Recycled plastics could benefit from a legislative assist

Departments - Commodities Plastics

Recycled-content legislation may encourage investment in plastics reprocessing capacity.

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June 25, 2020

Brand commitments to increase their use of recycled plastics may be insufficient in light of the pandemic if not supported by recycled-content legislation that encourages investment in reprocessing capacity, according to speakers at the Bureau of International Recycling (BIR) Global eForum on plastics. The Brussels-based organization hosted the webinar June 10.

BIR Plastics Committee Chair Henk Alssema of Vita Plastics, based in the Netherlands, said, “Our industry is facing a lot of problems for the moment,” brought on by the uncertainty surrounding Brexit, the U.S.-China trade war and the coronavirus pandemic. He said demand was “very weak” for recycled plastics, with “huge stocks hanging over the market.” Alssema also pointed to a “lack of liquidity” in the recycled plastics sector.

Sally Houghton of the Plastic Recycling Corp. of California, which is based in Sonoma, said the plastics recycling sector has been hard hit by the pandemic. She added that repercussions that have arisen from shelter-in-place orders throughout the United States have been “extensive,” with redemption centers in states with bottle bill laws closing for a time, reducing supply.

“There needs to be some incentive to encourage end users to use recycled content. We need some firm pull-through of demand.” – Sally Houghton, Plastic Recycling Corp. of California

Additionally, extremely low virgin resin prices have left reclaimers struggling. “The margin between virgin and recycled is very tight at the moment,” she added.

“Lower grade plastics have been very hard hit,” Houghton said, adding that they are struggling to find domestic and export markets.

Plastic reclaimers and the redemption centers that help to supply them “might not recover from the effects of the pandemic without relief” from the government, she said. “There has to be legislation; there has to be government intervention. The recycling industry is on its knees. There needs to be some incentive to encourage end users to use recycled content. We need some firm pull-through of demand.”

Clément Lefebvre of Veolia Propreté France Recycling, Paris, described the current market as a “nightmare,” adding that low crude oil prices have had a significant impact on the plastic recycling sector, reducing demand and putting pressure on pricing. He described price and demand for recycled plastics in Europe as “very low,” adding that some feedstocks are in short supply because a number of sorting centers have closed to reduce the spread of the novel coronavirus.

In this environment, he said, “If you produce high quality, you have a chance to make money.”

Steve Wong of Hong Kong-based plastic recycling firm Fukutomi Co. Ltd. said recycled plastic demand in China has been “quite low,” and export of this material is 25 percent that of normal levels because of lockdowns in other countries. The cut in oil production has helped to support pricing for oil and prime plastics, with pricing increasing 20 to 30 percent for some prime resins.

Wong said supply and demand always seem to be mismatched in the recycled plastics sector, adding that demand needs to be broadened beyond natural polyethylene terephthalate and high-density polyethylene. “We need to extend that to other polymers and colors.”