Commenting on the directive, Isabelle Gilks, Wood Mackenzie Analyst, said: "The target placed on PET beverage bottles is arguably the most ambitious of those in the proposal. To put this number into context, the 2017 European PET beverage bottle collection rate stood at an average of 58%. In volume terms, EU member states would need to collect twice as many bottles, by weight, in 2029 when compared to 2017.
"Germany and Norway have already reached the 90% collection rate target. However, in stark contrast, 2017 collection rates in Bulgaria and Greece stood at 17% and 29%, respectively. There will be considerable challenges in meeting the 90% target in Central and Eastern Europe – notably Poland, Bulgaria and Romania, where we forecast PET demand to grow by over 50% in the period up to 2029.
“Importantly, in order to recycle this additional volume in collected waste, more than 60 new reprocessing plants – with an average annual capacity of 30kt each – would be required. Without considerable investment in infrastructure and waste management collection, the target is unlikely to be met. If, however, EU member states do manage to reach the target, a larger volume of plastic waste will either be incinerated or sent to landfill.”
Included in the EU's directive is the target to incorporate 25% of recycled plastic from 2025, increasing to 30% from 2030, in all PET beverage bottles. "We forecast this will lead to a six-fold increase in demand for recycled PET in Europe by 2030. Given the current levels of investment in new PET recycling facilities, this is an extremely ambitious target.
"However, it's worth noting that the EU's target for recycled plastic in all PET beverage bottles is more modest than targets announced by industry, with a number of big brands targeting 50% use of recycled PET in their beverage bottles by 2030.
"As such, we expect there to be a strong demand for recycled PET leading up to 2030 and beyond, which may displace some virgin PET demand. We are also likely to see the price of recycle flake rise substantially as demand increases, however supply could well be constrained.
“Despite the ambitious nature of these targets, it is likely that we will continue to see further product bans or additional charges on single-use item usage, as this has been an effective method in causing demand destruction. This is evidenced through the implementation of the UK’s plastic bag charge, which led to more than an 80% reduction in demand,” added Ms. Gilks.
