In the EU, recycled PET is becoming harder to come by and, consequently, more expensive. The reason is everybody wants qualitative recycled PET from beverage bottles and the demand significantly exceeds the offer.
So far, not all businesses have to meet the same requirements when it comes to recycled materials, specifically, not all enterprises have to meet mandatory recycled content and collection targets, have to comply with strict food-grade safety requirements for their packaging, make considerable investments in the recyclability, collection and recycling of their packaging and can recycle their packaging several times in a closed-loop.
This is the case for beverage producers. Despite those legislative requirements and their investment in bottle-to-bottle circularity, many companies in the soft drinks sector have limited or no access to the recycled PET (rPET) issued from their own packaging.
We have some reasonable concerns regarding the risk faced by some producers not to be able to meet the obligations arising from the EU Single-Use Plastics Directive, especially when it comes to access the sufficient amount and quality of recycled material needed to produce new drink containers made with recycled PET.Lucia Morvai, Director of External Affairs and Communications at the Slovak Deposit Return System (DRS)
1. Price of recycled PET
Small and medium-sized enterprises (SMEs) are particularly at risk. Most of them cannot afford the very high prices of recycled material. Recycled PET price premium over virgin PET is continuously reaching new records. In Europe, rPET is reported at a 30%-plus premium over the virgin one.
The Portuguese SME Água de Monchique confirmed that the current rPET price is already way too high and “when more producers will start incorporating rPET to meet the 2025 and 2030 targets, the access to rPET will be even more limited and the situation may get worse”, they added.
The rPET price is currently defined by what the highest bidder is ready to pay, with companies from the food, the textile and the automotive sectors (among others) competing against each other. While this situation may please the recyclers, it cannot be seen as fair that many businesses with recycled content targets cannot access the necessary material to comply with their legal obligations, or that the current pricing favours downcycling over closed-loop recycling.
“In Slovenia, over 100 companies operate in the beverage industry, employing over 1,200 workers. These are mainly SMEs and many of them are currently facing a severe crisis due to the rising prices of recycled material and its general unavailability. In this context, and to support our sector’s efforts to create a closed loop for beverage bottles, a mechanism that grants a better access to recycled material is crucial”, explained Petra Medved Djurašinović, Secretary General of the Slovenian Beverages Association.
2. First right to buy back
To stay competitive with larger companies, for an SME like us, it is very important that basic rules about the buying of recycled PET from our packaging are set. It means we should have the first right to buy back the amount of recycled PET in proportion to what we put on the market.Bert Harwig, SHEQ Manager at United Soft Drinks, a Dutch beverage SME
This problem of access could easily be solved by the introduction of a priority access mechanism or right of first refusal in the upcoming revision of the EU Packaging and Packaging Waste Directive (PPWD). Every producer (from the smallest to the biggest one) would then have the option to buy the recycled material issued from the recyclable packaging it put on the EU market (after adjustment for collection and recycling rates).
Such a system would place all beverage producers, including SMEs, in a position to meet their mandatory recycled content targets, considerably reduce the downcycling of PET bottles by promoting bottle-to-bottle recycling and incentivise all sectors, including those outside the beverage industry, to invest in the recyclability and collection of their products.
We are convinced that such a mechanism would allow a better circularity of our packaging, with clear benefits for the environment. We are aware of the appetite of several non-food industries for the recycled material coming from beverage bottles, but the right way is to ensure the reuse of this recycled material in new beverage packaging cycles, thus avoiding downcycling.The Super Bock Group, a Portuguese beverage company
Soft drinks producers across Europe strongly support this proposal. Jean Thibault Geerts, Corporate Innovation, CSR & IT Director for the French intermediate-sized enterprise Laiterie de Saint Denis de l’Hôtel (LSDH) explaining that “every beverage producer, from multinationals to SMEs, should have an equal access to recycled material, considering the recycled content targets and the food-contact safety requirements imposed” on the sector. “Thanks to such a mechanism, all producers will be able to secure the possibility to buy the recycled material issued from the quantity of recyclable material they put on the market, and therefore to meet the EU and national recycled content targets”, he added.
3. The system works
Sweden put such a mechanism in place years ago, via their DRS, a system of priority access to the recycled content issued from their sector’s packaging. “Thanks to this system, all beverage producers contributing to the DRS can buy a share of recycled content proportionate to the recyclable packaging they put on the market”, showed Anna-Karin Fondberg, Managing Director at Sveriges Bryggerier/ The Swedish Brewers.
“This helps reducing the amount of food-grade material being sold to companies which are not participating in the collection of the material, and which will use our material for lower quality applications, therefore breaking our loop. Without this system, many of the numerous SMEs operating in our sector would not be in a position to access the recycled material they need to meet the EU recycled content targets by 2025 and 2030”, Fondberg added.
Sweden is not the only country which did not wait for actions to be taken at the EU level. Several countries have already understood that promoting closed-loop recycling is the condition sine quo non for an effective circular economy.
Slovakia is another example. The Slovak DRS supports closed loop recycling and creates “the conditions that will secure priority access to recycled material to all producers registered in the Slovak DRS”, Lucia Moravi explained. “Each producer, local or not, big or small, has the same opportunity to use its right of first refusal to access a share of material (collected and sorted), based on the quantity and quality it put on the Slovak market”, she added.
This system has been warmly welcomed by local producers. Milan Pasmik, Chairman of the Board at McCarter a.s., a Slovak company producing premium soft drinks and juices said that, as a local company, they were worried about accessing sufficient recycled materials, but the new DRS system gives them guarantees. “We do believe that it is an important step towards securing the necessary amount and quality of materials needed to fulfil not just our legal requirements but also our voluntary commitments to close the loop of our packaging”, Pasmik concluded.