Plastics recycling is a real business, despite what some critics have been saying recently. But being real means dealing with business cycles. It's not always easy.
When the Texas ice storm, the pandemic and supply chain chaos sent virgin resin prices through the roof a few years ago, recyclers benefited. They still faced plenty of problems, but demand and pricing were strong. It was a good time to be a plastics recycler.
When Russia invaded Ukraine in early 2022, we talked about the impact it would have on the plastics industry. Early on, I wondered, 'Would this mean that the push toward circularity would go on the back burner?'
At the time, Sustainable Plastics' Karen Laird predicted that the invasion would impact long-term thinking about sustainability and circular plastics. We didn't know then how long the war would last — and we still don't — but she speculated that it could prompt Western Europe to move faster toward sustainable materials out of necessity because it was cutting off imports of natural gas and oil from Russia.
"Here in Europe, we're dependent on Russia for 40 percent of our [natural gas] and 25 percent of our oil," Laird said during our March 1, 2022, Sustainable Plastics Live. "The sustainable choice ... would be for us all not to be so dependent on a state that has invaded another state."
I think she was right about that, but the move isn't happening very fast at all. We aren't seeing a big leap ahead in plastics recycling. Instead, the slumping economy — caused by the war — has meant lower demand for virgin resins, which has led to lower prices. That's slowed demand for recycled plastics.
"I'm very curious as to how many [recyclers] are actually going to survive and whether we're going to actually be able to generate the quantities we're going to need in a year and a half [to meet recycled-content requirements]," Laird said in our newest Sustainable Plastics Live, which we recorded last week.
But there's a problem with recyclers doing poorly: They're an essential link in the supply chain that the industry needs to help consumer product companies use more recycled plastics, either to meet their own sustainability goals or government mandates.
Low prices for virgin and recycled resins may seem like good news for processors and converters right now, but they don't bode well for the industry's short-term future.
Some companies are taking action. We've seen resin suppliers, compounders and processors buying and investing in plastics recyclers to make sure they're going to have the product when demand recovers.
Meanwhile, communities still aren't collecting enough plastics to be recycled. It's frustrating because we know the solution to this problem: container deposits. Industry leaders are generally in favor of some of the best levers that the government could pull to help plastics become more circular, like extended producer responsibility and recycled-content targets. But we're getting a lot of talk but not much progress from the government.
Plastics have tremendous advantages, including cost, carbon footprint, convenience and consumer preference. Despite the economic slowdown, the plastics industry should be in a good position to achieve its sustainability goals.
Preparing for a circular future is going to require some short-term pain. But we know it can work.
Don Loepp is editor of Plastics News and author of the Plastics Blog.