POST-COVID-19: Not all doom and gloom for PET recycling

It has been widely reported that the novel coronavirus pandemic has had a positive impact on the environment, reducing greenhouse gas emissions and air pollution

Covid-19 had an unexpected recycling value chain – from our converters and recyclers down to the informal reclaimers. But, even during this difficult and unprecedented time, the PET plastic recycling value chain kept its wheels turning,” says Cheri Scholtz, CEO at PET Recycling Company (Petco).

Petco was established at the end of 2004 as an industry-driven and -financed national recycling initiative, based on the concept of extended producer responsibility (EPR), with the goal being to act as the vehicle through which the PET industry could self-regulate and coordinate its recycling activities.

Petco is not involved in the physical collection or recycling of waste PET in South Africa – it acts as a producer responsibility organisation (PRO) that financially supports activities along the waste PET value chain. Members include brand owners, resin producers, converters, retailers and bottlers.

Value chain kept moving

Scholtz asserts that, although this has been a challenging time, bottleto-bottle recycling partner Extrupet was able to register as an essential supplier to the food and beverage industry during lockdown – meaning that food-grade Phoenix rPET remained available and kept their value chain moving.

“This is really important, as it means that, once total lockdown ended, collectors were immediately able to start collecting and selling their bottles to one of our contracted recycling partners. In May and June of this year, Extrupet purchased a whopping 3 000 tonnes of postconsumer PET bottles for recycling, despite feeling the impacts of Covid-19,” she added.

Added to this, many in the extended Petco network continued with their good work during the lockdown, supporting their communities, contributing food vouchers for informal reclaimers, and providing income opportunities wherever possible.

Additionally, the paper and packaging industry raised almost R800 000 in funds for the donation and distribution of electronic vouchers, to help sustain almost 4 000 informal reclaimers across the country.

Positive PET recycling rate

In June, Petco announced positive PET recycling rates for 2019, despite market contractions; however, for the first time in the organisation’s history, it not only fell short of its target in percentage terms, but also saw a contraction in the tonnes of bottles collected for recycling.

“Our collection dropped from 98 649 tonnes to 95 879 tonnes and, in percentage terms, from 63% to 62% of beverage bottles. While the overall year-on-year decrease in volume was disappointing, it was as good as could be expected.

“The primary cause of the shortfall was the unexpected closure of Mpact Polymers in August 2019. Although it was clear that the company had been struggling for some time, the decision to cease operations caught most of the industry by surprise.”

The Mpact Polymers closure accounted for over half of the nearly 8 406 tonne collection shortfall in 2019. Other factors that contributed to the underperformance included an increase in imports of material for recycling and load-shedding.

“Consumers and brand owners are starting to take their product packaging’s ‘green credentials’ seriously.”

On a positive note, the tonnage of rPET sold in South Africa – more than 23 904 tonnes – was similar to 2018, reflecting both the improving output at the remaining recyclers, as well as the increasing demand for rPET.

“This shows that consumers and brand owners are starting to take their product packaging’s ‘green credentials’ seriously,” Scholtz adds.

She asserts that the fact that Extrupet, the country’s only bottle-to-bottle recycling plant, was able to operate as an essential service under lockdown also helped to keep the value chain moving.

Reason to be optimistic

According to Scholtz, although 2019 and 2020 have been challenging, there are still plenty of reasons to be optimistic about recycling and collection.

“We have fallen slightly behind in our long-term strategic plan, but we still believe that PET is well positioned to deliver on the collection targets that we expect to be outlined in the Section 18 EPR notice.”

Section 18 regulations, which are expected to be effective from January 2021, are set to permanently alter the operating landscape for many South African industries – with a significant shift from voluntary to mandatory EPR.

This means that producers will be legally obligated to take financial and/or operational responsibility for collecting, sorting and treating their post-consumer products or paper and packaging for recycling and recovery. One of the most likely outcomes is alignment across PROs and material streams with respect to reporting standards.

“Petco believes that our approach to measuring, collection and recycling is particularly robust. To ensure equivalent reporting across the various PRO and material streams, some changes will be required, such as the definition and measurement of markets (e.g. consistently accounting for imports and exports), as well as accounting for waste in the collection streams. These issues are not unique to South Africa and global best practice will guide us.”

The SA Plastics Pact has already set a target of 70% collection by 2025 for members and, although not all Petco members have signed up to the pact, it will be critical that collection of beverage PET exceeds this benchmark.

Scholtz adds that current demand for rPET is strong, with experts predicting growth for the next 5 to 10 years as brand owners increase recycled content in line with their public commitments. Petco is also encouraged by the plans announced by Extrupet to expand its rPET capacity.

“We remain convinced that circular systems, such as bottle-to-bottle, will continue to be more stable than bottle-to-fibre and strapping.” PETCO will be working with existing recycling partners and potential investors to meet this need.

“Going forward, we will need to focus on dealing with the short- and medium-term impacts of the Covid-19 crisis to ensure that our recycling value chain survives. There is no doubt that a further contraction in the PET market, low commodity prices and business interruption will place enormous financial stresses on the Petco system. However, we know that if our members wish to continue to use PET to sell their products, we simply must find solutions. Although the crisis might delay the implementation of Section 18, it is clear globally that sustainability will not be deprioritised, and

government is unlikely to back down. As Petco, we need to be ready to meet the requirements of the pending Section 18 notice and maintain our position as a leading PRO.” Regarding what the pandemic has taught the body, Scholtz says: “The novel coronavirus crisis is a story with an unclear ending. The months ahead will surely test us but, unlike many organisations in this space, we believe that we have the skills and experience developed over 16 years to weather the storm with our members and recycling partners, who remain committed to helping us achieve our goals.”