The European plastics industry: hoping for the best, preparing for the worst

The European plastics industry:…

In the run-up to K 2019, the European plastics industry faces challenges on several fronts. Overall, the economy is just bumping along; the prolonged exit of the UK from the European Union is creating disquiet; major traditional export markets are wobbling; and hardening attitudes of consumers towards plastics packaging are leading to hasty - some say ill-judged - moves among law makers setting out a path to the Circular Economy.

The German economy, traditionally the powerhouse of Europe, is in a tense situation, with exports from and imports to the country both falling in recent months. One survey of industry executives indicated that factory activity fell beyond already poor expectations in March. Analysts at consultant IHS Markit concluded that the German manufacturing sector "was clearly in deep recession.” Germany is not alone. Unemployment in Italy has started to rise again, for example. In fact, the average purchasing managers index (PMI) for the eurozone (the 19 countries that use the euro) is now below 50 (neutral). Of the four largest economies, only Spain is in positive territory. Some analysts do expect GDP in the eurozone to increase this year, although the figure will be small. And across the Channel, UK manufacturing grew faster than in over in a year in March – but largely because factories have been stockpiling goods in anticipation of Brexit.

Sales of the plastics processing industry in Germany did actually rise by over three percent last year, roughly twice as fast as GDP, notes Oliver Möllenstädt, Executive Director of GKV, the German Association of Plastics Converters (GKV). “This is remarkable as the economy moves in an increasingly uncertain international environment,” he says. But solid growth across much of the industry “must not hide the fact that the plastics industry faces major challenges. The debate about plastics in the environment, which is sometimes very emotional in the media and the public, has massive impact on plastics processing companies.” Möllenstädt says the GKV's annual company survey showed the vast majority of companies were affected. “In our view, the course of political and public debate so far is going in the wrong direction,” he says. “The European Commission and national governments are attempting to address consumer concerns with symbolic gestures such as restrictions on single-use plastics (SUPs) and carrier bags. This strategy may quiet the public debate in the short term and give the impression of high activity, but it is not effective in the interest of the environment and sustainability.”

The plastics industry in Europe “is facing a reckoning,” says Martin Wiesweg, director of chemicals (PS, EPS and PET) at IHS Markit. “The sector has experienced years of moderate, yet steady growth, robust earnings and stellar contributions in terms of product and process innovation, employment generation, and added value in terms of functionality, convenience, and aesthetics for people’s lives. However, increasingly, it is losing social compact and public goodwill. “At the heart of this discord is the huge problem of plastic waste. With increasing intensity and rapidity, consumers and authorities in Europe are uniting against plastics by bringing sweeping measures to curb its use and strictly implement a waste hierarchy,” says Wiesweg. “The fact that the authorities are willing to risk significant cost and inconvenience to consumers is a testament of how much public faith has eroded relative to plastics.”

Directive will curb Single-Use Plastics

The European Parliament approved the Single-Use Plastics Directive in March. It is likely to be implemented across member states by 2021. The rules address the ten most found items on EU beaches. Measures include a ban on selected single-use plastics products for which alternatives exist on the market – cotton bud sticks, cutlery, plates, straws, and stirrers, as well as cups, food and beverage containers made of expanded polystyrene and on all products made of oxo-degradable plastic – plus sticks for balloons. Also included in the Directive is a 90% separate collection target for plastic bottles by 2029 (77% by 2025) and the introduction of design requirements to connect caps to bottles, as well as a target to incorporate 25% of recycled plastic in PET bottles as from 2025 and 30% in all plastic bottles as from 2030.

PlasticsEurope, the trade association for plastics material producers in Europe, said it welcomed the adoption of the Directive, and the acknowledgement “that the fight against litter is a shared responsibility between competent authorities, producers and consumers.” It called for prompt setting-up of guidelines on definitions and categories to avoid the risk that different interpretations will prevail among Member States. The Directive comes in the wake of the “European Strategy for Plastics in a Circular Economy” published by the European Commission at the beginning of 2018. This contains plans to curb waste, stop littering at sea, and to make plastics recycling more profitable for business in the European Union. All plastics packaging on the EU market will need to be recyclable by 2030.

At EuPC, the Brussels-based trade association representing European plastics converters, Managing Director Alexandre Dangis decries recent legislative moves to curb plastics. “Way too often are the benefits of plastics ignored,” he says. “They help fighting climate change by enabling the saving of CO2 emissions in all aspects of our lives -- preventing food waste, light-weighting, insulation, and more. The plastics industry is committed and working hard to increase its circularity.” Numerous associations and companies have pledged to increase the recycling of plastics waste and the use of recycled polymers, he points out.

To monitor and register the industry’s efforts to reach the EU target of 10 million tonnes recycled polymers used annually between 2025 and 2030, EuPC has just created the online monitoring platform MORE (MOnitoring Recyclates for Europe). “MORE will become the single, unified online tool to monitor the uptake of recycled polymers into products by plastics converters in Europe,” says Dangis. “It will allow the industry to demonstrate its efforts and report consolidated numbers on the use of recyclates in the entire EU.” Quality of recyclates will have to be improved if the ambitious EU targets are to be reached. Studies carried out by EuPC in 2017 and 2018 show that plastics converters currently have trouble finding an adequate supply of recycled polymers.

Almost three years ago – during K 2016 in fact – EuPC, PlasticsEurope and Plastics Recyclers Europe launched the Polyolefin Circular Economy Platform (PCEP). Secretary General Venetia Spencer describes it as a forum for collaboration and action, bringing together everyone active in polyolefins to transform our industry and advance the circular economy. “Our membership is open to the entire value chain, producers, converters, recyclers, brand owners, retailers, waste management companies and all the remaining actors who interact at any stage of the material cycle,” she says. PCEP has pledged to increase by one million tonnes the volume of recycled polyolefin content used in product in Europe. This is the largest polymer pledge made as part of the European Union’s Plastic Pledge campaign, which aims to see 10 million tonnes of recycled content in products in Europe in 2025 through voluntary industry action. “We are also committed to reusing or recycling 60% of collected polyolefin packaging by 2030 and having more than 75% of polyolefin packaging designed for recycling,” Spencer says.

“Effecting a transformation from today’s linear system to a regenerative one will be a challenging and complex task, requiring innovation and collaboration among industry partners,” says polyolefins producer Borealis, with most of its manufacturing in Europe, noting that it is providing various solutions for the new circular economy. Borealis has been taking the bull by the horns by moving more into mechanical recycling in recent years. In 2016, for example, it acquired two of Europe’s largest operators in the sector, which are now known as mtm plastics. Last year, these acquisitions were augmented by the acquisition of another leading recycler, Ecoplast. Related activities include the Full PE Laminate concept, an easily recyclable mono-material for polyethylene-based flexible packaging.