Plastic Recycling -- New "wealth": Grasp the new trend of recycling laws and plastic recycling technology

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Plastic Recycling -- New "wealth": Grasp the new trend of recycling laws and recycling technology

Plastics are everywhere, but they also create a lot of waste and emissions that need to be recycled. At present, the tightening of the Sustainable Development Goals and the introduction of new technologies are vigorously promoting the development of plastic recycling, promoting the recycling of plastic products "into treasure". In the new business opportunities, plastic industry enterprises how to effectively grasp the latest trends, a share of the pie?


Sustainability Challenges: Why do Plastics need to be cleaned up

Plastics emit about 2 billion tons of carbon dioxide equivalent (GHG) per year, or about 4% of total global carbon emissions. The European Union, a major producer and processor of plastics, accounts for 9% of global emissions. Greenhouse gas emissions permeate the entire plastic value chain, and only 10% of plastic is recycled once it is discarded. At the same time, demand for plastics is expected to remain strong, and so is plastic waste.

The key to addressing the sustainability challenge of plastics is the three Rs: Reduce, Reuse and Recycle. Our focus this time is on the third R -- plastic recycling. Recycling can reduce greenhouse gas emissions by extending the life cycle of plastics and choosing less energy-intensive reprocessing over making plastics from raw materials. However, it is important to note that recycling plastic is not easy, regardless of the material used.


Plastic regulation: Target setting is an effective way to promote plastic recycling

Since the 1990s, mandatory regulations on plastic waste disposal have been introduced worldwide, especially in Europe. Currently, about 70% of plastic waste is covered by the EU sustainable regulation, which covers a variety of plastic application scenarios such as consumer and transport goods packaging, textiles and electronic products. But it also means that 30 per cent of plastic waste in Europe is still not regulated, mainly in the construction, automotive, manufacturing and agricultural sectors. As a result, the world is still a long way from a fully circular economy, and there are many gaps in the current regulatory framework.

In 2020, 24% of plastic waste in the EU region was recycled, with the rest going to landfill or incineration. In the case of plastic packaging, the rate of recycling is even higher, at 30 per cent, as almost all of the EU's current plastic regulations focus on packaging. However, the 30% recycling rate is still a long way from the target set out in the Packaging and Packaging Waste Directive, which was introduced in 2018. The target is 50 per cent by 2025 and 55 per cent by 2030.



Many factors restrict the recovery rate, which is closely related to the deficiencies of the entire value chain.


Recycling targets are out of date: those set decades ago focused almost exclusively on household rigid plastics and films used in industrial operations;

Low oil prices have driven the use of cheap plastic materials: in the absence of recycling targets, companies prefer lower cost but less sustainable raw plastics;

The infrastructure for waste sorting is not well developed (for example, for lightweight plastics or drink packaging) : in southern and eastern European countries in particular, households simply throw away most plastic and other waste in a disorderly manner;

Consumer awareness still needs to be improved: consumer constraints and guidance are insufficient to properly dispose of plastic waste;

The profit margin of plastic collection and sorting is weak: the profit margin of collection and sorting is only 2-5%, mainly because the collection is usually handled by general waste suppliers;

Limited technology: In the past, waste sorting has not attracted significant technology investment due to limited applicability and demand for complex solutions;

Recycling technology to be upgraded: Recycling technology used to be limited to the mechanical recovery of rigid plastics and basic monolayer films, thus covering only a small fraction of the plastics with recycling potential in Europe.

Despite these challenges and the growing pressure to reduce carbon, the EU's plastics regulations are expected to give a strong impetus to the recycling of plastic materials in the future. For example, in addition to the Packaging and Packaging Waste Directive, the Single-Use Plastics Directive sets a collection rate of 90% for plastic bottles by 2030. Minimum plastic recycling targets in various application scenarios are in the pipeline, which will bring challenges but also development opportunities for market stakeholders.


What's new: New regulations and technology are driving the growth of plastic recycling

The increase in the number and strengthening of regulations has contributed to the new development of plastic recycling in the EU. With the increasing number of professional plastic packaging collection enterprises, the standardization of collection and classification has become a key expression. Currently, seven European countries (namely, Poland, Romania, Portugal, Hungary, Austria, Greece and the United Kingdom) have committed to introduce settlement return schemes (DRSs) for plastic bottles by 2025. The new DRS system, which builds on those already in place in EU countries such as Germany and Sweden, will boost PET plastic recycling rates to more than 80%. In addition, the implementation of more stringent plastic separation and collection across the EU, coupled with the development of recycling targets for most polymers, will further drive more quality plastic raw materials to be recycled


But the real driving force behind the new momentum in plastic recycling may be the development of a range of innovative on recycling technologies.

In terms of sorting technology, the emergence of new digital sorting technology has greatly improved the output and quality of recyclables. For example, process automation drives recycling volumes, while new sorting capabilities enable sorting by color or polymer, enabling a closed-loop system. These technologies have the potential to increase the current rate of sorting by 10-20%, thus reducing losses, improving the quality of sorting and recycling, and thus increasing the price of recycling. These systems require changes and significant investments by brand and sorters in the industry chain. The current technology is at a high level of maturity and has the potential to disrupt the industry.

In terms of recycling technology, there are two kinds of technology, plastic recycling machines and plastic chemical recycling. Machinery recycling technology has been quite mature, and has become the mainstream technology of current waste plastic recycling system. At the same time, the development of chemical technology is still in the emerging stage and has great prospects for development. Both recycling technologies will benefit from advances in sorting and complement each other.


The new 'wealth' : Increased volume and quality of recyclable plastics will boost the price of recycled products

Eu recycling targets are boosting recycling volumes, but plastic processing capacity is struggling to keep up. To meet the EU recycling target of 55% of plastic packaging, recycling must increase from around 6 million tonnes in 2020 to around 11 million tonnes in 2030 (almost double). Recycling of other plastics will need to triple from about 1 million tonnes to about 3 million tonnes. This means that the respective growth rates need to be maintained at 7 and 10 per cent, while the overall annual growth rate of plastic recycling needs to be 8 per cent. To handle the increased amount of recycled plastic, and to account for process losses, recycling capacity would need to increase by at least 150 percent

The price of virgin plastics is directly related to the price of oil, the underlying material. Recycled plastic, though made from plastic waste and not directly related to the price of oil that trades that day, trades at a slight premium to the price of raw plastic, a sustainable premium. With increased awareness of sustainability and new technologies improving the quality of recycled products, the price gap between raw plastics and recycled is expected to continue to widen, leading to greater profits for manufacturers.


Seize the opportunity: Act now to capture recyclable plastic raw materials and recycled product profits



Recycling of waste plastics is a key measure to reduce the production of raw plastics, control the landfill and incineration of plastic waste, and further reduce the emission of industrial waste gas from waste combustion. Currently, only about 10 per cent of plastic waste is recycled globally, mainly due to weak consumer awareness, limited regulation outside the EU and poor collection and sorting infrastructure.

With the gradual improvement of market regulations and technological innovation, plastic recyclables will soon become the new "wealth", with strong potential for scale growth and high profits. We suggest that relevant enterprises in the upstream and downstream of the plastic industry chain take effective actions to seize the new opportunities, such as optimizing the recycling management system, investing in advanced technology, and actively looking for industrial chain partners.


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