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Impetus needed on infrastructure, collection rates

PET best placed to take share of other polymers

Bottle industry ahead of the game

London — Market participants have met the UK Government's new plans to tax plastic packaging with a mix of concern and optimism, while questioning whether the planned tax will be effective.

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The announcement in the government's 2018 Autumn Budget last month of a tax on plastic packaging containing less than 30% recycled content has promised to "reduce the problem of excessive and environmentally harmful plastic packaging."

Some market participants believe the introduction of the tax in 2022 -- which has yet to go through a consultation period -- will give further impetus to a "plastic pact" that many in the plastic bottling industry have already signed up to. Others think there needs to be far more impetus, aided by the government, to improve infrastructure and collection rates if the 30% target is ever to be met.

Many in the polyethylene terephthalate market have expressed optimism that it will further demand for recycled PET and the potential switching from other, harder to recycle polymers, to PET.

CURRENT PLASTIC PACT

There is already in place a plastic pact, which many plastic bottle producers and consumers are signed up to. As part of this pact, 30% of plastic packaging is to be recycled by 2025. Many in the plastic bottle industry are near this point already, with some committed to 50% and some even 100% by 2025.

"For the forward thinking beverage market it won't change much. For packaging, it will be a wake-up call. They will need to think more seriously about sourcing that 30%," a recycler said.

This is what the government hopes to reinforce, and accelerate to 2022, by its introduction of a tax.

INFRASTRUCTURE

To achieve this, recyclers have said there needs to be a huge increase in collection rates and recycling infrastructure.

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"Improved collection rates will cover the extra demand. But the government needs to address the infrastructure in place and help improve collection rates. And we must stop exporting our waste," one UK recycler said, adding that around 55% of the recyclable plastic waste in the UK is exported.

Adrian Griffiths, CEO and founder of Recycling Technologies, speaking on BBC Radio 4 noted that the UK "recycles" 1.05 million mt of plastic waste each year, but that there is only capacity in the UK to process around 350,000 mt. So, the remaining waste simply gets exported, mainly to Asia.

Market participants hope that during the consultation period the government will assist with plans to improve recycling infrastructure and that local authorities will put in place plans to improve collection rates.

"This is a great initiative if the government follows up with support to make new infrastructure. But I am not aware of any incentives at the moment to support that," a UK recycler said. Another added that the "government needs to address infrastructure" and will face "challenges on collection rates."

For instance, Swindon Council in the west of England announced in September a plan to stop plastic recycling and instead burn recyclable plastic along with general household waste as fuel for processes such as cement mixing, itself an already environmentally harmful process.

GOOD NEWS FOR PET

The PET market could benefit the most from the proposed tax, with some in the industry believing many plastics producers not already using PET could switch from other polymers. "[Household] polyvinyl chloride is non-recyclable and cannot be burned because of its chlorine content. PET is the go-to polymer now," a recycler said. Virgin PET demand will increase as a result of this.

"One consumer business is looking to move around 12,000 mt of PVC demand to PET," a UK source said.

One PVC producer did note, however, that "PVC products have a long life cycle," meaning they are reused, as opposed to recycled after a single use.

Despite this, "demand for recyclates is outstripping supply, so there is a lack of raw material for recyclers," the source added. So, despite the long life cycle of many PVC products, there still comes the issue of finding recycled supply to make the products in the first place, to avoid falling foul of the tax.

Recycled PET is where demand will increase the most and will continue to fuel the already growing disconnect to virgin PET as it becomes its own market.

The message from sources in the recycling industry was that demand will consistently outstrip supply over the coming years. And to meet this demand, collection rates and recycling infrastructure must be improved, and the government must aid this impetus.

--Benjamin Brooks, benjamin.brooks@spglobal.com

--Maria Tsay, maria.tsay@spglobal.com

--Luke Milner, luke.milner@spglobal.com

--Edited by Maurice Geller, maurice.geller@spglobal.com