European recyclers are seeing drops in sales in the double digits, according to Sustainable Plastics sources. The possibility of closures in the chemical industry in general has recently been raised by representatives in Germany, after the government failed to meet demands for cheaper electricity prices for industry.
The downward price pressure on recycled PET is particularly precarious, as converters have increasingly opted for cheaper virgin polymer rather than recycled material. Since early 2019, clear recycled PET pellet prices have been consistently higher than virgin PET. Recycled PET once again saw the largest price decline in August, with clear flake prices falling by €100 ($105) per metric ton and clear food-grade pellet prices down by €90 ($95) per tonne.
PRE attributes the declining market situation to "the lack of a level-playing field," which has seen PET imports to the European Union increase by 20 percent from the second quarter of 2022 to the second quarter of 2023, resulting in low demand for European recycled PET. Data obtained through PRE surveys suggests that these market dynamics have led to a 10 percent decrease of recycled PET production in Europe during the same period.
The association is calling for enforcement mechanisms, like the introduction of an independent third-party certification system, to level the playing field between European and non-European plastics recyclers. It said Europe is using "non-transparent imports" from non-European countries to meet targets set by the Single Use Plastics Directive rather than supplying that demand with made-in-Europe recycled PET.
Between 2021 and 2022, the main imports of PET came from India, China, and Turkey, followed by Indonesia, Egypt and Vietnam, countries where energy and labor costs are significantly cheaper than in Europe.
"Legislation has proved itself as one of the most effective instruments in setting the course for a circular plastic future," PRE said. "However, enforcement measures are a must for its effective implementation. Without this, Europe risks untraceable, unverified imports of plastics participating toward the European recycling targets. Introducing an independent third-party certification system would solve these issues. In parallel, it would help to avoid unverified declarations and promote traceability, particularly for food contact materials, while boosting the transparency on the origin of recycled plastics."