March 4th 2024 promises to be a landmark day in the history of the European packaging industry. On this day, the last of the trilogue negotiations around finalizing the much-discussed Packaging and Packaging Waste Regulation will be taking place. In this article, Ton Emans, President of Plastics Recyclers Europe, gives his views on why – and how – the EU should ensure the ongoing protection of the European plastics recycling industry in this context.
Solving the challenge of plastic pollution in Europe cannot be achieved without a healthy plastics recycling value chain. Since the adoption of the Plastics Strategy in 2018, EU institutions have taken important legislative steps to advance plastic circularity on the territory.
Nonetheless, an approach that alleviates the current pressure on European recyclers will be crucial moving forward, particularly concerning the long-awaited Packaging and Packaging Waste Regulation (PPWR). It is high time for EU institutions to live up to their statements and ensure that recycling targets are met fairly.
PPWR Trilogues sparking controversy
The PPWR is set to become a game-changer for the European plastics industry. It will put in place the much-needed harmonization of recycling and plastics manufacturing practices across EU Member States, bringing in investments, contributing to advancing plastics circularity and safeguarding the EU Green Deal’s environmental objectives.
The latest developments in the PPWR trilogues are, however, driving away the initial optimism. Allowing post-consumer plastics from outside the EU to contribute to the targets paired with a lack of control and verification mechanisms would impact, even more, the shrinking and already threatened market.
2023 shows a downturn in the growth of the plastics recycling industry. Although the legal framework set up by the EU initially increased the demand for recycled European plastics, now EU players are clearly losing competitiveness vis-à-vis companies from third countries, whose production processes are not subject to the same standards and can, therefore, afford to sell their products much cheaper.
Indeed, in 2023 prices of recycled plastics decreased by up to 50%, while cheap imports of recycled content from outside the EU significantly increased. This is best represented in the polyethylene terephthalate (PET) industry, where low demand for EU recycled PET became blatant after the 50% increase in PET imports to the EU from 2021 to 2022, and over 60% from 2021 to 2023 for the bottle grade.
On top of this, these imports are self-declared as recycled content, with no measures to verify the authenticity of these claims. This creates a loophole when it comes to applying EU legislation, a loophole that is used to make economic gains on the EU circular economy for plastics.
Targets and taxes that ensure recycled content pave the way forward, but control and verification mechanisms must be implemented to avoid that goods with non-verified recycled content from outside the EU are placed on the single market.
A clear example is the case of the UK, where the implementation of the Plastic Packaging Tax resulted in the rise in imports of self-declared recycled plastics, as well as finished and semi-finished products with recycled content. This tax implies that plastic packaging which does not contain a minimum of 30% recycled content is subject to a financial contribution.
Given this, the main concern regarding the discussion on PPWR is allowing to meet the EU recycled content targets with plastic waste from third countries. However, this does not align with the impact assessment of the PPWR, in which plastics’ recycled content aims to boost recycling within Europe, nor with the objectives of improving plastic waste management on the continent.
This view has been shared often by industry players, who believe that there will not be enough recycling capacity in Europe to meet the targets and therefore consider these imports necessary. These claims, however, fall short of the current situation, as the total installed recycling capacity of the European plastics recycling industry increases year-on-year, standing at 12.5 million tonnes in 2022.
Additionally, some waste streams are already clearly on the path to meeting EU targets. For instance, data from 2022 indicates that there shall be sufficient recycling capacity of rPET at the EU level to meet recycled content SUPD targets of 25% by 2025. The PET market, in fact, currently faces overcapacity, with not enough waste to be fed back to recyclers. Further investments in collection systems and the quantity of the input material will be needed to keep up to speed with the upcoming targets.
Verification mechanisms for a level-playing field
The current situation calls for EU institutions to act quickly. The legislators must create a level-playing field between domestically recycled European plastics and imported recycled plastics accounted for achieving recycled content targets. To this end, verification mechanisms of both EU and third-country imports will be needed to ensure compliance with environmental and safety standards.
Third-party audited certifications should be one of the main tools used to ensure traceability and transparency in the industry. Self-declaration of recycled content is not verified or verifiable, so certifiers must make sure that all recycled plastic packaging placed on the EU’s single market is subject to the same environmental and health standards. The latter does not only put at risk consumers’ health, but also puts into question labour rights and safety measures of workers in the plastics recycling industry in non-EU countries.
The entire value chain is under threat
The critical situation of the plastics recycling sector reflects the general context in the European Union’s industry: a worrying lack of competitiveness in a geopolitical landscape where not all countries play by the same rules. Being able to contest strong powers like China and the United States, which are consistently stepping up their game, requires going the extra mile when it comes to creating a level playing field for European industry players.
In this sense, the PPWR cannot become the “holy grail” the industry was waiting for, unless it brings the much-awaited legal certainty for the entire European plastic recycling value chain. Every kilogram of recycled content imported is a kilogram that does not get recycled in the EU, consequently meaning that EU waste will end up being incinerated or landfilled.
Plastic recyclers are the first to experience the consequences of imported recycled materials, but they will not be the only ones. European converters and virgin material producers will be impacted mid-term by imports of plastic articles with recycled content, including finished and semi-finished ones.
We must not forget that one of the main objectives of the revision of the PPWD was to make all the packaging on the EU market recyclable in an economically viable way by 2030, which will not happen if companies do not have enough legal certainty to invest.
What is more, the Plastic Strategy is about “transforming the way plastic products are designed, produced, used and recycled in the EU”, an objective that should stay on top of policymakers’ agendas.
Unless EU institutions act now, recycling targets will inevitably turn into question marks threatening the future of the European plastics recycling industry.
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