Plastics Recycling Impact on the United States, Western Europe and - PowerPoint PPT Presentation

Plastics Recycling Impact on the United States, Western Europe and GCC Polymer Markets David Lines, Principal March 2019

Agenda 1 Introduction 2 United States 3 Western Europe 4 GCC 5 Transitioning Towards a Circular Economy For further detailed information please see the Nexant report (December 2018) Plastics Recycling and the Circular Economy: Impact on the United States and West European Polymer Markets Plastics Recycling Impact on the US, WE & GCC Polymer Markets March 2019 1

Introduction

Introduction Plastics Recycling Impact on Polymer Markets  Virgin and recycled polyethylene terephthalate (PET), low-density polyethylene (LDPE), linear low-density polyethylene (LLDPE), high density polyethylene (HDPE), polypropylene (PP) and polyvinyl chloride (PVC) resins in the United States, West Europe & GCC  In each region, how recycling value chains are structured along with the legislative drivers and activities of the industry participants. Plastics Recycling Impact on the US, WE & GCC Polymer Markets March 2019 3

Introduction (Cont.) 30 Recyclate Penetration of PET, Polyolefins and PVC Resin Demand in the US, West Europe & GCC 25  Despite the intentions and movements Percentage (%) penetration towards a circular economy, there are 20 structural differences between the United States, West Europe and GCC that result in a divergence of recycling rates and use of 15 recycled plastic materials for the conversion of packaging and durable goods. These, in 10 turn, will have different long-term effects on the dynamics of polymer markets. 5 0 2007 2011 2015 2019 2023 2027 2031 2035 WE US GCC Plastics Recycling Impact on the US, WE & GCC Polymer Markets March 2019 4

United States

United States Despite government and local initiatives to Polyolefins, PVC and PET Demand by End-Use in the United States, 2017 improve plastic recycling, there are numerous factors hindering growth in plastic recycling in (29.4 million tons) the United States, including: Others  The lack of household collection programs 16% Wire & Film and material separation Cable 26%  Strong competition with virgin plastics. 1%  Volatility in the value of scrap or recycled Pipe & Conduit plastic. 12%  Limited access to capital to invest in Profiles infrastructure and processing technologies. 2%  Consumer education and behaviour. Fibre  High transportation costs. Blow 8% Moulding 20% Injection Moulding 15% Plastics Recycling Impact on the US, WE & GCC Polymer Markets March 2019 6

United States (Cont.) Government policy and regulations are the Availability of Recycling Programs by Region primary drivers for recycling in the United States, but recycling laws are mandated by state and local government because there are no recycling laws at the Federal level . This leads to inconsistent legislation across the country as state recycling laws invariably address local issues, which are often affected by key factors such as:  Availability of funding for recycling programs.  Public awareness and attitude towards the problem of waste disposal.  The economics and markets for recycled plastics. Source: Sustainable Packaging Coalition Plastics Recycling Impact on the US, WE & GCC Polymer Markets March 2019 7

United States (Cont.) California has the most stringent recycling States with Mandatory Recycling Legislations legislation that has taken effect over the past decades, including:  Beverage Container Recycling and Litter Reduction Act.  Rigid Plastic Packaging Container Law.  Expanding Polystyrene Loose-Fill Packaging Law.  At-Store Recycling Law.  Plastic Carryout Bag Ban.  Recycled-Content Trash Bag Program. In June 2009, the United States Environmental Protection Agency (EPA) introduced the Sustainable Materials Management (SMM) Program. Source: Northeast Recycling Council and Association of Plastic Recyclers Plastics Recycling Impact on the US, WE & GCC Polymer Markets March 2019 8

United States (Cont.) Industry associations furthering recycling Due to increasing consumer pressure and initiatives: more stringent regulations, many companies  NextWave Plastics have pledged to increase their use of recycled  The American Chemistry Council (ACC) materials in packaging applications and to make their packaging more easily recyclable  The Flexible Film Recycling Group (FFRG) or compostable, including:  WRAP Campaign  The Recycling Partnership  Closed Loop Partners  The Association of Plastic Recyclers (APR)  National Association for PET Container Resources (NAPCOR)  The National Recycling Coalition (NRC)  The Sustainable Packaging Coalition (SPC)  The Vinyl Institute  The Carpet America Recovery Effort (CARE)  Many more…………….. Plastics Recycling Impact on the US, WE & GCC Polymer Markets March 2019 9

Western Europe

Western Europe  The latest EU statistics indicate that the EU Polyolefins, PVC and PET Demand by End-Use in Western Europe, 2017 28 countries as well as Norway (NO) and Switzerland (CH) collected over 27.1 million (29 million tons) tons of postconsumer plastic waste, Others including 16 million tons of plastic packaging Wire & 11% Cable waste. Pipe & Film 2%  Around 5.3 million tons of plastic waste was Conduit 28% recycled locally and over 3.1 million tons 5% exported outside the EU for recycling Profiles 6% purposes to principally China* as well as Thailand, Vietnam and Malaysia. Fibre  The main exporters were France, Germany, 8% Italy and UK. Blow Injection Moulding Moulding 20% 20% Plastics Recycling Impact on the US, WE & GCC Polymer Markets March 2019 11

Western Europe (Cont.) Domestic Recovery Rates of Packaging EU roadmap with increasingly stringent Materials within the EU, 2016 recycling targets:  The EU established extended producer (millions tons per year) Plastics Recycling responsibility (EPR) schemes for the plastic Impact on Paper/Card - 92% the US, industry to improve the plastic collection rate WE & GCC and recyclability. Polymer Glass - 75% Markets  This is expected to lead to more uniform Plastic - 76% and inclusive collection schemes across Wooden EU with advanced technology. - 66%  In parallel, NGO’s awareness campaigns, Metalic - 79% consumers are becoming more demanding Steel - 81% about the environmental impact of their favourite products and accept, or even Aluminium - 65% request, the presence of recycled plastic in Other - 51% packaging.  Brand owners now view recycled resins as a 0 10 20 30 40 way to promote their green credentials and Recovered Lost hence their brand. Source: Eurostat March 2019 12

Western Europe (Cont.) Household waste collection schemes in the EU are Recovery Rates of Domestic Plastic generally set up by local authorities, meaning that Packaging Across Europe, 2016 there is no unified mechanism, which leads to a wide (thousands tons per year) variation in recovery:  Some countries, like NL, segregate all their waste Germany - 100% into separate streams, which = valuable high- UK - 58% Italy quality recyclate. - 84%  Most countries collect plastic with metal, easy France - 64% Spain - 62% segregate. Poland - 55%  The UK, IE, GR, RO & MT mix metal, plastics, Netherlands - 96% glass and paper & cardboard, which is difficult to Portugal - 50% recycle. Belgium - 99%  DK, DE, FI, IS, IT, NL, NO, PT, ES, SE & CH Hungary - 54% Austria - 100% include all kinds of plastic packaging in their Ireland - 80% collection schemes Sweden - 62%  Some local authorities in AT and the UK collect all Czechia - 72% plastic packaging while others take only rigid Denamark - 98% Norway plastic packaging. - 99%  FR and BE focus principally on rigid plastics, but Finland - 97% FR is about to incrementally expand the scope of 0 1000 2000 3000 4000 the system to comprise all plastic packaging. Recovered Lost Source: Eurostat Plastics Recycling Impact on the US, WE & GCC Polymer Markets March 2019 13

Western Europe (Cont.) European Strategy for Plastics in a Circular Economy (2018). Design for greater durability, reuse and recyclability:  By 2030, all plastic packaging is either reusable or recyclable in a cost-effective manner.  Over 50% of plastics waste generated is recycled.  High level of plastic separation during collection.  EU plastics recycling capacity is significantly extended and modernised.  Sorting and recycling capacity & demand for Source: EU Commission recycled plastic will have increased 4X by 2030.  Phase out of poorly sorted plastics and substance hampering the recycling processes.  Innovative materials and alternative feedstocks are used. Plastics Recycling Impact on the US, WE & GCC Polymer Markets March 2019 14

GCC