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Plastic recyclers have to ride out ‘perfect storm’

Shipments of plastic scrap should consist ‘almost exclusively’ of a single polymer and should be ‘almost free from contamination’, according to the updated Basel Convention entering force in January. Recyclers fear this will have a big impact on their global industry.

Amendments will cut the input material available at recycling facilities, limiting the availability of recycled plastics. They would create a trading burden likely to result in ‘negative implications’ for the circular economy, said Patricia Whiting of US recycler Sims Lifecycle Services during a webinar hosted by BIR. She believes industry players will have to work out what levels of contamination are deemed acceptable.

Emerging regulations have halted the momentum of plastic scrap trading while parties await further developments, observed Dr Steve Wong of Fukutomi. China’s stricter enforcement of existing regulations on importing recycled pellets will see fines of up to US$ 750 000 for non-compliance when it comes to uniformity of colour, size and packaging.

Meanwhile, Wong reported that scrap availability has dropped by almost 50% and that prices are higher than before the pandemic. Many factories in South East Asia have not yet returned to full operation and a large proportion of recyclers are facing liquidity problems. The costs of recycling are higher than the prices currently being achieved for recycled pellets.

In the US, businesses are facing the ‘perfect storm’ of a pandemic, increased regulation and ‘cheap and plentiful’ virgin material due to favourable oil prices, says Sally Houghton of the Plastics Recycling Corporation of California. 

In her view, Covid-19 underlines ‘the weaknesses of certain markets and the need for modernisation of collection and sorting processes in the States’.

On a positive note, rPET prices appear to be ‘extremely resilient’ as commitments from big brands and steps towards mandatory recycled content are helping to realise a decoupling from oil prices.

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