Aluminium Deutschland highlights “hard realities” of PCR supply shortage, urges EU to take action

21 Apr 2023 --- Aluminium Deutschland (AD) has released a warning that a shortage of post-consumer recycling materials (PCR) will hinder the European Commission’s (EC) Packaging and Packaging Waste Regulation (PPWR) targets, due for January 2030.

In November 2022, the EC presented a draft of PPWR to promote using recycled materials in packaging. Since then, the EC has been updating the draft. 

Most plastic packaging must contain a minimum amount of recycled materials per plastic packaging by 2030, with an expected minimum recycled content target of 50% by 2025. The recycled material can be obtained from PCR or PET (rPET). The planned regulation does not yet include specific targets for using recycled materials for other packaging, such as metals. 

“The increased use of PCR material is not wishful thinking but has to face the hard realities on the supply side. Here, packaging manufacturers, brand owners, retailers, recyclers and legislators are equally challenged to create the necessary market and legal foundations,” says Clemens Behrenbruch, chairman of AD’s tubes, cans and impact extruded parts division. 

Plastics will be required to be made from 50% recycled plastic by 2025 according to EU regulations.Suppliers dictate precarious PCR market 
AD reports that recycled PE from PCR materials suitable for food contact have few suppliers throughout Europe. The cause is partly the European Food Safety Authority (EFSA) lagging in approving recycling processes for polyolefins. 

Recycled polymer used in PCR packaging is more expensive than virgin polymer due to the processes involved in its manufacturing. This also leads to packaging made using this material being more costly.

AD says the situation is further aggravated by large parts of the personal care industry demanding for food-grade recycled material qualities.

“The current suppliers of food-grade PCR-polyethylene can more or less dictate the conditions in an oligopolistic market structure. The situation is similarly precarious for the barrier material ethylene vinyl alcohol copolymer, where supply is also severely limited,” explains Behrenbruch. 

“The material costs for packaging manufacturers are correspondingly high. In addition, tool changes must often be made in packaging production to process the recycled material, which drives up costs even further.”

Solution or pollution
AD suggests a consistent design for packaging recycling and creating an appropriate legal framework in Europe that promotes the profitability of recycling activities and investments in technologies and supply logistics. “This is the only way to sustainably ensure that packaging is collected, sorted and recycled at a high standard,” it underscores. 

The company believes EFSA needs more intensive efforts to approve recycling processes for polyolefins regarding plastic tubes. It continues that legislators need to be open to different technologies and not demonize chemical recycling as a complement to mechanical recycling.  

Recently, a cross-sectoral body of material suppliers and associations called on the EC to implement a harmonized method for calculating chemically recycled content. The group requested a fuel-exempt mass balance approach, which it says is essential if the EU is to meet the packaging and packaging waste (PPWD) revisions. PCR materials come with a higher cost than virgin plastics. 

Regarding chemical recycling as a solution for the price of recycled materials, Just Zero accused the advanced recycling business of pushing a false narrative surrounding its environmental practices. The company said the fossil fuel industry spreads misinformation about advanced recycling, chemical recycling and other toxic and climate-damaging technologies that melt, boil and burn plastic waste. 

“The fact is, however, that the demand for high-quality aluminum and plastic recycling material needed for packaging production exceeds the supply by far. The race for these materials is ongoing, worldwide,” asserts Behrenbruch. 

The price of rPET
Another form of recycled content that the packaging industry can implement to meet the new EU regulations is rPET. Last year rPET more than doubled in price as other industries, notably fashion, have started to buy up stocks in their own environmental efforts. In Europe, rPET is reported at a 30%-plus premium over virgin.

“There are well-known ongoing challenges around meeting the supply demands for sourcing high-quality food-grade rPET globally,” a TCCC spokesperson previously told PackagingInsights.

Similarly, UNESDA Soft Drinks Europe said recycled PET was becoming as rare and expensive as gold or white truffles. The association called for the EU to grant priority access to rPET for bottlers, arguing that the beverage packaging industry contributes the vast majority of Europe’s supply but is being priced out by high demand. 

This may lead to businesses with recycled content targets not having access to the necessary material to comply with their legal obligations. Cost solutions must be met before the regulations take effect and companies pay the price. 

By Sabine Waldeck