A letter published by 12 member companies of the Consumer Goods Forum’s (CGF) Coalition of Action on Plastic Waste signals the demand for 800,000 tons of chemically recycled plastics per year by 2030.
- A group of 12 fast moving consumer goods (FMCG) firms has published a letter to suppliers, regulators and investors, calling for the expansion of chemical plastic recycling.
- Chemical recycling can be used in more demanding applications than conventional mechanical recycling, but current capacity is limited.
- The CGF members’ action not only highlights the increasing demand for such materials, but the sectors concern about reputational damage if they continue to use conventional sources.
The letter is addressed to suppliers, regulators and investors. It has been signed by Amcor (NYSE:AMCR), Barilla, Colgate-Palmolive (NYSE:CL), Danone (XPAR:BN), Ferrero, Haleon (LSE:HLN), Henkel (XETR:HEN3), Mars, McCain, Mondelez International (NASDAQ:MDLZ), PepsiCo (NASDAQ:PEP) and Unilever (LSE:ULVR).
What does the letter demand?
The letter’s demands are based on a survey of CGF members, which concluded that FMCG firms will demand at least 800,000 tons of chemically recycled materials per year by 2030.
It follows a paper issued by the Coalition in April 2022, which outlined six key principles for the development of credible, safe and environmentally sound plastics recycling technology.
According to the paper, up to 70 medium-sized chemical recycling plants would need to be constructed in Europe within the next 10 years to accommodate the FMCG sector’s growing demand.
The Coalition acknowledges that chemical recycling technologies will not provide an ultimate solution to the plastics crisis. It believes, however, that they will play a crucial role in addressing unavoidable waste that cannot be recycled through conventional mechanical processes.
This position is supported by an independently conducted lifecycle analysis, published alongside the April 2022 paper. The study assessed the use of chemical recycling for food-grade films, which are difficult to recycle mechanically, concluding that chemical technologies would be emit around 40% fewer CO2 emissions than waste-to-energy incineration.
FMCG companies face pressure for recycled plastics
FMCG companies are facing increasing pressure to reduce their consumption of virgin plastics. As governments begin to advance their plastic reduction targets, this pressure will only grow stronger.
The EU Commission, for example, has already introduced its Single-Use Plastics Directive and has threatened legal action against Member States that fail to transpose it into law. On the global level, the UN has launched a global plastics treaty that has already been endorsed by 175 countries.
International non-profit organisation CDP, meanwhile, plans to develop a plastics disclosure reporting framework that will add greater scrutiny to FMCG firms. Companies that fail to live up to such expectations are at risk of backlash on the behalf of consumers, as experienced by Unilever when the UK Advertising Standards Authority forced it to withdraw an advert that was unclear on its use of recycled plastic.
As such, the industry letter states its signees’ intention to “express their common interest in the development of credible, safe and environmentally sound chemical recycling infrastructure put forward by the industry players in Europe.
“More specifically, and assuming that global investment in the field materialises by 2030, the Parties wish to express their common interest in purchasing commercial volumes of chemically recycled plastic content to incorporate in their packaging”.
“The Parties wish to send a strong signal of support to society of the need for scale in plastics recycling infrastructure while meeting the necessary environmental and other safeguards laid out by the Parties”, it continues.
The benefits of chemical recycling
The vast majority of plastics recycling currently relies on mechanical methods. These processes can only handle a small share of plastic waste, and they typically produce low-quality recycled materials that cannot be used in applications such as food packaging or pharmaceuticals.
Chemical recycling technologies, however, can be used with a wider range of plastic waste streams, including flexible, multi-material or multi-layer plastics that would typically be landfilled or incinerated. The recycled materials it produces can maintain the quality and characteristics of virgin plastic, and can be used in food-grade applications.
The expansion of chemical recycling would, therefore, further the transition to a circular economy by increasing the supply of recycled materials while reducing the need for virgin plastic production and stemming the flow of plastic waste.
Current recycling infrastructure is not up to scratch
FMCG firms rely on flexible, food-grade packaging for its light weight, resource efficiency and its ability to protect and preserve valuable goods. The chemical recyling technologies needed to recover such materials, however, are currently lacking.
In 2021, fewer than 150 chemical recycling plants were operating globally, with a total capacity of less than 2.5 million tons. Of these facilities, less than 30% are operating at commercial scale.
This shortfall has occurred for several reasons, including technological immaturity, the uncertain legal status of chemical recycling and the increased volume of lightweight materials that would have to be collected to make the process economically viable.
These issues discourage the very investment needed to resolve them, placing the chemical recycling industry between a rock and a hard place.
Company demand will drive investment towards chemical recycling
The CGF members’ letter suggests that these constraints are contributing to a major shift in the market for consumer goods packaging. Such public demand will be crucial in driving the necessary investment in circular recycling technologies.
This shift is already underway, with specialist trade association Plastics Europe, projecting that investment in chemical recycling will reach €2.6 billion by 2025 before rising to €7.2 billion by 2030.
Although this would certainly provide a boost to the industry, it will need to be accompanied by supportive policy measures and public awareness to ensure that plastic waste is efficiently collected and delivered to the appropriate facilities.
Ultimately, the expansion of chemical recycling and its circular benefits will rely on the engagement of multiple stakeholders, but the call to action from FMCG firms makes for a promising start.