In a statement released today, UNESDA Soft Drinks Europe says that high rPET costs could prevent small to medium-sized enterprises (SMEs) from meeting legislative requirements on recycled content and calls on the European Commission to introduce a priority access mechanism or right of first refusal for the beverage industry in the upcoming revision of the Packaging and Packaging Waste Directive (PPWD).

According to UNESDA, many SMEs cannot afford the cost of recycled materials, with rPET reportedly at a 30%-plus premium over virgin PET in Europe. With the Single-Use Packaging Directive (SUPD) requiring PET beverage bottles to contain 30% recycled content by 2030, UNESDA says that the current situation puts SMEs at particular risk of not being able to meet legislative targets.

UNESDA adds that the current system, whereby rPET prices are apparently defined by what the highest bidder is ready to pay, forces companies from the food, textile, and automotive sectors, among others, to compete against each other. The organisation claims that, while this situation may be considered beneficial by recyclers, it is unfair that businesses with recycled content targets cannot access the necessary material to comply with legal obligations.

Portuguese SME Água de Monchique suggests that the pricing situation may become more severe without intervention: “When more producers will start incorporating rPET to meet the 2025 and 2030 targets, the access to rPET will be even more limited and the situation may get worse.”

In addition, UNESDA says that current rPET pricing favours downcycling over closed-loop recycling. As UNESDA has highlighted in a previous statement released with the European Fruit Juice Association (AIJN) and Natural Mineral Waters Europe (NMWE), clothes and toys made from recycled PET bottles are rarely recycled back into the same product after use, and often end up in landfill or incinerators, which constitutes downcycling.

UNESDA explains that the soft drinks sector has to meet mandatory recycled content and collection targets, comply with strict food-grade safety requirements, make considerable investments in the recyclability, collection, and recycling of their packaging, and can recycle their packaging several times in a closed-loop. However, despite these legislative requirements, the organisation says the sector has limited or no access to rPET, which is often issued from its own packaging, as opposed to other industries that do not have the same targets.

Speaking to Packaging Europe earlier this year, Nicholas Hodac, director general at UNESDA, said: “It’s not possible that virgin material is cheaper than recycled material, it needs to be the other way around. If you want to incentivize sustainability, recycled materials should be cheaper.”

Therefore, UNESDA is calling on the European Commission to introduce a priority access mechanism or right of first refusal in the upcoming revision of the EU Packaging and Packaging Waste Directive (PPWD), which it says could easily solve the problem of access for the beverage industry. This solution would reportedly mean that every producer of beverage packaging would have the option to buy the recycled material issued from the recycling packaging it put on the EU market, after adjustment for collection and recycling rates.

Jean Thibault Geerts, corporate innovation, CSR & IT director for the French intermediate-sized enterprise Laiterie de Saint Denis de l’Hôtel (LSDH), comments: “Equal access means that the distribution of recycled material should be made in due proportion to the quantities placed on the market by a given producer.”

According to UNESDA, a priority access or right of first refusal system would place all beverage producers, including SMEs, in a position to meet mandatory recycled content targets. Additionally, the organisation says it would considerably reduce the downcycling of PET bottles by promoting bottle-to-bottle recycling and incentivise all sectors, including those outside the beverage industry, to invest in the recyclability and collection of their products.

SMEs, beverage industry associations, and deposit return scheme (DRS) administrators have testified in support of UNESDA’s call for EU action.

Petra Medved Djurašinović, secretary general of the Slovenian Beverages Association, says: “Many [beverage SMEs operating in Slovenia] are currently facing a severe crisis due to the rising prices of recycled material and its general unavailability. In this context, and to support our sector’s efforts to create a closed loop for beverage bottles, a mechanism that grants better access to recycled material is crucial.”

The Super Bock Group, a Portuguese beverage company, adds: “We are convinced that such a mechanism would allow a better circularity of our packaging, with clear benefits for the environment. We are aware of the appetite of several non-food industries for the recycled material coming from beverage bottles, but the right way is to ensure the reuse of this recycled material in new beverage packaging cycles, thus avoiding downcycling.”

In Sweden, a priority access system for beverage producers was introduced several years ago via the country’s long-established DRS. Anna-Karin Fondberg, managing director at Sveriges Bryggerier/The Swedish Brewers, explains: “Thanks to this system, all beverage producers contributing to the DRS can buy a share of recycled content proportionate to the recyclable packaging they put on the market. This helps reduce the amount of food-grade material being sold to companies which are not participating in the collection of the material, and which will use our material for lower quality applications, therefore breaking our loop.

“Without this system, many of the numerous SMEs operating in our sector would not be in a position to access the recycled material they need to meet the EU recycled content targets by 2025 and 2030.”

Slovakia launched its DRS in January 2022. Lucia Morvai, director of external affairs and communications at Správca zálohového systému, the Slovak Deposit Return System (DRS) Administrator, warns: “We have some reasonable concerns regarding the risk faced by some producers not to be able to meet the obligations arising from the EU Single-Use Plastics Directive, especially when it comes to access the sufficient amount and quality of recycled material needed to produce new drink containers made with recycled PET.”

However, the Slovak DRS administrator “also committed ourselves to support closed-loop recycling and to create the conditions that will secure priority access to recycled materials to all producers,” according to Morvai.

Milan Pasmik, chairman of the board at McCarter a.s., a Slovak company producing premium soft drinks and juices, comments on the importance of the scheme: “In the new Slovak DRS system, we do have guarantees, both in the founding documents of the DRS system administrator and also in a contract with the administrator, that every producer of containers (or their importer) who is registered in the deposit return scheme and who places deposit containers on the Slovak market has the option to use its right of first refusal on the amount and quality of the material it placed on the market.

“We do believe that it is an important step towards securing the necessary amount and quality of materials needed to fulfil not just our legal requirements but also our voluntary commitments to close the loop of our packaging”.

Echoing previous calls to close the loop on PET beverage packaging, UNESDA concludes that the European Commission should act to solve the issue of access based on the testimonials and best practices put forward in its statement.