The volume of PET recycling in Europe is rising rapidly, which will keep European Union regulators satisfied. But the growth will not be enough to justify chemical recycling in the next five years.
Today's PET recycling business consists mainly of converting used bottles into fiber, sheet and strapping tape. Recycled PET has a 10 percent share of the total PET market, and its potential share is perhaps twice as high. Its major untapped market is bottles: Its current 1 percent share could be increased to around 15 percent.
At the same time, collection of used bottles is growing at about 15 percent per year in Europe. That growth comes from an expansion of collection systems in most countries and a restructuring of the existing system in Germany, where growth will be largest in absolute terms. Only in the past one or two years has Germany introduced automated bottle sorting at its waste-sorting plants, which allows PET bottles to be captured separately.
Based on our recent analysis, we believe PET collection rates should satisfy European Union regulations as stipulated by the packaging directive. Collection and recycling of PET in the EU as a percentage of PET packaging waste is forecast to rise from 14 percent in 2000 to 25 percent in 2006.
But the growth in used-bottle collection will change recycled PET's demand pattern. Traditional end uses will become completely saturated with recyclate. And exports of baled bottles will grow. The collection systems — which operate essentially as an oligopoly — will do this to maintain price stability in European markets.
Bottle-to-bottle recycling will grow if for no other reason than the “Hawthorne effect” — focusing on a perceived problem tends to generate improvement. And clearly, the entire PET recycling chain is focused on this problem. There is some debate currently as to how the bottle-to-bottle gap will be bridged. Some bottlers and equipment vendors argue that the only suitable bridge will be chemical recycling — de- and repolymerization of PET — as opposed to mechanical recycling. But other processors and bottlers disagree in practice, because already they are mechanically recycling bottle-to-bottle, albeit on a small scale.
Our analysis suggests that chemical recycling will not be required to generate large growth in the bottle-to-bottle loop or to satisfy regulators out to 2006. There is great interest in chemical recycling — and pilot projects abound — but the commercial imperative for it does not yet exist.
Johnson is with Atlantic Consulting near Zurich, Switzerland. Heinen is with SRI Consulting in Houston.