Paul Mayhew, MBA Polymers UK General Manager and President of EuRIC’s Plastic Recycling Branch (EPRB), supports EuRIC in the fight to recover the plastics recycling industry following the devastating impact COVID-19.
Paul Mayhew said:
“The cost structure and the carbon footprint of virgin and recycled polymers is completely different, yet they compete on price stresses.”
Oil prices have plummeted, resulting in a vast decline of virgin pricing. As a manufacturer of recycled polymer grades, MBA Polymers UK’s pricing is not directly reflected by oil prices, which is a major factor enabling plastics recycling companies to provide stable pricing. This prevents customers from the worries of the volatile price fluctuations that so often impact the virgin market. However, this crash in crude oil pricing, alongside a reduced demand for recycled plastics, could jeopardise the viability of plastics recyclers across Europe.
Should this situation continue, it could risk the objectives set out in the EU Green Deal and the recently launched New Circular Economy Action Plan, which mapped out a scale-up in European recycling capacity.
The only positive development relates to food-grade r-PET, which, thanks to recycled content targets set by the Single-Use Plastics Directive, has weathered the storm with stable demand and price. This is completely de-correlated from plummeting oil and virgin prices, since brand-owners are gearing up for the 2025 and 2030 targets in beverage bottles. If legislative measures were now put in place to support other sectors in the plastics recycling industry, this would help support and encourage growth through a circular economy.
The two-tier market witnessed in the current crisis, where plastics used in applications not subject to binding sustainability targets, sees their prices driven by short-term cost savings offered by the crash of oil values. This, versus plastics used in applications benefitting from sustainability targets, whose price-setting follows a positive trend regardless of the crisis, is the ultimate proof of the need to set targets of incorporation of recycled materials in new products, emphasised Sophie Sicard, Vice President of the EPRB.