Free delivered (FD) R-PET flake and food-grade pellet (FGP) prices in northwest Europe (NWE) hit record highs in summer 2022 before crashing down in reaction to cheap PET prices. This coincided with falling freight rates and a surge in imports of virgin material into the European market.
Recyclers canvassed by ICIS following the Commission’s announcement have welcomed the investigation, as they see a link between a stable PET market and a more robust, and less volatile R-PET market.
Romania’s Green Group, which owns R-PET flake and pellet producer Green Tech has expressed support for the notice of initiation of an anti-dumping proceeding concerning imports of certain PET originating in People’s Republic of China.
“As an R-PET producer, we believe that this initiative is both just and necessary, particularly at a time when Europe should be protecting itself against any form of unfair competition”, the company said in a statement seen by ICIS.
“A fair virgin market that operates at normal prices has an impact on the recycling efficiency in Europe. [R-PET] is a secondary market and a consequence of the first life packaging created from v[irgin] PET. It’s a related market created under the circular economy model. Therefore, we believe that it is important to create a level playing field for both v[irgin] PET and [R-PET] producers in the European market.”
R-PET VIEW
The company also called for a future investigation into the R-PET market as well.
“…[We] expect that in order to have a fair European market in the future, this investigation should be extended to R-PET in the near future”, adding it is ready ‘to support any further initiatives that help to promote fair and sustainable practices in the industry’.
Whether or not the Commission would consider a separate investigation into imports of R-PET flake and FGP from outside of the EU remains a question, but other recyclers in Europe have previously expressed concerns about the impact these cheaper imports are having on European R-PET production and prices.
Lower-priced imports of flake and FGP from outside the EU have been one of the major contributing factors to lower flake and FGP prices offered by European producers in 2023.
One German recycler said the market needs time to see the outcome of the PET investigation, which could be between nine and 12 months, so it does not see an immediate impact on R-PET.
A second producer said that even if the Commission implements an anti-dumping duty on China, there are still other countries exporting PET to Europe, so it may have limited impact on the virgin market, which in turn would result in limited impacts on R-PET.
IMPACT ON RECYCLED CONTENT TARGETS
The Commission has mandated that all PET beverage bottles contain 25% R-PET by 2025 as part of the Single Use Plastics Directive, which has led to ambitious recycled content pledges by several large beverage brands, some of which go above and beyond the mandated volume.
Any possible ban on R-PET imports into the EU could make it harder for some companies to hit that target.
Given the limited availability of EU-origin food-grade R-PET in Europe, imports may well be needed to allow all beverage bottle producers to hit the 25% recycled content target in less than two years’ time.
ICIS’ Recycling Supply Tracker – Mechanical puts Europe’s current food-grade R-PET capacity at around 850,000 tonnes/year. Several food-grade R-PET projects are expected to come online in Europe during 2023 which have the potential to increase capacity by 200,000 tonnes/year.
Helen McGeough, ICIS senior analyst plastics recycling said: “Due to the uncertain market outlook, R-PET end users are looking to reduce costs throughout 2023, increasing the use of cheaper virgin PET and R-PET imports. Lower priced R-PET imports are putting pressure on European players who face higher production costs, and are absorbing some of the lower demand there is currently in Europe.
