Progress in packaging sustainability: Slow but steady

A new report from Rabobank examining sustainability in plastics packaging warns that companies are finding it challenging to meet commitments made in the past.

The report looked at the U.S. and European Union. It found that despite good intentions, many companies have had to adjust their sustainability goals and packaging strategies by "shifting the target date of the goals further into the future."

Technical and material limitations, inadequate infrastructure, economic pressures and consumer behavior were cited as the main reasons companies have found it necessary to delay and rethink their targets and timeline.

Yet, write the authors, while the initial targets may not be met, the ongoing efforts and strategic shifts nonetheless reflect a "deep commitment to packaging sustainability."

More realistic goals, better collaboration and lending support to investment in infrastructure, for example, through EPR fees, are evidence of progress, "even if the path isn't straightforward."

The general tenor of the report, "Unwrapped: Plastic Packaging Matters," is positive. Recycling and the use of recycled content have become key aspects of sustainability in plastic packaging, and demand for recycled polymers has grown in both the U.S. and the EU, primarily driven by state regulation and company pledges in the U.S. and EU-level regulation in the European Union.

Europe is the frontrunner in the global post-consumer recycled content (PCR) market, accounting for over half of PCR consumption, with the U.S. trailing closely. The food and beverage sector, responsible for two-thirds of PCR usage in 2021, is set to expand its demand for sustainable packaging through 2026.

In the EU, regulatory frameworks are the driver behind the increased interest in recycled material. In order to be able to meet the future surge in demand, substantial investment in collection and recycling infrastructure is essential.

In terms of production, Europe accounts for 18 percent of total production of recycled plastics, second only to Asia. Yet despite a 17 percent capacity growth in 2021, economic headwinds have reduced demand, leaving recyclers underutilized. The EU's Packaging and Packaging Waste Regulation's (PPWR) recycled content targets could provide a much-needed boost for recyclers.

The PPWR's ambitious targets necessitate equally ambitious investments in collection and recycling infrastructure. According to RaboResearch, to meet the 2030 goals Europe must triple its recycled plastic production from 2021 levels.

Polypropylene and polyethylene need a nearly fivefold increase, while recycled PET volumes must double, with stringent targets for food-grade PET by 2040.

The PPWR mandates improve collection and sorting systems and prioritize recyclate access for applications that achieve greater circularity, such as closed-loop bottle systems. Investments must also consider the growing demand for recycled content in other sectors, like automotive, to mitigate interindustry competition.

Despite the many corporate promises to integrate PCR into products, actual implementation in the U.S. has been slow. Challenges such as cost, limited availability and product quality concerns have hindered progress. According to RaboResearch: "Many companies are recalibrating their commitments, now focusing on carbon emissions reduction or extending packaging goals by about five years in most cases. Progress has been made, but the value, scale, purity, and consistency of PCR resins have not yet reached the levels needed for higher adoption rates."

The U.S. Food and Drug Administration's issuance of "letters of no objection" has broadened the approved sources for PCR, potentially easing the supply constraints in the U.S. However, there is a looming supply-demand gap for recycled PET, with consumption possibly outpacing supply growth by a significant margin.

"Without additional actions, this could potentially lead to a future supply-demand imbalance of [recycled] PET in the market. Solutions like extended producer responsibility schemes and deposit refund schemes are proving effective in bolstering high-quality plastic collection for recycling," according to RaboResearch.