According to ICIS, prices for both colorless bottles and post-consumer bottle flakes in Europe reached “record highs” in January 2022 due to the impact of COVID-19 and tight recycled PET supply chains.
ICIS said that compared with December 2021, the price of post-consumer plastic bottles in northwest Europe increased by more than 200 euros per ton in January this year, and the price of bottle flakes increased by 150 euros per ton. Currently, the price of colorless bottle flakes is between 1,600 euros and 1,700 euros per ton. There may be some higher prices, but ICIS believes that it cannot prove that these transactions actually exist, so it is not of reference significance for the time being.
Price increases in northwest Europe are consistent with those in southern, central and eastern Europe. This is the highest price observed by ICIS since it began reporting the data in 2006.
Data show that since January 2021, the price of recycled PET flakes in Europe has soared 103% to 1,690 euros per ton. The price of used bottles used to produce recycled PET flakes has risen even faster, more than tripling since January 2021. The price of recycled plastics in the United States has also risen sharply, and the current price of recycled PET has exceeded that of virgin PET.
There are currently several factors that influence the supply, demand and price of rPET:
1. EU Directive on Restriction of Plastic Products (EU) 2019/904
The European Union requires that starting from 2025, PET plastic bottles must contain at least 25% recycled plastic, and by 2030, this content must reach at least 30%. This means that demand for post-consumer bottle flakes is high in Europe, but supply is somewhat more volatile.
2. Global supply chain crisis
COVID-19 has led to a series of irresistible factors such as production interruptions, extreme weather, shipping delays, and container shortages, exacerbating the global supply chain crisis.
Renato Zelcher, chairman of the European Packaging Council, told Packaging Europe last year: “More than 90% of companies in all EU member states have been negatively affected by this situation. Although there are Improvement, but supply remains unstable and some companies have had to stop production due to lack of materials or to avoid price increases.”
3. Application scope of high-quality recycled PET
In December 2021, major players in the European beverage industry issued a statement calling on the European Commission to introduce a mandatory “first refusal” policy to encourage the establishment of closed loops for bottle-to-bottle recycling systems. The organizer said that high-quality food-grade recycled PET is being used in non-food contact products such as toys and clothing. The organization believes that these products will reduce recycling and pose a threat to the beverage industry’s recycling goals.
Existing EU legislation, such as the Single Purpose Packaging Directive (SUPD), has also been criticized for a lack of coordination among member states. The European Unified Trade Commission pointed out that some countries have failed to establish clear national rules on single-use plastics, and uneven promotion may lead to the fragmentation of the single market. As a result, both business and government are facing increasing pressure and scrutiny as packaging category regulations tighten, with the perception that there is currently insufficient support to realistically achieve the targets.
Because supply chain changes are likely to be permanent, it is difficult to predict how long these effects will last. ICIS acknowledged that many companies are adopting a cautious “wait and see” response and that this change may not become apparent until the second quarter of 2022.
Explosive demand growth
Many giants spend money to expand production capacity
Affected by various factors such as supply constraints of recycled bottle flakes and related recycled bottles, as well as rising energy and transportation costs, the price of colorless post-consumer bottles (PCR) and flakes in the global market, especially in Europe, has reached unprecedented highs, while many places in Europe and the United States have introduced The regulations to increase the recyclable content of products have also been driving the “explosive growth in demand” of major brands.
According to Fact.MR, as consumer and market preferences for sustainable and recyclable products continue to grow, the global recycled PET (rPET) market is expected to grow at a compound annual growth rate of 8% by the end of 2031, totaling to US$4.2 billion.
Since February, many companies and brands have built or acquired recycling plants in Europe and the Americas to continue to expand recycling capabilities and increase rPET production capacity.
1. ALPLA and Coca-Cola bottling company build PET recycling plant
Plastic packaging company ALPLA and Coca-Cola bottler Coca-Cola FEMSA recently announced the construction of a PET recycling plant in Mexico to expand their rPET production capacity in North America. The two companies announced the launch of new facilities or machines that will serve the market Add up to 110 million pounds of rPET.
▲ALLPLA and Coca-Cola FEMSA took a group photo at the ceremony of the new PET recycling plant. Image source: ALPLA
It is reported that the $60 million PLANETA recycling plant will have “the most advanced technology in the world” and will have the capacity to process 50,000 metric tons of post-consumer PET bottles per year and produce 35,000 tons of rPET, or approximately 77 million pounds. The construction and operation of the new plant will also provide 20,000 direct and indirect jobs, promoting development and employment in southeastern Mexico.
Coca-Cola FEMSA is part of The Coca-Cola Company’s Waste-Free World initiative, which aims to make all company packaging 100% recyclable by 2025ic.168tex.com/Upload/News/image/2022/02/11/20220211095905_0029.png” />
According to reports, after the acquisition, the plant will become one of the largest manufacturers of food-grade recycled pellets (rPET) in the United States, with a total annual production capacity of approximately 92,000 tons. The plant will recycle more than 3 billion PET plastic bottles annually and provide more than 130 jobs.
IVL is one of the world’s largest producers of recycled PET from beverage bottles. The acquisition expands its U.S. recycling capabilities to 10 billion beverage bottles per year. Thailand-based Indorama Ventures entered the U.S. PET market in 2003 and is on track to reach its global goal of recycling 50 billion bottles (750,000 tons) per year by 2025.
The hot “double carbon” concept
It has created a new outlet for the domestic recycling industry.
For domestic chemical fiber companies, in addition to economic motivation, the promotion of China’s “double carbon” goal and the low-carbon trend of the global supply chain have made them clear the direction of transformation to high value, and they are also looking forward to the penetration of carbon trading. Bring them tangible benefits.
On September 15 last year, the National Development and Reform Commission and the Ministry of Ecology and Environment issued the “14th Five-Year Plan” plastic pollution control action plan to strengthen the recycling of waste plastics and clearly encourage the homogeneous and high value-added utilization of waste plastics. More and more brands have put forward their own “zero carbon” goals, and 80% of the brand’s carbon emissions are indirect emissions. Therefore, carbon emissions reductions in the front-end supply chain and back-end consumption must be promoted, thereby promoting more regenerative enterprises. into its own supply chain.
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