After entering 2022, the global market has shown that the effectiveness of relying on voluntary commitments from some enterprises to control plastic pollution is significantly insufficient.

According to the 2022 progress report released by the New Plastic Economy Global Commitment, which represents 20% of global plastic packaging usage, the total amount of raw plastic used by its signatories in 2021 has returned to the benchmark level of 2018, thus reversing the downward trend in 2019 and 2020.

The proportion of packaging usage in the signatory's repeated use mode has been decreasing year by year, with only 1.2% of the total in 2021. It is obvious that relying solely on voluntary commitments from enterprises cannot achieve significant progress in key indicators, and even has regressed.

Global leading environmental organizations and institutions have become aware of this severe challenge, therefore, in the past two years, they have been more actively accelerating the promotion of the global plastic agreement, and their work and investment proportion related to the plastic agreement have become more prominent.

The global plastic agreement has high expectations but faces many difficulties

At the Fifth United Nations Environment Conference, member states of the United Nations reached an agreement to develop a legally binding international agreement to prevent plastic pollution, which is one of the most ambitious environmental actions worldwide since the 1989 Montreal Protocol.

However, there are significant differences in the positioning of global plastic agreements among different countries. As a major plastic producer and consumer in the world, the United States, based on its own plastic recycling rate of only about 6%, proposed a negotiation positioning based on national action plans, allowing a single country to determine the total amount of plastic produced and used by itself; Meanwhile, the US proposal emphasizes recycling and investment in infrastructure, which is difficult to convince.

Many people around the world have lost confidence in similar commitments, such as the Paris Climate Agreement, believing that their actions cannot stop the pace of global climate change. In addition, at the "plastic recycling Conference" held at the beginning of March this year, the main foreign spokesman of the United States participating in the negotiation of the plastic agreement also expressed the hope that the agreement would be an overall plan, including volume reduction and reuse.

The United Nations has received 60 public proposals from Member States and approximately 200 proposals from non-governmental organizations. The second round of consultation meeting will be held in Paris from May 29th to June 2nd, and several major proponents will collide head-on.

Among them, the European Union and the High Ambition Coalition, led by Norway and Rwanda, have proposed setting global targets for reducing plastic production.

The alliance claims that each country should take effective measures to reduce the production of native plastic polymers, achieve consistent levels, and achieve common goals. It is obvious that there is a significant difference between this proposition and the proposals of countries such as the United States and Saudi Arabia.

The alliance covers regions including Canada, Mexico, Australia, and most EU countries.

The EU serves as the locomotive for the development of the global plastic circular economy

The increasing emphasis on plastic pollution control in the international community has highlighted the differences in communication. Since the circular economy system is regarded as the key in the EU's Green New Deal, its construction of circular economy provides a powerful model for the world. Its degree of promotion and effectiveness will provide a very valuable reference for other countries in the world.

After successively launching the European Plastic Strategy and a Plastic Directive, the European Union is attempting to add a more comprehensive driving force to the construction of the European plastic circular economy through the Packaging and Packaging Waste Regulations (PPWR). It is obvious that the recyclability setting and management, as well as the requirements for regeneration content, not only have a huge impact on the EU internal market and packaging industry, but also have a ripple effect on the interests and operations of external stakeholders.

Among them, regulations such as the EU Action Plan for the Development of Circular Economy require that by 2030, all packaging must be recyclable or reusable under economically feasible conditions. Therefore, the definition of recyclability, as well as its connection with relevant certifications and packaging labels, will have a certain impact on packaging products exported from countries including China to the EU.

The determination of regeneration content not only has an impact on the physical recycling industry within and outside the EU border, but also has a critical impact on some so-called advanced recycling technologies, such as BHET depolymerization.

Currently, the ReMade labeling mechanism being discussed in Australia not only encourages the use of recycled content, but also proposes whether the main transformation of ReMade products must occur in Australia and whether 50% recycled content must be produced locally.

The five level recycling evaluation recommended by the European Commission is based on the proportion of recyclable packaging quality: less than 70% of the quality is non recyclable packaging, which will be banned starting from 2030. Starting from 2035, only packaging that can be recycled on a large scale will be allowed to enter the market.

This definition is: it can be collected, sorted, and regenerated through advanced infrastructure and processes covering 75% of the EU population. However, innovative newly launched packaging is exempt from the above 5 level definitions and has a 5-year market exemption period.

The five level recycling evaluation recommended by the European Commission is based on the proportion of recyclable packaging quality.

At present, some European companies have begun to provide recyclability certification for packaging requirements for Chinese exports to the European Union. The requirements are generally two certifications: one is the German Institute Cyclos HTP certification, and the other is the European plastic recycling Agreement (PRE) RecyClass certification.

Last year, China's total export packaging volume exceeded 55 billion US dollars, with about 66% being plastic packaging. It is believed that a certain amount of it was exported to the European market. Therefore, there are still 7 years left for Chinese and EU packaging companies to improve recyclability. How relevant enterprises follow up and how domestic policies and regulations guide the market during these 7 years will be interrelated, which will have a significant impact on the development of the local packaging industry.

Urgent Clarification of System Construction Plan for the Development of Plastic Recycling

China's 14th Five Year Plan for Circular Economy and Plastic Pollution Control, as well as the Policy Recommendation No. 80 on Plastic Pollution Control issued the previous year, have set the tone for policy direction in 2021.

At present, the circular development pattern of packaging, electronic appliances, automobiles, construction, and agricultural plastics is not the same. Plastic packaging, as the largest market segment for plastic waste generation, mainly relies on informal systems to collect and concentrate plastic packaging waste after consumption.

In the past two years, in order to save labor costs and improve quality, the PET bottle packaging process has rapidly upgraded using automatic sorting equipment. In addition, the scale of bottle chip enterprises is also expanding, and the granulation capacity is also rapidly growing.

In addition, the recycling of HDPE and PP mixed plastics and hollow plastics is gradually concentrated due to the active involvement of private enterprises and the large demand in the backend. The construction of new production capacity is also very fast, and some high-end materials are exported. Due to the gradual inclination of foreign demand towards local procurement, the sustainability of export demand poses risks.

Although the packaging industry has relied on market forces to drive the development of some areas, due to limited backend demand, investment and research and development are relatively limited, and it is difficult to form a system transformation. In the field of film and soft bag recycling, due to a lack of external incentives, the industry has not shown significant improvement in recent years and is still operating at a low level.

Compared to external policies, demand driven industry and value chain cooperation is an effective way to form; Through regulations and policies, promoting the front-end to take responsibility for the back-end can promote the formation of the entire system.

Compared to the development and discussion of extended producer responsibility systems in fields such as electronics and automobiles, packaging and agricultural plastics, such as pesticide packaging and oil kettles, still face challenges and have not yet formed a fundamental transformation

The recycling content of electronic appliances and automobiles is gradually increasing

The recycling of electronic appliances faces the phenomenon of more than half being collected through informal channels, which is similar to the situation where post-consumer packaging waste is mostly collected through informal systems, which directly makes it difficult to collect data.

In the past two years, the National Development and Reform Commission and other ministries and commissions have been requiring electrical appliance production enterprises to take responsibility for recycling through policies. In 2016, the government proposed in the EPR system policy that by 2025, the proportion of recycled raw materials used in key products should reach 20%. In fact, most of the recycled materials generated after the consumption of waste household appliances are downgraded for use.

In the past two years, due to the widespread promotion of circular economy, the EPEAT rating requirements for electronic product procurement in the US market, and the commitment of enterprises themselves, electronic and electrical products have begun to widely accept the use of recycled materials, and the proportion of recycled materials used is gradually increasing.

In the past two years, more upstream manufacturers and suppliers have joined in the production and modification of recycled plastics, thus further improving the quality of materials.

Every year, a large number of electronic appliances are discarded, causing waste pollution.

In addition, the automobile recycling policy also proposes a 5% recycled content for key components, which to some extent promotes the adoption of recycled plastics in related fields. The clarification and encouragement of industrial policies will further expand the use of recycled plastics in areas such as car mats, fenders, dials, decorative parts, ceilings, battery casings, and handles. At the same time, it will also allow recycled plastic to flow into automotive products from other fields, such as PP disassembled from electrical appliances.

However, the approval process for the application of recycled plastics in the automotive industry is complex, from recycling enterprises producing recycled materials, modifying, to parts being tested and approved by vehicle applications, which takes a long time. Many foreign brands also need to go through recognition from their overseas headquarters to enter. In addition, the value chain is relatively long, and the layers of extrusion from dismantling, modification, processing, assembly plants, and entire vehicles also make the final suppliers of recycled materials profit little, hindering the attractiveness and investment of recycled materials in vehicle applications.

At present, the use of recycled materials in automobiles is relatively mature, such as recycled PET and recycled PP, and many of their raw materials come from other market segments, such as PET bottles used for recycled fibers from packaging, and PP modified recycled materials from electrical appliances.

Due to the significant size of the overall automotive market and the fact that many of the headquarters for new energy vehicles are located in China, both recycled and modified materials companies are currently hoping to expand their presence and seek future dividends.

The Chinese construction industry has adopted a large number of recycled plastic products, such as sunshade nets, pipelines, etc., but the collection of sunshade nets and the standardization of the use and management of recycled materials in pipelines urgently need to be strengthened. The recycling of pesticide packaging waste and plastic film in agricultural plastics is a long-standing problem, and there are many attempts, but the sustainability is difficult to ensure.

Plastic pollution control cannot be comprehensively solved solely through recycling, but recycling is definitely the key solution. However, neither circular economy nor recycling can be achieved solely through end-of-life governance.

At present, policies, publicity, and actions are all focused on the end, without forming a single system solution. Even with better recycled PET bottles, we can see that there are still huge problems in the front-end design, the use of PVC labels and adhesives that are not easy to recycle, and the clear direction of collecting raw and clean bottles.

In fact, this also requires the market to clearly provide a fundamental direction positioning, otherwise uncertainty still exists, and the future development of enterprises faces unnecessary risks, after all, no enterprise hopes to hang a "gap" in its development path.

Content source: AdsaleCPRJ