Like the sword of Damocles, the energy crisis hangs over the global recycling scene

Inflation, logistic issues, increased scrap trade hurdles and, most of all, widespread concerns over sky-high energy costs dominated the BIR world recycling convention in Dubai.

The energy crisis is causing major headaches among recyclers worldwide but especially in Europe. Confronted with ever-growing gas and electricity prices, production at high-energy facilities such as aluminium smelters and shredders has been cut back. 

Many among the 1 300 delegates gathered in Dubai have also been affected.

‘It is a nightmare and it does not look like this situation will change for the better soon,’ Jan Visser, managing director of electronics recycler Mirec in the Netherlands, told Recycling International on the sidelines of the conference. Visser has seen the company’s energy bills explode in recent months. ‘In 2021 we spend EUR 300 000 EUR on energy per year, that has gone up by a million to EUR 1.3 million,’ he said.

Mirec has an LCD flatscreen line, which Visser called a ‘major energy consumer’.

‘Huge problem’

At a press meeting as the event got underway, BIR president Tom Bird acknowledged that many recyclers were ‘struggling’ due to the energy crisis. Asked if the sector will be facing a situation where companies are forced to completely shut down operations, as predicted recently by the association of German steel recyclers BDSV, he replied: ‘Really, I cannot tell. It’s a huge problem, for sure. But every situation in every individual company and country is different.’

European governments are working on compensation programmes to ease the pain for companies and business but experts suggest these will not be enough to fully compensate the losses.

Mirec, meanwhile, has no choice other than to pass the extra costs onto the purchase side. ‘Obviously, we are forced to talk with our material suppliers and pay them in order to secure our business for the future,’ says Visser.

Paper recyclers, too   

The high cost of energy – specifically gas – is also challenging paper recyclers who cannot pass on this cost in their sales prices because demand for their products is low due to the financial crisis, observed BIR paper division chair Francisco Donoso of Dolaf Servicios Verdes in Spain. ‘Therefore, the only cost they can manage somehow is what they pay for their incoming materials,’ he argued.