BIR Autumn 2022: Middle East hosts rising plastic recycling investments

The United Arab Emirates has set targets for recycling of resins beyond PET; plastics sector in Europe ailing from energy costs.

dubai skyscrapers
Dubai and the other emirates in the UAE are playing host to plastic recycling investments designed to meet mandated recycled-content targets.
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Speakers at the Plastics Committee meeting at the Bureau of International Recycling (BIR) Autumn Round-Tables event in Dubai, United Arab Emirates (UAE), in mid-October pointed to a sector with frenzied investment activity. While Europe has been among the more active regions for plastic recycling investments, its current energy woes may slow down some of that activity.

Reporting on behalf of the host country, Bashar Ehsan Gadawala of the UAE-based Ala Group said that nation was developing an action plan for plastics management and recycling based on the European Union and Organization for Economic Cooperation and Development (OECD) “lifecycle approach.”

UAE emirate Abu Dhabi is host to the new Rebound Plastic Exchange digital trading platform, which Gadawala says has been introduced to facilitate the trade of 5 million metric tons of recycled plastic by 2025.

The UAE-based recycler and trader said some manufacturers in the region were “still a bit hesitant to use recycled content” and governments in the region were looking to provide encouragement to do so. “Producers and users know that if concerns are not addressed, they risk facing more stringent regulations and also pressure from customers,” Gadawala said.

Panellist Mahmoud Al Sharif of the Sharif Metals Group of the UAE said he also has observed growing plastic recycling momentum in the region. “Governments are investing a lot in plastic recycling facilities," Al Sharif said. "There will be new legislation to be implemented by next year that plastic products must have 30 percent recycled content. We are following in the footsteps of Europe and the U.S., and that’s a good step forward.”

Fellow panelist Max Craipeau of Singapore-based Greencore Resources Ltd. said the EU’s 30 percent minimum content applies only to polyethylene terephthalate (PET) products, while the UAE’s intervention is poised to apply to all plastic types.

“Imagine if that happened in Europe,” said Craipeau, whose company operates facilities in Indonesia and Poland. “Companies and brands would have no choice but to use mandated 30 percent [recycled] content and that would support the recycling industry.”

Craipeau said that without any such mandates, producers and brands would switch to virgin when it was cheaper. “The only party who can support recycling, no matter the electricity costs, is the legislator. I am happy to see this region is taking such a move.”

Panelist Sally Houghton of the California-based Plastic Recycling Corp. warned that in any legislative climate, access to scrap supplies cannot be taken for granted. “We can set as many mandates as we like, but if we don’t collect the materials, we won’t have the volume.”

Pertinent to Craipeau’s comment about electricity costs, Plastics Committee Chair Henk Alssema of Vita Plastics in the Netherlands said the industry in Europe was “reeling under pressure due to high electricity charges, low demands for raw materials, low prices, lack of labor and inflation; it looks like a mess.”

Alssema said energy costs, which normally comprise 15 percent to 20 percent of production costs for European recyclers, had recently jumped to nearly 70 percent. “That’s a huge problem,” he remarked. “Recycling companies are switching off, and we have huge feedstocks.”

Gadawala said that with high energy prices not being an issue in his region, “We see a lot of European companies coming and opening a branch here to make compounds because they want to target the African or Middle East market.”

A separate presentation on extended producer responsibility (EPR) was given by Xavier Lhoir of Valipac, Belgium’s accredited organization for EPR in commercial and industrial (C&I) packaging. The organization, which may soon be mimicked in other EU nations, deals with 250 waste districts and 7,000 customers.

Lhoir said the Belgian EPR model is based on a free market with no interference by Valipac in the financial relation between a company producing C&I packaging scrap and the collector, or that between a waste management company, trader and recycler. “In order to fulfill the expectations of brand owners and those of the public authorities, an EPR system based on the free market relies on the collaboration with its stakeholders, their transparency, and the quality of the information they communicate,” Lhoir said.

The BIR Autumn Round-Table Sessions took place at the Intercontinental Festival City in Dubai.