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November 21, 2018 01:00 AM

Execs say plastics recycling at a 'tipping point'

Steve Toloken
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    Erema North America Inc.
    Attendees at the Erema Group's annual Discovery Days technology event at its Ipswich, Mass., technical center Sept. 25.

    Ipswich, Mass. — Public concern about ocean litter, China's ban on scrap imports and plans by major consumer product companies to use more recycled content could be a "tipping point" for boosting plastics recycling.

    At least that was the view from a recent open house held by recycling technology supplier Erema Group GmbH. The Austrian company, one of the largest makers of equipment for plastics recycling, hosted its annual Discovery Day forum at its Ipswich technical center Sept. 25.

    Martin Baumann, vice president of sales at Erema North America Inc., said the emotional impact of ocean plastics waste for consumers and the pressure that puts on brand owners that use a lot of plastics packaging will create a pull of demand for using more recycled content plastics in products.

    "The whole issue of ocean plastics, the pictures that have reached the common consumer, everybody knows about it, and that emotional aspect will actually drive the brand owners to keep their commitments," he said. "Hence I do believe we have reached the tipping point and the amount of recycled plastic will increase in the coming years significantly."

    Ansfelden, Austria-based Erema says those pressures are leading to more investment in recycling equipment, with the company reporting growing global sales, hitting 155 million euros ($179.4 million) in the fiscal year ending March 31, part of a steady rise from 95 million euros ($130.8 million) in 2014.

    Erema estimates that to meet new European goals of a 55 percent recycling rate by 2030, the amount of recycled plastic used in products there will have to more than double compared to what was used in 2014, to more than 10 million tons.

    Attendees also talked about the challenges, however, from lower virgin resin prices as North American shale gas provides a cheaper feedstock to concerns that users of recycled material have about cost and quality.

    Manica Ulcnik-Krump, managing director of German recycler and environmental services firm Interseroh Dienstleistungs AG, told attendees at the event that the end users of those recycled plastics are apprehensive about availability and quality of supply.

    "The truth is they are scared," she said. "They are scared because the market is still new; they are scared because the injection molding or blow molding or extrusion or whatever they do will not run smoothly, they won't have any stability."

    Cost as well is a major concern, she said.

    "At the end of the day, the fact is that no customer is willing to pay more for recycled material than virgin material," she said. "We do have a few customers, being very honest, they are willing to pay more than for virgin material. But they are boutique customers."

    The company said the Massachusetts event drew about 130 people, and a larger, three-day version at its Austrian headquarters in June had 1,000 attendees, which Erema attributes to growing interest in how businesses will meet recycling targets.

    One recycling executive at the event, Sunil Bagaria, president of GDB International Inc. in New Brunswick, N.J., said his company is investing in new plastics recycling lines to boost capacity in New Jersey to make recycled plastic pellets.

    If that expansion goes well, the company plans similar investments in Ohio and Wisconsin, he said.

    GDB previously focused on trading in recyclables but changes in the market, including China's ban, prompted the company to begin investing in its own manufacturing and recycling equipment and selling its pellets domestically, he said.

    One line is running in New Brunswick, and two more will be operating by the end of November, he said.

    "Obviously we have never been in manufacturing; now we are taking that step," Bagaria said. "Our recycling cannot be dependent on the country [of China]. That is not recycling. We have to have our own infrastructure here."

    Bagaria, who is also chairman of the plastics recycling committee at the Institute of Scrap Recycling Industries Inc. in Washington, said that group is discussing how it can better support recycling markets, including looking at minimum recycled content legislation. That would be a change in its policies, he said.

    Baumann noted that with China's ban on plastic scrap imports cutting off U.S. exports, more plastics are being sent to landfills. Erema pointed to statistics that only 14 percent of plastics packaging is recycled now, with 40 percent landfilled, 32 percent leaked into the environment and 14 percent incinerated.

    For Interseroh's Ulcnik-Krump the amount landfilled, rather than recycled, is a particular problem.

    "We have to be very honest ourselves: We have a problem," she said. "The pollution in the ocean, yes it terrible, but it is even worse that we landfill it."

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