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

Chemical recycling on the rise

The growing importance of chemical recycling was also reflected in the creation this January of a new association, Chemical Recycling Europe, to promote and implement new and innovative solutions. “The fast development of chemical recycling technologies that can provide a solution to recycle hard-to-recycle plastic waste is outpacing the regulation and policy around it,” CRE claims.

In December, one major materials supplier, SABIC, signed a memorandum of understanding (MoU) with UK-based Plastic Energy, a pioneer in chemical plastics recycling, for the supply of feedstock to support SABIC’s petrochemical operations in Europe. The two companies intend to build a commercial plant in the Netherlands to refine and upgrade a feedstock patented by Plastic Energy called Tacoil, which will be produced from the recycling of low quality, mixed plastic waste otherwise destined for incineration or landfill. The plant should enter commercial production in 2021.

Another polymer major looking to boost chemical recycling is BASF. “With BASF’s new ChemCycling project, we want to make a significant contribution in reusing plastic waste as feedstock in production,” says one company representative. “Together with our customers and partners, we developed and manufactured the first pilot products based on chemically recycled plastic waste.” BASF is also a supporter of the PolyStyreneLoop project, which is at the pilot plant stage with a solvent-based recycling technology that should allow the recycling of expanded polystyrene (EPS) used in building insulation. Unlike existing mechanical recycling approaches, the technology would also be suited to deal with flame retardants that have been used in the past, but which are now banned.

Bioplastics growing

How much will bioplastics contribute to the circular economy? Europe is proving to be an important centre for production of these materials. Latest market data compiled by European Bioplastics (in cooperation with the Nova-Institute) shows around 20% of global bioplastics production capacity, which hit 2.11 million tonnes in 2018, is located in Europe. That figure should to grow to 27 % by 2023, supported by recently adopted policies in several European Member States, notably Italy and France.

Not surprisingly, EUBP says it fully supports the transition from a linear to a ‘no-leakage’ circular and bio-based economy in Europe. “However, specific regulations like the single-use directive fail to acknowledge the potential of biodegradable certified compostable plastics in those situations where EU legislation for hygiene and food contact need to be fulfilled, but where no multi-use options can be deployed,” it says. “Especially since boosting organic recycling is a major pillar of the EU´s circular economy.”

The Brexit effect

Will the UK ever leave the European Union? At the time of writing, the answer appeared to be yes, but questions remain over the exact when and how. Under the original plan, the UK would in fact have already left (on March 29 of this year), but the UK parliament has succeeded only in deciding what sort of a “divorce settlement” from the EU it does not want. The uncertainty has been driving many people to distraction. The latest deadline is October 31.

Nobody knows what the consequences for the plastics industry will be. But many companies with manufacturing in, and/or trading with, the UK are planning for the worst, while hoping for the best. Things they are looking at include a possible need for increased warehousing, risk of border delays, new customs systems and processing codes. This also incorporates obligations to comply with any new UK legislation – a UK equivalent to EU REACH regulations for example.

Despite all this, Philip Law, Director-General of the British Plastics Federation trade association, said in April that he was “very upbeat” about the long- term prospects for the plastics industry in the UK. “There’s always adversity of some kind in business but our essential skill is to look for ways to find opportunities in the resolution of problems,” he said. The Brexit saga for many helped fill the gap in television viewing left by Game of Thrones, with numerous key players falling on their swords. Law said that Brexit was threatening to turn into a “national Calvary.” “UK business, sensibly, has become more cautious, avoiding bold moves, but there are many other factors causing uncertainty for the plastics industry globally – the China- USA trade tensions, the slowdowns in China and Germany and the travails of the aerospace industry,” he said. But he put a very positive spin on things. “For the UK we have to look at the fundamentals, which will continue to propel the plastics industry achievement to new heights in the decades to come. We have a strong platform in raw material manufacture and distribution (…) and we have a vibrant recycling industry. All the elements of a circular economy are in place.”

According to Kühmann, Managing Director Plastics and Rubber Machinery VDMA, European manufacturers of plastic and rubber machinery have been delighted by the excellent progress which has ensured that industry-wide turnover has almost doubled over the past ten years. The turning point has now been reached, and the VDMA now predicts a drop in turnover of 10% for German manufacturers of plastic and rubber machinery, calculated for 2019. The reason for this is the cyclical downturn, which is long overdue after 10 years of growth. This downturn is, however, augmented by the uncertainty that is currently prevailing in the automotive industry. Investments are experiencing a standstill, to some extent, for this reason. The use of plastics is also subject to increasing scrutiny in the packaging sector. Here, the poor image that plastics have been tarnished with today is blanketing the sector”, explains Kühmann and continues: “In addition, the trade conflict between the USA and China has led to worldwide delays in the supply chain and is having a noticeable impact on the market, introducing more insecurity. In Europe, there are also uncertainties due to Brexit, with the methods via which the UK will leave the EU remaining unclear, and the immense Italian national debt.”

Machinery makers see market “moving sideways”

Among major European machinery makers, injection moulding specialist Engel says sales in its fiscal year 2018/19 grew by around 6% – which it calls moderate. But now things are going sideways. “In Europe, the German speaking countries of Germany, Austria and Switzerland in particular remain as before at a good level. On the one hand, since the last quarter of 2018, we have been feeling a significant decline in production in the German automotive industry. The effects of Brexit, punitive tariffs and sanctions, as well as the debate about diesel limits and driving bans are unclear.” The company points out that increasingly lower limits on emissions from vehicles will favour the use of plastics, which are the ideal materials for weight saving. For a long time, the EU has been clamping down on emissions of nitrogen oxides, hydrocarbons, particulates, and carbon monoxide, and more recently has been regulating CO2 emissions as well. A target for passenger vehicles of 130 g/km was phased in between 2012 and 2015, and a new target of 95 g/km will apply from 2021.

The circular economy is proving to be a strong driver of innovation among machine makers as well as materials companies. “As the quality of the recycled material is usually more volatile than the quality of virgin material, recycled material has so far been out of the question for many applications,” it notes. “Intelligent assistant systems, which are an essential feature of Industry 4.0, are about to change this.” At K 2019, Engel will premiere the use of its iQ weight control smart software – which monitors the injection moulding process shot by shot, and automatically compensates for fluctuations in real time – using recycled material.

Hans Ulrich Golz, president of the injection moulding machinery segment of the KraussMaffei Group, is another industry leader seeing the European plastics industry exhibiting a lateral movement. “Especially the automotive industry is currently not a growth driver,” he says. “The topic E-mobility has not yet ignited in Europe as expected, but investments for conventional drives are not being made by suppliers either. “The market increasingly requires machines and technologies that are highly standardized and flexible at the same time in order to profitably use investments in rapidly changing markets over the entire life cycle of the machine.” Golz says at the K show, KraussMaffei will present future-orientated solutions that are exactly in line with these and other current key trends. Doubtless there will be numerous other exhibitors planning to do the same.

Source: K