Plastic waste in private households increased by 10 percent in recent months as the numbers of home offices and Internet orders went up and the demand for recyclates – recycled plastic from plastic waste – decreased dramatically. What appears at first glance to be a paradox can be attributed to one cause – oil prices.
The corona pandemic brought about a sharp fall in the price of oil. Cheap crude oil lowers the cost of producing new plastic and thus reinforces new plastic's privileged legal status in Germany as it is exempt from petroleum tax and EEC levies. In comparison, the material recycling of used plastic packaging is economically even less attractive. Many manufacturers which previously used recyclates for products and packaging are now switching back to new goods.
That means not only substantial losses for the recycling industry and a giant step backwards for climate and environmental protection, but also a huge blow to the circular economy!
Consumers long ago recognized the danger. Surveys show that consumers see plastic as the greatest (environmental) problem (top-of-mind theme 2019 with regard to the environment and ecology, Source: GfK Unternehmergespräch 2019). They expect solutions in favor of a sustainable economy and that has not been changed by the coronavirus (Source: GfK Webinar IM AUGE DES STURMS, 2020).
The solution to the plastic pollution of our environment has been known for some time. Used plastic from post-consumer waste collections like the German Yellow Bag can now be recycled at such a high quality that it fulfills strict requirements for use in cosmetic packaging. Plastic remains in a closed cycle, where it becomes valuable raw material instead of polluting waste.
The technology of material recycling, however, is still pushed aside because the use of new plastic is cheaper in comparison.
That's why three representatives along the supply chain have issued a joint statement in which they demand that the German government use the impending transformation of the economy to establish a sustainable circular economy in general and the reuse of recyclates from used plastic in particular.
Peter Kurth, President of BDE (German Association for the Waste, Water and Raw Materials Industries), appeals to the role model function of public procurement for sustainable management: “The decline in oil prices intensified the already difficult circumstances for many plastic recyclers. Expensively produced recyclates find no takers, investments in better recycling are put off or cancelled because refinancing appears impossible. Given the lack of political action, plastic recycling is threatened with severe damage. Anyone who wants a successful, sustainable economy has to employ suitable instruments that have been known for a long time. An altered procurement process that takes ecological aspects seriously should be at the top of the agenda.”
Reinhard Schneider, owner of the cleaning products company Werner & Mertz and winner of the German Environmental Award 2019, provides concrete solutions to balance out the existing financial disadvantage between the use of post-consumer recyclates (PCR) and of new goods in Germany. “The ecological differential in the purchase prices could be incorporated in the Packaging Law in Paragraph 21 in the form of a fund to which all producers would have to contribute. Only those who use recyclates should receive reimbursement. Additionally, a plastic tax could be introduced which would apply only to new goods, something Italy plans to do. That corresponds to cutting the subsidies for the manufacture of new goods in that the exemption from mineral oil tax and EEC levies no longer apply. The debated minimum utilization rate makes sense only when combined with incentivization for exceeding the minimum rate.”
Michael Wiener, CEO of The Green Dot (“Der Grüne Punkt”), says specifically about minimum utilization rate: “The potential of the circular economy for climate protection, especially for plastic, has not yet been exhausted. We are missing out on the economic opportunities the circular economy offers. A circular economy that earns the name creates jobs and brings urgently needed added value into the European Union. Instead, we are experiencing a complete market failure. Recycled plastic saves up to 50 percent in greenhouse gas emissions generated by new plastic, but that is not reflected in the price. Politicians have to set defined recyclate utilization goals for certain product groups in order to promote the creation of sustainable recyclate markets and provide the necessary investment security. In July 2020 the federal government will take over the EU Council Presidency – a good opportunity to advance relevant measures.”
Summary: A stronger focus on sustainability in public procurement, a fund system, a new plastic tax for new goods and a clearly defined minimum rate for the use of recyclates combined with financial incentives are instruments that will save plastic recycling from extermination and, after the corona crisis, will ensure a stable, sustainable circular economy as an important contribution to climate protection.
