New Basel Convention regulations regarding scrap exports due on 1 January require clarification, say traders.
Recycled plastic prices have remained unchanged over the last few months due to low demand. Prime plastics prices were so low that customers and converters are not willing to use recycled material. On the other hand, the brand owners’ commitment to using post-consumer recycled (PCR) plastics in their products and packaging is not moving at the required speed. Everyone is looking for the best grade, natural in colour, and usually suitable for food. Such material is very limited in the market.
One more factor contributing to the low demand for recycled material is confusion in accepting PCR sources. Many brand owners include PCR in reporting the fraction of their materials that are recovered from consumers’ homes but they don’t include similar materials from industry or supermarkets as PCR. In this limited scenario, the total demand for PCR based on those brand owners’ commitments is around five million tonnes and that would be a big challenge to meet.
Plastic scrap trade becomes more restricted from 1 January and the result might be that there will be no export of waste from Europe to non-OECD countries. According to new rules from the Basel Convention, plastic waste will be categorised differently. The receiving non-OECD country has to agree to accept scrap by writing to the European Commission before it can be exported. Yet it is not clear if the Commission has secured the support for this from all non-OECD countries.
Once they get an answer, the Commission will have to amend the waste shipment rules, which will also take time. It will certainly be a big challenge to have all of the replies by this December and then to amend the relevant waste shipment regulations. The fate of shipment of plastic waste from USA is also not very clear. USA is not a party to the Basel Convention but it is not clear if waste can be shipped from USA to countries that have signed the Convention. We expect the trade of plastics scrap across the world to shrink further.
Due to all this uncertainty, shipping lines will also be reluctant to book plastic waste cargo to non-OECD countries. In the current scenario with freight charges already rising due to insufficient space and less availability of containers, it seems the coming month will be even more challenging for the export of plastic waste.
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