Is this the end of high-quality plastic recycling?

Out of shredded and cleaned packaging waste from the Yellow Bag (left), The Green Dot produces recyclates (center) that go into the production of new bottles for cleaning products from Werner & Mertz (right). The recyclates – although significantly more environmentally friendly – are more expensive than comparable new plastic. Copyright Photo: Der Grüne Punkt

The Green Dot, Werner & Mertz and the German Association for the Waste, Water andRaw Materials Industries demand financial incentives and commitment from government

Plastic waste in private households increased by 10 percent in recent months as the numbersof home offices and Internet orders went up and the demand for recyclates – recycled plasticfrom plastic waste – decreased dramatically. What appears at first glance to be a paradox canbe attributed to one cause – oil prices.

The corona pandemic brought about a sharp fall in the price of oil. Cheap crude oil lowersthe cost of producing new plastic and thus reinforces new plastic's privileged legal status inGermany as it is exempt from petroleum tax and EEC levies. In comparison, the materialrecycling of used plastic packaging is economically even less attractive. Many manufacturerswhich previously used recyclates for products and packaging are now switching back to newgoods.

That means not only substantial losses for the recycling industry and a giant step backwards forclimate and environmental protection, but also a huge blow to the circular economy!

Consumers long ago recognized the danger. Surveys show that consumers see plastic as thegreatest (environmental) problem (top-of-mind theme 2019 with regard to the environmentand ecology, Source: GfK Unternehmergespräch 2019). They expect solutions in favor of asustainable economy and that has not been changed by the coronavirus (Source: GfK WebinarIM AUGE DES STURMS, 2020).

The solution to the plastic pollution of our environment has been known for some time. Usedplastic from post-consumer waste collections like the Yellow Bag can now be recycled at such ahigh quality that it fulfills strict requirements for use in cosmetic packaging. Plastic remains in aclosed cycle, where it becomes valuable raw material instead of polluting waste. The technologyof material recycling, however, is still pushed aside because the use of new plastic is cheaper incomparison.1

That's why three representatives along the supply chain have issued a joint statement in whichthey demand that the German government use the impending transformation of the economyto establish a sustainable circular economy in general and the reuse of recyclates from usedplastic in particular.

Peter Kurth, President of BDE (German Association for the Waste, Water and RawMaterials Industries), appeals to the role model function of public procurement for sustainablemanagement: "The decline in oil prices intensified the already difficult circumstances for manyplastic recyclers. Expensively produced recyclates find no takers, investments in better recyclingare put off or cancelled because refinancing appears impossible. Given the lack of politicalaction, plastic recycling is threatened with severe damage. Anyone who wants a successful,sustainable economy has to employ suitable instruments that have been known for a long time.An altered procurement process that takes ecological aspects seriously should be at the top ofthe agenda."

Reinhard Schneider, owner of the cleaning products company Werner & Mertz andwinner of the German Environmental Award 2019, provides concrete solutions to balanceout the existing financial disadvantage between the use of post-consumer recyclates (PCR)and of new goods in Germany. "The ecological differential in the purchase prices could be2 von 3incorporated in the Packaging Law in Paragraph 21 in the form of a fund to which all producerswould have to contribute. Only those who use recyclates should receive reimbursement.Additionally, a plastic tax could be introduced which would apply only to new goods, somethingItaly plans to do. That corresponds to cutting the subsidies for the manufacture of new goodsin that the exemption from mineral oil tax and EEC levies no longer apply. The debatedminimum utilization rate makes sense only when combined with incentivization for exceedingthe minimum rate."

Michael Wiener, CEO of The Green Dot, says specifically about minimum utilization rate: "Thepotential of the circular economy for climate protection, especially for plastic, has not yet beenexhausted. We are missing out on the economic opportunities the circular economy offers. Acircular economy that earns the name creates jobs and brings urgently needed added valueinto the European Union. Instead, we are experiencing a complete market failure. Recycledplastic saves up to 50 percent in greenhouse gas emissions generated by new plastic, but thatis not reflected in the price. Politicians have to set defined recyclate utilization goals for certainproduct groups in order to promote the creation of sustainable recyclate markets and providethe necessary investment security. In July 2020 the federal government will take over the EUCouncil Presidency – a good opportunity to advance relevant measures."

Summary: A stronger focus on sustainability in public procurement, a fund system, a newplastic tax for new goods and a clearly defined minimum rate for the use of recyclates combinedwith financial incentives are instruments that will save plastic recycling from exterminationand, after the corona crisis, will ensure a stable, sustainable circular economy as an importantcontribution to climate protection.