European plastics off-course to meet net-zero by 2050: Plastics Europe report

Current policy initiatives in Europe will boost plastics' recycling levels to 30% by 2030 from 14% now but the industry and regulators must do much better to reach net-zero by 2050, according to a report commissioned by Plastics Europe published April 4.

The existing trajectory towards 30% by 2030 will cut CO2 emissions by 11 million mt and means 4.7 million mt less plastic waste will go to landfill or incinerators but the system must make better progress, according to a report commissioned by trade body Plastics Europe and written by consultancy Systemiq.

Current European Union legislation targets include a Eur800/mt tax on non-recycled plastic from January 2022; 77% polyethyene terephthalate bottle collection by 2025 and 25% minimum of recycled PET in PET bottles by 2025.

However, the report suggests this does not go far enough if the EU is to meet its ambition of climate neutrality by 2050.

Significant changes are possible; disposal of plastic packaging could decrease from an estimated 11 million mt in 2020 to 500,000 mt in 2050, effectively reducing incineration and landfill use by 96%, the report said. Greenhouse gas emissions would drop to approximately a sixth of current levels.

A circular economy, which eliminates waste and pollution and which re-uses products and materials at their highest value, is the fastest and most cost-effective way to increase resource productivity and drive down greenhouse gas emissions by 2040, the Systemiq report said.

Plastic reduction through elimination of unnecessary packaging and scaling of reuse models are the major drivers of efficiency. The chief candidates for elimination solutions are secondary plastic wrappings, unnecessary tear-offs, excess headspace, unnecessary films and plastic windows, the report said.

The world produced 367 million mt of plastics in 2020 while Europe produced 55 million mt, according to data from Plastics Europe.

Plastics are produced from natural gas, feedstocks derived from natural gas processing, and feedstocks derived from crude oil refining. The British Plastics Federation, PBF, estimates that 4-6% of oil in Europe is used for producing plastics.

Climate-friendlier feedstock

Recycled plastics have been around for years as a premium option for those aiming to reduce their environmental footprint while continuing to use the material. While in the past, recycled plastics were often viewed as a more cost-effective alternative, recent surges in demand in response to upcoming EU legislation, have caused many recycled plastics to trade at a premium to their virgin polymer equivalents.

Currently, recycled polyethylene terephthalate food-grade pellets in Northwest Europe are pricing at a Eur620/mt FD premium to virgin PET.

In the PET market, which usually goes to bottles for drinks and is the most easily recycled of the polymers, the global European market accounted for 3.30 million mt in 2020. There was recycling capacity for 2.80 million mt and 2.23 million mt was recycled, according to data from PETCORE Europe, the PET industry body.

To meet the demands of European legislation, assuming a market size of 3.50 million mt PET in 2025, there will need to be recycling capacity for 3.17 million mt, S&P Global Commodity Insights analysis showed.

The Systemiq report listed material redesign, plastic reduction, alternative feedstocks, alternative energy sources, mechanical recycling, chemical recycling and emissions capture as viable avenues to meeting net-zero targets.

Among these innovations are chemical plastic recycling and bio-plastics – which over recent years, traditional petrochemical companies have been announcing significant investments into research and production of chemical plastic recycling and bio-plastics. These refer to both to plastics that are made using bio-feedstocks or plastics that are biodegradable at the end of their lifecycle.

Carbon reduction efforts are also taking off, although low-carbon petrochemical markets are nascent and yet to see liquidity of any significance.

Over 7.8 million mt/year of capacity was certified for bio-polymer production across the globe at the end of 2021, according to ISCC data, and over 1.4 million mt/year of chemical recycling capacity is expected to start up by 2025, according to S&P Global Commodity Insights research. While this pales in significance compared to the overall size of the plastics market the pace of growth is rapid.