Plastic and rubber industry urges recyclables to be used as strategic raw materials

Recycled plastics should be recognized "as a strategic, sustainable raw material" that creates a more resilient economy, not "a temporary solution when virgin materials become expensive", BIR Plastics Division President Henk Alssema of Netherlands-based Inviplast BV told delegates at the world organisation's first joint meeting between its Plastics Division and its Tyres & Rubber Committee.

"If customers only buy recycled material when the virgin prices are high, we create a very dangerous situation for our industry," he said in Gothenburg, Sweden, on June 3.

Decreased oil supply caused the use of recycled plastics to increase 

In recent months, the global plastics recycling sector has experienced a turnaround, with increased demand and stronger order books, following a challenging couple of years of low prices, an abundance of cheap virgin material, and plant closures. The change in market conditions is owed to the sharp increase in virgin material prices caused by the conflict in the Middle East, which in turn has driven demand for recycled materials.

Now, recycled plastics are increasingly seen as a valuable and strategic part of raw material supply chains. But if buyers don't continue to use this material when the markets eventually stabilize, they could lose this supply option, as seen with the recent plant closures. "Our message is very simple today: use it or lose it," Alssema said.

"If we want enough recycling capacity in the future, we need stable demand today," he continued. "Recyclers need long-term commitments to justify investments in new equipment, innovation, quality systems, and traceability." Policy support is also important. "Without strong and stable obligations, demand for recycled material will continue to depend on oil prices and geopolitical events," he noted. "With clear policies, companies can invest with confidence and build for the future."

Minimal recycled content mandates increase the use of secondary materials 

According to BIR Tyres & Rubber Committee Chairman Max Craipeau of Hong Kong-based Greencore Resources, the market upturn for recycled rubber mirrors that of recycled plastics, and for the same reasons. Both sectors face similar issues, and both benefit from positioning as a "strategic" material. If brands rely solely on primary material, said Craipeau, "they're definitely in trouble when you have geopolitical issues happening". A strong advocate of minimum recycled content mandates, he said these measures must be in place to create demand.

Turning to South-East Asia, where he operates a PET recycling plant in Indonesia, Craipeau said the issues in the Strait of Hormuz have reduced the typical oil inflows into the market, especially to Asia, by around 20 percent. This has benefited secondary materials, with recyclate prices increasing 15-20 percent and returning to levels that made operations sustainable.

But he warned that, while the current situation means customers are "coming to us to beg for more material", they "tend to have a short memory". He reminded the audience that, during the COVID pandemic, there was much talk about securing more recycled material, but after a couple of years, "that momentum disappeared".

But security of supply is important for brands, and the current Middle East crisis is proving that point, Craipeau argued. "The Strait of Hormuz might just be the tip of the iceberg if a conflict between the U.S. and China arises, for example, in the future," he warned. "So, brands should stop having short memories and secure long-term contracts if they want to keep their products on the shelves."

Legislation can be a powerful tool to increase recycled plastic rates

Surendra Patawari, Chairman of Gemini Corporation in Belgium, agreed that now is the time to take advantage of the current situation and persuade buyers to enter long-term contracts and memorandums of understanding.

He urged the industry to engage with and educate its customers on the need to use recycled materials, but he warned that they will always have other demands on their time, and that the oil industry has a powerful lobby.

Asked by Alssema whether policy-makers view recycled material as "strategic", Executive Director of the PET Recycling Corp. of California Sally Houghton said recycling is used as a "salve" to address the anti-plastic sentiment of voters in California, and she said she is sometimes "flabbergasted" in her conversations with policy-makers about how little they know or understand about the plastics recycling industry.

California does have positive policy measures in place, which include a requirement to have 50 percent recycled content in bottles by 2030 — and this goal supports demand for recyclate. 

A similar measure is not in place for packaging, which means packaging producers abandoned recyclate for cheaper virgin material and have only recently started coming back to recycled material. But an extended producer responsibility bill has now been passed in the state, requiring 100 percent recyclability of packaging, design for recycling, and a 65 percent recycling rate — measures that give recyclers confidence.

Closed-loop recycling solutions need to increase

As such, policy measures increasingly come into play, the need for more closed-loop recycling solutions should increase. Guest speaker Kristin Nilsson, CEO of Reelab in Sweden, explained that the ‘cap to cap' bottles project it is pursuing with Dagab aims to achieve food-grade approval and shows it is possible to close the loop with this material. "It will take a couple of years, and it takes a lot of testing, but I'm more than positive that if there should be a quality and a grade on the market, this is it," she said. Achieving circular goals needs collaboration and transparency, she added, as they cannot be done alone.

Kay Riksfjord, downstream manager of Revac AS in Norway, agreed that more openness is needed along the value chain for circularity. Despite managing a huge volume of waste fridges, his company is never asked for input on the design of new fridges, and producers are quite secretive. But as Houghton suggested, progress requires these connections to be made: "Maybe not in my lifetime, but the change has to be that everything we design — [from] shoes to fridges to bottles to packaging — has to be with end-of-life in mind. I think that's the area that we need to start moving towards."