After several turbulent years marked by intense competition from low-cost virgin plastics produced in Asia and the Middle East, is recycled plastic staging a comeback in Europe? “We’ve seen a slight uptick in demand over the past two weeks,” said Sébastien Petithuguenin, CEO of waste management specialist Paprec Group.
For now, the Paprec plant in La Loyère, near Chalon-sur-Saône (Eastern France), which specializes in recycling high-density polyethylene (HDPE) and polypropylene (PP) waste, is still running below full capacity.
“When we made these investments (EUR 26 million in 2021, including EUR 5 million from the French Agency for Ecological Transition, Ademe), we expected to reach full production much faster,” added Sébastien Petithuguenin.
That was without taking into account a protracted crisis, marked by “a decline in demand,” continued the CEO. His group, like the entire plastics sector in Europe, had to contend with fierce competition from virgin plastics from China and the Middle East, fueled by Chinese overcapacity and falling prices, a consequence of oil prices having plummeted for months.
A new landscape
But since the blockade of the Strait of Hormuz, through which 20% of the world’s hydrocarbons transit, and the surge in oil prices, the tide appears to be turning. Recycled plastics may now benefit from the headwinds facing their “virgin” counterparts made from petroleum.
"A huge number of French and European plastics manufacturers depend on imports from the Middle East or Asia," Bibiane Barbaza, head of economic affairs at Polyvia, the leading French plastics industry association, told AFP. She estimates that "10 to 15%" of virgin material will be imported from the Middle East by 2025. All these trade flows are being jeopardized.
"There is no widespread risk of supply disruptions in Europe, but some plastics manufacturers, particularly those who purchased plastics from the Middle East or Asia, may face delivery stoppages or delays," Jean-Yves Daclin, managing director for France at the industry association Plastics Europe, confirmed to AFP.
A breath of fresh air for recycled plastic
The new context is prompting manufacturers to explore a shift toward recycled materials, all the more so as soaring oil prices since the start of the Middle East conflict are narrowing the price gap with costlier virgin plastics. However, "having customers in a crisis situation is not a sustainable business model," warns Mr. Petithuguenin.
Along with his fellow European recyclers, he has been lobbying Brussels for months for a regulatory framework that would stimulate demand, including stricter requirements for the incorporation of recycled material in beverage packaging.
There was growing urgency to act as the crisis began to weigh on Europe’s industrial base. Despite massive investment — doubling recycling capacity from 6 to over 12 million tonnes between 2017 and 2022 — several plants have recently shut down, wiping out around one million tonnes of capacity and putting the EU’s targets at risk, including recycling 55% of plastic packaging by 2030.
For Xavier Chastel, CEO of Polyvia, even if it comes at a cost, "using recycled plastic" allows for less oil consumption, therefore "less CO2 emissions," but also for "becoming independent from the countries that supply us," concludes Mr. Chastel.
