UK rPET industry must grow to meet brand demand

Consumer giant Nestle's recent announcement that it had reached 100pc recycled PET (rPET) content in all of Buxton water brand UK bottles is another sign of rampant competition for recycled content in packaging, and raises a question over whether supply can keep up with the growing demand.

Many companies and brands in the UK fast-moving consumer goods (FMGC) sector are aiming to increase recycled content in plastic packaging. Some, such as Buxton and Japanese firm Suntory's blackcurrant drink Ribena, as well as all Coca-Cola Great Britain's smaller bottles, have scaled up quite quickly to 100pc recycled content. But trade association the British Plastics Federation (BPF) estimates the current average level of recycled content in the UK PET bottle market is just 15-20pc, and space for others to scale up their use of recyclates is ever more limited.

The BPF's Recycling Roadmap finds around 350,000t PET bottles were placed on the UK market, and environmental non-profit Recoup estimates around 75pc of these were collected for recycling. This is consistent with Argus estimates of an around 87.5pc operating rate of at the UK's 300,000 t/yr of PET recycling capacity. The average 'process loss' during PET recycling in Europe is around 30pc, according to Plastics Recyclers Europe (PRE), meaning rPET output capacity is a little over 180,000 t/yr, or enough for a little over 50pc of bottles put onto the market.

The need for special certification for food-contact applications is a major bottleneck to supply, with just 30,000-35,000 t/yr of production capacity for food-grade rPET pellets in 2020 according to the BPF Recycling Roadmap, although this is likely to have risen.

The UK's implementation of a £200/t ($250/t) tax on all plastic packaging with less than 30pc recycled content may add complications, because this applies to PET applications outside of the bottle industry, particularly trays. The UK PET tray market was nearly half the size of the bottle market in 2019, according to BPF data, but tray-to-tray recycling, which would create an rPET stream specifically aimed at non-bottle applications, has still to develop.

Scope for rPET imports is limited, given tightness in the European market and with the EU Directive on Single-Use Plastics (SUP) setting out an obligation for PET bottles to include 25pc recycled content by 2025. Meeting this probably means including more than 25pc rPET given the comparative difficulty of sourcing food-grade recycled polyolefins for caps and closures.

The more than 3mn t of PET bottles placed on the European market in 2020 suggests Europe-wide demand for food grade rPET would easily exceed 1mn t by that 2025 deadline. Latest data from PRE show just 632,000 t of rPET pellets manufactured in 2020.

Nestle Waters UK head of corporate affairs and sustainability Hayley Lloyd House told Argus "there is higher demand than ever across many industries for recycled PET plastic, and the volume PET plastic collected for bottle recycling is not keeping up with that demand." She said a Deposit Return Schemes (DRS) "is the best solution to increase bottle collection rates, whilst helping to improve the quality of recycled PET."

Successful DRS schemes can increase collection volumes and the quality of waste streams, reducing process loss at the recycling stage and easing the process of food-grade certification. This would help to ease the shortfall, but significant investment would also be needed to increase reclamation and reprocessing capacities to produce enough recycled material to reach and sustain recycled content ambitions in the UK plastic packaging market.

By Chloe Kinner