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3. Analysing Europe’s shifting plastics markets Martyna Fong Director, Market Intelligence, AMI:
At AMI, we track the activity of plastics processors in Europe and beyond. We have established our position in the market as a focussed
downstream plastics information provider. We know who is transforming what polymers, where, with what technology and into what end-use application.
A decade ago, we tracked the activity of almost 26 thousand plastics processors in Europe. 64% of them were injection moulders, 8% were film extruders and 7% were blow moulders. The industry has consolidated operations since then, and we are now down to just over 20 thousand processing sites.
The industry structure is changing via horizontal consolidation to gain market share and buying power; and via vertical integration with the recycling industry to secure recycled resins. The plastics industry has not shrunk though! The demand for plastics in Europe grew by 3 million tonnes in the past decade up to just under 50 million tonnes of virgin material in 2022. The industry rationalised 20% of plastics processing sites – and that is either consolidated multiple operations into larger output ones or closed down sites that were commercially non-viable. The industry is much leaner! In addition, if we consider the extraordinary industry efforts to downgauge, the scale of demand development is under-represented in pure demand volume terms.
Packaging is by far the biggest user of plastics – in 2022 rigid packaging accounted for 26% of demand, while flexible packaging accounted for 23%. Construction/infrastructure accounted for 21% and there are significant changes ahead in all three of these applications in line with regulatory targets for recycling, recyclate usage and energy transition.
4. Plastic Recycling – producing the “New Gold”?
Silke Einschuetz, Senior Consultant – Recycling and Sustainability, AMI:
“Plastics Recycling – Exploiting the New Gold” is the title of a study published earlier this year. Against a background of strong market volatility that once again threatens to put mechanical recyclers’ survival at risk and a difficult macroeconomic environment that is slowing down investment flows into chemical recycling, we will explore how a viable and profitable recycling industry can be established.
A key barrier for the development of profitable markets for recycled polymers is the decoupling of virgin polymer and recyclate prices, combined with the fact that low oil prices have at times created a situation where virgin polymers, with a few exceptions, can be cheaper than recyclates. The creation of profitable markets thus requires regulatory intervention to incentivise recyclate usage.
Pressures to achieve a consistent supply of high- quality recycled polymers will continue to grow with increasing legislation, further underlining the need to increase recycling capacity and throughputs, and to achieve higher recycling rates for those items, such as flexible polyolefins, which are currently considered challenging to recycle.
The harmonisation of waste collection systems, developing the accessibility of so far untapped waste streams containing waste plastics, improved sorting, and the creation of end-markets for recyclates, are key requirements for progress.
The key thing to remember, however, is that recycling is only one part of the equation. Whether mechanical or chemical, is only one element in a complex set of measures that will be necessary to achieve a more circular economy, taking into full account the interplay between the plastics lifecycle, fossil fuels and climate change.
5. Future of packaging materials: the road ahead/ effective management of anti-plastic narrative Martyna Fong, Director, Market Intelligence, AMI: ‘The European SUP directive and the Packaging Waste Directive provide a regulatory context to move away from non-recyclable materials used in packaging and single use items. This context has caused a dramatic shift away from PS in the thin wall packaging space into recyclable alternatives, such as polymers with established recycling streams (PET, PP), compostable materials (PLA based), cellulose and natural materials such as bagasse. We are seeing investments in new technologies from both a material and manufacturing perspective.
We are witnessing a phenomenon of ‘paperisation’, which means a renewed interest in the use of cellulose in conventionally plastic domains. While replacing plastics with paper is still a highly nuanced debate, it's encouraging to see so much R&D in the industry, and opportunities opening across the whole value chain to manage new material performance and barrier parameters.
Moulded fibre, for example, is a complimentary material to plastic for traditional plastic packaging businesses and can offer a route to extend portfolio as well as to manage risks associated with the potential loss of customer base. Likewise, moulded fibre is another portfolio product for paper packaging converters. In the thin wall packaging space, the markets that are most reliant on foamed PS, which isn’t recyclable, offer the greatest opportunity. Food service disposables, such as drinking cups, trays, plates, bowls and cutlery are a perfect entry for moulded fibre. Retail applications, with shelf-life requirements and hence seal integrity will be the second phase of development – dependent on overcoming technical challenges.
Whilst conventional paper packaging companies have chosen to use an anti-plastic narrative in recent marketing communications, the industry needs to manage how both solutions are marketed to end-users as viable options. This alignment offers consolidation opportunities across packaging industries.
Events Plastics
Sustainability Strategies
5-6 December 2023 Düsseldorf, Germany
Book your place today
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