The Contrasting Realities of Recycled Plastic Demand; Long-Term Optimism Amid Short-Term Concerns

Despite legislation providing long-term optimism, polymer Recyclers continue to face fierce competition from virgin plastics.

In an interview with Argus, Ton Emans, president of Plastic Recyclers Europe, acknowledged the challenging circumstances that recyclers in Europe currently confront. Many recyclers had anticipated a seasonal uptick in demand in the spring, but that has notably not happened.

Additionally, virgin plastics, which were previously priced at historically high levels for two years following the Covid-19 outbreak, have become less expensive in the last 12 to 15 months, posing fierce competition for recyclers. Lower-priced virgin polymer costs have had a direct influence on the sizeable amount of recyclers’ demand that has historically relied on converters employing second-generation materials to save money. And as cost-cutting measures have become more important and the price difference between less expensive packaging-ready recyclates and more expensive virgin polymers has grown, there is little doubt that the need to develop more goods using recycled content has lessened during the last six to nine months.

Unluckily, large global capacity expansions will likely keep pressure on virgin PE and PP pricing and margins for at least the ensuing two years. Because of the overproduction in the area and the additional new additions planned for this year, imports from Asia remain a problem for PET.

Unluckily, large global capacity expansions will likely keep pressure on virgin PE and PP pricing and margins for at least the ensuing two years. Because of the overproduction in the area and the additional new additions planned for this year, imports from Asia remain a problem for PET.

On the other hand, the short-term anxiety is thought to be tempered by the legislative advances.

When it comes to setting recycling goals and supporting the industry in achieving them, policymakers in Europe have been among the most engaged globally. To promote investment in recycling, they have implemented a patchwork of deposit return and extended producer responsibility (EPR) programs. Additionally, they have taken steps to “guarantee” demand through financial penalties for using virgin plastics in packaging and minimum recycled content standards for plastic packaging.

In addition, recycled content standards have been published for the entire EU. By 2025, all PET beverage bottles must contain 25% rPET, and by 2030, all beverage bottles of all materials must employ 30% rPET. By 2030, almost all packaging would have to meet minimum recycled content criteria under the EU’s Packaging and Packaging Waste Regulation (PPWR), if it were to be enacted in its current form. As another significant prospective development, Emans referred to Dutch plans to adopt a minimum 30 percent recycled content objective for all plastic products (packaging and otherwise) sold in the Netherlands by the end of this decade.

Emans predicted that policies like PPWR (Packaging and Packaging Waste Regulation) and the proposed 30 percent recycled content mandate in the Netherlands will have a substantial positive impact on the demand for recycled plastics by the end of the decade.

He also cited the expansion of PRSE (Plastics Recycling Show Europe) as evidence of the recycling sector’s strength. The event will expand by one additional exposition hall in 2023, which will more than treble its size from 2022. Recyclers will be hoping that their short-term demand situation has also improved by then.