The demand for recycled plastic is increasing – but who will get it?
Part of a series of business columns in Danish newspaper Fyens Stiftstidende
Author: Camilla Haustrup Hermansen, Director of Business Development
As chair of the Climate Partnership for waste, water, and circular economy, and as leader in a packaging company, I had been looking forward to a uniform sorting of waste in Denmark from July this year. Unfortunately, only nine of the 98 Danish municipalities have been settled on time. 74 municipalities have been granted dispensation for the deadline, and the rest have simply announced they will not make it before deadline. Thus, it seems that I will have to arm myself with patience, even if it is difficult.
We are looking at a world in which the pressure on the Earth’s resources is increasing. According to the UN, extraction and processing of natural resources is to blame for approximately half of the global CO2 emissions and over 90% of the global biodiversity loss. The world’s resources are not sufficient for us to continue down the route we know today. We have to act.
Let’s try to fast forward to 2026 or 2027, then we will hopefully see a somewhat different picture. The extended producer responsibility has been implemented in EU, meaning that producers of packaging waste are responsible for handling of their own waste after use. All Danish municipalities have managed the collection of the various types of waste, and the necessary investments in sorting and recycling facilities have been made. We have achieved higher and better recycling rates within the largest material flows. We will see a market supported by public and private institutions and companies through active opt-ins and opt-outs. Standards and green procurement have become the norm everywhere. As consumers, we are part of new consumption models. We accept a new type of aesthetics for products, and we are proud to recycle products that are made from materials that would have otherwise been sent to incineration plants. The recycled materials match the demand in both quality, price, and volume. We are all well under way with the transition to a circular economy, and Denmark is reaping the benefits of significant CO2 reductions in the green transition. Waste will undoubtedly be in demand as raw material in the resource-efficient circular economy of the future. It’s just a matter of time. Whether it takes 2, 5, or 10 years depends on who you ask.
However, not all materials can be used again as raw material for new products. For example, it is crucial to know where a material originates from, if it is going to be used in new packaging for food. Let me come with a concrete example. In Plus Pack, we produce packaging solution in different materials, but there is only one type of plastic that we are allowed to use in recycled form in our products. It is a plastic type called rPET, which originates from the plastic bottles in deposit and return systems. rPET is an abbreviation for recycled PET. The return system ensures a controlled flow of materials, which provides the necessary traceability according to EU Regulation No 10/2011 on plastic materials and articles intended for contact with food.
However, it is far from all plastic from bottles that ends up in products for the food industry. Data show that in 2018, 24% of the recycled plastic from bottles was used for fibres required by the fashion and textile industries and used for clothing and car mats. That is, products that are not intended for food contact. It is far from being unproblematic at a time when consumers are pushing for large brands to increase the proportion of recycled plastics in their products. In addition, the infrastructure to collect, sort, and recycle plastics in qualities and quantities that match market requirements in different industries is still far from being settled. At the same time, the increase in the consumption of recycled plastics is expected to exceed the consumption of plastic bottles. Therefore, there are many good reasons as to why we should ensure efficient collection, sorting, and recycling of packaging with a focus on high quality. Meanwhile, we will probably also need to discuss whether all industries should have equal access to the valuable plastic derived from bottles. It is a difficult and dilemmatic discussion that has not really been started yet.
As chair of the Climate Partnership, I can only be thrilled when an increased number of companies across industries demand recycled materials. The Climate Partnership estimates that 7-9 million tons of CO2 can be saved in 2030 by transitioning into a circular economy in Denmark. Out of those, approximately 3 million tons of CO2 can be reduced by increasing the use of recycled materials. Increased use of recycled plastic contains a reduction potential of approximately 0.5 million tons of CO2. Furthermore, by avoiding the incineration of Danish plastic waste, a reduction potential of approximately 1 million tons of CO2 is estimated. Thus, higher and better recycling is effective on several fronts.
As director in Plus Pack, however, I am left with a business concern. The prospects of a well-functioning market for recycled plastics for food products are distant, if Plus Pack and other small and medium-sized companies are going to compete with some of the world’s largest companies, such as IKEA, H&M, and Volvo, for the pure rPET to be used in our products. In addition, the capacity of the plastics recycling industry has only seen limited growth since 2014.
Through Plus Pack’s active participation in innovative value chain projects both nationally and internationally, I know that this is a highly topical issue. I also know that the discussion about a priority approach to the recycled materials is certainly not one in which actors across industries find it easy to take part in. However, that does not make the discussion less relevant. If we are to achieve the goals of the national climate objectives and strengthen the green transition of Danish business towards 2030, then we all need to get moving – in the public sector, in companies, as consumers and as consumers.