INSIGHT: France’s Emeraude taps into emerging markets’ recycling growth
LONDON (ICIS)–France-headquartered global polymers distributor Emeraude’s newly-created division for recycling will aim to tap in to the local markets of emerging economies, where the industry’s implementation is lagging, according to the recently-appointed managing director of Emeraude Green.
Benoit de Chanaleilles is the first head of Emeraude Green and said that recycling investments in emerging markets needs to grow in the coming years, and Emeraude will aim to build develop its technology at the local level to potentially export the products to global markets in the future.
De Chanaleilles cited the recent deal signed with UAE-based polyethylene terephthalate (PET) bottle recycler DGrade as an example of the growing local interest in the recycling market.
Emeraude is not new in the recycling sphere; the company has operated recycling operations for post-industrial polyvinyl chloride (PVC) waste in the US for any years.
The aim is now to expand the company’s involvement with other recycled products in other jurisdictions and markets, added the executive.
“There is value at the end of life of plastics, that is very clear to us. We do believe our industry has been quite late in reacting to finding a solution [to end-of-life plastic management],” said de Chanaleilles. “Recycling of plastic is not a new idea,” he added.
The company has been selling recycled plastics for over 20 years, but this has mainly been on a cost-saving basis and into low-end applications such as garbage bags and bales for use in the agricultural sector.
However, with the ever-increasing attention placed on the impact of plastic waste in the environment and ever-growing sustainability targets being made by global brands and fast moving consumer goods companies (FMCGs), now is a good time for the company to be looking into the recycled polymers market, he said.
START LOCAL, AIM
The French firm has always focused its virgin polymers activities on developing and emerging markets, and aims to replicate this success in the recycling sector.
“The end game is, to be frank, [to do] as much local to local [business] as we can. That is the DNA of the recycled business according to Emeraude,”, de Chanaleilles said.
“Our main outlets are emerging markets, and [places] where the waste management infrastructure is not that well organised, or not organised at all, so we believe we have a duty [to invest in these countries],” he added.
Recycling activity in the Middle East is at an early stage.
According to ICIS’ Recycling Supply Tracker, there is 2.2m tonnes of recycled polypropylene (PP), polyethylene (PE) and PET in the Middle East.
Turkey is the key recycling market in the region, with 86% of the total mechanical recycling capacity for these three key polymers.
The UAE has the second largest capacity in the Middle East, with near 5% of recycled PE (R-PE) capacity, 4% of recycled PP (R-PP), and 12% of for recycled PET (R-PET).
The graph below shows Turkey’s dominance in the region, by polymer.
In general, the Middle East has fewer drivers to the recovery and recycling of PE and PP, with limited regulation mandating such activity, nor significant end user demand for recycled materials.
The key driver to PET recovery and recycling is the significant fibre industry within Turkey, which has developed the infrastructure, albeit informal, and pull for recycled feedstocks.
Consequently, the infrastructure and supply chain has yet to develop substantially and consistently across all polymers within the region.
Source: ICIS Recycling Supply Tracker, 2021
In this environment, Emeraude will source post-consumer PET bottles (PCBs) from the local market and use them as the feedstock for producing recycled PET (R-PET) flakes.
There is also the human element to these activities, according to the executive.
The growing consumer backlash against plastic waste can often be driven by a lack of education around the benefits of plastic, but also around how best to dispose of, and to collect and sort post-consumer plastic waste. With this in mind, the company has worked with local communities to raise awareness about their local environments as well as showing there can be value for these same communities in the plastic waste they generate.
Emeraude Green is also looking to work with local NGOs to ensure the material recovered from around these communities can be used in the recycling process, while ensuring there is no exploitation of the local population in obtaining the plastic waste.
Emeraude’s goal of working with local communities fitted well with those of DGrade, who shared the same actions, values and visions around education and awareness, to supporting the local markets, de Chanaleilles said.
“We would like to increase and enhance those actions,” de Chanaleilles said, which would become the first pillar of Emeraude Green’s strategy.
“The second goal [of the] awareness programme is to share the facts on plastics. We heard so many bad things about plastics, which are totally out of scope,” de Chanaleilles said.
DGrade will begin supplying customers with R-PET flakes and R-PET granules for use in consumer packaging by Q4 2021. De Chanaleilles puts the capacity upwards of 14,000 tonnes/year, with significant scope for expansion. If everything goes well, the company will be running at full capacity by end of 2021, de Chanaleilles said.
The company is also considering entering the recycled polyolefins market, with a view to look at projects in the recycled PE and PP space in 2022-2024, mainly within the packaging sector.
According to the press release which announced the partnership between the two companies, DGrade has been working for a decade to divert plastic from landfill by recycling plastic bottles into yarn to produce sustainable uniforms, clothing and merchandise. The company also plays a role in recovering PCBs in the UAE via its Simply Bottles recycling initiative.
CEO of DGrade Kris Barber has said the company is very excited to be partnering with Emeraude due to the two companies’ shared visions, and the fact that Emeraude will be able to provide DGrade with scalability and the exposure to global markets the company needs to take its products further, including to ultimately supplying the bottle-to-bottle sector.
Emeraude’s partnership in the UAE will allow it to tap into the yarn or clothing business, de Chanaleilles said, adding that Emeraude would have a learning curve in that industry sector, in which DGrade is already heavily involved.
THE WAR ON PLASTIC
Anyone involved in the recycled polymers markets, either within advanced markets like Europe or globally will most likely state that investment is the key area for growth. Collection and sorting capacities are woefully short, even within Europe, and this is where the investment is needed the most.
“To be sustainable, we need to invest in this [waste recovery] industry as well,” de Chanaleilles said.
Being an EU-headquartered company, Emeraude has gained experience in certification applications, such as the 27-country bloc’s Reach regulation.
“We would like to partner with recyclers or any kind of bodies able to offer recyclability solutions. We want to be part of this value chain,” de Chanaleilles said, adding he believes it’s a business with significant potential for development.
Consumer awareness, regulations on recycled content, and taxes and bans on plastics are all driving demand for recycled plastic.
However, de Chanaleilles said consumers or regulators are not always presented with the right model for sustainability, figures, or ideas, and this can lead to mis-informed judgements or actions.
“[We] have to be more proactive in this field… to avoid plastic bans just to avoid [using] plastic…and the question then will be ‘what’s the substitution?’ The life cycle analysis [LCA] for a glass bottle is much higher [compared to a plastic bottle],” he said.
“We don’t have much influence on lawmakers and consumers, but we can help all other parties to understand what we can do with recycled materials and what we cannot do with it.”
The partnership between Emeraude Green and DGrade has the aim to expand the country’s recycling market, focusing on investments in sorting and recycling technologies, as well as consumer awareness.
Emeraude hopes that, from the UAE joint venture, it will be able to expand globally.
By focusing on the local market, the partnership will be able to develop and improve its processes, as well as its recycled polymer offerings and improve the collection and sorting in the region to give it access to much sought-after post-consumer feedstocks.
Moving material over a long distance to serve a target market can have hidden consequences in terms of carbon emissions, and this is something de Chanaleilles is keen to ensure is addressed before looking at exporting Middle East-produced recycled material to other regions.
“We are working to find partners in Europe as we will need to dig into this market [greener logistics],” said the Emeraude executive, but conceded that will not be the priority for the company right now.
“For the time being we need to launch the product, be sure of the quality, and go for the best outlet.
Increasingly, companies from different backgrounds are recognising the fact that sustainability is one of the largest and fast-growing areas of development and, for the polymers and petrochemicals markets it will mean disruption for years.
Emeraude is just one of many companies in the industry who see a changing future: the lines between companies’ activities in the recycling sector are already being blurred as waste management firms transform into R-PET producers, for example.
Equally, the growth in extrusion capacity in Europe has meant some companies have integrated through the recycling chain to produce R-PET preforms from flake, cutting out the need to purchase costly food-grade pellets.
Then, of course, interest in recycling from the big brands. whom consumers come into regular contact with, and also from the big global petrochemical producers continues to rise. The the opportunities are large, but the uncertainty is equally daunting.
“The main strategical point is to be a part at the very beginning of the recycling stage. To support, invest in initiatives, to master the feedstock and quality we want … And keep investing in this field. There are a lot of possible synergies,” de Chanaleilles said.
Insight article by Matt Tudball
Additional reporting by Daria Grossi, Plastic Recycling Analyst at ICIS
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