Mandatory recycled content vital, says BIR

Continuing low prices for plastics worldwide have added weight to calls for legislation to underpin the use of recycled content in new plastic products, according to the Bureau for International Recycling. 

Henk Alssema, writing as chairman of BIR’s plastics committee in its latest Mirror, notes that the European market for recycled plastic remains under severe pressure with prices falling to levels not seen for some time. Demand for raw materials is extremely low, resulting in massive stocks. 
‘The deteriorating market situation is caused mainly by uncertainty in the economy,’ he says. ‘Inflation in Europe remains high and consequently the European Central Bank continues to apply interest rate increases which are not creating the best investment climate. This has also led to a substantial drop in consumers’ purchasing power, driving their confidence to extremely low levels.’ 

Cheaper virgin 

The market is unlikely to improve in the short term, largely because it is cheaper for brand owners to purchase prime material, particularly in the PET processing industry.  
‘This trend can be felt by all recycling companies across Europe and the industry has been hit hard. Some recyclers have had to cut production while the current malaise has forced others to stop their lines altogether. 
‘The calls for regulations regarding the use of recycled content are becoming stronger by the day,’ Alssema concludes. ‘Ultimately, regulation will be required to ensure that the demand for recycled material stabilises and that the fluctuations in supply/demand and in price are consigned to the past.’ 

View from China 

Fellow board member Steve Wong of Fukutomi and executive president of the China Scrap Plastics Association, reinforces the view that low prices of prime materials are impacting scrap plastics.  

‘Sorted mixed kerbside PET bales in the USA are selling at US$ 130 per ton and natural for US$ 250, while mixed-colour HDPE bottles are attracting US$ 220. It is relatively easy to imagine that all unsorted plastics and low-quality recyclables are selling at negative prices or are being sent to landfill. No agricultural films with a recovery rate of less than 60% are being exported to Asia, and low-end mixed supermarket film, grocery bags and mixed runners either end up in landfill or are incinerated.’ 

Wong reports that most recycling factories in Western and developing countries are putting their purchases on hold and reducing production or running at a loss to remain in operation. He says key market needs include reduced capacities on prime and supplies for upstream and, echoing Alssema, policies to use recycled content. 

Gradual decline 

The US perspective in the Mirror comes from Sally Houghton of the Plastic Recycling Corporation of California who reports the market for all recyclables has seen a gradual decline and lacklustre demand.  

‘In the USA, and particularly California, there has not been the usual seasonal uptick in consumption that stimulates the market. The wet winter delayed the growth of seasonal produce which, in turn, has led to weak demand for thermoforms. On the East Coast, bale prices have fallen as fears of recession and the impact on the housing sector have seen the fibre market decline.’ 

She says post-consumer resin markets are struggling with three major issues: cheap imports, high summer volumes and uncertain markets. It is anticipated that markets may see some uptick at the start of 2024 and gain positive momentum halfway through that year.