Unanswered PPWR questions remain: IK

  • Spanish Market: Petrochemicals
  • 22/12/23

As negotiations on The Packaging and Packaging Waste Regulation (PPWR) are progressing, Dr Martin Engelmann, director-general at plastic packaging association Industrievereinigung Kunststoffverpackungen e.V (IK), told Argus the regulation has become heavily focused on plastics, and reaching a conclusion at any cost could negatively affect the plastic packaging market.

Do you expect PPWR to be finalised before the change in EU Parliament?

That is the number one question. The discussions have been very difficult. Even for member states to find a solution was hard. The EU Council needed a break in negotiations to deal with last-minute changes. The biggest hurdle is that the Parliament has taken a very different position with regard to reuse quotas and bans by suggesting many exemptions based upon life-cycle assessment (LCA), which is completely opposite to what many member states want.

So I expect the discussions to be very, very challenging, and we will have to see who is in the stronger position. To close the deal before the elections to the European Parliament they would have to find a compromise by the end of February at the latest.

How do you expect a compromise to be found?

It is very high on the political agenda, but trying to find a conclusion at any cost is concerning as it could negatively impact the packaging market, and the plastic packaging sector in particular, because the PPWR has become more a "Plastic Packaging Waste Regulation" instead of a material-neutral approach that was originally attempted by the European Commission.

The tendency is to solve conflicts with regard to specific rules by allowing member states to go their own ways, and the Council presidency has used this method a lot to come to a solution. This approach will increase the already existing patchwork of national packaging regulations and thereby weaken the European internal market.

Industry at the very beginning was very much in favour of the PPWR, since it seemed a way to return to to harmonised packaging rules across the entire internal market. But the worry is we may end up with an increased patchwork of national packaging regulation plus a whole tonne of bureaucracy from this proposal, so the industry would get the worst of both worlds. It is very frightening.

What are the main challenges of a patchwork of European regulations?

The Europe internal market is the home market for many companies. In the past, companies did not need to worry where the packaged product appears within the region because all the packaging rules were the same for every European country. But this has changed over recent years.

There are plastic packaging bans in France in regard to fruits and vegetables for instance, and recycled content quotas in Spain coming into force in 2025, and we had a challenging labelling discussion in Italy.

If the PPWR will be decided according to the Council proposal these differences by countries will increase. For companies it makes life very difficult, because they have to check in which countries their packaging is being used, and if it complies with the specific rules of those countries.

The inclusion of reuse targets in the proposal has been highly debated. Could you outline the different positions that currently exist and the challenges?

The main problem with the Commission proposal on reuse quotas is that there is no underlying LCA that would look at a product or packaging format and then say whether certain reuse quotas would make sense overall.

Now the EU Parliament has suggested grant exemptions to reuse quotas based on LCAs, but it is a very difficult approach. Using LCA as a possibility for exemptions afterwards would allow entire sectors to completely get rid of the reuse quotas by producing an LCA that demonstrates their packaging is better in single use.

There are certain sectors where reuse quotas do not make sense, in particular the industrial and commercial packaging mentioned in Article 26 paragraphs 12 and 13. For the rest of the reuse quotas it is immensely important they are at least material neutral, which is not the case at the moment.

Regarding the recycled content quotas for plastic packaging proposed in the PPWR, are both the Commission and Parliament, as well as the member states, all in support?

Yes, the institutions are pulling in the same direction.

Parliament and Council have amended the approach to the calculation for recycled content, from ‘per unit' to ‘average per manufacturing plant by year'. But the quotas themselves remained basically unchanged, except the recycled content quota for contact sensitive packaging, which has moved down from 10pc to 7.5pc by Parliament, which has also introduced a new recycled content quota for non-PET packaging for 2040. It remains open whether the Council will accept that.

The problem for plastic packaging is that recycled content quotas in particular for content-sensitive packaging, have been set with the assumption that recycled plastics from chemical recycling will be broadly available in 2030. It is still unclear whether that will be the case. From the very beginning our industry pointed out it is unlikely there will be enough recycled material, in particular for food contact packaging, to fulfil quotas. We therefore demand more flexibility by applying the quotas.

What are the latest developments you have heard about discussions on the legal status of chemical recycling?

The discussion is still focusing around the calculation methods permitted for allocating chemically-recycled content.

The Commission has not proposed to allow mass-balance accounting by the more flexible "fuel-exempt" approach as suggested by the entire industry, but instead a "polymer-only" approach, which would allow just a limited credit-based system. The worrying thing is that the chemical industry (Cefic) and plastic industry in Europe (Plastics Europe) have already announced that investments in chemical recycling will not be achieved based on a "polymer only" calculation method, since the output would be too small.

So the quotas we get for recycled content are based on the assumption of chemical recycling capacity, but the chemical industry says they do not have a business case to invest, because the calculation methods allowed for allocating recycled content could make chemical recycling unprofitable in Europe.

The EU Technical Committee will meet to make a decision in January, which will need to be support by a majority of member states. Because the polymer-only approach is seen as a compromise between the fuel-exempt model and the very narrow proportionality approach that some non-governmental organisations are pushing for, if you ask me, there is a high chance that it will go through.

We heard that Germany is considering implementing a plastic packaging tax — have you heard any more details?

Simply, we don't know.

The government pulled this out on 13 December as an idea to easily generate €1.4bn per year. The government needs the money urgently for the 2024 budget. So a proposal is expected in the next couple of weeks, early in the new year.

The idea of a plastic packaging tax was already in the coalition agreement that was decided on two years ago. It is unknown whether it will be a levy or a tax — taxes usually generate revenue for the general budget, whereas levies typically can be reinvested into the industry that pays into the fund. Any plastic levy that will be paid for by the industry, and by the consumers in the end, is bad for the environment because it will increase and further strengthen the trend away from good-to-recycle plastic packaging towards difficult or non-recyclable laminated paper composite packaging.

So there are a lot of questions. Will it be a tax or a levy? Will it only be applied to consumer packaging? What about commercial and industrial packaging? Is it only for plastics or other packaging materials? We will follow the issue closely and our member companies are heavily involved.

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Huge potential for tray-to-tray recycling:PETCORE

Huge potential for tray-to-tray recycling:PETCORE

London, 17 June (Argus) — Ahead of the Petcore Europe Thermoforms Conference in Granada, Spain, on 25-26 June, the technical manager of Petcore Europe's thermoforming working group, Jose-Antonio Alarcon, spoke to Argus about the development and challenges of tray-to-tray recycling in Europe. Why is closing the loop on tray-to-tray packaging important for the European industry? Most of the PET recycling industry has been concentrated on recycling PET bottles, while tray packaging makes up around 25pc of the overall PET market in Europe. For many years, bottle producers were not keen to use recycled content in their packaging, so most recycled PET flakes were going into tray applications. As regulation continues to push up recycled content in bottles, more and more flakes are going to the bottle market, while trays have not followed the same circularity path and recycled content supply has become more competitive. Around 70pc of bottles are collected on average in Europe, but the figure is less than 30pc for trays. Only around 50,000 t/yr of trays are currently recycled in Europe, when more than 1mn t/yr are placed on the market. There is huge potential. Petcore Europe has been pushing for tray-to-tray solutions, and in the thermoforming working group we are working on dealing with barriers to making trays circular, looking at collection, recycling technologies, standardisation and design for recycling, food contact and communication. What are the major obstacles to scaling up tray-to-tray recycling? One is the collection of trays in most countries in Europe. In some countries, such as Italy, trays are collected together with other packaging types. In others — particularly where there is a deposit return system (DRS) for bottles — then trays are not properly collected. Collection is the first challenge, if you are not collecting, you are not sorting, you are not recycling. One country that is very successful in tray collection is Belgium. France is working on it and is doing a good job. And Italy is also carrying out trials, but these have been less successful — finding an appropriate outlet for material was a challenge and improvements need to be made to make this work. It is worth mentioning that, Corepla, the EPR system in Italy, has several industrial schemes to improve tray-to-tray recycling with selected recyclers. But the success story in Belgium really stands out. It is a chicken and egg scenario, why is there not more tray-to-tray recycling? Because it is not collected, sorted, recycled? Or maybe because there is not enough demand? If there is not the demand for inclusion of tray flake, then sorters do not have the critical mass to create a dedicated stream. The technology is advancing, there are sorting technologies capable of identifying PET bottles, PET mono-layer tray, PET multi-trays and there are recyclers today that are leading the market and recycling both mono and multi-layer trays already. No fewer than seven stakeholders in the value chain need to be convinced that tray-to-tray is the right thing to do and makes sense — both environmentally and economically. How do you see tray-to-tray recycling developing in the coming years? Ultimately, the market will determine the value of tray-to-tray recycling. The recycling of trays needs to evolve. Bottle recycling has been in place for more than 20 years, and there is a clear progression from how it looked at the beginning to how the market works today. The tray recycling sector is in its infancy, and it will take time to evolve. It needs to have the right level of interest and demand to progress. At the end of the day if things are not economically viable, they will not progress. The market needs to be self-sustaining. Some companies are already focused on recycling of multi and mono-layer recycling. And there is a learning curve. If you look at the number of players recycling bottles in Europe and compare it with recyclers of trays, it is very different. But it is growing, and most tray-to-tray projects only started in recent years. There will be more solutions — sorting and washing technology will improve, decontamination technology will improve. We need separate sorting, and the value chain and retailers to be aligned and moving in the right direction. Progress is slow, but it is necessarily so for the learning curve. At the same time, we need to put pressure on the market to catalyse this movement. Legislation will play a critical role, but the best action is to drive your own fate. How is regulation supporting the development of tray circularity? There are particular chapters on trays in Packaging and Packaging Waste Regulation (PPWR) in EU regulation 2022/1616 and the Single Use Plastics Directive (SUPD), but there is no specific legislation dedicated to thermoforming packaging just yet. In the SUPD, there is mention of on-the-go packaging that can be related to trays, but it covers all packaging types for single use, not specifically PET trays. Article 6 under EU regulation 2022/1616 mentions the need for separate collection of plastic to be used in food contact applications. This is where we need to work more on the collection and sorting of PET trays and have to push for the trays to be placed in a separate collection stream. While legalisation undoubtedly underpins demand for recycled content, Petcore aims to go above and beyond the minimum requirements set for the tray market. The thermoforming market needs to be circular and needs to be self-reliant, independent of the regulation imposed. Will the development of chemical recycling be in competition with tray-to-tray recycling? The aim of the association is to make the whole PET market circular — my expectation is that in the future there will most probably be some bottle flake going into trays and some tray flake going into bottles. There will also be some claim for chemical recycling, but each sector needs to have its own area, we need to have mechanical and chemical recycling working in harmony. Recycling of trays is not the same as recycling bottles, mechanical properties and composition of the packaging is different. And trays are more complex than bottles, because they have the tray, lidding film, inks, labels, etc. The percentage of multi-layer material is much higher in trays than in bottles and this makes the recycling process more complex. And design for recycling will help, but there is a place for both mechanical and chemical recycling. We need to look for the most conservate and sustainable recycling route — first this is mechanical, but when this is not possibility chemical recycling makes sense. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US PVC export prices rise in early June


US PVC export prices rise in early June

Houston, 14 June (Argus) — Average prices for US polyvinyl chloride (PVC) exports have continued to rise in recent weeks, increasing by $50/metric tonne (t) in just the last two weeks as US exporters expand market share in key regions. Argus assessed export prices in the week ending 14 June between $820-850/t fas Houston. In addition to the reflect the recent price increase, this week's price range is $110/t higher than the start of May, when PVC prices first started to rise. That early May rise in prices coincided with the shutdown of Orbia's 690,000t/yr PVC plant in Altamira, Mexico. The plant has been down since 5 May due to water shortages from an ongoing drought in the region. There has been no public announcement on when operations will resume and there is no clear outlook on when the drought will end, but some market participants suspect it could last deep into the summer. At the same time, Asian producers continue to be challenged by rising freight rates and tight vessel availability, making their PVC offerings less competitive to key markets. In particular, US traders have said exports to Africa, India, and south Asia from northeast Asia have been decreasing. On 10 June, Korean PVC producer LG Chem sent out a letter to its customers informing them about delivery delays due to logistical challenges. In the letter, the company noted a steep rise in ocean freight costs because shipping lines are keeping vessel space significantly tight. The letter also told customers that they may need to help partially cover the added shipping costs by paying an additional $100/t for shipments to be delivered on time, as shipping companies were only agreeing to transport cargo that was covered by these higher upfront costs. US exporters have taken advantage of the supply gaps created from those two issues, and several traders in recent weeks have said buyers around the world would look to the US going forward to provide adequate supply. The result has meant that even with the increase in prices, US exporters have continued to gain traction in Africa and Asia, while shoring up market share in the Americas. While the operating rates in the US have improved, the industry as a whole is still not running at full rates. Domestic demand is still strong according to producers and buyers in the US, a dynamic which could keep export availability tighter in the weeks ahead. This has led some traders to expect further price increases for export volumes in the weeks ahead. By Aaron May and Tasani Stokes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India implements e-PVC anti-dumping duties


India implements e-PVC anti-dumping duties

Singapore, 14 June (Argus) — India's central government has imposed additional anti-dumping duties (ADDs) on imports of paste polyvinyl chloride (e-PVC) from China, South Korea, Malaysia, Norway, Taiwan, and Thailand from 13 June. The implementation comes after Indian authorities concluded investigations on 26 April which found that imports were purchased at dumped prices from these countries. Authorities also noted there was a substantial increase in imports from these countries and concluded that the domestic industry was affected negatively because of this. But the authorities also incorporated exclusions to the ADDs. These were on PVC resins with a K-value below 60K, PVC blending resins, co-polymers of PVC paste resin, battery separator resins and the brand name "Biovyn" produced by European PVC producer Innovyn. The announcement of the ADDs comes at a time when regional freight challenges have been a significant concern for Indian importers. Limited container availability has resulted in South Korean producers Hanwha Solutions and LG Chem postponing shipments of cargoes that were purchased by Indian buyers for arrival in June and early July. The producers sent letters to their customers informing them of the freight challenges. Both producers indicated a raise in prices for shipments, with LG Chem indicating a rise in PVC prices by $100/t. Key Taiwanese PVC producer Formosa was forced to postpone the announcement of its offers for July shipment from this week to next week because of shipping uncertainties, according to market participants. With the lack of imports, Indian producers this week raised domestic prices of suspension-PVC (s-PVC) by 4,000 rupees/t ($48/t) and e-PVC by Rs5,000/t. Offers of Chinese-origin cargoes have been limited, with some s-PVC offers at $930-950/t this week. Chinese producers are trying to circumvent freight difficulties by shipping PVC cargoes in jumbo bags in bulk vessels instead of containers. But acceptance by Indian buyers has been underwhelming, according to market participants. The ADDs will be enforced for a period of six months from 13 June and are payable in Indian rupees. By Matthew Rajendra India e-PVC ADD list $/t Country of Origin Country of export Producer Duty China Any Formosa Industries (Ningbo) Co., Ltd. 546 China Any Shenyang Chemical Co. Ltd 115 China Any Other Chinese producers except above 600 Any China Any 600 South Korea Any Hanwha Solutions Corporation 0 South Korea Any Other South Korean producers 41 Any South Koreaa Any 41 Malaysia Any Kaneka Paste Sdn. Bhd. 317 Malaysia Any Other Malaysian producers 375 Any Malaysia Any 375 Taiwan Any Formosa Plastics Corporation 118 Taiwan Any Other Taiwanese producers 168 Any Taiwan Any 168 Thailand Any TPC Paste Resin Co. Ltd. 195 Thailand Any Other Thai producers 252 Any Thailand Any 252 Norway Any Any 328 Any Norway Any 328 Data from India's Ministry of Finance Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Ineos Styrolution to close Sarnia SM plant


Ineos Styrolution to close Sarnia SM plant

Houston, 11 June (Argus) — Global styrenics producer Ineos Styrolution plans to permanently close its430,000 metric tonne (t)/yr styrene monomer (SM) production site in Sarnia, Ontario, by June 2026. "The long-term prospects for the Sarnia site have worsened to the point that it is no longer an economically viable operating asset," Ineos Styrolution chief executive Steve Harrington said on Tuesday. The Sarnia site was shut down on 20 April to address issues related to benzene (BZ) emissions after the Canadian government issued a BZ emissions control order on 18 April. The company said it continues to assess what would be required to restart the plant, a process that will require about six months. Ineos said complying with the BZ emissions control order was unrelated to the decision to permanently close the plant. Ineos said it has made several investments to ensure safe and reliable operations and that additional large investments unrelated to plant startup were necessary for site operations moving forward, which the company considers economically impractical. Ineos declined to comment further. Sources close to the company said Ineos has been fulfilling Sarnia's customer orders with products from Texas units in Baytown and Texas City. By Jake Caldwell Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US GSA finalizes new plastics packaging rule


US GSA finalizes new plastics packaging rule

Houston, 11 June (Argus) — The US General Service Administration (GSA) finalized a rule encouraging single-use plastic (SUP) free packaging for supplied and purchased products under Federal Supply Schedule contracts (FSS). The rule will incentivize the reduction of SUP packaging through marketing opportunities on the FSS by using an icon to indicate which products are SUP-free, according to the 6 June rule release by the GSA. The FSS is the primary contracting method for federal buyers and includes more than 14,500 contractors. The rule supports President Joe Biden's Federal Sustainability Plan to lower the federal government's environmental footprint, which includes finding products to decrease plastic waste in consumer supply chains. FSS contractors will be prompted to announce if they offerSUP-free packaging and if that is the default option or if it must be stated. GSA will promote FSS contractors with SUP-free packaging to federal consumers. Feedback on the rule has been mixed. The Center for Biological Diversity, an environmental advocacy organization, said it appreciates the GSA for recognizing the federal government's participation in the waste of single use packaging, but said it does not go far enough. The rule is "underwhelming" and "won't make a dent in the plastic crisis", the organization said in a statement. The Plastics Industry Association, American Fuel & Petrochemical Manufacturers, and the American Chemistry Council released a joint statement with concerns over the new rule. "It suggests that eliminating plastics will be better for the environment in all scenarios — which is fundamentally false," the groups said. The rule has an effective date of 8 July. By Tasani Stokes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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