Circular Economy for Plastics – UK reprocessors perspective Ray Georgeson MBE MCIWM FRSA Chief Executive, Resource Association Green Alliance Circular Economy Task Force and Embassy of the Kingdom of the Netherlands in the UK London, 2 nd March 2015

About the Resource Association Voice for the reprocessing and recycling industries, providing advocacy for an important and growing industry Launched Nov 2011 Members from across the industry – reprocessors, recycling supply chain and support industries Contributing c£3bn to GDP; over 6mt tonnes material recycled; more than 10,000 direct jobs supported Active in England, Northern Ireland, Scotland and Wales Office in Otley, West Yorkshire; Brussels bureau

Our vision and mission Our vision is for a resource efficient materials economy that realises value, prizes quality and seeks to maintain the integrity of the secondary materials that are still too commonly treated as waste. Our mission is to support the development of a sustainable and healthy industry by providing a voice, forum and leadership for the materials reprocessing and recycling industries, as well as related environmental and social interests. Member companies will promote the management of materials as resources not wastes.

UK plastics recycling – a decade of rapid change

UK Plastics Recycling - summary 2,535,000 tonnes of plastics packaging consumed in the UK, of which 1,194,420 tonnes are from households Total of 440,401 tonnes collected (2012) - 316,054 tonnes of plastic bottles and 124,347 tonnes of pots, tubs and trays Household Plastics Packaging Recycling Rates 58% Plastic bottles 19% Pots, tubs and trays 37% Overall for rigid plastics packaging 391 Local Authorities offer a kerbside collection service that includes plastic bottles - 96% of all UK Local Authorities

Post-consumer plastic collections in the UK - a summary Tonnes/annum (estimate) Plastic Bottles24,000263,000316,000520,000 ‘Non bottle’ Plastics0 40,000124,000280,000 Total24,000303,000440,000800,000 ‘Non-bottle’ plastics (%) 013%28%35% Collection of plastic bottles is plateauing at around 50% - similar to other EU countries Recently announced Government targets will double tonnage available in the next 5 yrs UK has pushed for mixed plastics collections due to political pressure – ahead of technology and markets UK collection system has grown quickly but fragmented The good news – the consumer has embraced recycling and wants to do the right thing 400 collection authorities in the UK More than 100 different types of collection systems in place!

UK Recycling Targets – still a major challenge ahead 640,613 tonnes of plastics packaging recycled in 2012 (from household and C&I sectors) An estimated 1,213,000 tonnes of plastics packaging to be recycled by 2017 to meet current UK targets If the household and C&I split was applied to 2017 there would be 836,970 tonnes of plastics packaging being collected from UK households - a 90% increase from the 440,401 tonnes collected for recycling in 2012

Collection methods Separate Collection Kerbside Sort Co-mingled

Collection methods Separate Collection Kerbside Sort Co-mingled QUALITYCOST

Strong and growing demand for recycled PET and HDPE from brand owners and retailers Using recycled polymer significantly reduces the carbon footprint against equivalent virgin items Virgin prices and supply pressure are increasing over the long term (not at moment…) Market drivers

Customer demand PET bottle content from 25 to 50% rPET content UK Milk bottles at up to 30% rHDPE content (50% by 2020) PET Pots, Tubs & Trays at 50% rPET content Products switching to PET to use rPET (e.g. yoghurts)

What are mixed plastics? Because of public confusion about polymer types, we think the best description currently is ‘non-bottle plastics’ Polypropylene (PP) – butter tubs, ice-cream tubs, food-trays Olefin films Polystyrene (PS) – cups, yoghurt pots Polyvinylchloride (PVC) – food trays, sandwich wrappers Polycarbonate (PC) & ABS – only in very small amounts in household waste (post-consumer) ‘Other’ mixed plastics – typically black plastics including olefin and a lot of cross-linked PET from ready meal containers

Mixed plastics: threat or opportunity? Threat To efficiency of current plastics reprocessing - yes The UK plastics collection and processing market is in its relative infancy Limited infrastructure has been built to process mixed plastic bottles Plants are quoted in tonnes/hour but are volume driven If mixed plastics collection continues to grow without suitable processing capacity/technology many existing plants will face further viability challenges Opportunity In the medium to long-term - yes Consistent end markets need to be developed – the demand is there The requirement for resource efficiency and security will help drive the economics

Coloured HDPE End markets: Compound – huge demand Drainage and utility pipe manufacture Storage tanks – water, diesel etc Wheelie bins Alternative to wood

Coloured Polypropylene (PP) End markets: Compound – automotive sector Drainage and utility pipe manufacture Storage tanks – water, diesel Wheelie bins Pallets Other alternatives to wood

Mixed Polystyrene (PS) End markets: Current markets are limited Compound – automotive sector CD case inners

Mixed Polyvinylchloride (PVC) End markets: Current markets are limited Drainage pipes and gutters Tree guards Cooling tower filter

Residual mixed plastics (mainly black) End markets: Currently energy recovery R&D on going into sorting black plastics

Summarising and learning lessons As other countries in Europe seek to accelerate plastics collection and reprocessing, there are some lessons to draw from recent UK experience UK started with a strategy totally focused on collection of plastic bottles only - huge effort and resources deployed by WRAP supported by Government strategy to build collection infrastructure and R&D/capital investment/standards work (what was called recycling market development) to ensure an industry existed to take and use the bottles - supporting development of world leading technology on food grade plastics packaging helped to drive this Political and therefore WRAP focus turned to mixed plastics before earlier strategy had fully bedded down – pressure from waste companies and councils on mixed collection, with the suggestion this was supported by public demand Mixed plastics technology and collections have proved to be a mixed picture… original companies supported have had to adapt their process to a business model not anticipated – requiring much more pre-sort at their own front-end

Summarising and learning lessons The result – short to medium term issues for reprocessors facing unanticipated high costs of contamination and further sorting of poor quality recyclate Still a lack of strong markets for products using mixed plastics and limited potential, despite significant public funds deployed by WRAP and others to this agenda Disjointed UK plastics recycling strategy – moving into mixed plastics agenda before settling the successful plastic bottle recycling sector - has had a deleterious effect on plastic bottle reprocessors Signals and strategy have to be clear and long-term to support investment - when you settle your strategy, stick to it. The balancing of elements needed in a market development strategy is challenging with multiple stakeholders (collection/public/councils/sorters/reprocessors/end users/product developers/retailers) - but - the needs of the manufacturer in the heart of reprocessing must be central to your strategy. No circular economy without sustainable manufacturing!

Towards resource-based circular economy policy measures: some highlights Regulation & enforcement Regulation of MRFs now in force, needs rapid progress and vigilance from regulators in their delivery – to drive forward quality improvements Enforcement of TFS Regulations – for benefit of UK manufacturers and legal exporters alike – a pro quality agenda not an anti export agenda Manufacturing strategy Strategic focus needed for green manufacturing – support for product innovation, eco-design, resource efficiency Create new Object C in Landfill Communities Fund – time limited support for research and innovation to support UK manufacturers to use recycled content in next generation products c Transparency and communication Public and industry clarity on what happens to recycling at home and abroad – End Destinations of Recycling Charter is a starting point Sustained public and industry communication on value of resources and the importance of their role in recovery Fiscal and other policy measures Move to carbon-based indicators away from weight- based Virgin resource levies, VAT differential for recycled products Reform of PRN/PERN system to create level playing field for UK manufacturers, especially plastics reprocessors Better co-ordination of disjointed UK resources policy through an Office of Resource Management

Conclusion UK plastics collection and processing has expanded rapidly over a decade, with successes as well as hazards PET processing to food grade is reasonably well developed but still a long way to go – but UK were pioneers here several years ago Mixed plastics processing in its infancy and whilst currently challenging does present an opportunity but: End markets need to be developed and demand created Sort technology needs to continue to improve Readily available supply Significant capital expenditure will be required but huge tonnages of material become available Opportunity for Europe to lead the way and in turn export (licence?) our know how to the emerging markets

Thank you for your attention Ray Georgeson, Chief Executive Resource Association Suite One, 2 Boroughgate, Otley, West Yorkshire, LS21 3AL, United Kingdom +44(0)