Plastics Under Duress

The European plastics recycling industry is facing some daunting challenges. While new capacity has been coming on stream in Europe, the collection of the raw material has failed to keep pace. The result is a growing concern by many in the plastics industry that the situation could create even further problems for the industry over the next several quarters.

Adding to the lack of collection, a slow economy throughout much of Europe is reducing the overall generation of the material, which is creating even greater concern.

Supporting these concerns has been a recent report from the European Plastics Recyclers (EuPR), an association that represents both national associations and individual member companies that cover 80% of the European plastics recycling industry. The EuPR says that the PET recycling industry is being jeopardized by “persistent, structural market failures across Europe.”

One area that is creating challenges has been the collection of PET plastic. The EuPR claims that collection of this material is stagnating with the remainder being either landfilled or incinerated.

“Europe is not maximizing the sustainable use of a valuable resource such as post-consumer PET,” says Casper van den Dungen, chairman of the EuPR’s PET Working Group. “Furthermore, due to intensive lightweighting and complex bottle design, the average costs of recycling have increased substantially in recent years. Such increased costs cannot currently be corrected by further economies of scale.”

Meanwhile, the demand for recycled PET continues to grow. There have been a number of new facilities requiring greater amounts of scrap plastic, especially PET, as a raw material.

The result, van den Dunger notes, is that many of these facilities are now operating at less than 75% of capacity. He also notes that a potential lifting of currently existing anti-dumping duties on virgin PET could exacerbate the situation. “Until today, PET has been an undisputed success and example for sustainable development. It can remain so in the future if the collection moves upwards to another level and the virgin PET is fairly marketed,” he says.

In Germany, one challenge has been the incineration of a large amount of solid waste. According to the Germany-based recycling association BVSE, mixed plastics recycling in the country is being jeopardized by an overcapacity of incineration.

At the same time, much of the collection of the material comes from systems that encourage the commingling of mixed plastic with lower value nonrecyclables.

In the U.K., a report by the organization ReCoup notes that at the end of 2012 and in early 2013, markets for scrap plastics had stabilized, although a number of plastics exporters were expressing concern that shifting policies in China may make it more difficult to ship material from Europe to China.

The question of quality is also growing in importance. Peute Recycling, one of the largest Dutch paper and plastics recyclers, recently was raided by law enforcement over some suspect shipments. The company has refuted the issue.

According to one European source, the result of the raid has been the company’s trading practices have frozen, and the situation may continue for a few more months as the investigation continues.

As Peute is one of the largest plastics and paper recycling companies in Europe, the freeze could be problematic. Insiders have speculated about supply problems in the plastics industry resulting from reduced collections and processing of material.