Overall, 2018 was a very challenging year for exporters of plastics scrap as their market options continued to recede.
Following China’s regulatory moves to slash its imports, other countries in the region have also taken steps to limit the volumes they are prepared to absorb. Vietnam closed its doors to plastics scrap at the end of June last year and exports to Thailand have also been ruled out.
Also in 2018, Malaysia placed a moratorium on issuing new import permits; although environmental authorities issued a new advance permit at the beginning of 2019 for some shipments going to Malaysia, the process is time-consuming and not easy.
Late-2018 import licence renewals in India provided some comfort but this market is vanishingly small compared to the 7 million tons-plus of plastics scrap that was exported to China as recently as 2016.
Up to the point when China’s policy shift began to bite, around 60% of the plastics scrap traded internationally ended up in the Far East as a whole, and so business was always going to be heavily influenced by any political and regulatory decisions taken in the region.
With the welcome mat so widely withdrawn, many exporters struggled to find homes for their material in 2018; as a result, full-year shipment statistics are likely to make for uncomfortable reading. As a consequence, prices have remained under pressure with no immediate solution in sight; indeed, many waste management companies decided against segregating some waste streams as these were proving unviable to recycle even after sorting. As an example, mixed-colour LDPE film saw its value drop into negative numbers last year; after having commanded ex-works prices of Euro 100-150 per tonne during the course of 2017, these fell as low as minus Euro 20-30 per tonne in 2018.
In business, however, the closing of one door often leads to the opening of another. The aforementioned problems in exporting to traditional markets has resulted in a significant increase in capacity investments within established supplier countries and regions. In Europe, this trend was most pronounced in the east of the continent where labour costs are generally more attractive than in the west. Among the new business lanes to be developed has been shipment of recycled pellets to Asia.
Last year will also be remembered for the bad publicity attracted to plastics, notably surrounding the large volumes ending up in the world’s oceans. At many conferences around the globe, the emphasis was placed on extended producer responsibility or other means of applying pressure on primary producers to consider the recycling of their products at their end-of-life stage.
Speaking at our meeting in London last October, Keith Freegard of Axion Polymers and the British Plastics Federation’s Recyclers Group pointed to research showing that 88-95% of land-to-sea plastics debris emanates from just 10 rivers – eight in Asia and two in Africa. At the same event, Dr Steve Wong of the China Scrap Plastics Association identified the need for more recycling at source, as well as for appropriate systems and regulations to boost recycling rates, particularly in developing countries of the world. At our earlier meeting in Barcelona, it was difficult to disagree with guest speaker Vincente Olmos of Sintac Recycling & Sintac Recycling Systems and Compounds of Spain when he declared that plastics had arrived at “a big moment of change”, with the focus now falling more on local recycling rather than on shipping large volumes to far-away destinations.
Given such comments and the well-documented events of 2018, however, it is worth reiterating BIR’s support for free and fair trade in secondary raw materials. Whereas some regions of the world may have a surplus of plastics scrap, such as Europe and the USA, others – particularly in the developing world – may need to import in order to ensure that their growing plastics production capacities have sufficient vital raw materials available to them.
It also bears constant repetition that, despite the recent negative publicity engulfing plastics, the prospects for the recycling industry remain bright, with a host of leading researchers forecasting healthy growth rates for the years ahead. As said in London, there are few if any better business propositions than plastics recycling given the abundant availability of scrap as input and of “green” funds for investment, alongside rising governmental and public awareness of the need to find sustainable environmental solutions for plastics.
by Surendra Borad Patawari
Gemini Corporation NV (BEL)
Chairman Plastics Committee 2012-2018
PLASTICS COMMITTEE CHAIRMAN
Vita Plastics (NLD)
Available today in many shapes and forms, plastics have become part of everyday life. However, their popularity and almost endless applications present a series of challenges for the recycling industry. Certain post-consumer products contain as many as 20 different types of plastic material. This widespread use of all kinds of plastic makes it difficult to collect large enough quantities of certain types to render recycling viable. At the same time, each variety has a particular molecular composition and, as a result, a different recycling process must be employed. Identification and separation technologies are crucial for efficient and effective plastics recycling.
Recycling helps to reduce energy consumption, air/water pollution and also the amount of plastic that ends up in landfills. Plastics are polymers composed primarily of petroleum, thus the recycling industry plays an important role in preserving this vital natural resource. At the same time, issues surrounding plastics waste, and particularly the effects of single-use plastics on the marine environment, have been regularly catapulted into the world media spotlight.
The reality is that plastics recycling offers plenty of upside potential. Global plastics production approached 350 million tonnes in 2017. According to the OECD environmental policy paper of September 2018 entitled “Improving Plastics Management Trends, policy responses, and the role of international co-operation and trade”, plastic recycling rates are between 14 and 18% at the global level. The remainder of plastic waste is either incinerated (24%) or disposed of in landfills or the natural environment (58-62%). Also in 2018, however, the United Nations put the global recycling rate for plastics at just 9%.
Plastic recycling rates vary significantly across different countries, as well as by waste stream and polymer type. Recycling rates in the European Union average 30% but are thought to be considerably higher in some member states, according to the OECD paper. However, it adds, plastic recycling rates in other high-income countries are typically of the order of 10%.
THE SORTING CHALLENGE
The biggest problem with plastics recycling is that it is labour-intensive because of the difficulties of automating the sorting process. Numeric codes are used to indicate different types of plastic. Mechanical sorting processes using spectrometry and other technological innovations have helped to increase plastic recycling capacities and efficiencies.
Containers are usually made from a single type of plastic, making them relatively easy to sort. But mobile phones, for example, usually have various components made from different types of plastic. Research and development programmes have been designed to improve disassembly technologies and to increase the recovery and recycling rates of plastic-containing products.
RECYCLING MARKET VARIATIONS AND SHIFTS
Various researchers believe the global plastic recycling market will register a compound annual growth rate of well over 6% in the coming years, pushing its value from approaching US$ 40 billion at present to nearer US$ 60 billion by the middle of the next decade.
Of the 300 million tonnes of plastics waste generated in 2015, only around 14 million tonnes (or 4%) was exported outside the country of origin. Imports of plastics waste are concentrated in a small number of countries; for many years, China imported more than half of the internationally-traded plastics scrap. However, the market has undergone massive disruption of late as the introduction of severe new restrictions led to a 99% drop in Chinese imports of plastic scrap in 2018. Initially, other Asian countries increased their imports hugely but a number have since implemented bans or import restrictions of their own.
Reflecting the supreme adaptability of the recycling industry, this loss of key overseas markets for scrap has led to the development of new plastics recycling capacities, particularly in the major traditional exporting regions of the world such as North America and Europe. This trend benefits the environment because more plastic scrap is processed closer to its point of origin rather than being shipped potentially vast distances for recycling, thereby saving resources and reducing greenhouse gas emissions.
The plastics recycling industry helps protect the environment by supplying other sectors - for example, packaging producers - with quality, often tailor-made recycled resins for incorporation into their products, thereby helping to build a circular economy where resources are kept within the usage loop for as long as possible. The recycling industry can also provide valuable expertise at the design stage to help ensure that products are made with their recyclability in mind.