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Are big brands failing in their commitments to use recycled plastic?

Multinational consumer goods companies have made public commitments to use more recycled plastic. But recyclers say they're not buying enough of it to prevent the circular economy for plastic from drifting into oblivion.

Consumer goods companies with commitments to use more recycled plastic need to do more to support a recycling sector that is in danger of collapsing amid perilous market conditions, expert have warned.

Heavy users of plastic, such of soap firm Unilever, snacking company Mondelez and soft drinks giant PepsiCo, have made public pledges to raise the proportion of post-consumer content in their packaging, but industry watchers say these brands are failing to live up to their sustainability pledges by underinvesting in the circular economy for plastic.

Recyclers in South and Southeast Asia are facing ruin as buyers opt for virgin plastic, which is now roughly half the price of post-consumer content as the Covid-19 pandemic keeps oil prices — and therefore the price of prime resin — cripplingly low.

Alvaro Aguilar, a consultant for Indonesian recycling company Polindo Utama, said that recycling volumes have dropped by about 60 per cent and the amount of waste plastic collected is 30 to 40 per cent of pre-pandemic levels, as social distancing and lockdowns have restricted the work of waste-pickers.

“Companies in the Western world are trying to survive, so they’re not looking to buy recycled material at the moment,” he said.

Unless companies are trying to pull the wool over our eyes with their [recycled plastic] commitments, at some point they will have to invest more to drive the creation of a supply chain for recycled content.

Doug Woodring, founder and managing director, Ocean Recovery Alliance

report from the Ellen MacArthur Foundation last year noted that consumer goods companies and retailers have aimed to increase their use of recycled content to an average of 25 per cent by 2025, but vary markedly in their progress. PepsiCo, which produces 2.3 million tonnes of plastic a year, uses 3 per cent recycled content in its packaging. Mars, which produces 200,000 tonnes of plastic a year, uses no recycled content, according to the report.

Eco-Business asked companies including L’Oreal, Nestle, Mars, PepsiCo and Henkel what they were doing to meet their sustainability commitments and support the recycling trade, and how much recycled content they were using. 

PepsiCo said it recognises the role it plays in building a circular economy for plastic, and remains “committed” to advocating for policies that “allow the use of rPET [recycled PET] in our packaging in more markets and partnering to drive systemic change that will build the supply and economy for rPET.”

PepsiCo did not say how much recycled content it currently uses, but noted that by the end of this year US brands Lifewtr and Tazo would be made from 100 per cent recycled PET. It added that it is looking at “reinventing” how it approaches packaging through reuseable platforms such as Sodastream, the company it acquired in 2018.

Henkel said that at the end of 2019, the firm used 12 per cent recycled plastic in its packaging in Europe, and 10 per cent globally. It aims to increase the proportion of post-consumer content to 30 per cent by 2025 as part of its sustainability commitments.

L’Oreal, Nestle, and Mars did not respond to Eco-Business.

Brands need to do more live up to their commitments, Aguilar said. Companies are particular about the sort of used plastic they’re prepared to buy, he noted. 

“The companies in the market for recycled plastic are fighting over PET [polyethylene terephthalate] bottles. But the problem is that the plastic leaking into rivers and oceans is not only PET,” Aguilar said.

Mixed plastic is being sold for IDR1,000 (7 US cents) per kilogram, while separated PET plastic is going for five to six times the price, Aguilar noted. Some multinational recycling firms are only buying 100 per cent colourless PET bottles, and not processing the rings or labels. “They don’t want to get involved with the sorting, as that will involve a labour force they don’t have,” he said.

His company, Polindo Utama, has opened new collection centres in Indonesia to manage the pandemic-induced rise in waste. Some mixed plastic can be recycled into plastic pallets or construction blocks, but not all of it. “The problem is volume,” said Aguilar. “We cannot sell hundreds of tonnes of recycled pallets or construction blocks. We need the big brands to support us. We are not looking for free money. We are looking for demand.”

One of Indonesia’s biggest pollution problems comes from single-use, multilayer plastic sachets, which were introduced by multinational consumer goods firms to sell liquid products in smaller volumes to low-income families. Unilever set up a “breakthrough” facility to recycle sachets in Sidoarjo, East Java in 2017, but Aguilar said Unilever will not accept the sachets his firm collects.

Unilever—which has committed to use 25 per cent recycled content, and collect and process more plastic packaging than it sells by 2025—told Eco-Business that the facility is still in the pilot phase and has not reached commercial viability. “Our focus now is on sharpening the technology,” a spokesperson said. 

In an update on its progress on plastics, the company said on Wednesday (28 October) that post-consumer content now accounts for more than 10 per cent of its plastics footprint. The Ellen MacArthur study from 2019 reported that Unilever only uses 1 per cent recycled content. Unilever said it expects its use of recycled plastic to double over the next 12 months.

Vytas Gruodis, managing partner of recycling firm Bantam Materials, said that Swiss multinational Nestlé is a leader in supporting the market for recycled plastic, despite the impact of the pandemic on supply chains and recycled plastic prices.

The companies that have been quickest to drop recycled content in favour of virgin are the sheet and thermoform packaging companies, which mould heated plastic into packaging. “Your salad bowl may say ‘recyclable’ on it, but it has no recycled content,” Gruodis said.

Capital needed to jumpstart the circular economy

To save the recycling industry from irreparable damage, more capital is needed from the large multinationals that depend on recycled content to fulfill their sustainability commitments, said Doug Woodring, founder and managing director of Hong Kong-based circular economy non-profit, Ocean Recovery Alliance.

“Unless companies are trying to pull the wool over our eyes with their [recycled plastic] commitments, at some point they will have to invest more to drive the creation of a supply chain for recycled content,” he said.

Woodring noted that the recycling trade is not an easy sector to invest in, particularly in Asia, where recycling businesses are small and localised. But large corporates — which are among the world’s biggest marine polluters — have a duty to help fix the system, he said.

Informal waste-pickers make up 82 per cent of the recycling trade in South Asia and 65 per cent of the sector in Southeast Asia, but pandemic containment measures have hit the sector hard, costing millions of workers their livelihoods.

“It’s not as if the infrastructure [in Asia] is set up to feed companies (with) recycled content. That will take a few years to build, and Covid has slowed that process down. Covid is a thousand excuses not to do that [invest],” he said.

While there has been some investment in the trade—such as the US$6 million pumped into two recycling businesses in India and Indonesia in April by Circulate Capital, a US$100 million circular economy investment firm backed by consumer goods firms that launched in 2018—the amounts are “tiny” compared to what is needed, Woodring said.

Regulation is needed to force companies to use more recycled content in their products and packaging, Woodring added. “Once companies are obliged to use, say, 20 per cent recycled content in their products, the supply and demand dynamic will change,” he said.

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