According to a new study by ICIS, a marketing company operating in the petrochemical industry, the European recycling industry may not achieve the PET bottle recycling targets planned for 2025 amid slowing growth rates in recycling if the reverse trend does not begin. The study also found that bottle collateral return schemes work better as an incentive than market prices for recycled material.

ICIS report assesses market conditions in 2018. It is concluded that the level of collection of PET bottles in Western Europe increased from 58% in 2016 to 63% in 2018 and is projected to reach 65% in 2019. In accordance With a directive regarding the use of disposable plastic, the industry should achieve a conversion rate of 77% by 2025 and 90% by 2029. However, the growth rate of bottle collection is currently slowing. According to ICIS estimates, the volume of raw materials collected will need to be increased by 7% per year in order to reach the target of 2029.

Helen McGeough, ICIS Senior Plastics Recycling Analyst, explained the dynamics: “The growth in demand for RPETs (recycled PET) began at the beginning of 2018, as problems with the supply of primary PET continued from the end of 2017. This led to an increase demand from sectors that can easily use any raw materials. This, in turn, pushed up prices, because supply was limited, because collection activities did not increase in line with demand. The stimulus for the growth of nutritional RPET appeared later, in 2018, after the adoption of the directive of the European Parliament on the use of disposable plastics. Despite the growing demand for RPETs, the collection could not meet these growth rates, reaching 2.1 million tons in 2018 – an increase of only 2.4% compared to 2017. Due to the limited supply of prices for pressed PET bales increased by 20% in 2018, which is exacerbated by the growth of waste disposal facilities during the year, which increased to meet the demand for RPET products. Thus, the prices for pressed transparent PET in bales in 2018 averaged 450 euros / ton, which is 75 euros or 20% higher than the prices of 2017.

The recycling industry increased RPET production by 17% to 1.4 million tons, and two-thirds of this amount was used for packaging production. Capacities for the production of food RPET barely had time to increase before the requests for its supply began after the signing of the directive on disposable plastics. As a result of the directive, food-grade RPET prices increased by 13%, which was accepted by all, since these prices rose by only 7% (on average) compared to primary PET prices. Nevertheless, in 2019 the situation has changed significantly: the premiums on average exceed 30%, reaching a maximum of almost 50%. ”

According to the forecast, the volume of collection of secondary raw materials will grow by less than 4% per year during 2019-2020. If such growth rates continue further, the targets outlined in the directive to reduce the use of disposable plastic will not be achieved.

The top 7 highest collection rates for recycled materials in 2018 were found in countries with a collateral value recovery (DRS) system for collecting PET bottles. Perhaps this is evidence that such systems are needed to obtain the results required in terms of improving quality and quantity. Regulation is seen as the most effective way to stimulate investment in recycling, but agreeing on who pays in the supply chain is an argument that will take some time.

The study was conducted in 28 countries of Western Europe from May to July 2019 (in the EU countries with the exception of Malta and Cyprus, as well as Norway and Switzerland). The focus of the study was on the RPET industry in 2018 with a detailed description of each of the main elements of the supply chain: collection, recycling and end use. The report is a joint work with the participation of national authorities, supervisory authorities, collateral value return systems and processors.