PETpla.net Insider 06 / 2021

TRADE SHOW REVIEW PETplanet Insider Vol. 22 No. 06/21 www.petpla.net 40 Although supply varies according to region (Asia Pacific dominates the rPET supply, followed by Europe and North America), collection and sorting remains the biggest bottleneck. Within Europe for instance, a lack of harmonisation results in collection rates varying between 23% and 96% according to 2019 figures. Besides the need to increase collec- tion volumes, another focus should be on increasing the quality of the mate- rial, as was pointed out in the presenta- tion. Deposit return schemes could help achieve higher levels both of collection and quality. Since the question of the potential of chemical recycling comes up often in this context, Helen was also able to shed light on this topic. Although she sees great potential in the process, she cautioned that it could take another 5-10 years to reach industrial levels. In their research, Icis analysts identified 200 chemical recycling processes using a variety of technologies, with the majority of them still at the pre-commercial stage. Besides this, there are uncertainties about the pro- cess relating to the possible environmen- tal impact or lack of clarity from the legal point of view (in Europe for example). For these reasons, a decision is unlikely to be reached for the next couple of years about the contribution that chemical recycling may make to reach recycling targets. Asian and European recycled PET: Managing supply challenges amid increasing demand In another presentation, Matt Tudball – Senior Editor Recycling Icis covered the European rPET market. In 2020, major beverage brands reported falling sales. Due to the pan- demic, on-the-go consumption or con- sumption during big events fell and with that post-consumer bottle availability. This could not be bolstered by the increased consumption of larger PET bottles as they were consumed over a longer period of time, with consumers making less frequent use of bottle return schemes. At the same time, a massive drop in crude oil prices caused a sharp drop in price for virgin PET. As a result, some companies - particularly in the thermoforming sector - were replacing rPET with virgin material, while others, especially bottling brands, due to brand commitments, sustainability targets or regulations, maintained their use of rPET. At the beginning of Sep- tember 2020, rPET flakes held a 30% premium over virgin PET, while Efsa- approved food-grade pellets were double the price of PET. The situation completely changed in early 2021 with virgin PET prices rocket- ing. Matt pointed out that many sources he has spoken to in the European rPET market said a forecast of the further price development is very difficult to make as there is a huge uncertainty about post-lockdown Europe; will there be a rapid return to normality or will produc- ers adopt a more cautious approach with corresponding effects on the market? Factors which are likely to play a key role are regulatory legislation which are not expected to have an impact before the end of the year, and consumer behaviour. Other important developments which are likely to have an impact on the market are the rise of tray-to-tray recycling, and the growing level of extrusion technol- ogy being employed by the bottle sector across Europe. The growth of this is expected to increase rapidly, making extrusion technology a new competitor in the scarce rPET market, with the pos- sibility of additional competition from the tray-to-tray sector on the horizon. Hazel Goh – Senior Editor Icis looked at the Asian rPET market. Virgin PET prices have increased significantly, especially in Q1 this year. This led price sensitive downstream converters, mostly from the fibre textile industry, to use more rPET and less virgin PET in their produc- tion where possible. There were improve- ment in the domestic demand, resulting in less export volume availability. In addition to that, freight costs increased in October/ November last year, made rPET exports had higher total cost, and hence seemed less attractive for importing buyers. Regarding Asian recycling capac- ity, China houses a large percentage of mechanical recycling capacity (66% or 5,342,083 t/a). Other Asian regions with substantial PET recycling facilities are in India, Indonesia, Japan, Malaysia, Taiwan, Thailand and Vietnam. With a shift in regulations and brand owner commitments in sustainability, Hazel expected more new recycling plants to come on-stream in the near future. www.icisevents.com