The changing dynamics of plastics recycling

The plastic industry across the world is moving ahead with different resolutions.

Filed under
Plastic Recycling
August 28 2020
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On the one hand, we have companies that have expressed their commitment to use a high percentage of recycled plastics in their packaging material. On the other hand, many recyclers have determined that they will increase recycling and make available the recycled plastics required to fulfill the commitments made by multinational companies. So the whole industry is set to increase recycling by collecting and sorting the scrap and using the recycled material to close the loop.

The ground reality is that the significant percentage of the recovered packaging material is not acceptable to converters due to the quality or the colour. Moreover, high-priced recycled material is unable to compete with comparatively low-priced and high-quality prime plastics. It sounds easy to have a circular model, but at the same time, there are a lot of problems to solve.

Plastics scrap availability in Europe is getting lower due to low industrial output and consumption. And due to the start of the holiday season in July, the volume has dropped even lower. Prices of plastics scrap have remained flat through the last two months as there weren’t many changes in the industry. The COVID-19 situation and reduced industrial activities have delayed a lot of expansion plans and discouraged any new investment plans. Most of the industrial enterprises are working in safe mode, and it looks like the rest of the year 2020 would remain the same.

The plastics industry is set to face a lot of challenges from January 2021. European Union (EU) agreed on the imposition of plastics waste tax from the beginning of next year. Under the agreement, the tax will be calculated at euro 800 for every ton of non-recycled plastic packaging waste. The full mechanism of calculating the weight is yet to be announced by the member states.

Some national associations believe that this rate of levy is rather low and will not encourage strongly enough the need to promote recycling. It is expected to generate a revenue of 6 to 8 billion euro every year. The proceeds will go to the EU. The unfortunate part of the tax is that it may not be used to create infrastructure or incentives to promote recycling. I feel that it is a step in the right direction, but only when the tax collections are substantially used for promoting recycling.

188 countries have approved amendment rules under the Basel Convention on international trade on plastic scrap. The rules will be applicable from the beginning of Jan 2021. In this rule, it is not very clear which material will be treated as green listed waste, under Annex IX, and what will fall under Annex II, which is hazardous waste. As per the new rule, all scrap which is “almost free from contamination and destined for recycling” will be green listed material.

As this free from contamination is not standard, every country will have to make their own decision about what is clean material which will fall in Green listed material, and what is contaminated material which will fall in prohibited material. On the other hand, under the amended regulation, every contract for the shipment of plastic scrap has to be approved by the relevant authorities (mostly environmental authorities) of both importing and exporting countries.

The approvals have to be obtained in writing before the shipment takes place. It was Europe that had proposed the amendment. Now it seems that it is Europe that is proposing that these rules may not be applicable for movement of plastic scrap within the member states of EU. It is rather odd and contradictory, but a step in the right direction. Enforcement of the rules of prior approval within EU will have created chaos and enormous amount of administrative burdens. The plastics recycling industry is wondering how the plastic scrap shipments from USA to the rest of the world will be managed under the amended rules as USA is not a party to the Basel Convention. I learnt that USA may opt for bilateral agreements for continuation of its scrap exports.


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