The European recycling industry will likely miss a 2025 target for recycling PET bottles unless there is a reversal of the slowing growth rate in recycling, according to a new study by ICIS.
The report conducted by ICIS on the 2018 market concluded that the PET bottle collection rate in western Europe rose from 58% in 2016 to 63% in 2018 and is projected to reach 65% in 2019.
Under the recently adopted Single-Use Plastics (SUP) directive, the industry is required to reach recovery rates of 77% by 2025 and 90% by 2029.
However, the ICIS research found that the collection volume growth rate is currently falling.
ICIS estimates that the volume of collected material will need to increase by 7% per annum if the 2029 target is to be met.
The study also found evidence that bottle-deposit schemes are working better as an incentive than market prices for recycled material.
“The rise in demand for rPET (recycled PET) began early on in 2018 as supply issues for virgin PET resin carried over from the end of 2017,” explained Helen McGeough, ICIS senior analyst, Plastics Recycling.
The drive for food-grade rPET came later in 2018, once the SUP directive was passed.
"Despite the boost in demand for rPET, collection failed to match those growth rates, reaching 2.1 million tonnes in 2018 - just 2.4% growth on 2017 volumes,” McGeough noted.
According to the industry analyst, the reclamation industry increased rPET capacity by 17% to 1.4 million tonnes and packaging applications absorbed two-thirds of that total.
As a result of SUP, there was also an increase of 13% in food grade rPET prices, which were generally accepted as these prices sat only 7% higher (on average) than virgin PET prices.
“However, this has changed considerably in 2019 with premiums of over 30% on average, peaking at near 50% so far this year,” McGeough added.
Looking ahead, the study found that collection volumes are projected to grow by less than 4% per annum over 2019-2020.
“If this growth rate is sustained in the longer term, the SUP directive recovery targets will not be met,” the research added.
The top seven highest collection rates in 2018 were found in countries with a deposit return scheme (DRS) in place for PET bottle collection, perhaps evidence that such systems are what is needed to produce the outcomes required in terms of quantity and quality improvements.
Regulation is seen as the most effective way to drive investment in recycling -- but agreeing who pays within the supply chain is an argument that will run for some time.