BIR Autumn 2024: A year of setbacks

Based on recycled-content pledges made in corporate boardrooms around the world, plastic recyclers earlier this decade anticipated several years of demand growth and the potential for rising secondary resin prices.

However, panelists at the Bureau of International Recycling (BIR) Plastics Division meeting, held in late October in Singapore, painted an unhappy picture involving unmet targets, disappointing demand and financial stress—especially in Europe.

Henk Alssema of Netherlands-based Vita Plastics said the year started with about 50 plastic reprocessing firms in his country.

“Five have gone bankrupt,” the recycler said, with most of those filings occurring in September and October.

Steve Wong, who conducts business globally at Hong Kong-based Fukutomi Co. Ltd., said to Alssema, “The situation is really, really bad. I think that number [of bankruptcies] is going to grow.”

China often is cited as the location for overcapacity in the steel and aluminum sectors. Wong said the nation’s petrochemical industry is likewise producing far more polymers than it can consume internally—about 200 million metric tons annually out of a global total of about 390 million.

Chemical recycling methods (often championed by the petrochemical industry) had been poised to become a larger consumer of plastic scrap, with an initial promise to focus on materials not always reprocessed by mechanical recyclers.

However, increased skepticism of the nascent sector was expressed during the two-day BIR event, with Wong among the skeptics.

“I think there is a lot of misinformation,” Wong said of pyrolysis and some other proposed chemical recycling methods. “The whole world has been misinformed. At the end of the day, this is not going to be viable.”

Mechanical recyclers and reprocessors have not benefited from the slow start of chemical recycling, however. Wong said low virgin polymer prices caused in part by overcapacity in China have reduced recycled polymer prices.

“There is no margin” for collectors or reprocessors," he added.

With virgin resin prices low, even brand owners with recycled content pledges are having a difficult time honoring those commitments, the panelists said.

Max Craipeau of Singapore-based Greencore Resources says the one resin that has “decoupled” from its virgin counterpart is recycled polyethylene terephthalate (rPET). That circumstance, however, is not helping it this year.

According to Craipeau, rPET has been trading for about $1,400 per metric ton recently, while virgin PET can be obtained for just $900 per metric ton. Such a gap “is an issue” for buyers, even if they have a sustainability pledge on their websites, he indicated.

Craipeau also expressed concern about PET or “off-spec” PET that may not have recycled content being offered to the global market as rPET. Whether its origin is domestic Chinese scrap or it is virgin material, Craipeau said it is being offered at "a huge discount.”

Alev Somer, BIR trade and environmental director, offered meeting attendees an update on the United Nations Environment Program (UNEP) Global Plastics Treaty, a document that could spur demand for recycled-content resins.

Somer and Craipeau have attended Global Plastics Treaty meetings, and both said petrochemical lobbyists and allies are seeking a nonbinding treaty or one with numerous exemptions.

“It needs to be legally binding,” Craipeau said of treaty aspects involving recycled-content mandates for packaging and other sectors where plastic is heavily used. "[Currently,] we lack the necessary legislation to boost demand.”

Enforced commitments to recycled content could create a bright spot, panelists said. Bashar Ehsan Gadawala of Ala International, based in the United Arab Emirates, said that nation and neighboring Saudi Arabia have packaging extended producer responsibility (EPR) programs launching soon.

Gadawala said the market for recycled resins in his region (as elsewhere) has been not so good for the last year. He added, though, that brand owners and packaging firms in the region are willing to accept recycled materials.

If such help is on the way, it needs to arrive soon, Alssema said.

“There are a lot of challenges,” the veteran recycler said. “The market for recycled plastic in Europe is really, really struggling. The [plastic recycling] infrastructure built in the last few decades is at risk.”

The 2024 BIR World Recycling Convention Round-Table Sessions was held at the Raffles City Convention Center/Fairmont Hotel in Singapore Oct. 27-29.