INTERVIEW: Looming EU plastics directive at forefront of recyclers' thinking: Petcore president

Some European countries could struggle to meet the EU's 2030 recycled plastic targets, Antonello Ciotti, president of Petcore Europe, a Brussels-based group representing the PET value chain, said in an interview in which he discussed the main issues facing the recycled PET market ahead of the annual Petcore conference.

Impact of the single-use plastics directive

The single-use plastics directive being implemented by the European Union states that by 2025, 25% of plastic material in PET bottles must be of recycled origin.

"This target makes sense," Ciotti told S&P Global Commodity Insights, pointing to Eunomia data that states as of 2020 the average collection rates of PET bottles in Europe allows to feed up to around 23% of recycled material back into future PET bottles. Forecasting forward to 2025, Ciotti believes that Europe should be able to cope with the goals set out in the directive.

However, going forward to later goals within the single-use plastics directive, such as 30% of plastic in PET bottles should be made up of recycled material in 2030, Ciotti said some former Eastern European countries will struggle. He attributed this not to the capacity of recyclers able to produce recycled PET products, but to lower collection rates in those countries.

Ciotti said the best route to combat collection rate issues is deposit schemes for recycling, which are already in place in some places like Germany, being implemented across Europe.

Ciotti said "the way societies are organized" is a key point to implementation. He pointed to an inherent issue with deposit schemes, namely, the need for dedicated space for the deposit areas within shops. The "population of countries such as Italy and Spain rely more heavily on small shops to purchase their groceries," Ciotti said, which wouldn't have the space and funds to cope with the deposit system. On the other hand, countries such as the UK and Germany have "larger retail chains that would be able to provide the space and funds necessary to commit to the deposit system," Ciotti said.

Ciotti also said he believed the implementation of recycling policies within Europe is more top-down rather than being generated by the masses. He said during the current economic climate, people are more concerned about the price of the bottle they are purchasing, rather than if it is environmentally sustainable. Ultimately, the "final consumer cares about recycling content but does not want to pay more for it."

Imports interact with EU policy, sustainability desires

Europe's growing focus on sustainability, coupled with increasing prices for recycled PET during the first half of 2022, saw many imports heading to Europe, Ciotti said.

With mandatory recycling content policies a rarity outside Europe, flow was opened globally into Europe. The key difficulty facing imports into Europe are certification issues, as the import material may not be up to the standard required by European consumers, Ciotti said.

He also said the question posed about imports at the moment was how to offset the carbon footprint of global travel with the environmental benefits of recycled PET.

"The pollution from transport is much higher than production of plastics in Europe," Ciotti said.

Moving forward, Ciotti hopes that European policy explicitly dictates the input into recycled material should be from a European source rather than any source.

Environmentally friendly policy drives R-PET prices

The price rises seen for recycled PET in the first half of 2022 were due to decisions made by brand owners in order to become more environmentally friendly, Ciotti said. This move inflated demand for R-PET, raising the price far above the price paid for virgin PET.

Platts, part of S&P Global Commodity Insights, assessed recycled PET clear flake at Eur2,150/mt FD NWE June 30, with prices falling to Eur1,500/mt FD NWE by Dec. 30.

Virgin PET was assessed at Eur1,730/mt FD NWE July 6, with values falling to Eur1,280/mt by Jan. 4.

While this price trend can be partly attributed to normal R-PET seasonal demand, Ciotti said "recession in September 2022 made people less concerned about recycling," bringing a drop in demand for R-PET products as consumers focused on affording everyday items.

Also, several big brands reversed their goals of high recycled content in their products, leading to reduced R-PET demand.

"All brand owners were pushing to go over the 50% minimum target required by 2025," Ciotti said. "When they realized the price delta between the virgin and recycled was too wide, they reduced their targets. Some brands were aiming for 100% recycled content."

Prices are not expected to bounce back to mid-2022 levels, Ciotti said. But this depends on "what the consumers are ready to pay for the extra cost for recycled content."

The greenwashing issue

Ciotti highlighted a key issue, greenwashing, he thought was facing the recycled plastics industry. He describes greenwashing as when "someone pretends to improve the sustainability of their product but is not."

Ciotti uses an example of a "PET half liter bottle being replaced with a carton box, which takes more energy to recycle." He said the European Commission indicated that 42 percent of claims of sustainability by textile companies were exaggerated, false or deceptive. He added he hoped more would be done to tackle greenwashing.

The annual Petcore conference takes place in Brussels Feb. 1-2.