‘The recycling deception’: Plastics industry accused of greenwashing circularity, stalling progress on pollution treaty

Using misleading recycling symbols, the plastics industry has duped regulators and consumers into believing in the circularity of plastic, a study by Planet Tracker finds. The non-profit warns investors of plastic liability risks.

Packaging for Taiwanese bottled water brand pH Balancer bears the plastic resin identification code for PET. Though the circular recycling symbol implies recyclability, it actually refers to the type of plastic used. Only 81 per cent of PET is recycled globally.
Packaging for Taiwanese bottled water brand pH Balancer bears the plastic resin identification code for PET (the number '1' positioned within the circular symbol on the yellow band). Though the circular symbol implies recyclability, it actually refers only to the type of plastic used. Only 19 per cent of PET is recycled globally. Image: Robin Hicks / Eco-Business

Aggressive industry lobbying and a decades-long campaign to shift the blame for pollution on to consumers have enabled the plastics sector to stall progress on the United Nations plastic pollution treaty while ramping up polymer production, a report finds.

In its new study, The Plastic Recycling Deception, London-based non-profit Planet Tracker has examined how plastic producers, independently and through industry trade associations and front groups, have created an “aura of recyclability” for a material only 9 per cent of which is recycled globally.

The report highlights how producers use the “recycling illusion” as leverage to stave off regulation to slow production and avoid taking financial responsibility for plastic pollution. 

The industry’s promotion of recycling as a fix for plastic pollution has passed the financial burden of waste management to cash-strapped local municipalities – or in most of Asia’s case, informal waste pickers which make up the largest part of the waste management value chain, the report noted.

The global cost of municipal solid waste management is set to increase from US$38 billion in 2019 to US$61 billion in 2040 at the current rate of plastic production growth, with local authorities footing most of the bill and, in Asia, waste collectors doing the job of cleaning up. 

The plastic industry has not earned the right to call plastic recyclable.

The Plastic Recycling Deception, Planet Tracker

More than half of the world’s plastic is manufactured in Asia, a region with the highest rate (34 per cent) of mismanaged plastic waste. 

Misleading “recycling” labels

A key instrument of the industry’s greenwashing of recycling has been the widely-used symbols on products and packaging that indicate recyclability – three arrows that encircle a number – that are actually plastic resin identification codes (RIC). These codes, which were developed by the plastics industry, do not represent recyclability rather the type of plastic used to make the product, the report said.

Seven of these numbered codes are in use globally, and refer to plastics such as polyethylene terephthalate (PET), the most recycled type of resin, and polystyrene, the least commonly recycled polymer type. The codes misleadingly give the impression that the product can or will be recycled, Planet Tracker said.

The seven recycling resin identification codes

The seven different plastic resin identification codes (RIC), which are often referred to as “plastic recycling codes”. The numbers inside the circular recycling symbol denote the type of plastic, not their recyclability. RICs are “an excellent example of how the plastic industry has deflected attention away from the producers of plastics and instead made plastic pollution a waste management problem,” Planet Tracker claims. Source: The Plastic Recycling Deception

“The oil and chemical industries appear to use these symbols to support the narrative that the solution to global plastic pollution is recycling. This is false as 90 per cent [of plastic] is not recycled,” the report said.

The plastics industry, which is made up of oil and chemicals firms, has opposed any cut to production to curb plastic pollution and is pushing for upstream producers to be excluded from solutions being negotiated for a legally binding instrument to curb marine litter, according to Planet Tracker. 

The United Nations has committed to deliver an agreement to end plastic pollution by the end of 2024. 

Negotiations have not yet moved beyond an initial draft, with much of the text still unagreed around whether the treaty will “be based on a comprehensive approach that addresses the full life cycle of plastic”, i.e. include the upstream plastic production stage, the report read.

The participant list of the last round of negotiations last November showed 143 fossil fuel and chemical industry lobbyists in attendance – a 36 per cent increase on the previous round of negotiations, signalling a ratcheting up of lobbying efforts by industry, according to the report.

Meanwhile, the petrochemicals industry is banking on rising plastic production to sustain profit growth. Petrochemicals, from which plastics are made, now account for 14 per cent of oil use, and are expected to drive half of oil demand growth between now and 2050, according to the International Energy Agency (IEA). 

Protecting upstream production is particularly important for Asia, as the vast majority of new petrochemical expansion is forecast to take place in Asia, Planet Tracker told Eco-Business. New petrochemical plants are heavily concentrated in China, which will account for 51 per cent of all new olefin capacity, the raw material to make polymers, and 48 per cent of olefin feedstock consumption between 2022 and 2028.

Plastic risk

Equity risk premium of the plastic value chain over the last five years. Source: Bloomberg, Planet Tracker.

Equity risk premium of the plastic value chain since 2018 [click to enlarge]. The upstream plastic producers are perceived to be a lower investment risk than further down the value chain. Source: Bloomberg, Planet Tracker.

The financial markets also seem to have bought into the plastic sector’s narrative that responsibility for plastic pollution should be focused downstream in the plastics value chain, with upstream producers perceived by markets as a lower investment risk, according to Planet Tracker’s analysis (see chart).

“This is partially explained by most of the environmental focus being on the downstream supply chain players, leaving the perception that the producers are likely to incur little liability,” the report read.

However, the non-profit warned that producers of toxic synthetic chemicals are likely to have to fight “a rising tide of litigation” that could affect investor risk assessment.

Citing the case of Bayer, the pharmaceuticals giant which has paid US$14 billion in legal fees to settle more than 100,000 lawsuits claiming that its weedkiller caused cancer, Planet Tracker said investors should be scrutinising the risk premium required to fund producers of harmful chemicals.

“Should sentiment about plastic pollution change, including the health implications of plastic additives, and progress be made on an upstream solution, producers, which price in the lowest equity risk premia, are looking particularly vulnerable,” Planet Tracker said. 

The non-profit called on investors with exposure to the plastics value chain to lean on petrochemical companies to set targets to transition to safer, environmentally safe plastic, address chemicals of concern in their products and publicly support an ambitious, legally binding instrument to end plastic pollution.

“We encourage stakeholders to factor in the true costs of plastic pollution now,” said John Willis, director of research at Planet Tracker. “Upstream solutions, including extended producer responsibility, taxation and regulation, must be examined to create a sustainable path forward. Recycling alone is unable to cope with existing, let alone rising, plastic waste.”

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