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Tough UK recycling environment needs highlighting: BPF

  • Market: Petrochemicals
  • 10/01/25

UK plastic recyclers, as with counterparts elsewhere, face a tough environment. Last year's change of government brought with a desire to focus on the circular economy, but directing policy to provide meaningful support to recyclers is a multi-faceted challenge. Argus spoke to Helen Jordan, sustainability manager at the British Plastics Federation (BPF), about the association's expectations for the industry and recommendations after the government recently outlined its position on mass balance for chemical recycling. Edited highlights follow:

There's a lot of concern about the plastic circular sector economy in the UK, with some high-profile closures in the past 12-24 months. Should we be worried, and what can help put development of the industry back on track?

There is concern over what's happening and the conditions that have caused the situation. We have just been working on a briefing document for government setting out that these closures are happening, and the issues that have led to them, such as the price of virgin material and the difficulty of competing against imports of recycled material and competition from plastic waste exporters.

But I don't think it's all doom and gloom. The government should be looking at what needs to happen to prevent further closures, but I think we've still got a lot of scope to grow recycling in the UK. There is a focus in government around the circular economy, and I think this is a very good time to remind them of how important recycling in the UK is as part of that overall picture.

I think government will be listening to those sorts of message, which is why we wrote this briefing document saying — among other things — there are problems with the Packaging Recovery Notice (PRN) system, and with how the Plastic Packaging Tax (PPT) has been developed, but we can put measures in place to change that. And I think if we can stop some of these delays in legislation and make sure it works for UK recyclers, there's still a great opportunity.

The EU confirmed PPWR legislation in December and the Single Use Plastic directive will mandate recycled content in PET beverage bottles in the EU from next year. Is there willingness in the UK to develop similar requirements?

We expect a lot of the impacts will roll into the UK because companies supplying the EU will need to meet EU requirements. EU demand for recycled material from the UK could also increase, because — unlike the PPT, where companies have the option to pay the tax and use virgin material — under PPWR recycled content is a requirement. This could also be seen as a risk to availability of recycled material for UK converters. But PPWR recycled content requirements will not come in for six years. I think there's still a chance for the UK to do something, potentially faster than the EU did, although we are not aware of anything in development.

In the BPF's recent Recycling Road Map, you significantly reduce your estimate of how much chemical recycling would contribute to the overall picture by 2030. Why was that and what does it signify?

When we wrote the first road map in 2020-21, we felt that our estimate for chemical recycling by 2030 was realistic and actually lower than what companies were saying they would be able to achieve within that timescale. But time has shown that we are not getting the commitment to investment in the UK that we were hoping to see, and we felt that we had to scale back expectations for 2030 because that's only five years away.

Delays to rules around how mass balance accounting can be used to attribute chemically recycled content to count towards the PPT have been a big problem and that's why we've been pushing to get it dealt with. We must create the right environment so that people see it as a place to invest. Our hope is that the recommendation on mass balance from the recent consultation makes people start looking to the UK and seeing we've made a commitment to mass balance, which the EU hasn't yet. This might encourage companies to invest in the UK.

You are referring to the government's recent recommendation for fuel use-exempt mass balance to be allowed for calculating chemically recycled content in the context of the PPT. What are the next steps in this?

They say their intention is to use fuel use-exempt and there's been overriding support for mass balance in general. The biggest question from our members is the time scale for next steps. They are keen to work with industry to develop the next stage and work out how to put the plan in place. Questions around how certification would work and how mass-balance attributed ‘credits' for chemically recycled content could be transferred within companies need to be resolved. We are going to be working with HMRC to understand the detail and get involved in the next stage of developing legislation. At the moment there is no indication of a timescale. That will be our big question, because we need the reassurance it will happen, as this encourages people to invest.

Was your members' reaction to the consultation universally positive?

It was positive in terms of its aligning — in most cases — with what industry was calling for. We have always said we need chemical recycling to complement mechanical recycling and we need developments to infrastructure in both. There was always support for mass balance as long as that complementary element of it works. But the big questions are what's next and what's the time scale.

Another element of the consultation response was recommending pre-consumer recyclates become ineligible for counting towards the 30pc threshold of recycled content above which the PPT does not apply. What has the reaction been to this and how significant do you think the impact might be?

We are still developing a statement on this, but as you can imagine it's an area with mixed views. We don't think the timescale for putting this into practice would necessarily need to be aligned with confirmation on mass balance. Excluding pre-consumer recyclates might need to be a slightly longer journey and a phased approach might be necessary to support companies that invested in machinery on the basis that they were allowed to use pre-consumer recyclates to count towards their PPT threshold, and to allow development work in areas where you currently can't use post-consumer recyclates without challenges.

We haven't got data from members saying how much of what counts towards meeting their 30pc comes from pre-consumer and post-consumer. It's likely that in some sectors, where using post-consumer is really challenging, people are using more pre-consumer.

We're talking to our members to form a clear position on this. But a phased approach, not necessarily aligning to mass balance changes, seems to make sense because you won't be replacing pre-consumer content with chemically recycled content. It will take a long time to scale up chemical recycling, and you cannot expect to turn pre-consumer off and turn chemical recycling on at the same time.


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11/02/25

Trump bans federal use of paper drinking straws

Trump bans federal use of paper drinking straws

Houston, 11 February (Argus) — President Donald Trump has signed an executive order to ban the procurement of paper drinking straws by the US government and to take steps toward enacting a similar ban nationwide. An "irrational" campaign against plastic straws had forced Americans to use "nonfunctional" paper straws that are more expensive and may pose a risk to human health, Trump said in the order signed Monday. Health risks include the leaching of polyfluoroalkyl substances (PFAS) from paper straws into drinks, the White House said. The order signed on Monday bans the purchase of paper straws for use in federal buildings and requires within 45 days the development of a " National Strategy to End the Use of Paper Straws". Former president Joe Biden had directed the federal government to end the use of single-use plastic in food applications by 2027. The Plastics Industry Association praised the executive order. "Plastic is the best material for nearly everything it is used for, while being sustainable," Plastics Industry Association chief executive Matt Seaholm said. "Straws are just the beginning — 'Back to Plastic' is a movement we should all get behind." Plastic straws are typically made from polypropylene. Environmental group Greenpeace USA accused Trump of signing the order as a distraction from his administration's moves to prevent federal institutions from protecting Americans from microplastics and "dangerous chemicals". By Zach Kluver Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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LyondellBasell mulls Dutch PO/SM plant reorganisation


11/02/25
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11/02/25

LyondellBasell mulls Dutch PO/SM plant reorganisation

London, 11 February (Argus) — Chemicals firm LyondellBasell is in negotiations with workers at its Maasvlakte propylene oxide (PO) and styrene monomer (SM) production facility in the Netherlands about "a reorganisation at the plant", Dutch workers' union FNV told Argus . The union is negotiating with the company on compensation for workers whose jobs may be affected and assistance with transitioning to new roles. Members will vote on the proposed plan by the end of February. "At this stage, no definitive decisions have been made," LyondellBassell said today. The firm "continuously evaluates business conditions, our portfolio and a wide range of options for managing our assets," it said. The Maasvlakte PO/SM plant is a 50-50 joint venture between LyondellBasell and Germany's Covestro. "Covestro regularly reviews its portfolio in the light of business conditions. This includes discussions with our joint venture partner regarding the Maasvlakte site," Covestro said. LyondellBasell and Covestro both declined to comment on whether they are discussing a possible sale of the Maasvlakte facility. LyondellBasell launched a strategic review of its European assets last May. The review is ongoing, the firm said last month. The Maasvlakte plant is one of six ‘non-core' European assets, the company said in August last year. The facility has 315,000 t/yr of PO capacity and 640,000 t/yr of SM capacity. It began operations in 2003 and employs approximately 160 people. The plant has been idled since December last year 2024. It has been intermittently idled several times in recent years, reflecting a structural surplus in Europe's PO and SM production capacity. The negotiations with workers indicate LyondellBasell is considering longer-term changes to operations at the site. Europe's petrochemicals sector remains squeezed by high energy costs, a higher overall cost base compared to other production regions and stagnant regional downstream demand. LyondellBassell also has 220,000 t/yr of PO and tertiary butyl alcohol (TBA) production capacity in France and 260,000 t/yr of PO and TBA capacity in the Netherlands. It also has a total of 649,000 t/yr of PO and SM capacity in the US that it operates jointly with Covestro, as well as over 1mn t/yr of its own PO and TBA capacity in the US including a 470,000 t/yr plant in Channelview, Texas, which started up in early 2023 . Production margins for PO/TBA facilities, which supply TBA for MTBE production, are generally much more favourable than for PO/SM plants. And lower US energy costs help to make US PO output more cost-efficient than in European production. US exports of PO to Europe have increased sharply since 2023, reaching 7,800 t/month in 2024, according to US customs data, up from just 760 t/month in 2020 (see graph). By Laura Tovey-Fall US PO exports '000 t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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BP puts Gelsenkirchen refinery in Germany up for sale


06/02/25
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06/02/25

BP puts Gelsenkirchen refinery in Germany up for sale

Hamburg, 6 February (Argus) — BP said today it will begin seeking buyers for its Ruhr Oel business, which includes the 257,800 b/d Gelsenkirchen refinery and an associated petrochemicals plant in western Germany. The UK company hopes to reach a sales agreement in 2025, although the exact timing will depend on approval of local competition authorities, it said. The sale should have no affect on short-term supply of oil products in western Germany as the refinery will keep up normal production in the interim, the company said in a press release. BP had said it planned to downsize Gelsenkirchen , shutting four unitsand reducing its crude capacity by a third. The shutdown of the affected units is scheduled for the end of the 2025 and will go ahead, BP told Argus . Potential buyers are not yet known. BP is the latest in a series of companies looking to sell or reduce their refinery shares in Germany. Shell is still searching for a buyer for its 37.5pc stake in the PCK consortium's 226,000 b/d Schwedt refinery, in eastern Germany, after a sale to UK energy firm Prax fell through in late December. Shell was also in discussions to sell its 32.25pc stake in the Miro's consortium's 310,000 b/d Karlsruhe refinery to czech company MERO CR in 2024, which did not result in a sales agreement. Shell is further on track to shut down the Wesseling plant at its 334,000 b/d Rhineland refinery complex. Russian state-controlled Rosneft intends to sell its German subsidiaries, Rosneft Deutschland and RN Refining & Marketing, which are held under the trusteeship of the Federal Network Agency. These assets include a controlling stake in the PCK joint venture, a 24pc share in the Miro's consortium and a 28.6pc share in the Bayernoil joint venture, operator of the 207,000 b/d Neustadt-Vohburg refinery in Bavaria. ExxonMobil announced its intention to sell its 25pc stake in the Karlsruhe refinery to Austria's Alcmene, a subsidiary of Estonia's Liwathon, in 2023. The sale fell through in July 2024 after a German court upheld a ruling banning the company from selling its stakes in the Miro consortium following an injunction filed by Shell. BP also operates the 95,000 b/d Lingen refinery in western Germany. This is unaffected by the sale plan for Gelsenkirchen. By Natalie Müller Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US Mexico-Canada tariffs to disrupt polymers markets


31/01/25
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31/01/25

US Mexico-Canada tariffs to disrupt polymers markets

Houston, 31 January (Argus) — Planned US tariffs on Canadian and Mexican imports will disrupt years of free flowing polyethylene (PE) and polypropylene (PP) trade between the three countries, market sources say, which could lead to higher prices and less spot market trading. US President Donald Trump repeated on Thursday plans to impose 25pc tariffs on all Canadian and Mexican imports as soon as 1 February. The US and Canadian petrochemical markets in particular operate like one market, with buyers purchasing resin from producers on both sides of the border. Canadian producers are embedded in US buyers' supply strategies, but if Canadian resin is suddenly 25pc more expensive, buyers may need to reconsider other alternatives within the US. Canadian producers may feel obliged to swallow the costs to keep market share, while others may back away from spot trading in the US market, where margins for generic prime, offgrade and widespec material are already lower. "It's about to get pretty crazy," said one US polymer distributor, active in both the US and Canada markets. Canadian producer footprint significant There is approximately 4.6mn t/yr of PE capacity in Canada operated by three major producers, Nova Chemicals, Dow and ExxonMobil, representing around 16.3pc of total US/Canada capacity. Dow is in the planning stage of a $6.5mn net zero CO2 emissions project planned in Alberta, Canada, that will include an additional 2mn t/yr of PE capacity. Heartland Polymers, the only PP producer in Canada, has 525,000 t/yr of PP capacity, representing approximately 4.9pc of total US/Canada PP capacity. Canadian producers are still figuring out how to respond, not wanting to lose market share to US competitors. In a 23 January statement to customers, Nova Chemicals attempted to reassure its US customers. "We understand the importance of remaining competitively priced to retain your business," the communication said. "As stated previously, Nova chemicals is the importer of record, and will be responsible for paying the tariff." Buyers have taken that statement to mean that Nova will not pass the cost of the tariff on to US customers, but other market participants said that is less clear. A Nova spokesman said only that "US customers will not need to manage the customs process associated with their order from Nova" but did not comment on whether the cost would be passed along to buyers. A spokesman from Heartland Polymers declined to comment, saying they do not comment on "political matters." Dow and ExxonMobil did not immediately respond to requests for comment. Sources said the tariffs could fundamentally shift the way the markets operate. "Tariffs will change the way they do business," said one buyer active in both the US and Canadian markets, speaking of Canadian PE and PP producers. One trader said it believes that even if Canadian producers remain competitive for contract business, they are unlikely to participate in the spot market in the US, which typically has lower margins. "If they don't have to sell it in the US, they won't do it," the trader said. Canadian customers could also feel the impact if Canada responds with its own tariffs, sources said. "Canadian customers might feel out of harms way, but if the US tariffs them, they will tariff the US," said one PP distributor. "I think both sides are going to be looking for a solution." Mexico flow largely one-way The situation in Mexico is slightly different, with most resin flowing one way — from the US into Mexico — where local production is not enough to meet Mexican demand. Sources there said the big impact will come when or if Mexico responds with retaliatory tariffs on US resin. "A tariff is going to be like a gunshot in the leg for the Mexican economy," said one Mexican polymer producer. The initial concern for most customers in the three countries is existing contracts with resin producers, but later there will be concerns about demand, with the potential for manufacturing to shift back to the US from Canada and Mexico. "Some people are thinking some production may come back to the US with tariffs, so you could see a slight demand boost," said one US-based PE distributor. For now, Canadian producers are believed to have shipped large quantities of resin over the border to the US in recent weeks, believing that if it is already across the border it is not subject to any new tariff. Sources said they are hopeful those volumes will buy them some time until the governments in both countries can come to an agreement. By Michelle Klump Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US PVC producers weigh cutbacks on lower margins


30/01/25
News
30/01/25

US PVC producers weigh cutbacks on lower margins

Houston, 30 January (Argus) — US polyvinyl chloride (PVC) producers are weighing operation cutbacks in February after grappling with deteriorating sales margins underpinned by elevated feedstock costs and stagnant end-product values. PVC producer profitability eroded in January as prices for key feedstock ethylene leapt to four-month highs by mid-January, various sources said. Ethylene is a main component in ethylene dichloride (EDC) manufacturing, which is then cracked into vinyl chloride monomer (VCM) before being converted into PVC. Some domestic PVC production is fully integrated and feature ethylene crackers, but many producers still purchase spot or contract ethylene and remain exposed to price fluctuations in the spot market. Spot US ethylene prices to-date in January have averaged 18pc higher than in December and 66pc higher than in January 2024, according to Argus data. Meanwhile, PVC spot values in Houston appreciated at a much slower rate between December and January, climbing by 1pc. Elevated ethylene spot prices are expected to persist in the near-term, maintaining pressure on PVC margins, due to planned maintenance and recovery from unplanned shutdowns in mid-January stemming from sub-freezing temperatures that gripped the US Gulf coast. The expectation for ethylene values to persist at current levels is anticipated to result in PVC production cutbacks, according to several exporters. Some producers, though, remain incentivized to maintain operating rates after bringing online expanded capacity last year. Formosa and Shintech collectively brought more than 500,000 metric tonne (t)/year of new PVC capacity on line during the second half of 2024. The ramp up in added capacity coincided with increasing trade barriers into key offshore destinations, which is expected to keep more volumes within the US while consumer demand outlooks this year remain cautiously optimistic . US buyers are unsure if domestic demand will be strong enough in 2025 to absorb additional volume, placing a ceiling on upward price direction. Exporters are even less optimistic operating in a global market increasingly defined by anti-dumping duties and plentiful Chinese supply. Domestic contract negotiations have highlighted the contrast between higher operating costs and a well-supplied PVC market. Producers cited higher operating costs to argue against lower contract negotiations in January, especially after prices fell in October and November. Several producers announced increases for February volumes, with some rising as high as 5¢/lb. But buyers said current demand does not support increases and instead view price hikes as to recapture lost margin. While producers sought price stability for January monthly contracts, they are also competing to lock in volume commitments through 2025 with aggressive annual contract discussions. Producers are trying to establish a price floor domestically by limiting price erosion among already-low-priced customers, but the additional capacity has made steeper price concessions difficult to avoid in other instances. One evolving upstream market variable is a firmer US Gulf coast spot export caustic soda market, which could encourage producers to maintain current rates and delay any cuts. Integrated PVC producers also manufacture chlorine and caustic soda through chlor-alkali units. Caustic soda is a co-product of chlorine — the latter a key feedstock in EDC production — and price swings in chlorine or caustic soda values can influence production decisions for PVC manufacturers. Caustic soda export prices from the US Gulf coast this week rose by $10/dry metric tonne (dmt) from the prior week and remains 8pc higher than the same week last year, according to Argus data. Tightened spot supply availability is a tailwind for spot values in the near-term, but values remain 24pc lower than peak levels in September when caustic soda prices last offset tighter PVC margins. By Aaron May and Connor Hyde Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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