More plastic waste sorting, investment needed to meet EU Green Deal pledges: KPMG

Additional sorting of low density polyethylene waste destined for incineration and landfill will be the only way to boost the supply of R-LDPE and meet pledges in the EU Green Deal.

Speaking at the Plastics Recyclers Europe conference in Amsterdam, Netherlands, Tom Hesselink, director at KPMG Netherland's Global Strategy Group, said that currently only 2% of post-consumer LDPE waste is recycled and placed into products of comparable quality to those they came from.

The majority of material is either downcycled or is not sorted from residual waste and ends up in incineration or landfill.

Additionally, Hesselink said that investment will be needed in high-quality recyclate production that will better match up with current demand for high-quality consumer goods products.

KPMG see a growing divergence in the R-LDPE market between lower-quality pellets, which may see stable demand and oversupply, and higher quality pellets, which will remain tightly supplied and may show a premium to their virgin equivalents.

The EU Green Deal is made up of a number of separate initiatives, which include mandatory requirements for recycled plastics usage in packaging and minimum collection and recycling levels for plastic waste.

The Northwest European R-LDPE pellet market already shows a clear divergence in market fundamentals. Translucent, odourless pellets, which are most in demand for consumer packaging applications are pricing at a significant premium to grey and black pellets, which are more commonly used in the production of garbage bags and grocery bags.

R-LDPE translucent pellets were assessed at Eur1,450/mt DDP NWE, Nov. 4, S&P Global Platts data showed, compared with Eur780/mt DDP NWE for grey pellets and Eur730/mt DDP NWE for black pellets. According to sources, a more typical spread between translucent and grey pellets is Eur400-500/mt, however, strong demand from the consumer packaging sector, as well as high virgin LDPE prices, has created far higher premiums for translucent pellets in H2 2021.