LONDON (ICIS)--Mechanical recycling has the biggest potential to provide value to the circular economy, the chairman at the World Plastics Council (WPC) said on Thursday.
Jim Seward, who is also an executive at chemicals major LyondellBasell, said: “There is a hierarchy. We need to push mechanical recycling as far as it goes just because of the value it brings. That’s probably how you can bring the most value."
Seward was speaking at the IdentiPlast conference in London.
In several European recycling markets, a shift in consumer attitudes to plastic and the resulting raft of brand commitments to minimum recycled plastic content from packaging firms has meant that demand for material outweighs supply, particularly for food-grade material.
Food grade material is that which is certified by the EU as suitable for food contact.
In markets such as recycled polyethylene terephthalate (R-PET) and recycled high density polyethylene (R-HDPE) food-grade material prices are trading above virgin material prices because of structural shortages.
For polyethylene (PE), for example, the UK is the only producer of food-grade R-HDPE.
The UK is able to produce food-grade volumes because of its natural post-consumer bale material which is sourced from used plastic milk bottles.
Across most of the rest of Europe, milk bottles are made from polyethylene terephthalate (PET).
This gives the UK a readily available separated stream of post-consumer material from food-contact applications, which is not possible in other regions of Europe.
EU legislation for food-grade contact approval stipulates that recycled input waste must be sourced from at least 98% former food contact packaging for recycling back into food-grade pellets.
With no comparative pre-separated post-consumer collection stream in mainland Europe, it is not possible to meet these targets.
Sources continue to see a shift away from virgin PE packaging to other plastics such as PET because of the lack of food-grade R-PE.
UK food-grade R-HDPE pellets are currently trading at £1,200-1,300/tonne ex-works, compared with virgin HDPE blow-moulding spot prices of €1,060-1,140/tonne FD (free delivered) NWE (northwest Europe).
Food-grade pellet recycled polyethylene terephthate (R-PET) prices, meanwhile, are trading at 25% above virgin polyethylene terephthalate (PET) on average, which is the widest spread on record.
ICIS records for R-PET date back to 2006.
Demand for R-PET food-grade pellets remains high on the back of the raft of sustainability commitments from beverage manufacturers in recent months, and proposed EU legislation for a minimum of 25% content by 2025 and 30% by 2030.
This has meant that despite a 25% spread between virgin PET and food-grade pellet prices, demand has not been affected, demonstrating the diminishing influence of virgin PET values on the R-PET market on the back of the increasing number of brand pledges to including minimum R-PET content in their packaging.
Seward went on to argue that economic viability is necessary to ensure the continued growth of the circular economy.
“Sustainable viability is important, but economic viability is also important because financial incentives might not be there forever,” he said.
IdentiPlast runs in London on 7-8 March.