amount of plastic that ends up in landfills. Plastics are polymers composed primarily of petroleum, thus the recycling industry plays an important role in preserving this vital natural resource. At the same time, issues surrounding plastics waste, and particularly the effects of single-use plastics on the marine environment, have been regularly catapulted into the world media spotlight.
The reality is that plastics recycling offers plenty of upside potential. Global plastics production approached 350 million tonnes in 2017. According to the OECD environmental policy paper of September 2018 entitled “Improving Plastics Management Trends, policy responses, and the role of international co-operation and trade”, plastic recycling rates are between 14 and 18% at the global level. The remainder of plastic waste is either incinerated (24%) or disposed of in landfills or the natural environment (58-62%). Also in 2018, however, the United Nations put the global recycling rate for plastics at just 9%.
Plastic recycling rates vary significantly across different countries, as well as by waste stream and polymer type. Recycling rates in the European Union average 30% but are thought to be considerably higher in some member states, according to the OECD paper. However, it adds, plastic recycling rates in other high-income countries are typically of the order of 10%.
THE SORTING CHALLENGE
The biggest problem with plastics recycling is that it is labour-intensive because of the difficulties of automating the sorting process. Numeric codes are used to indicate different types of plastic. Mechanical sorting processes using spectrometry and other technological innovations have helped to increase plastic recycling capacities and efficiencies.
Containers are usually made from a single type of plastic, making them relatively easy to sort. But mobile phones, for example, usually have various components made from different types of plastic. Research and development programmes have been designed to improve disassembly technologies and to increase the recovery and recycling rates of plastic-containing products.
RECYCLING MARKET VARIATIONS AND SHIFTS
Various researchers believe the global plastic recycling market will register a compound annual growth rate of well over 6% in the coming years, pushing its value from approaching US$ 40 billion at present to nearer US$ 60 billion by the middle of the next decade.
Of the 300 million tonnes of plastics waste generated in 2015, only around 14 million tonnes (or 4%) was exported outside the country of origin. Imports of plastics waste are concentrated in a small number of countries; for many years, China imported more than half of the internationally-traded plastics scrap. However, the market has undergone massive disruption of late as the introduction of severe new restrictions led to a 99% drop in Chinese imports of plastic scrap in 2018. Initially, other Asian countries increased their imports hugely but a number have since implemented bans or import restrictions of their own.
Reflecting the supreme adaptability of the recycling industry, this loss of key overseas markets for scrap has led to the development of new plastics recycling capacities, particularly in the major traditional exporting regions of the world such as North America and Europe. This trend benefits the environment because more plastic scrap is processed closer to its point of origin rather than being shipped potentially vast distances for recycling, thereby saving resources and reducing greenhouse gas emissions.
The plastics recycling industry helps protect the environment by supplying other sectors - for example, packaging producers - with quality, often tailor-made recycled resins for incorporation into their products, thereby helping to build a circular economy where resources are kept within the usage loop for as long as possible. The recycling industry can also provide valuable expertise at the design stage to help ensure that products are made with their recyclability in mind.