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INTERVIEW: Challenges ahead for the UK plastics industry

The UK plastics industry faces numerous challenges, from short-term supply chain disruptions to a changing landscape with how the public -- and governments -- view plastic in a world looking to go green and fight climate change.

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There is, of course, also the UK's changing relationship with its closest trading partner -- the EU. Indeed, Brexit has become all too easy to forget during the global COVID-19 pandemic and wider supply chain issues.

To discuss the challenges and opportunities for the UK plastics industry, S&P Global Platts spoke with Philip Law, director general of the British Plastics Federation.

Platts: Global logistics is a key issue for all industries. What are the challenges for the UK plastics industry and how is the industry overcoming them?

Law: Global logistics cannot be separated from Brexit. There are specific issues with global freight but with the UK, they have been compounded by teething problems by Brexit bureaucracy.

British plastics had moved to just-in-time deliveries. That pattern has been disrupted and now long delivery times have forced companies to hold more stock.

Now the question of warehouse availability has come to the fore.

Platts: The impact of Brexit has the potential to last far longer than current supply chain issues. What are the challenges and opportunities the UK plastics industry is facing and will face regarding Brexit?

Law: The EU remains a major export destination. We hope that customers there flourish. There are teething problems as mentioned but, more so than Brexit, the regulatory environment for plastics does not seem auspicious.

The EU acknowledges that plastic has valuable uses but there is still negativity around plastic.

In spite of this, there is investment particularly in chemical recycling. This presents big opportunities for the UK.

Platts: What is your view on the role of plastic in a sustainable future when we see so much negative press about plastic?

Law: The future has got plastics written all over it. There is a positive plastics story attached to Boris Johnson's ten-point plan for a green industrial revolution -- electric vehicles, renewable energy, wind power, green buildings.

Plastic is durable and light-weight so there are energy savings you can achieve from using plastics, including transportation and preventing food waste.

The challenging net zero carbon target from the UK government would be difficult to get anywhere near without plastics.

Despite this, there is a lot of legislation under debate (plastic packaging taxes, consistent collection, deposit return scheme (DRS)). This arose off the back of programs like David Attenborough.

The consequence of this is more recycling. This has been the focus of government and industry targets.

But now, concerns have turned to climate change and carbon emissions. Recycling as the most pressing question has been pushed to one side.

Recycling can assist with net zero. What is missing is a two-pronged approach on circularity (and recycling) and net zero carbon.

Platts: Recycling is the obvious route to plastic sustainability. The UK has set an ambitious target of 30% recycled content in plastic packaging from April 2022. What are the challenges the industry will face?

Law: Supply. UK recycling capacity has ramped up -- around 150,000 mt will come onstream in 2021 -- but supply still remains challenging.

Another aspect is that new financial requirements to support extended producer responsibility (EPR) will be introduced. The hope is that they will be equally apportioned in a fair way and not prove to be an unfair burden on any one link in the value chain.

Overall, everybody is concerned about their liabilities. I think the government did not appreciate how complex the market is and how difficult it has been to implement.

Platts: Will it be delayed?

Law: No. They are under a target to deliver. It will go ahead and one hopes things will be handled properly.

I think the government has infinite faith in the ability of industry to innovate. But to innovate we need consistent waste collection.

Platts: Deposit return schemes have been an effective way to boost supply but have been delayed across the UK. Do you think it's the right route to go down and what about polyolefin collection, since DRS is focused on PET bottles?

Law: The big problem in the UK is local authorities accept different types of plastic. For example, plastic film is mostly not collected by local authorities. But there are much-needed legislative proceedings to bring about consistent collections.

For now, retailers are stepping up to provide film collection bins. This will continue to happen and if it boosts supply then it's a good thing.

The more pressing issue is organizations pushing to ban things like polyvinyl chloride (PVC) and polystyrene (PS) packaging. We are against this. It's like throwing the baby out with the bath water. You are denying the possibility of a future innovation.

Platts: Retailer film collection is industry led. What role should the government play?

Law: There's this tax, which is certainly going to bring in revenue for the government. That money should be invested in recycling infrastructure, namely collection and sorting. Governments are reluctant to hypothecate taxes but they must be careful not to have the appearance of a smash-and-grab raid.

Platts: You mentioned plastic can help reach net zero. We've also spoken about plastic's negative publicity. What is the industry doing on these fronts?

Law: One thing that has been happening for years, which industry hasn't got credit for, is the reduction and minimization of plastics used in products, i.e. lightweighting. Today's PET bottle -- because of design innovation and technical advances -- is lighter than a PET bottle produced years ago. Similarly for yoghurt pots and many other products from vehicles to building materials.

This has been a consistent theme from the origins of the industry because it also made commercial sense.

This all happened before sustainability was christened but was nevertheless a major theme of sustainability.