Report: More recycled plastic needed to meet Walmart, Ikea and others’ goals
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Multinational giants such as the PepsiCo, Coca Cola and Walmart have set ambitious goals for using recycled plastics in their products, but the nation’s plastic industry won’t be able to meet those goals without dramatically boosting investments in recycling plastics, a new analysis suggests.
A report from the energy research and analysis firm Wood Mackenzie finds that up to $3 billion in additional capital investment would be required in the next decade to achieve companies’ goals for reclaiming plastic bottles as material for other plastic products, providing another challenge for the petrochemical industry that makes plastics and plastic feedstocks.
The backlash against plastic waste has spurred dozens of brands such as the toy maker Lego, consumer products company Procter &Gamble and retailer Ikea to set goals to increase their use of recycled plastics. But because of poor recycling rates in the United States and lack of recycling centers and processing plants, there may not be enough recycled plastics to supply meet the goals of these and other companies.
“These goals have placed an emphasis on using recycled plastic, primarily (recycled polyethylene), as the central component of their products,” said Michael Bermish, chemicals principal analyst at Wood Mackenzie. “However, this raises the question of whether there will be enough (polyethylene) bottles recovered to meet these ambitious bottle-to-bottle requirements.”
U.S. recycling rates of plastic bottles have historically been sluggish. In 2017, just 29.2 percent of polyethylene bottles were recycled compared to the global average of 56 percent, according to the National Association of PET Container Resources, a trade group for the polyethylene packaging industry.
Substantial investment
Wood Mackenzie forecasts that there will be a slow, but steady growth in the supply of plastic bottles available for recycling as Americans are expected to increase plastic bottle consumption by about 2.5 percent a year through 2030.
If beverage companies were to make all carbonized soft drink and water bottles with just 25 percent recycled content, Wood Mackenzie’s analysis estimates that an additional eight recycling plants, each with processing capacity of 45,000 metric tons, would be needed by 2025. If the target becomes 50 percent recycled content, then 27 45,000metric-ton processing plants would be needed by 2030.
That would require about $560 million of capital investment by 2025 and nearly $1.9 billion by 2030.
In a more ambitious scenario, if brand owners replaced all beverage bottles with 25 percent recycled content, another 14 plants would be needed by 2025. If all beverage bottles were replaced with 50 recycled content, another 43 new recycled plastic processing plants by 2030. That would raise the additional capital investment required to $1 billion by 2025 and $3 billion by 2030.
“Both scenarios clearly suggest that the current amount of (recycled plastic) bottles collected — on a tonnage basis — will fall far short of what is needed to meet current plastics recycled content goals,” said Bermish. “The capital investment costs to build the plants required to process the additional (plastic) bottles collected would be substantial, assuming the bottle collection goals are met in the first place.”
Reality gap
Bermish noted that some companies also have set goals for using more recycled plastics in other products such as fibers, and that will further increase competition for recycled plastics..
“Clearly,” he said, “a huge gap exists between existing corporate sustainability goals and the current state of the U.S. (recycled plastics) market.”