BrazilMajor investments needed to meet EU plastic recycling goals
Current levels of plastics recycling in the European Union are still well below established targets. In order to increase recycling capacities – and thereby reduce plastic waste pollution – major investment is needed.
Compared with other regions, the EU is doing quite well in combating plastic waste pollution. Despite that, investments worth €6.7 to €8.6 billion are needed to meet goals devised to position the EU as a world leader in climate change mitigation. That is according to a report by InnovFin Advisory, an advisory group part of the European Investment Bank.
In order for the EU to meet the plastics recycling goals set by the European Commission’s Circular Plastics Alliance, the sorting industry output capacity must be scaled up from 12.5 million metric tonnes to 16.7 million metric tonnes.
The ‘European Strategy for Plastics’ set the ambitious goal of 10 metric tonnes of recovered plastics in new goods across all member states by 2025, with a target of 50% plastic packaging recycling. Achieving these targets requires both substantial investments in sorting and recycling capacity and the creation of a reliable end market for the recycled content.
Some of the suggestions made by the InnovFin Advisory report include an increase in sorting and recycling capacities, subsidising innovative solutions to various issues in the plastics value chain, and restricting the variety of plastics that enter the market in order to ensure waste is more homogenous, making recycling easier.
The EU has set a number of ambitious waste reduction goals in the past decade, including the 2019 ban on single-use plastic cutlery.
Other recent efforts include 2022 legislation now being considered by the European Parliament and Council that aims to drastically reduce packaging waste, the most prominent source of plastics waste. The legislation also stipulates that by 2030, all packaging in the EU must be recyclable, with obligatory percentages of recycled content in new plastic packaging.
The EU’s Green Deal, the incredibly ambitious goal of making all 27 member states climate-neutral by 2050, would similarly require enormous investment. A report from McKinsey & Company estimated that successfully achieving net zero would cost the continent roughly €28 trillion.
The InnovFin Advisory report used interviews with industry leaders and experts to better understand the most significant root cause of inefficiencies in the plastics value chain. 73% of those interviewed pointed to issues with the recyclability of retailers’ design of plastic products, 50% blamed the presence and capacity of recycling facilities, 45% singled out sorting facilities, and 27% stressed the low quality of recycled material when compared with virgin material.
A number of complex financial barriers stand in the way of reducing plastic waste via an increase in recycling. For example, virgin materials derived from oil and gas are cheaper than recycled material and it is more difficult to guarantee to investors a steady supply of recycled feedstock as compared with virgin material.
Only 25 companies are responsible for around half of the world’s plastic production, with the majority of plastic producers based in China and the Asia Pacific region.
Asia is the largest plastic producing region in the world (230 million metric tonnes), with China the leading single country in terms of annual production (23%). By comparison, North America and Europe each account for just 16% of total production. Asia also leads in terms of annual plastic waste generation, at 46% of the total plastic waste generated worldwide.
