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The recently-adopted revision of the EU Waste Shipment Regulation prohibits the export of plastic waste to non-OECD countries in the short term. This measure puts the market for the sorting, collection and recycling of Europe’s plastic packaging at risk of collapse.

Although the new regulation provides for a transition period over a couple of years, exports of plastic waste to non-OECD countries will ultimately be banned, requiring European industry to assume responsibility for the handling and recycling of such waste. This development marks a crucial step towards a circular economy but also highlights the current gaps in terms of recycling capacity in Europe, creating worrying uncertainty in the European recycling market. Processing capabilities can only develop if recyclers manage to sell the recycled material; the demand for recycled material is still far too low, however, and might even have a tendency to shrink.

Demand for plastic has plummeted owing to the unfavourable economic climate, leaving plastic producers to face significant overcapacity. This has led to a substantial fall in the price of virgin plastic on the spot market, with a noticeable difference of several hundred Euros compared to contract prices.

For transparent film grades, the market cost of virgin plastics is currently lower than that of recycled plastic, making the disposal of recyclers’ stocks difficult. Owing to persistently high costs of energy and labour as well as lower demand, recyclers’ margins are still very low or even at zero.

For companies wishing to incorporate a recycled content into their packaging, the difference in cost with virgin materials is not the only element to be taken into consideration: investments are sometimes necessary to adapt packaging lines and the production yield of recycled material is lower than that of virgin material (longer start-up time, slower production speed, more falls in production), which makes recycled plastic less and less attractive even at a lower price.

Associated with the unstable geopolitical situation in the Red Sea, these conditions are likely to lead to higher costs related to the collection and processing of commercial and industrial plastic packaging waste, which could reduce the incentive for selective collection of this material. In addition, it may become increasingly difficult for recycled material to find suitable outlets.

The EU Packaging and Packaging Waste Regulation, which is still under discussion, provides for the mandatory integration of recycled content but its impact on companies’ purchasing behaviour remains limited. Approval of the regulation’s text remains uncertain; if it is accepted in its current form, the targets are to be achieved as of 2030. In the short term, the revised EU Waste Shipment Regulation will significantly limit recycling destinations for plastic packaging waste outside the EU; in some countries, including Belgium, 60% of commercial and industrial packaging waste is still recycled beyond the EU.

Faced with these challenges, a co-ordinated approach to polices at EU level is needed. A more effective alignment of the two EU regulations would be more than welcome to ensure a smooth transition in the plastic waste recycling market.

Xavier Lhoir

VALIPAC (BEL), Board Member of the BIR Plastics Committee


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