PRSE, the European recycling industry's flagship annual trade fair, took place this week against a background of challenging times for the industry. Concerns about its present state were reiterated at the show, while optimism resulting from rising demand in many sectors was tempered by recyclers' frustration that they have struggled to offset the impacts of rising feedstock and production costs on their margins.
Industry association Plastic Recyclers Europe (PRE) chairman Ton Emans warned in March that decisive action is required to support the industry against various pressures, such as high energy costs and import pressure. Several European recyclers have announced bankruptcies or capacity closures in recent months.
Emans reiterated this in his opening address at the conference, noting that the confirmation of recycled content requirements for almost all plastic packaging types by 2030 — under the EU's Packaging and Packaging Waste Regulation (PPWR) — are a positive step, but the European recycling landscape may have changed significantly by then without more immediate support. Measures to extend recycled content requirements to the automotive industry were also mentioned in the presentations as a possible opportunity for the recycling industry. But slow progress was noted on the End-of-life Vehicles Directive the European Commission proposed in 2023, which included recycled content requirements for automotive plastics.
Turn the volume up
On the floor of the trade fair recyclers in many industries were glad to see improvements in demand in recent weeks. Minimum rPET requirements in EU beverage bottles, growing usage of recyclates in PE films and strong production of plant pots and trays were all mentioned as factors contributing to healthier sales volumes for recyclers.
But many expressed frustration that rising costs have prevented them from taking advantage of the more dynamic market by increasing margins. Bottlenecks in collection and sorting were mentioned in the presentations as a challenge for the industry. And it is noteworthy that the uptick in demand has lifted prices for PE, PP and PET bales more sharply than the prices of the corresponding pellets in many recycling chains since the start of the year.
Demonstrating the bottlenecks in European collection, Eurostat recently slightly-adjusted recycling rates for plastic packaging for 2022, originally published in the third quarter 2024. These showed that many companies were at risk of mising EU targets to recycle 50pc of plastic packaging waste by 2025, rising to 55pc by 2030. Without significant investment and growth in collection, sorting and recycling infrastructure the region will likely fall short. In addition, the recent bankruptcies or capacity closures will make it increasingly challenging to improve recycling rates across the region. The data show Europe averaging a recycling rate of around 38pc in 2022. Belgium (54pc), Germany (51pc) and Slovenia (51pc) are leading, closely followed by Latvia and Italy (both around 47pc). Austria (25pc), France (25pc), Denmark (23pc) and Malta (16pc) are lagging behind.
Combined with higher year-on-year electricity prices in the first quarter, rises in bale prices resulted was a squeeze on recyclers margins so far this year.
Concern about the future direction of virgin polymer prices was a common discussion point. This concern highlighted the role that the recycling industry would like legislation to play in supporting demand for recyclates and reducing the exposure of recyclers to fluctuations in the virgin market, which is driven by completely different cost bases. This was particularly true among PP recyclers, many of which were concerned their ongoing efforts to pass through higher costs for household packaging waste and packaging-based regrinds to their rPP pellet customers will be hampered by falling virgin PP prices, after the propylene monthly contract price (MCP) was settled €55/t down on the month for April.
Because of the mandated minimum recycled content requirements for rPET in bottles in Europe, the price of recycled material is more disconnected from virgin. But recyclers are still concerned that premiums for recycled PET flake and food grade pellets have reached the highest seen in at least two years (currently around €600/t for food grade pellet and just below €300/t for flake), which is providing a barrier to increased recycled content demand, particularly into applications outside of the bottle market.
