Sustainability to the fore: Much work to be done to meet environmental targets
Expert, consultant, author, speaker and advisor to Packaging Innovations & Empack; Neil Farmer, Founder of Neil Farmer Associates, reports on global FMCG markets, consumer & industrial packaging, sustainability, techno-economics, machinery & equipment, market research and more.
The global consumer goods packaging market is worth over $550 billion. It is a dynamic sector full of innovations and companies with leading edge technologies. The impact of the war in Ukraine and the cost-of-living crisis have affected market growth. There is now hope that the downturn in 2023 will not be as severe as originally anticipated. The author has always believed that the resilience and economic strength of the packaging industry will be more than adequate to ride out the current economic storm.
Current problems within the recycling sector
However, there is little doubt that the current position on the environmental front, particularly in relation to plastics, is far from satisfactory. The harmful effects of the Covid-19 pandemic on the recycling industry are manifest and apparent for all to see. Some recycling businesses went into administration during the period of the pandemic. The plastic recycling industry is in desperate need of investment to improve infrastructure to boost recycling rates, which are at alarmingly low levels. As a result, key environmental targets are in danger of being missed. A new approach is particularly needed to address issues in respect of flexible packaging waste, which continues to be a huge problem.
Research by Biffa in November 2022 revealed that nearly one fifth of England and Wales waste could not be recycled, (see image 1). The research was based on the amounts of non-target and non-recyclable material that entered UK materials recycling facilities. Analysis showed that the average contamination rate of recycling waste had risen from 13.4 per cent in 2016 to 17 per cent by the end of 2020. In 2020 non-target materials (recyclable items that had been placed in the wrong bin) accounted for 6.5 per cent of contaminated waste. Non-recyclables (items that either could not be recycled or are too contaminated with other materials such as food) made up 10.4 per cent of contaminates.
The most alarming fact to emerge from the research was that if this trajectory of growth in non-recyclables continues, contamination rates could reach nearly one quarter of all recycling by 2030, without legislative intervention.
New UK governments initiatives – EPR scheme and DRS – the need to succeed
Clearly much is wrong in the UK`s system. This has been apparent for a very long time. Now EPR (Extended Producer Responsibility – making producers responsible for the cost of managing packaging waste) is on the way. The aim of the regulations is to deliver a more circular economy for packaging, so that more recyclable waste is reprocessed into valuable, higher-quality secondary resources. The packaging sector is urging the Department for Environment, Food and Rural Affairs (Defra) to move forward quickly with the new EPR system. This is planned to be rolled out in 2024, after much delay.
The proposed Deposit Return Scheme (DRS), to levy a deposit on plastic bottles to boost recycling in England, Wales and Northern Ireland, which was first announced in 2018, will now not be introduced until October 2025, (see image 2). The programme could even slip back further. Defra has described October 2025 as “a stretching target date”, as reported in the Weekend Financial Times of 21/22 January 2023. With all of these issues, limited communication as to the requirements and expectations of those within the packaging sector are negatively affecting the industry. Changes in government structure and creation of new departments, such as those announced in February 2023, could potentially cause further confusion. A revolving door of ministers, which has occurred in recent years, has further made communications problematic. The UK Government is committed to protecting the environment and has pledged to achieve Net-Zero carbon emissions by 2050. This signals its positive intent to introduce Extended Producer Responsibility for packaging, along with other initiatives. It now needs to show that its actions match its words. Some still have doubts.
UK Plastics Tax
The whole environmental field is complex. The recently introduced UK Plastics Packaging Tax, for companies with an annual turnover above £2 million and who handle more than 50 tonnes of packaging annually, is seen by many in the industry as a green packaging tax and no more than that. It would be good if the monies taken were ploughed back in to the industry but this is not the way the system works.
Need for mono-material investment
To achieve sustainability targets and meet demanding UK and EU regulations there has got to be more investment in the production of mono-material substrates. This is happening but there is still some way to go. As we have seen in the research by Biffa, the generation of food packaging waste as a result of the inability to separate “good” from “bad” plastics in the recycling stream, is one of the reasons why plastic recycling performance is so poor. The industry has simply got to produce more high-quality mono-material substrates or the problem will continue for a long time to come.
International investment in new technology
Moves by companies such as PureCycle, who in January 2023 announced plans to locate a new polypropylene recycling facility in Belgium, make me believe that the industry is realising that something has got to change and quickly. The plant will come on stream in 2024. It is very much part of the drive to achieve a circular economy in packaging which is still alarmingly small and in desperate need of impetus.
Similarly In November 2022 LyondellBasell announced it was moving forward with engineering to build an advanced recycling (chemical recycling) plant at its Wesseling, Germany site, (see image 3). Using the company`s proprietary MoReTec technology, the commercial scale plant will convert pre-treated plastic waste into feedstock for new plastic production. The final investment decision is targeted for the end of 2023.
The problems surrounding disposal of plastic packaging waste are substantial. SABIC announced in December 2022 that it was working with Scientex to produce flexible packaging for a Malaysian noodles brand by chemically recycling ocean-bound plastic waste (OBP), to be used as a feedstock in the production of polypropylene. The OBP is believed to be discarded up to 50 km inland and washed into the ocean by rainfall, rivers and tides. Zero Plastic Oceans, a non-governmental organisation dedicated to addressing plastic pollution issues, has estimated that OBP from uncontrolled waste disposal accounts for 80 percent of marine plastic litter. The plan is for the OBP to be converted into pyrolysis oil, which will then become an alternative feedstock for SABIC to produce polypropylene. This is good news and an important move in the battle to combat the indiscriminate disposal of plastic waste, particularly in Asian and African countries.
There is a feeling within the packaging industry that recent events, both global and national, have left the sector with concerns about the future. Communication with government and legislators, newly introduced compliance standards, high costs of raw materials leading to margin erosion and subsequent reductions in profits, are just some of the issues which have impacted on companies, (see image 4). Yet there is a belief that as winter turns to spring, as the cost of living crisis begins to recede and as energy prices start to revert to some semblance of normality (whatever that might be), the industry can come through choppy waters and look forward to a brighter future. However, the issues I have outlined will not go away and urgent action is now imperative.
Neil Farmer, Founder & Owner at Neil Farmer Associates:
+44 (0)1789 415775