Collection rates the 'main issue' for the R-PET industry - trade group

Author: Mark Victory

2019/02/07

BRUSSELS (ICIS)--Collection rates are “the main issue” facing the recycled polyethylene terephthalate (R-PET) market, an executive at industry trade group Petcore said on Thursday.

Christian Yves Crepet, executive director at Petcore, was speaking at the trade group's annual meeting, which runs in Brussels on 6-7 February.

The need to increase collection rates of post-consumer polyethylene terephthalate (PET) bottles – the main feedstock for the R-PET industry – has been a theme throughout the conference so far.

Casper Van den Dungen, vice president of Plastics Recyclers Europe, is expecting bottle-to-bottle R-PET production capacity to grow from its current estimated 350,000 tonnes/year to 990,000 tonnes/year by 2030.

"The only issue to get there is collection,” he said.

The EU has set collection rate targets for the R-PET beverage industry at 77% by 2025 and 90% by 2029.

Van den Dungen argued that if five of the largest PET consuming countries without deposit schemes were to switch their collection systems, this would bring the necessary volume.

“We only need five additional countries in deposit schemes and we can get the required 2.5m tonnes of collection,” which is the amount Van den Dungan estimated would be needed to reach the 90% collection rate.

He singled out Italy, Spain, France, the UK and Poland as the countries needed to switch to deposit systems to reach the target.

“There’s a couple of other countries like Romania that are big, but outside of that you’d need a lot of other countries to get there, because those five countries are where the consumption is,” added Van Den Dungan.

Currently, the top five countries with the largest post-consumer PET bottle collection account for around 68% of all collection across Europe, with Germany alone accounting for 25%, according to Susan Mair, analyst at ICIS.

Mair was presenting the results of the ICIS and Petcore Europe PET Recycling Survey 2017.

Although collection rates in 2017 – the latest year for which data is available – increased by 2.9% compared with 2016, “growth in collection is almost the same as growth in consumption, so we’re not really seeing any real improvement,” Mair said.

All countries where deposit schemes are the main form of collection have collection rates above 65%, with many having collection rates above 80%, she added.

The majority of kerbside collection schemes are run by municipalities, and austerity measures have meant that investment in infrastructure has not kept pace with the increasing complexity of packaging, or the spike in sustainability pledges from packaging brand-owners.

Previous ICIS analysis shows that current collection rates are not enough to meet brand owners targets, and that virgin PET consumption is growing at almost three times post-consumer collection.

“Tell the governments: first collect the bottles, then come and criticise us,” Crepet said earlier in the meeting.

Increased R-PET content commitments from beverage firms continue to drive R-PET demand, particularly for food-grade pellets.

One producer previously estimated that 2019 demand could double compared with 2018 on the back of brand commitments.

Highlighting the impact of this demand, the spread between quarterly rolling average colourless bottle prices and quarterly rolling average food grade pellet prices, and the spread between quarterly rolling average colourless bottle prices and colourless flake prices, are both at their highest on record, as can be seen on the graph below.

What this shows is that even as average colourless post-consumer bottle prices have been falling as a result of a long and hot summer, increasing the volume of material collected in 2018, strong flake and food-grade pellet demand has kept average prices of both materials high, suggesting increased profits for flake and food-grade pellet producers.

ICIS records for R-PET prices stretch back to 2006.

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Pictured: A collection box for PET bottles in a staircase of a house in Zurich Oerlikon, Switzerland; archive image
Source: Keystone-SDA/REX/Shutterstock

Focus article by Mark Victory