INSIGHT: EU policy changes favour R-PET market but some players want bolder steps

Source: ICIS News

2018/11/06

LONDON (ICIS)--Recent legislative decisions in the EU are pushing recycled polyethylene terephthalate (R-PET) in the right direction, but not all European market participants consider them a bold-enough step.

- European Parliament moves towards higher recycling rate targets

- UK government announces plans to introduce plastics tax

- R-PET market says further action necessary 

On 24 October, the European Parliament approved draft plans that would result in plastic bottles being collected separately and recycled at a rate of 90% by 2025.

On 29 October, the UK government announced that it would introduce a tax on produced or imported plastic packaging that does not include at least 30% of recycled content.

The UK’s decision would lead to an increase in demand for R-PET, while the European Parliament’s approval could result in more upstream post-consumer polyethylene terephthalate (PET) bottles in the market.

Both proposed actions would also, needless to say, have a beneficial impact on the environment as well.

However, R-PET participants have pointed out flaws with the two policies.

Many have said that the UK’s recycling infrastructure needs an overhaul, with the packaging recovery notes (PRN) system at the forefront of their criticism.

Some of Europe's most populous countries will have to install deposit collection systems for the EU to meet the European Parliament’s suggested recycling rates, other sources said.

One recycler argued that it was not enough for the the European Parliament just to set a target, adding that there needs to be regulation to back it.

“Country to country there are differences, but if there is [legislation] from the EU ... [mandating] that you need to install a European-wide deposit system, this will help a lot to achieve those targets,” the recycler added.

There are those within the industry that argue deposit schemes are not necessarily the solution to raised rates of collection.

According to that view, governments should consider the implementation of deposit collection systems only on a region-by-region basis.

Nonetheless, adoption of deposit schemes may be a natural development either way after the European Parliament approved these draft plans.

“When you look into the new guidelines which the EU will bring … [it] forces countries like France, Spain and the UK to implement the deposit [system] in the next coming years,” said another recycler.

“If you have that in place, you have three countries that will have the total capacity of at least double the amount of Germany. The volumes already exist, but at a poor quality.

"So, if you have that now pre-sorted, pre-collected in a good quality, that will have a positive impact,” it added.

The CEO of Austria-headquartered polymers major Borealis, as well as the director general of plastics trade group the British Plastics Federation (BPF), have already expressed disapproval regarding certain elements of the UK government’s plastic tax proposal.

Their desire for a change in European recycling investment and infrastructure instead is shared by R-PET sources, especially with regards to the UK.

UK recycling is often regarded by those in the industry as substandard, partly due to the country's kerbside collection system.

In March, the UK government proposed a deposit scheme in place of it and scheduled a consultation on the matter.

However, a spokesperson for the Department for Environment, Food and Rural Affairs (DEFRA) said this consultation was still due later in the year.

“You can see that people are aligning to go in the right direction and I think the desire to have better policy is genuine. It is just going to take a bit of time to come to effective execution,” said a UK-based R-PET source.

“If the UK moved towards a deposit system and implemented it properly, all of a sudden the UK would be an effective recycling [country].”

The UK PRN system specifically is a subject of criticism as industry insiders say it is a scheme ripe for exploitation.

Plastic packaging producers legally have to help finance the recovery and recycling of packaging materials so that the UK can meet EU packaging recycling targets.

These firms have to achieve the UK government’s annual as well as general targets by ensuring that, per their obligations, an equivalent amount of packaging waste of relevant materials will be recovered and recycled.

One way for companies to reach this is by securing PRNs or packaging export recovery notes (PERNs) for a fee, which provide evidence of recycling or recovery from accredited reprocessors or exporters.

UK-based consultancy Eunomia said in March that this system could lead to some plastic packaging manufacturers allegedly under-reporting how much packaging they produce, in order to pay smaller fees.

Furthermore, the UK’s Environment Agency (EA) has an ongoing investigation linked to illegal waste exports.

The EA has a dedicated producer responsibility investigations team, formed in January, and an additional £30m waste-crime funding was provided for the four-year period from 2018/19.

If recycling had been a priority in all parts of the supply chain, a good collection, sorting and actual recycling system would have been created in the UK, a recycler concluded.

Pictured: Automatic machine for bottles devolution in Germany
Source: Walter G. Allgower/imageBROKER/REX/Shutterstock

By Pavle Popovic