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Why the EU needs to be ambitious on mandatory recycled content targets

By now, you have probably heard a lot of debate around the circular economy and plastics recycling. We find ourselves too frequently reading about controversial ideas of how recycling does not work, how the circular economy is a fantasy or even how mandatory recycled content targets for plastics are not going to lead us to a circular economy. These statements help to keep the status quo for some industry players, make consumers even more confused and frustrated with plastic use than they already are, and, of course, make for a catchy headline with little substantiation.

Packaging waste reforms are triggering strong views

At the moment, the much-anticipated EU proposal on packaging waste is triggering strong views. We believe that the mandatory recycled content targets for plastics need to be ambitious to create the necessary incentives to move the market into the right direction else we risk derailing the goals of the Green Deal and the Circular Economy Action Plan. One of the arguments against the adoption of mandatory targets is that there is not enough recycled content on the market. But the targets are meant to do just that – create the necessary incentives for more volumes to be available in the market. It is also believed that the Commission will keep the option open to review the targets in case volumes on the market are not high enough so then the argument against the targets becomes a red herring.

Plastic Energy is strongly supportive of a comprehensive policy framework to solve the issue of plastic waste pollution. We believe that recycling plays an important role, however, a mix of both upstream and downstream measures needs to be implemented in tandem with reduction, re-use, strong EPR schemes and ambitious mandatory recycled content targets in packaging but also in other sectors that heavily rely on plastic use.

We also need a level playing field for all recycling technologies to play their part in reaching these goals. However, circularity should not come at any cost. The right combination of mechanical and chemical recycling together with innovation and the expansion of recycling infrastructure should be at the heart of reaching these goals. We also need to get much better at collecting, sorting and ensuring higher quantities of plastic waste reach recyclers to reverse the current trends.

In 2020, in Europe (the EU plus Norway, Switzerland and the UK) only 35% of all post-consumer plastic waste was sent to recycling (including plastic waste exports) while the rest of 65% was sent to landfill (23%) and incineration with energy recovery (42%) suggests data from the latest Plastics the Facts report compiled by Plastics Europe. Bad news does not end here. A material flow analysis suggests as much as 84% of all plastics in Europe end up in landfill (30%) and incineration with energy recovery (54%). This has a net impact of 38 million tonnes of CO2eq emissions a year which is the same as released by 15 million passenger cars in a year. Every year. This is only a snapshot of the emissions impact from plastics in Europe, as it only captures end-of-life management and not the entire lifecycle of plastics production and use.

More bad news or a silver lining?

The UNEP Emissions Gap report suggests that with current policies we are on a course for a 2.8°C temperature increase by the end of the century dangerously overshooting the Paris Agreement goal of 1.5°C. We are currently at 1.1°C above pre-industrial levels and we already clearly see the devastating effects and economic impacts of climate change. Leaving fossil fuels behind in all industrial sectors and dramatically reducing greenhouse gas emissions is not up for debate but the challenge is the speed with which we need to accomplish this. So what is holding us back? On plastics, it is a patchy framework of regulations that has sent far too many plastics into landfill, incineration and plastic waste exports with little traceability. It has also created a lot of downcycling with little environmental benefit. The result is that we are heavily reliant on virgin resources to produce new plastics. In fact, instead of reducing virgin use we are now reverting to the same level as 2018 after very minimal reductions were achieved in previous years.

Although the uptake of recycled content is on the rise globally by 4.3% in 2021 compared to the previous year, any hope of decoupling is far away. Decoupling production from virgin sources is important as it helps us achieve circularity and it also significantly reduces the net emission impact from the entire lifecycle of plastics. This is where regulation has an important part to play.

The link between climate change, emissions and plastics is a complicated one that we cannot fully explore here. One area of this is the high risk of stranded assets from global industries built on the use of fossil fuels. The silver lining is that, when it comes to producing plastics, that risk is much smaller than compared to other industrial sectors. Chemical recycling allows us to use the existing infrastructure for plastics production using recycled feedstocks and put that back into circulation achieving closed loop recycling for the share of plastic waste that cannot be mechanically recycled. Making best use of all recycling technologies should be a no-brainer.

Consensus is emerging on principles for chemical recycling. The Consumer Goods Forum, WWF and WRAP have already put forward valuable position papers. We support these efforts and encourage others to coalesce around principles for an environmentally sound deployment of chemical recycling technologies. We need more transparency on process impacts from all players in the industry. We also need to recognise that grid decarbonisation, scale-up process efficiencies and cracker electrification will all contribute to lowering the environmental impacts. These have already been demonstrated to be much lower than current practices such as incineration which is the current end-of life-management option for mixed post-consumer plastics.

We should also ensure we make the right comparisons when it comes to life cycle analyses and not compare apples with oranges. When it comes to recycling mixed post-consumer plastics and achieving food-grade quality output, which is one of the missing links for plastics circularity, chemical recycling is the best option we have. Companies like ours have already commercialised a diverse range of food-grade plastic packaging from major brands using recycled content from our recycling process.

Technology scale-up in Europe at the heart of circularity and decarbonisation  

More recently, together with other innovative front runners we founded and launched the Cleantech Scale-up Coalition backed by Bill Gates’ Breakthrough Energy Fund. We will be working as part of this initiative to create a future where the new generation of industrial players thrive and are supported by regulatory incentives to help make the transition to a sustainable future a reality. This is only one of the many partnerships where we are working closely with a broad range of stakeholders to change the landscape on the circular economy and decarbonisation. We are award winning market leaders in chemical recycling with a growing portfolio of projects in Europe and globally. Sustainability is not just a buzzword for us, our goal is to generate high volumes of recycled plastics with the lowest environmental footprint and close the gap in the market between demand and supply of recycled plastics.  But we cannot change the landscape on plastics by ourselves. Collaboration across the supply chain together with an ambitious policy framework are paramount.

Solving the plastic waste crisis is not something that can be delivered through one policy instrument or one technology in isolation. A combination of complementary policy instruments and technologies is needed to provide strong incentives and create the conditions for the establishment of a secondary materials market and a truly circular plastics economy. Until then, delaying the adoption of mandatory recycled content targets for plastic packaging is not an option.

Authored by:

Adela Putinelu

Head of Policy

Carlos Monreal

Founder and CEO