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On the plastic recycling industry in Europe

Plastics recycling in the EU is going to expand remarkably in the upcoming few years, especially in response to increased force from regulators and consumers. However, ambitions towards growing sustainability efforts have made slight progress among the current recyclers in Europe.


Interviews by McKinsey & Co with actors within the European recycling industry indicate that plastics recycling is not flourishing as an industry; and a lot of plastic recyclers struggle to overcome a need for product standardization, inefficient sorting processes, and volatile customer demand. These challenges have been intensified due to the COVID-19 pandemic worldwide.


In the year 2017, the EU set a target for recycling at least 50% of collected plastic packaging by the end of the year 2025 and 55% by the year 2030. Brand owners throughout various industries have pledged to boost the recycling and usage of recycled plastics


While most media attention sets focus on post-consumer plastics waste, only 16% of companies using recyclates as input for their production depend mainly on municipal solid waste (MSW). Research by Mckinsey & Co show that the main source of recyclable plastics used in production among 60% of European companies was from post-industrial sources. Primarily from the automotive, agricultural and industrial packaging industries as well as from construction. Often, the supply and collection of plastic raw materials depend on self-negotiated agreements or existing relationships.


Companies using recycled plastic as input in their production have found that that the circulation from MSW to the industry is not working well yet. There are multiple reasons that could help elaborate why this might be the case, including lower feedstock quality or high rate of contamination compared to post-industrial plastic.


A future for chemical recycling?


In the past few years, we have seen an increase in interest in plastic recycling with the help of chemical technologies that break plastic polymers down to either a mix of cracked liquid polymers or into their building blocks. These can then be processed in refining or in petrochemical plants to produce new plastic resins or other products such as fuels.

It is seen that chemical recycling can be useful for low-quality waste that cannot be processed mechanically.


Challenges for the European recycling industry


Few companies have shown hopeful growth over the past 5 years, nearly 50% of the surveyed companies stated plastic business had grown at a rate below GDP, become inactive or shrunk according to McKinsey & Co.


Creating significant change needs investment in the industry by both the recyclers themselves and other entities. This raises the question: “How does one grow an overall plastic business?” When companies were questioned about factors that could improve the attractiveness of the plastic recycling business, mostly say government incentives, such as mandates for recycled plastic, a change in public mindset to surge the acceptance of recycled material and the removal of any disgrace associated with waste as a raw material.


More essential however, is to control the pricing of virgin plastics, for example through taxes imposed on virgin plastic materials or subsidies for the use of recyclates.


Sources: www.mckinsey.com/industries/chemicals/our-insights/the-european-recycling-landscape-the-quiet-before-the-storm

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