The overall status of the plastics recycling market has not changed materially since our last update in January, 2021.[i]
- The amount of plastic being produced continues to increase, with significant CAPEX spending planned by the plastics industry globally.
- Low oil prices lead to low-cost virgin plastics, making it difficult for recycled material to compete in the market. Recycled plastic from new technologies (chemical recycling and captured carbon) also must compete with low-cost virgin material. While this overarching challenge remains, it is important to note that the situation for recycled material has recently improved somewhat for 3 main reasons.
- Oil prices rebounding from pandemic lows have increased the cost of virgin plastic, making it easier for recycled material to compete. The effect here is limited though, since at the end of May 2021 prices for recycled PET were at an all-time high, in line with general trends for commodity pricing in 2021.
- Some retail brands, both voluntarily and under pressure from NGOs and consumers, are increasing their demand for recycled material.
- Increased regulation demanding minimum levels of recycled content in new products and packaging is supporting the market for recycled material. Europe is driving this trend, though Washington State recently joined California in imposing a minimum recycled content requirement for plastic beverage containers.
- Nations that historically accepted plastics from higher income trading partners are banning plastic imports; most recently, Turkey banned material coming from Europe.
- Many nations have signed on to the Basel Convention to stop the illegal trade in scrap plastics, although data shows that US exports to many of these countries continues to expand. [ii]
- The global recycling system cannot handle what is being produced currently and in the short term there are no viable solutions that can reasonably be expected to keep up with increasing production of plastic.
- Plastic/microplastic pollution is ubiquitous, found in most drinking water samples, in remote mountain lakes and at the bottom of the ocean. It is estimated that humans consume a quantity of microplastic equivalent to the size of a credit card each week.
Developments in Industry
- Expansion of mechanical recycling:
- New technologies: Industry continues to focus on the development and implementation of new recycling processes including depolymerization, pyrolysis, thermal conversion, and hydrothermal conversion. Some plants are starting to go live. Brightmark is finalizing a plant in Indiana, expected to start operating this year, that will process 100,000 tons of plastic annually. They also recently announced the development of the world’s largest advanced recycling plant which will be built in Macon, GA. That said, chemical recycling is not expected to be a significant factor until later this decade.
- Research, development, and commerce in bioplastics is on the rise, with global demand for bioplastics currently growing at a rate of about 15% annually.[iii]
- Captured carbon as a plastic feedstock is being studied and has been implemented to some degree. The company Newlight, for instance, has developed a PHB, called AirCarbon, which captures more carbon in its material than is required in its production. Plastic made from captured carbon is, of course, expensive. As with recycled material from mechanical recycling, it will be difficult for it to gain market share in competition with low-cost virgin plastics.
- Canada recently designated plastic waste as a Schedule 1 toxic material, and it is widely expected that many single use plastic items will be banned there on a national level by the end of 2021.
- In the United States the Break Free From Plastic Pollution Act currently under consideration in the US legislature is the most comprehensive plastics law ever introduced in the US: it would reduce single-use plastics, improve recycling rates and information, hold producers responsible for their waste (EPR), and pause new permits for plastic production plants. In its current form it is highly unlikely that the law will pass over fierce industry opposition in a narrowly divided Senate. That said, the momentum for some form of national regulation of plastic production and pollution is clearly increasing.
- DOE announced an Energy Earthshot seeking to reduce the cost of energy from Clean Hydrogen by 80% over the next decade. DOE specifies that Clean Hydrogen needs to be powered by renewable energy, and that it considers Thermal Conversion to be renewable.
- Preliminary talks are underway in the United Nations for a global treaty to stop plastics from entering the oceans.
- At various levels of government, the cost of recycling is being shifted from taxpayers to manufacturers through Extended Producer Responsibility (EPR) legislation.
- Ontario just expanded its EPR Program called Blue Box; starting in 2023 full financial and operational responsibility for Ontario’s PPP (paper products and packaging) recycling will be assumed by producers.
- Legislation is under consideration in Maine that would lead to the first EPR program in the United States. The proposed legislation in New York State was stalled at the end of the most recent state legislative session.
- Minimum Recycled Content laws are under consideration as well. Washington State just imposed a Minimum Recycled Content requirement, stating that plastic beverage containers will need to have at least 15% recycled content by 2023, rising to 50% by 2027. The law also phases out the use of expanded polystyrene for packing peanuts and food containers and starting in 2022 customers of food delivery services will have to opt in to receiving plastic utensils, straws, etc..[iv]
WTS will continue to monitor the situation and provide updates on new regulations and technologies.