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How drastic decisions have shaped the plastics industry

Not long ago, the international trade in plastics scrap used to be in the region of about 15 million tonnes annually. Now, it is reduced to almost five million tonnes per year and the volume is decreasing. What has changed? Government crackdowns on low-quality waste have become a day-to-day fact while the Basel Convention has put plastic scrap business on a restricted trade list.

Written by Surendra Borad Patawari of Gemini Corp.

The international trade in plastics scrap from Europe to rest of the world is already very heavily regulated. For example, you cannot freely export a single tonne of plastics scrap from Europe to more than 100 non-OECD countries? Under existing European Waste Shipment regulations, you need specific approval to export to such countries.

More critical scope

The Basel Convention has extended the scope of the notification procedure to practically every country of the world. Experience in Europe of receiving responses and feedback on prior consent and notification procedures has not been encouraging.

Every few years, the European Commission sends out a written questionnaire to non-OECD countries asking them what kind of scrap they would like to import from Europe. Many countries do not respond.

Surendra Borad Patawari

Notification procedures are required in order to export to those countries that do not respond to these questionnaires. Some countries do not really understand the spirit and objective of the survey. Thailand and Bangladesh responded vaguely so, as a result, it is not possible to export plastics scrap from Europe to Thailand and Bangladesh despite the fact they have a reprocessing industry and are importing plastic scrap from the US.

What does this mean? Recycling will move more towards the developed world while developing countries will not have access to plastic scrap. The process of prior consents is too complicated, involving as it does bank guarantees, transportation details ahead of transit and warehouse information.

Economy of scale

Overall, I doubt the decision is based on hard facts. It is the public, the media and the politicians who have driven it. Clearly, it will lead to further reductions in international trade. For many developing countries it will be very difficult to import scrap based on prior consents because you need a minimum level of production for economy of scale.

In the United Arab Emirates, plastics recycling did not develop as a business because they could not collect enough materials for economic production and importation is not allowed. While I believe in the spirit of the Basel Convention, the reailty is that this strict approach will stifle the recycling business.

Instead of further restricting trade, I would have preferred we educate people, spread correct information to the media and eventually convince politicians to support the recycling sector.

Plastics 24/7

It is also important to realise that we cannot live without plastics, not even for 24 hours. Without plastics, food waste will increase tremendously, currently costing the global economy an estimated US$ 750 billion (EUR 773 million) annually. Without plastics, our vehicles will be heavier and will consume more fuel. Without plastics, agricultural irrigation will become difficult. A thought should also be given that how hospitals would run or how medical instruments or medicines can be practicable without plastics.

In fact, plastics are in such demand from the general public that in 30 years we will be producing 26 billion tonnes of plastics. Instead of coming up with decisions of prior consent, we must think of alternatives to ensure that plastics are processed properly.

Showcasing best practices

From time to time, official visits should be arranged to recycling plants in developing countries to investigate if they are working in environmentally friendly conditions. Last year, Gemini Corporation sent 19 senior executives from 11 countries to different regions of India. As a result of this trip, the executives contacted the Indian authorities about increasing the import of scrap from Europe.

At the same time, the world is suffering from a low recycling rate globally. Currently the world generates about 300 million tonnes of plastics waste annually and less than 20% of that is recycled. There is a universal desire to double this recycling rate to 40% in next five years but I believe we do not have either the physical or financial resources to achieve it through mechanical recycling.

To increase the capacity from the existing 60 million tonnes to about 125 million tonnes we would need investment of about EUR 40 billion in plant and machinery alone. Either way, we don’t yet have a market for the additional 60 to 75 million tonnes of reprocessed materials. Even if brand owners needed such quantities to fulfil their lofty ambitions of using recycled materials, is it at the quality they need?

A resin partnership

There must be greater collaboration between the resin producers and recyclers to improve quality. We need a breakthrough in alternative recycling and we need to find the solution fast because plastics scrap is growing by about 4% every year while the recycling rate is growing by less than 2%. A solution to increase low recycling rate can also be proposed here.

Prime resin producers can contribute to this issue. Brand owners P&G, Unilever and IKEA have set lofty ambitions for using post-consumer recycled resins because the current quality of PCR or reprocessed goods is just not good enough to cater to their needs. The quality of PCR can be improved substantially by mixing off-grade or transition materials.

Resin producers should distribute their off-grade, wide-range materials through recyclers. When resin producers collaborate with recyclers, I’m sure the recycling rate will increase substantially and producers will have a better image. After all, when they sell through recyclers, they are promoting recycling, creating new markets, and different market segments.

Find more articles of our previous issue right here.

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