Can the plastic recycling industry be saved?

The plastics industry continues to see casualties.

Waste management company Biffa's Sunderland plant closed in February after opening in 2022 at a cost of £7m, while rival Viridor closed its Avonmouth plant in 2022, Skelmersdale in 2023 and confirmed this summer that its Rochester plant would also close.

Like falling dominoes, plastic recycling plant closures are also common across Europe, with another high-profile company, Veolia, closing two of its plants in Germany this year, and seven plastic recycling plants closed in the Netherlands last year.

Meanwhile, Borealis, Dow and Nester all plans were canceled build new plastic recycling plants in Europe.

Industry body Plastic Recyclers Europe equates this to a loss of almost one million tons plastic recycling capacity from 2023.

“Without decisive policy action, Europe will replace its recycling industry with a reliance on unsustainable imports and rising volumes of waste, undermining both its economic sustainability and its climate leadership,” the BBC said in a statement.

More closures are likely, warns James McLeary, managing director of Biffa's polymers division, as the industry here and in Europe faces its toughest year yet. High energy and labor costs are two factors here, in parallel with the fact that purchasing virgin and recycled plastic from Asia currently cheaper than buying European recycled plastic.

Closing of a plastic recycling plant also affects the USAwhich is also caused by the low price of virgin plastic, causing the country to fall short of its recycled content targets as S&P Global Reports.

“There is a large global dependence on Asian plants and then we are faced with a situation where (UK and European plant operators) will have to make very difficult decisions. Either they are running their factories at a time when they are literally producing nothing, or they decide to close down,” explains Mr McLeary, who lives in County Durham.

Reliance on plastic waste exports hasn't helped either. The UK exported around 600,000 tonnes of plastic waste last year, according to environmental analysts. in the ENDS report – 5% more than in 2023.

Loopholes in current UK legislation mean that plastic waste collectors are inadvertently incentivized to export rather than recycle domestically. Meanwhile, manufacturers using plastic packaging still tend to use cheaper virgin plastic from overseas, and have to pay taxes for it.

Ahmed Detta, CEO and founder of plastic waste recycling company Enviroo, is frustrated by the shortcomings and controversies he sees plaguing the industry and undermining the goal of creating a circular economy that keeps materials used for as long as possible.

“For me, the circular economy is a win-win. Every person along the way has to get some benefit, and that doesn't work,” says Mr. Detta, who lives in London.

“Brands are not supporting the circular economy. They say, “Why should I buy recycled material when it’s cheaper for me to pay a fine for plastic packaging than to actually pay for recycled materials? Nobody says: “Let's unite.”

RECOUP, the UK's independent plastic recycling body, is so concerned that its head of policy and infrastructure, Steve Morgan, warns: “We are almost witnessing the demise of plastic recycling as we know it unless we take some action. Many processors in the UK will not be able to compete.”

British rules have benefited foreign markets more than the UK and major reforms are needed, Mr Morgan argues.

“There are a lot of fantastic technologies being developed. But scaling them and how they can actually make money, continue to exist and then thrive is a secondary issue,” says Mr Morgan, who lives in Peterborough.

“The commercial viability in the long term is simply not there. There are some really good people creating technologies that we couldn't even dream of 10 years ago. But I just feel like we won't see any real change in the next two to three years without some kind of intervention.”

RECOUP is calling on the UK Government to introduce a single plastic recycling certification scheme, aimed at reducing the export of plastic waste and increasing the propensity of more companies to use recycled packaging.

Mr Morgan hopes UK Government consultations this year will seriously consider the changes that need to be made to save the plastics recycling industry.

Packaging reforms are indeed underway, as well as £10 billion of investment in new plastic sorting and recycling facilities, according to a UK Department for Environment, Food and Rural Affairs (DEFRA) spokesman.

They also say the Deposit Return Scheme, which will launch in October 2027, will create better material for recycling as consumers will be encouraged to return bottles and drinks cans to collection points to receive the small deposit they paid at the time of purchase. The government has also created a Circular Economy Task Force.

“Our collection and packaging reforms will support recycling in the UK, meaning we can reduce our dependence on plastic waste exports,” the spokesman said. “The export of waste is subject to strict controls under UK law.”

In Brussels, Virginia Janssens is managing director of Plastics Europe, which represents plastics manufacturers, including those that recycle and use recycled materials. She is concerned that the plastic recycling industry will flourish outside of Europe.

“Business will go where it makes sense and where it is cheapest to build. If these big production plans are built somewhere else, with huge billions of dollars in investment, they won't suddenly decide to come back and build them in Europe,” says Ms Janssens.

“This will have a huge impact on our value chain. This would take us back 20 years when we would have had to burn more or use landfills and that would have been a real shame. Nobody wants this.”

But there are some bright spots in an otherwise struggling industry.

Biffa, for example, recently acquired bottle manufacturer Esterform, which uses recycled PET.

Meanwhile, Enviroo recently received £58 million to build a new recycling facility in the north west of England, specializing in converting PET drinks bottles into recycled granules that can be used in food packaging.

The plant is expected to be operational by 2026 and will process up to 35,000 tons of plastic per year.

Mr Detta believes the key to success will be his expertise in the generalist industry and getting back to the basics of plastic recycling.

“I'm not here to tell you that I have the most innovative technology. No, I looked at real, serious problems and said, “What do I need to solve?”

Meanwhile, Plastic Energy is successfully converting plastic waste into pyrolysis oil, which can be used to make food and medical plastics. The company is headquartered in London and has factories in Spain, France and the Netherlands.

CEO Ian Temperton is preparing to capitalize on an expected shortage of recycled plastic as recycled content targets come into force across Europe, with plastic drinks bottles required to contain at least 65% recycled content by 2040.

“We are developing and continuing to improve technology related to the processing of plastic waste. Getting partners to commit to new investments over the next few years will be a little more difficult, but it is clear that the market will be very significantly undersupplied relative to any version of the targets,” says Mr Temperton.

“So I will keep my team focused on the best technology when that happens.”