Original by Dr. Steve Wong
December 22, 2023
Our waste plastic recycling industry faces increasing challenges, primarily due to the continuous decline in prime material prices caused by overcapacity, economic and political factors. Many experts believe that this situation will not improve in the short term, with Standard & Poor’s predicting that improvement in overcapacity will only be by 2029. Price stabilization and upward adjustment can follow then. As for the next one or two years, prices are expected to fluctuate narrowly at the current low level. Of course, this is an estimate, and it may change with government policies, especially energy policies in the United States and other petroleum-exporting countries. If production is not reduced to support oil prices, the situation may worsen, and falling oil prices will exacerbate the continuous decline in the prices of prime plastic materials. Many plastic factories and product manufacturers have shifted from recycled materials to low-cost but high-quality virgin materials.
In mid-December, Viridor Polymers in the UK announced its performance, recording a loss of over £29 million for 2022/2023. The company has an annual production capacity of recycling 80,000 tons of PET bottles. In the UK, there is a recycling system with subsidies for the cost of recycling. The selling price of recycled materials is higher than virgin materials because the recycling process is very complex and costly. Despite the subsidies, the high recycling cost remains a challenge. Viridor and other companies I recently interacted with have benefited from the Extended Producer Responsibility (EPR) policy. However, due to industry competition and the incomplete development of the EPR system, the recycling industry still struggles to cover its expenses. During my discussions with local recycling suppliers in India, which have already implemented the EPR system, many criticized beverage companies for paying only US $ 20-40 per ton, which has not effectively addressed the problem. In Vietnam, I learned that the industry charges as high as US $400 per ton for packaging films, which helps to alleviate the recycling cost issue.
EPR Globe Action Partnership, established in October with the support of the United Nations Environment Programme and OECD (Organization for Economic Co-operation and Development), aims to develop global initiatives to promote EPR worldwide. During the meeting, members focused on formulating mechanisms for waste collection. To prioritize waste collection under EPR system, considerations include its environmental impact, easy implementation, urgency, and volume involved. Examples of waste under EPR include packaging waste, batteries, household appliances, and cars, among the first to launch a global EPR system. I also proposed that the subsequent promotion of EPR waste recycling should focus on agricultural and marine plastic waste, such as fishing nets and ropes.
Interestingly, members of the organization very seldom mention the cost of recycling and how much support is needed to maintain our industry’s essential operation. In this regard, I hope they will consider economic factors when formulating policies.