Circular Plastics · 2020. 10. 5. · Growth in Europe RPET market European collection volumes current and projected 16 0 500 1000 1500 2000 2500 3000 3500 4000 ... Price Difference

28 September 2020

Circular PlasticsThe world of recycling, environmental impact and sustainability

Senior Analyst, The Americas - Plastics Recycling, ICIS

Paula Leardini

The recycling chain

Government and waste

management companies

focus on collection and sorting

Consumers purchase products from

retailers and brands, consume the

product and dispose of the

product/packaging at end of life

Recyclers and manufacturers offer the technologies and capacity to reprocess the waste mechaniclly and chemically

Converters and brands design and produce the packaging on the market and determine the volume and type of recycled content

3

4

Production Waste

Flake

Washed, shredded and dried

Integrated into

virgin productionIntegrated into

virgin production

Washed, shredded, dried

melted and re-extruded

Micronized

Plastic

Integrated into

virgin production

Post-ConsumerPost-Industrial

Sorted Waste Bale

Pellet

Final Product

Melted and

re-extrudedPulverised, sieved

Food-approval

Food Grade Pellet

Integrated into virgin production

Integrated into

virgin production

Separated and crushed Separated and crushed

Mechanical Recycling

• Any waste stream can potentially be used

• Material endlessly recyclable

• Near-identical properties to virgin and can revert to different states

• Gets round food-contact restrictions

Chemical Recycling - Advantages

Photo: Plastic Energy 5

• Requires waste collection infrastructure

• Processes typically expensive

• Yields typically low

• Limitation of scale

• Regulatory status uncertain

• Environmental benefits magnitude unclear

Chemical Recycling - Disadvantages

Photo: YinYang/ Getty Images 6

The Major Price Drivers

Quality

Production Cost

Demand

Supply

Uncontrollable factors impacting recycled materials

Influencing factors are both domestic and global

Crude oil, force

majeures

Upstream

Political situation,

recession, trade

wars, major global

events

Macroeconomics

Fads, consumer

preferences,

‘extinction

rebellion’

Consumers

Legislation, Green

deal, bans, trade

flows, compliance,

taxation

Regulation

New materials,

packaging,

processes

Innovation

Natural disasters,

coronavirus

Unexpected

United States - Congress Acts

9

Act Investment (USD million)

Target Status

RECYCLE Act S.2941 H.R.5906

75 Education Introduced in Senate (11/21/2019)Introduced in House (02/13/2020)

RECOVER ActH.R.5115

500 Infrastructure, programs and education

Introduced in House (11/15/2019)

Break Free From Plastic Pollution ActH.R.5845

Waste and recycling collection systems

Introduced in House (02/11/2020)

Save Our Seas 2.0 ActS.1982

Marine debris combat Referred in House (01/13/2020)

ZERO WASTE ActH.R.4050

250 Zero-waste practices Introduced in House (07/25/2019)

The Plastic Waste Reduction and Recycling ActH.R. 7228

Plastics waste reduction and recycling research

Introduced in House (06/15/2020)

Source: Congress.gov

State bills - California

10Source: CalRecycle

11

US Bottle Collection Rates by Resin 2018

0%

5%

10%

15%

20%

25%

30%

35%

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

PET HDPE PP LDPE PVC

Bottle consumption Bottle collection Collection rate

Source: APR, ACC and NAPCOR

To

nn

es

US PET Bottle Collection Rates 2010-2018

12Source: NAPCOR

To

nn

es

0%

5%

10%

15%

20%

25%

30%

35%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

PET Bottle Consumption PET Bottle Collection Collection Rate

US vs. Europe PET Bottle Collection Rates 2018

13

US Collection

Rate, 29%

Europe Collection

Rate, 63%

Sources: NAPCOR and ICIS

To

nn

es

Global Analyst Team Lead - Plastics Recycling, ICIS

Helen McGeough

Europe - Legislation driving change in the plastics industry

15

Recycling targets in Europe

2020 2021 2025 2029 2030 2035

Municipal waste recovery for

reuse50% 55% 65%

Plastic waste recyclability 100%

Plastic waste recycled 55%

Plastic bottles collection 77% 90%

Mandatory recycled content

in PET bottles (2025) / in

plastic bottles (2030)

25% 30%

Single-use plastics ban (*) 100%

(*) Single-use plastic cutlery, plates, straws; cotton bud sticks made of plastic; plastic balloon sticks; EPS cups

Growth in Europe RPET market

European collection volumes

current and projected

16

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2016 2017 2018 2019 2020 - 2025 2030

Collection Growth rate Collection to meet SUP

Source: ICIS

European RPET usage in food contact bottles

current and projected

0

200

400

600

800

1000

1200

1400

1600

2018 - 2025 2030

00

0/t

Current RPET usage in food contact bottles

RPET usage to meet SUP targets

US vs. Europe RPET End Markets

US RPET End Markets Europe RPET End Markets

Source: APR, ACC, NAPCOR, and ICIS

Brand-owners pledges

• 100% of packaging recyclable, compostable, or biodegradable by 2025

• 25% recycled plastic content in plastic packaging by 2025

• 35% reduction of virgin plastic use across beverage portfolio

• By 2021, launch 100% recycled PET bottles

• 100% of packaging reusable, recyclable, or compostable by 2025

• 25% of recycled material on plastic packaging by 2025

• 50% of recycled material on beverage bottles, and 100% for Evian bottles by 2025

• By 2025, launch 100% bioplastic bottles

• By 2025, support collection and recycling in top 20 markets

• By 2025, 90% collection for recycling of bottles and caps in EU

• Help improving the US recycling infrastructure and capabilities

• 35% recycled PET in its bottles by 2025 globally. In the US, the company has committed to using 50%

• By 2030, collect as many plastic bottles as produced

18

•100% recyclable global packaging by 2025

• Collect and recycle a bottle or can for every one sold by 2030

• Bottles made from 100% recycled plastic, fully recyclable materials, plant-based materials and hybrid innovations are now available

Virgin PET vs. RPET Price - Europe

19Source: ICIS

Virgin PET vs. RPET Price - US

20Source: ICIS

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-300

-200

-100

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100

200

300

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900

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1100

1200

1300

1400

1500

1600

1700

1800

19000

4-J

an-2

01

8

25

-Jan

-20

18

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-Feb

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08

-Mar

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r-2

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USD

/to

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eVirgin PET Bottle vs RPET Pellets Food Grade

Price Difference USEC Price difference USWC Virgin PET Bottle Grade RPET food grade USEC RPET food grade USWC

Opportunities

Developments

Virgin resins

Recycled resins

Additives

Packaging

Technologies

End markets

Sorting and collection

Material standardization

Educational programs

Infrastructure

Supply chain

Price transparency

Value addition

Partnership

Collaboration

Market development

Educational programs

Incentives

How ICIS can support you to architect a sustainable future

We see many barriers to circularity in plastics & massive opportunities for those who overcome them

Support growing trade in waste

plastic & recyclate.

Trading

Manage price volatility in

immature markets.

Risk

Help source material with physical capacity data

.

Sourcing

Experts support longer term investment decisions

.

Investing

Bring the value chain together at events & forums

.

Partnering

Public & in house training on recycling

markets.

Training

Development of price transparency at ICIS

23Date

2006

Europe

R-PET

2013

US

R-PET

2019

Europe

R-PE

R-PP

• IOSCO audited pricing

• Online delivery and download

• Price history and charting

• Alerting

• Market insights

• Market-moving news