The International Recycling Week (IRW) virtual event brought together industry experts from various sectors including plastics recycling. Panelists at the roundtable session titled “Show us the Money: Plastic Recycling’s Potential,” represented different links in the plastics recycling supply chain and they examined the economic feasibility considerations of plastics recycling heading into the decade, including major investments and improvements in plastic recycling.

 Talking about the signs that indicated that the plastic industry is prepared to invest heavily to boost recycling rates in plastic packaging and other applications, SyedShahzad Alam, Sr. Procurement Manager MENA at Unilever said, plastic is a valuable resource that unfortunately ends up in the landfills, but with growing awareness on the environmental impact of plastic, there is an increasing demand for making better use of the material. He highlighted the company’s plastic recycling targets and their commitment to halve the amount of virgin plastic they use in packaging, also achieving an absolute reduction of more than 100,000 tonnes in plastic use by 2025. Unilever will help collect and process more plastic packaging, and they have to ensure that 100 percent of their plastic packaging material will be reusable, recyclable or compostable, he noted, adding that they also have to increase the use of postconsumer plastic materials up to 25 percent. “We are not the only one doing this, but we are certainly the pioneer and we are also helping to create an industrywide drive to support and facilitate this industry’s development, and that is actually happening.” He said all the members of the value chain play an important role in helping boost recycling rates.

On the capacity and investment needs to handle the impending demand on recycling, Alam said, “Unilever’s total footprint is about 700,000 tons of plastic, but this is a small figure compared to the global consumption of plastic.” At the moment, they do not have enough investments, but he linked that to the complexity of the whole value chain, plus feasibility and other issues that need to be addressed.

Also touching upon this subject, Max Craipeau, CEO, Singaporebased Greencore Resources Ltd., and Chairman of BIR and Plastic Committee board member said, as per the latest estimates, there is today roughly 13 million tons of PET that is being used globally to manufacture beverage bottles.

There is currently around 3 million tons of food grade or rPET spread across regions. As an example, he cited Alam’s statement regarding Unilever’s pledge to reach 25 percent of recycled material in their products, stating that the company would need an additional 3.5 million tons of material to match this target. So, he said, if manufacturers want to increase recycling rates the necessary amount of material should be made available. Even if the capacity is increased, the bottleneck is related to the collection of material, he pointed out.

Considering the high plastic recycling rate of about 46 percent in South Africa, one would wonder how they achieved the same, and how much money needs to be invested globally to improve the recycling rate taking into consideration all aspects such as collection, sorting, cleaning, etc. to get to this figure.

 South Africa is a bit of a mixed economy and there are a lot of collectors doing the job of collecting plastics; also there is a strong middle class that demands recycled content and has a sustainability perspective, said Johann Conradie, Director, Myplas and Chairman, SAPRO. But then, “most importantly, the demand drives this industry,” he added. In developing countries, supply chains exist and when they collect the material and have the capacity to recycle it, they still have to convince converters in many countries at this stage and the inertia initially can be quite difficult to overcome, he stated. “But as the commitments start coming through and as the pressure from brand owners and others start coming through, they have no choice but to change.”

 On the question as to whether they are seeing any change in the market or scrap plastic reprocessing investments, Conradie pointed to the plant and equipment investments being made by technology providers such as Starlinger & Co. and Erema Group. “So clearly someone is buying the equipment; someone is investing. It’s happening,” he said. While the investments can help plastic packaging raise global recycling rates, the panelists also highlighted the hurdles that hinder the process.

 “Veolia has been heavily investing in plastic recycling,” said Ronald Richa, General Manager, Plastic Recycling at Veolia Middle East, also pointing out some of the factors that have made recycling so challenging at scale such as lack of regulations, lack of incentives for the collectors or recyclers, difficulties in convincing brand owners to convince converters, and a procurement strategy linked to the price of virgin material and crude oil. “This is something that is very difficult when you are managing a recycling project and you want to ensure its sustainability over time.”

Price fluctuations are also impacting the recycling sector, he said, and it’s a trend where the higher they move up the value chain and try to produce high quality resins in line with what the brand owners want, “the more investment you need and the more quality control you should ensure” not only with regard to the facility and technology, but also in aspects including collection, source segregation, quality of the bales and so on. “This needs a lot of money and a stable environment and ecosystem to evolve it,” he commented.

Richa also underlined the challenge with regard to the regulatory framework. He said while the regulatory environment is becoming clearer in Europe, outside the EU “it is a bit hazy.” Considering all these factors, he said the company is contemplating whether or not to invest in certain countries “This is a big gap which we need to bridge in the coming months and years to boost plastic recycling.”

Max Craipeau said “price decoupling for recycled resins has been happening for the past five years for PET” in Europe. It is the only resin that has experienced real decoupling from virgin and despite the Covid-19 crisis, when the price of virgin PET dropped at least by half during the worst period, the food grade rPET prices remained high, he remarked. A regulatory climate that helps promote plastic recycling is a key factor, he said. “If you have legislation to make it mandatory for brands” to have a certain recycled content percentage, “this is the only thing that can lead to price decoupling. This is why so far you don’t see other resins enjoying that price decoupling.” It will eventually happen for other resins, but it would all depend on the legislation, he said.

Increased restrictions to the international cross-border flow of plastic scrap, particularly in the light of the Basel Convention amendments that took effect in January, have created challenges as well as opportunities, said panelists. While the amendments are making the transfrontier shipment of plastic material difficult, “we see it as an opportunity,” said Richa. Recycling needs to become a local or regional market, and you tend to collect it, segregate it properly and to put it back through a certain transformation system,” he added. “And it goes along with the policies and commitment of the brand owners that would like to ensure that the plastics packaging in the market are collected, segregated and so on.” So, it is a challenge, “but I think it is a positive way to push towards a more local recycling industry in each and every country,” Richa commented. We have also started to see the emergence of trading platforms, and “this is structuring the market more and more,” which is providing more visibility and transparency in the business, he said.

 One needs to keep in mind that in many African countries “there is no capacity for conversion; there is no capacity for recycling,” said Conradie. “The packaging that is being used in these countries is very often coming from Europe and the likes, so there needs to be some form or way for them to be able to bale their plastic and ship it back to Europe, where it is originally coming from, in many cases.” Or, he said, reprocessors in South Africa need access to material from neighbouring countries that have little or no capacity.

 While PET was discussed most during the conversation, Unilever’s Alam said, “HDPE is quite a significant material for us. We can’t meet our target unless we have a solution for recycled HDPE material as well.” While Unilever has cooperation agreements for HDPE capacity globally, he said in the Middle East the company has signed a memorandum of understanding with environmental solutions provider Bee’ah with “an intent to think about how to put an rHDPE plant in place.”

 Talking about the importance of certifications in helping improve standards and keep plastics from reaching the oceans, Craipeau said, there is a lot of buzz around words like ocean-bound plastics, etc. Over 80 percent of plastics found in the ocean are from land based sources and create a lot of problems, “so the key is to prevent these ocean-bound plastics from reaching the ocean,” he stressed. Many brands are interested in incorporating oceanbound plastics in their products, “but in the end the consumers are aware of a lot of greenwashing around this idea, and certification is key to provide authenticity that the consumer is expecting and provide peace of mind to the brand owners,” said Craipeau, adding that if the brand owners want to incorporate ocean-bound plastic, “they need to have a rock solid certification behind the material they are buying.”

International Recycling Week was organised by US-based Recycling Today and UAE-based Waste & Recycling Middle East & Africa magazine.