UK Plastics Waste – A review of supplies for recycling, global market

Transcription

Final Report
UK Plastics Waste – A review of
supplies for recycling, global
market demand, future trends
and associated risks.
Project code:
Research date: November 2006
ISBN: 1-84405-254-0
Date:
Disclaimer: While steps have been taken to ensure the accuracy of this report, WRAP cannot accept responsibility or be held liable to any person for any loss or damage
arising out of or in connection with this information being inaccurate, incomplete or misleading. Care should be taken in using any of the data provided as they are based
upon numerous project-specific conditions. This report was prepared in 2006 and reflects the situation at that time and does not take into account any subsequent
developments. The listing or featuring of a particular product or company does not constitute an endorsement by WRAP and WRAP cannot guarantee the performance of
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Published by
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Executive summary
WRAP commissioned GHK, working in association with Recoup, to investigate the UK supply of plastics for
recycling, global market demand, future trends and associated implications. The base date for the information
and data collected in this report is 2005.
This Executive Summary presents the objectives, methodology, main conclusions and recommendations of the
study.
Cross-references to the relevant sections of the main report are provided.
ES1
Objectives
The objectives of the study were:

To provide projections for future UK growth of collection rates for plastics for recycling for 2008, 2010 and
2015.

To provide projections for future UK growth of domestic end markets for plastics recyclate for 2008, 2010 and
2015.

To identify and assess the current export market for UK recovered plastics.
To provide projections for future demand for recovered plastic by each destination and material type for 2008,
2010 and 2015.

To provide an assessment of the balance between collection and end markets to 2015.
To identify and assess the uncertainties associated with the projections.
To provide an assessment of the risks associated with any of the key end markets.
To identify possible risk mitigation measures that could be taken.
ES2
Methodology
This study has been developed using an extensive range of interviews, contacts, primary research and
references. Over 120 organisations have contributed information to the study between October 2005 and March
20061. In addition over 150 references have been drawn upon to provide the review and analysis presented2.
The supply side and UK demand information is constructed based on discussions with over 40 relevant consultees
and with reference to more than 80 published sources. The UK demand analysis is constructed from primary
research involving some 65 plastics recyclers and UK-based traders of plastics waste.
The review of international market demand and associated analysis has been carried out following interviews with
20 businesses, trade bodies and regulatory organisations in Europe, over 25 organisations in Hong Kong and
China, 13 organisations in India and over 20 organisations in North America. Research included local visits in
Hong Kong and China. The demand analysis is supported by a review of a wide range of published trade data
from over 75 referenced sources.
The initial findings of the research were presented both to the project steering team and to a study group made
up of relevant UK stakeholders for review and comments prior to finalisation.
1
Annex L
2
Annex M
UK Plastics Waste – A review of supplies for recycling, global
market demand, future trends and associated risks. 1
ES3
Conclusions
ES3.1 UK collection rates of plastics for recycling & future trends
The quantities of plastics entering the market and being collected for recycling between 2005 and 2015 in each of
the sectors studied, as concluded in the report, are set out in table ES.1. The ranges represent different growth
scenarios or technical developments. These are detailed in the relevant sections of the main report.
Table ES.1
UK plastics waste arisings & supplies of plastics for recycling (ktonnes)
Sector
Packaging3
Agriculture (excluding
agricultural packaging)4
ELV5
WEEE available for recycling6
Total
Projections
2005
2008
2010
2015
Plastics waste
arisings (kt/a)
2,0402,200
2,2022,675
2,323 2,934
2,565 3,814
Collected for
recycling (kt/a)
414
503 - 548
580 - 692
686 -1,028
% recycled (minmax)
19-20%
19-25%
20-30%
19-40%
Plastics waste
arisings (kt/a)
60
60
60
60
Collected for
recycling (kt/a)
<3
10
15
29
% recycled
<5%
17%
25%
48%
Plastics waste
arisings (kt/a)
196
204
234
252
Collected for
recycling (kt/a)
Low
23-68
47-117
101-177
% recycled
Low
11-33%
20-50%
40-70%
Plastics waste
arisings7 (kt/a)
219
242
258
281
Collected for
recycling (kt/a)
Low
68
89
104
% recycled
Low
28%
34%
37%
Plastics waste
arisings (kt/a)
2,5152,675
2,7083,110
2,8753,405
3,1584,300
Collected for
recycling (kt/a)
c.425
604-695
731-913
920-1338
% recycled
16-17%
19-27%
21-32%
21-42%
Other plastics waste (e.g.
process scrap, plastics
construction waste, etc.)
Not within scope of study.
NOTE: some of these wastes will account for the current gap between
export trade statistics and PERN returns.
Source: Various quoted sources & assessments by Recoup, detailed in this report.
Supporting commentary for the data in the above table is provided below by sector.
3
For more detail see page 48, Table 2.14
4
Agricultural packaging arisings and recycling rates are included in packaging data in this table, but are identified separately on
page 54, Table 2.15
5
6
7
Assumes 22% of WEEE is plastics (ICER 2000)
ES3.2 Packaging
Packaging arisings

Packaging is the main application for plastics and the largest plastics waste stream arising in the UK. The
study concluded that in 2005 approximately 2,474ktpa of plastics entered the production stream for UK
packaging8.

After accounting for process losses and deductions for reusable packaging it is estimated that 2,400ktpa of
packaging plastics arose as post-use waste in the UK in 2005.

Polyolefins (LDPE, HDPE, PP) represent 75% of consumption. PET is c. 15% of consumption. A full breakdown
of consumption is provided in Annex A.
Packaging growth trends

The UK is a net importer of plastic packaging both for domestic packing and in the form of packaging for
imported goods. Based on reported packaging obligations the historic annual rate of growth of imported
packaging and packaged goods (>15%) is significantly higher than the growth in domestic production (1.8%).
It is important to consider this issue when projecting future trends.

This study therefore considers overall annual growth in plastic packaging by weight ranging from c.2%-5%.
Packaging recycling

DEFRA data for 2005, based on PRNs/PERNs issued, reports that 414kt of plastic packaging was recycled.
The study was able to reconcile sources of approximately 75% of the currently reported packaging recycling
activity based on other evidence from recyclers and waste generators. Post-use plastic films (165kt) and
bottles and other household plastic packaging (67kt) make up at least 57% of plastic packaging recycled9.
Approximately 100kt of the anticipated recycling reported were not able to be reconciled within the scope of
this study. This issue is addressed in the report recommendations.

An analysis of UK local authorities has shown a large increase in collection levels of both bottles and ‘mixed
plastics’ from households by local authorities. Strong growth in these supplies is expected in the next ten
years. A new recovery infrastructure is likely to be created, with an increase in availability of new technologies
for sorting both recyclables and mixed household waste, leading to better separation of domestic plastic
streams for recycling.

It is estimated that between 180ktpa and 522ktpa of post-domestic plastics will be recovered for recycling by
2015, of which up to 164kt will be ‘mixed plastics’10. This represents at least 113kt of additional bottle
collections compared to 2005 levels. A market for at least 167kt of plastic bottles, including 80kt for mixed
baled polymer bottles, will be required by 201511.

‘Away from home’ initiatives to recycle more waste from offices, schools, cafes, leisure facilities and public
buildings are growing. A 30kt growth in collections for recycling is assumed by 2015.
8
Table 2.1, page 30
9
Figure 2.1, page 41
10
Table 2.10, page 43
11
Table 2.11, page 43

Increased segregation of wastes by businesses and waste management contractors will lead to increases in
plastic packaging extracted for recycling from commercial and industrial (C&I) waste. An increase of c.140kt
in the supply of post use C&I packaging for recycling is estimated by 2015. This growth is predicted to come
primarily from increased films recycling, and development of additional recycling of industrial drums, shelfready trays, crates and agricultural packaging plastics.

The Directive on Packaging and Packaging Waste requires 22.5% of UK plastic packaging placed on the
market to be recycled in 2008. There appears to be little desire within the EU to notably increase targets
beyond 2008 when the second 5-year phase of Packaging and Packaging Waste Directive targets ends.
Continuing growth in plastic packaging recycling is therefore expected to be primarily driven by improving
waste management technology, social expectations and economics – rather than by the Packaging and
Packaging Waste Directive targets.

The analysis shows that the development of extraction of plastics for recycling from mixed waste processes
will be essential if growth rates of packaging are to reach the higher end of the projections12. The extraction
technology will also be important if the targets ultimately set for packaging recycling post-2008 are higher
than those assumed in this study.

Based on current levels of reported obligation, the UK is likely to exceed statutory targets in 2008, 2010 and
the anticipated 2015 targets.

In relation to the above comments and the Directive targets, although providing an underpinning mechanism,
PRN/PERN revenues look unlikely to be the major driver for increasing the supply of plastic packaging to the
recycling industry. Improved recyclables-handling infrastructure, development of a ‘recycling culture’ and the
impact of other economic factors, such as landfill tax, are likely to be more influential on recycling levels
achieved.
ES3.3 Agricultural plastics

Agricultural plastic waste arisings are approximately 93ktpa and represent c.12% of all agricultural waste. This
comprises primarily of plastic sheet, wraps, bags and drums. The quantity of plastic materials on farms and
agricultural holdings is not expected to rise significantly over the next 10 years.

The implementation of The Waste Management (England and Wales) Regulations 2005 changes the
classification of agricultural waste so it is no longer possible for farmers to bury or burn waste plastics on site
without a licence exemption. Statutory producer responsibility for non-packaging agricultural plastics is also
being introduced. Both these changes will drive up separate collections of agricultural plastics for recycling.

It is projected that 17kt of waste plastic will be available for recycling in 2008, 26kt in 2010, and 49kt 2015.
Of this quantity just over 40% is packaging plastics, the remainder is non-packaging including silage wraps
and crop covers.

Current expansions in recycling capacity for agricultural plastics suggest there will be sufficient capacity in the
UK for all non-hazardous materials collected.
ES3.4 End of life vehicles

End of life vehicles (ELV) contain c.10% plastic by weight. Based on current arisings of ELVs this amounts to
potentially c.200kt of plastics per annum in ELV waste.

The main polymers used are PP and PVC, with ABS, HDPE, PA and PU also used in automotive components.
Plastics consumption is expected to increase in this sector and plastics waste arisings from ELV will grow by
over 50ktpa by 2015.
12
Table 2.14, page 48

The ELV Directive (200/53/EC) requires a 95% recovery and 85% recycling rate of total ELV weight by 2015.
These targets are not material specific, but will require increasing efforts to be concentrated on non-metal
fraction recovery. The 2015 targets are currently under review.

Technologies for recovery of single stream polymer fractions from automotive shredder are key to increasing
recycling rates in this sector.

The quantity of plastics that must be recycled to meet 2015 targets is estimated to be between 4% and 7%
of the total vehicle weight, or c.100-175kt. It is likely that almost all this material will be generated by post
shredder extraction of plastics, in particular through separation of the polyolefin rich stream.

The economic conditions are not yet sufficiently attractive for shredder operators to make major investments
in new separation technologies. The current debate about recovery targets for 2015 is not likely to give
confidence to those considering investments in ELV plastics recycling based on fulfilling a producer
responsibility “need”.
ES3.5 Waste electrical and electronic equipment (WEEE)

It is estimated that plastics account for 219 ktpa (22%) of all electrical and electronic equipment arising as
waste (this excludes reused/exported equipment). Styrenics and polypropylene account for over 70% of
plastics used in the manufacture of electrical and electronic equipment.

WEEE arisings are predicted to grow at the rate of 3-5% per annum.
Targets will require 70-80% recovery and 50-75% recycling for all collected WEEE.
Quantification of current levels of WEEE recycling remains problematic. Projections suggest that the main bulk
of plastics arising will remain in shredder residue from recycling of large appliances. Smaller amounts of
plastics will be generated from the recycling/dismantling of small household appliances and CRT applications.

Effective brominated flame retardant (BFR) removal and post shredder separation of plastics are important
factors in maximising plastics recycling from these sources. Investment in sorting technologies will increase
volumes of source separated materials.

It is estimated that over 100kt of WEEE plastics will be available for recycling by 2015, although it is
acknowledged that the figure could be significantly higher than this depending on how the WEEE Directive is
implemented and on the separation technologies developed and implemented for plastics.

A number of new WEEE processing plants are being established both in the UK and internationally integrating
various separation technologies. The success of these in capturing plastic streams should be monitored. The
supply assessments made here should be reviewed, as such information becomes available.
ES3.6 Other plastics wastes

Although not within the scope of this report it is noted that there are other plastics waste streams that
provide supplies for the recycling industry and that provide end markets for recycled plastics. Supplies from
process scrap represent a large flow of waste plastics for recycling. Plastics from construction applications
(pipe, window frames, etc.) are also a growing source of material and many of these applications can be
produced using recycled plastics.
ES3.7 UK plastics reprocessing capacity, market demand & trends

A survey of 53 UK reprocessors and traders suggests at least 640kt of available capacity (for a combination of
UK recycling and export) for collected recyclable plastics13. 90% of this capacity was reported by businesses
operating recycling plants in the UK as a component of their business. It is believed the companies responding
represent approximately 70% of tonnage handled by all UK reprocessors and traders.

It is estimated that UK-based recycling businesses will offer over 700ktpa of recycling capacity (in a
combination of domestic and export markets) by 2008. The bulk of this capacity is capable of handling
packaging.

It is unlikely that reprocessing capacity will be a barrier to achieving 2008 plastic packaging recycling targets,
or indeed 2010 targets. If anything the UK, like Europe as a whole, suffers from over-capacity in some sectors
of plastics recycling.

Although there is evidence of investment in the UK reprocessing sector, there is also evidence of a decline in
the quantities of plastics being reprocessed in the UK. Consultation with UK recyclers reveals they are
undertaking an increasing volume of trading with export markets, rather than running collected material
through their own reprocessing lines. Anecdotal evidence suggests that returns on investment are low for UK
recyclers and that some businesses are mothballing capacity.

It is unclear whether the UK plastics recycling industry will be able to remain competitive with markets in Asia
and, potentially, Eastern Europe. These markets have the relative advantages of significantly lower labour
costs, less costly regulatory controls and proximity to lower cost manufacturing centres. Arguably, the
challenge for the UK recycling industry is to develop “better” recycling capacity, suited to specific long-term
opportunities – rather than simply to create more of the same capacity.

The kind of interventions that will be important to maintain competitiveness of reprocessors relate to
supporting technology innovations that will minimise the impact of the large labour cost differentials between
the UK and Asia. For example, working to integrate supply chains to make opportunistic buying from traders
less attractive and/or which provide a scale of supply that can justify investments that provide economies of
scale.

Market demand in the UK for recycled plastics looks set to remain strong, with growth in many areas, such as
agriculture, horticulture and new applications for recyclate in food grade packaging and the construction
sector emerging.

Specific market challenges exist in the domestic market for handling plastics from ELV and WEEE streams;
particularly those generated through post-shredder extraction. The study identified UK markets for some
WEEE plastics and for ELV from dismantling operations. Recycling capacity for bulk shredded plastics from
ELV and WEEE sources was not identified in the UK.

The UK manufacturing industry could potentially use a large quantity of the plastics collected for recycling in
the period 2008-2015 to manufacture new products. In most cases the barriers to domestic consumption
relate to pricing, rather than technical limitations. Competitiveness factors tend to draw raw material to lower
cost remanufacturing locations outside the UK.

Some UK environmentally-directed policy instruments (e.g. Climate Change Levy) make recycling in the UK
less competitive compared to export markets. This results in more plastics being recycled outside the UK in
circumstances where environmental controls or emissions from energy sources can be less environmentally
acceptable. This may represent a misaligning of policy aims and outcomes and these issues should be further
considered. No recyclers, so far are known to have achieved exemption from the Climate Change Levy.
13
Table 3.4, page 74
ES3.8 UK exports of plastics for recycling

UK trade data show that the UK exported around 324kt of waste plastic in 2005, slightly less than in 2004
(see Fig. ES.1). At least 75% of this went to China, mostly via traders in Hong Kong and some via
consolidators in continental Europe.

UK exports of plastics waste destined for China have increased by approximately 700% between 1998 and
2004.
Figure ES.1
UK exports of plastics for recycling
400,000
350,000
Tonnes
300,000
250,000
200,000
150,000
100,000
50,000
0
2001
2002
2003
Exports
2004
2005
PERNs
Source: UK trade statistics website & Defra

Packaging, as reported by PERNs issued, represented 238kt (73%) of plastics waste exports in 2005 (see
Figure ES.1). The remaining exported material (87kt) is thought to include production scrap, WEEE-derived
plastics, packaging exported without PERNs, reprocessed flake and re-exports of material imported from third
countries, though the exact origin and composition is unknown.

There are notable differences between the consistency of total exports of plastics waste from UK trade data
and the PERN data. For example, in 2002 PERNs issued exceeded the total volume of exports reported by
trade statistics. These anomalies in data merit further consideration. This point is considered in the
recommendations.
ES3.9 The global market in recovered plastic
An overview of global trade in waste plastics
The following conclusions can be drawn from the review of the global market.

Most of the demand for waste plastics now comes from emerging economies in Asia. The lower labour and
energy costs (compared to the UK) provides a competitive advantage to reprocessors and manufacturers in
an environment of increasingly globalised investment, sourcing and supply.

The main trading blocks for plastics waste and the trade within, to and from these regions are illustrated in
Figure ES.2 and described in more detail below.
Figure ES.2
Main components of the global trade in recovered plastics
EUROPE
EUROPE
HONG
KONG
AMERICAS
AMERICAS
USA
USA
Canada
Canada
Mexico
Mexico
South
South America
America
CHINA
Intra
-regional
trade
Intra
-regional
trade
Germany
Germany
UK
UK
Netherlands
Netherlands
Belgium
Belgium
Other
Other EU
EU
Ban on direct
trade lifted 09/05
Su
pp
ly
Co
Sid
mp
e
eti
tio
n
JAPAN
JAPAN
OTHER
OTHER
India
India
SE
SE && SS Asia
Asia
Australasia
Australasia
Middle
Middle East
East

Exported waste plastic is a valuable commodity. The export trade is driven by a strong market demand for
secondary material, not by an intent to dump waste.

China absorbs the majority (over 70%) of globally traded recovered plastics (see section 10.3.3). China’s
declared imports of recovered plastic have increased at 500kt-1000kt per year over recent years and were
just less than 5 million tonnes in 2005, as shown in Figure ES.3. Consultations in China and Hong Kong
suggest that true imports are probably higher, possibly by up to 25%.

The trade in recovered plastics is facilitated by the comparatively low cost of container freight to China, a
consequence of the imbalance of trade on the routes between China and its major markets in Europe, North
America and Japan. Freight costs to other potential markets, such as India, can be several times higher.

The trade in waste plastics encompasses a range of different polymers, applications and material qualities –
from post-production scrap and unused inventory, through processed and semi-finished secondary plastics to
unprocessed post-consumer material. Trade data will include all these items.

Low labour costs in South East Asia enable mixed plastics waste to be sorted at very low cost prior to
reprocessing. Some of these mixed or lower grade plastics (including post consumer packaging and plastics
from shredder waste) would not normally be recycled in Europe. It is imperative that these mixed plastics are
sufficiently pretreated to make their export from the UK legal.

The increasing use of recovered plastic material has been largely driven by the growing capability of recycled
plastics to achieve “fitness for purpose” at lower cost than virgin plastics. This has been enabled by the recent
high prime plastic prices. Even if prime prices fall significantly, the baseline demand for recovered plastics for
lower grade and less quality sensitive applications in China is expected to remain.
Figure ES.3
Imports of recovered plastics to China (kt)
6000
5000
4000
kt
3000
2000
1000
0
1999
2000
2001
2002
PE
PS
PVC
2003
2004
2005
Other
Source: China Customs Statistics (CCS) Information Center

Most of the supply to the global market comes from the wealthy nations of the world. Japan, Germany, the
US, and the Netherlands all export larger quantities of recovered plastic to China than does the UK.

Consultations and press reports show that Asian export demand is affecting prices and the availability of
material in almost all the OECD markets examined.

The strength of export demand is drawing out new sources of supply and increasing competitive pressure on
local recyclers in the process. Regions where plastic consumption is increasing, such as South-East Asia and
South America, are also becoming sources of recovered plastic for the export trade. For example, PET bottles
collections in Asia (including Japan) reportedly exceed European levels14.
Profiles of major markets for recovered plastics
Table ES.2 summarises the main features of countries and regions with a significant role in the global market in
recovered plastics. Detailed country/region profiles, including trade data and information by polymer type, are
presented in the main report.
14
PCI Consulting, personal communication
Table ES.2
Summary of global market in waste plastics by country/region
Market
EU
Features of current market for waste plastics
•
15
Assessment of future market outlook
•
Supplies of plastics for recycling will continue to increase throughout Europe, as
all member states must achieve higher recycling targets.
•
European plastics recyclers report that it is increasingly challenging to remain
competitive with Asian recyclers. The market data suggests that total available
capacity in Europe is significantly under-utilised and this trend is likely to
continue, with margins being squeezed.
•
As more product manufacturing transfers to Asia, so local end markets for
recycled flake and pellet products also become less available.
•
‘Green dot’ packaging recycling schemes are using competition in the market to
drive down costs. EU plastics recyclers are receiving less favourable
arrangements than in the past and are being forced to compete fully in the
international market.
•
The European plastics recycling industry is estimated to comprise over 700
businesses and 2,500ktpa recycling capacity15.
•
2,200kt- 3,100kt of plastics were collected in Europe for recycling in 2004. Of this
at least 1,800kt of plastics packaging was collected for recycling, with
approximately 80% recycled within the EU.
•
There is significant intra-EU trade of recovered plastics with major imports from
other EU countries to the Netherlands, Belgium, Italy and Germany. These
countries are also the major exporters outside the EU.
•
In 2004 EU export of plastics waste to Hong Kong and China were 1,245kt almost two thirds of total EU exports by volume. Exports to this region have more
than tripled since 1999 (see Figs. 6.2 and 6.3).
Recycling capacity in Eastern Europe and the new EU states is growing. This will
compete with capacity in Western Europe for material and has the advantages of
lower labour costs and, in some cases, better access to new markets in Russia.
•
Changes to the EU food contact regulations will improve opportunities for ‘closed
loop’ packaging recycling for PET that will favour local markets.
•
NAFTA
Many EU countries (e.g. Germany, Italy, Netherlands and France) have wellestablished plastics recycling industries. Some have developed plastics recycling
infrastructure with support from ‘green dot’ packaging fees through access to
waste plastics packaging supplied at below global market rates and secure, longterm supply contracts given in return for guarantees of market availability and
traceability of materials.
•
There is extensive trading of recovered plastics within the NAFTA region (the
USA, Canada and Mexico), and also a net outflow of this material to East Asia.
•
Supplies of plastics for recycling will increase with increasing regulatory
interventions, although at a slower rate than Europe.
•
The US is one of the world’s largest importers and exporters of waste plastics. It
imported 396kt and exported 745kt in 2004.
•
North American plastics recyclers are concerned about ability to compete with
Asian recyclers. Their concerns mirror those expressed by Western European
plastics recyclers.
•
Exports of, for example, PET bottle waste have increased by over 400% since
1998 whilst domestic recyclers’ consumption has declined slightly during the
period.
•
Six of the ten largest recovered plastic export markets for the US are in Asia,
accounting for more than two-thirds of US recovered plastic exports (see Fig 8.4).
The US’s close neighbours, Canada and Mexico, receive most of the remainder.
•
The US exports more plastics waste direct to China than to Hong Kong.
http://www.eupr.org/
UK Plastics Waste – A review of supplies for recycling, global market demand, future trends and associated risks.
10
JAPAN
Japan has a range of laws covering recycling of different waste streams, including
packaging and appliances. This requires high levels of plastics recycling (e.g. c.
850ktpa of plastic packaging recycling in 2005)
Japan is the country with the largest recovered plastics exports to the China
market. It exported 850kt of recovered plastic in 2004 (Fig 9.3).
Japan has a strong reputation in China and Hong Kong for reliable supply of high
quality plastic, both industrial scrap and post-consumer plastic waste. Many of
the firms in Hong Kong focus exclusively on Japan-sourced material.
After the introduction of a ban on direct import of plastics waste to China in May
2004 the proportion of Japan’s plastics that was routed through Hong Kong
increased. The ban was lifted in September 2005, and a recovery of direct trade
is now expected.
•
Japan is a wealthy economy and, like Europe, is likely to continue to act as a net
supplier of waste plastics to lower cost economies for recycling.
•
China is the driving force behind the huge worldwide growth in the trade of waste
plastics and the ultimate destination of most of the waste plastics that are
exported from the European Union and NAFTA regions.
•
•
C. 40,000ktpa of plastics are used in manufacturing in China and this demand is
increasing at over 10% per annum. Demand for plastics in China has doubled in
the last five years. Total imports of waste plastics to China were ‘only’ 12.5% of
production - 5,000kt in 2005.
The demand for waste plastics from China looks strong for many years ahead.
Consumption of plastic is expected to increase by at least 7% per annum over the
next ten years as domestic consumption rises in line with income. There is robust
growth in export manufacture of plastics products, which also drives growth in plastic
packaging use.
•
Even allowing for expected growth in virgin plastics manufacturing in China, imports
of plastics are expected to form an important part of overall supply. At least
10,000ktpa of plastics imports (virgin & waste) will be required.
•
Commercial drivers to source lower cost raw materials will continue to drive demand
for scrap plastics. The development of domestic virgin plastics capacity is generally
not expected to displace recycled material, unless virgin prices were to fall massively.
•
Projections suggest that demand for waste plastics will rise to 6,500ktpa by 2010.
•
Local collections of plastics waste are not expected to significantly reduce imported
plastics demand within the period to 2010.
•
Hong Kong’s demand is a function of demand in China, which is expected to grow
(see above).
The role of Hong Kong as a trader and broker of deals with Chinese recycling
businesses is likely to erode over time as increasing numbers of buyers gain the
international business skills and connections to source material directly. Any decline in
demand from Hong Kong will therefore be counterbalanced by increases in demand
for direct shipments to mainland China.
If China’s enforcement of import controls is tightened Hong Kong could become a site
•
•
•
•
CHINA
HONG
KONG
•
The UK waste plastics sales to China (including plastics routing via Hong Kong)
are not significant when compared to China’s overall consumption – they
represent less than 1% of total plastics demand and only 5% of waste plastics
imports.
•
The waste plastics are used in a wide variety of applications, from textiles to toys
to kitchen utensils.
•
The end-user manufacturers are seeking to reduce production costs by finding
cheaper sources of plastic inputs, particularly when virgin prices are historically
high.
•
Demand for waste plastics remains strong. The combination of low cost labour,
relatively low entry costs to establish recycling plants, more limited regulatory
controls and low freight costs makes China highly competitive when compared to
European and North American plastics recyclers.
•
Hong Kong acts as a point of transhipment and temporary storage for plastics
waste destined ultimately for China. It is a free port - a separate customs zone
that is not subject to China’s import duties and customs law.
2,730kt tonnes of plastics waste imported in 2004. Almost all these imports
(2,500kt tonnes) were subsequently routed to mainland China.
Most imported material is not processed in Hong Kong before onward shipment to
China though small scale operations are beginning to sort, rinse and shred postconsumer bottles to comply with entry requirements of mainland China.
•
•
•
•
11
for sorting and upgrading material prior to entry to China, although it would probably
face competition in this role from countries such as Vietnam and Malaysia.
INDIA
•
•
•
OTHER
•
•
India has a sizeable domestic plastics recycling industry consisting of an
estimated 20,000 companies. It is estimated that 30-40% of all plastics in India is
recycled.
Import restrictions on waste plastics have limited India’s influence on the global
waste plastics market. It imported 100kt of waste plastics in 2005, against a total
demand for all polymers of 4,500kt.
Import licenses for plastics waste are hard to obtain and in effect only waste
equivalent to virgin plastics can be imported. The single exception to this rule is
PET bottle waste, which can be freely imported.
This study highlighted growth of recycling capacity in other parts of South East
Asia, North Africa and South America.
These regions are all characterised by a combination of low labour costs
(compared to the UK) and increasing demand for plastics products, with relatively
low market entry barriers for those wishing to establish plastics recycling
operations.
•
•
•
•
India is a “sleeping giant” with the potential to be a buyer of much larger quantities of
waste plastics.
Average per capita consumption is low (3.6kg/person cf. a global average of 21.5kg)
Total plastics demand is predicted to rise at 12-15% per annum in coming years,
increasing demand for plastics to 12,300kt by 2010.
The commercial importance of securing plastics for this growing economy is expected
to lead to relaxing of the restrictions to import of waste plastics. There is evidence
that the Indian Government is considering some easing of import restrictions on a
case by case basis for industrial scrap. It is unlikely this would extend to postconsumer material in the near future.
Growth in plastics recycling capacity is expected to continue in developing countries,
particularly those that are able to access international markets. This capacity will be
used to supply raw material for growing domestic end-product consumption at lower
cost than virgin plastics and to supply plastic products for the international market.
12
ES3.10 Anticipated trends in the global market in recovered plastic

The global consumption of plastics is over 200 million tonnes a year and growing. Based on the experience of
several European countries with strong domestic recycling activity, it appears that from a technical
perspective well over 20% of this global consumption could reasonably be met by recycled plastics – or at
least 40 million tonnes per annum.

Demand for material from the export market will continue to exert strong competitive pressure on recyclers in
the UK.

All indications during research and consultations are that China is set to remain the focus of global export
demand for recovered plastic for the next five years.

During the next ten years additional demand is expected from India, North Africa and other regions where
plastic consumption is increasing.

There is a growing recycling industry in Eastern Europe that will be operating freely in the EU market (and
therefore not influenced by uncertainties of regulators in Asia). These new recycling businesses are likely to
offer further stiff competition to Western European plastics recyclers.

Long term global demand for recycled plastics appears to be structurally strong for most materials considered
– whether it is from recyclers in the UK, Mainland Europe, China or emerging economies. The actual location
of the recycling activity will therefore be determined by both price issues (including low labour costs) and the
extent to which sellers wish to incorporate non-price factors into their selling decisions. For example, suppliers
of waste plastics in the UK can – if they choose - guarantee material is recycled in the UK but may in some
cases have to accept a lower purchase price in return for this facility.

The differences in prices paid for equivalent waste plastics by domestic and overseas buyers are not only
determined by shipment and labour costs. In part, indirect factors such as business costs of environmental
controls, environmental taxation (e.g. Climate Change Levy), health and safety and other social costs are
components of the final pricing. In this regard, the UK plastics recycling industry is generally meeting higher
operating standards (with associated costs) than some international buyers outside the EU. Higher minimum
international standards for recycling could ‘level the playing field’ in relation to these indirect cost factors. This
could in turn impact on where recycling occurs.
ES4

Regulatory issues for the export & import of plastics waste
A concern raised by recyclers in Europe is the legality of waste trade with recyclers in Asia and the risks of
changes in regulatory regimes suddenly blocking access to established routes to market in Asia.

The Basel Convention, Transfrontier Shipment of Waste Regulations and the associated Green List
declarations, etc. provide a common international framework on trade in waste for recycling that state which
materials can be imported without prior notification. Beyond this there is variation in standards and practices
that can restrict flows of certain grades of material and cause uncertainty.

Most international trade in waste plastics is not controversial from a regulatory perspective.
UK, EU and China regulators have particular concerns over some elements of the trade in post-consumer
waste, such as mixed plastics waste. Such shipments have a potential to cause waste arisings and pollution if
reprocessing facilities do not have adequate control measures.

Mixed plastics shipments are currently a small part of total exports from the UK but could increase
significantly as domestic collections expand. This growth will provide an increased regulatory challenge for
the Environment Agency.

China has laid down strict standards that require plastic waste to have been cleaned and processed before
import. The application of these standards varies; research suggests that they are more rigorously applied to
direct shipments to China than at the Hong Kong/Mainland border. Some other Asian countries have more
limited controls and allow import of mixed recyclables for sorting for recycling purposes.

Mixed plastics can be exported for recycling as ‘green list’ waste provided that they are not mixed with other
wastes and are prepared to specification in accordance with the relevant Transfrontier Shipment of Waste
regulations.

There is evidence that a proportion of the international trade in mixed plastics shipped for recycling does not
fully comply with the requirements for green list shipment. It is believed that there is not full enforcement of
this requirement by the appropriate regulatory agencies.

Discrepancies in trade data and anecdotal evidence suggests that some plastics waste enters China illegally
either to avoid complying with the requirements for separating and washing (which may be carried out at
lower cost in China) or to avoid customs payments.

In some cases bans may be introduced on certain grades of material, or on imports from countries where
material contamination - particularly with hazardous or clinical waste - has been identified as a serious
problem (e.g. China’s ban on direct Japanese imports of plastics for recycling).

Fuller enforcement of current waste regulations by the Chinese authorities would result in more sorting plants
being established in Hong Kong and South East Asia. This would increase costs of recycling some plastics in
Asia. It would not affect the underlying demand for plastics. It is not believed that the additional costs
resulting from a fuller enforcement of import controls would fundamentally change the competitive advantage
of recycling plastics in China.

India currently has much tighter restrictions on import of plastics for recycling than China.
New import controls or increased enforcement of current standards are unlikely to result in reduced market
demand generally for waste plastics.

A more literal enforcement of the Transfrontier Shipment of Waste Regulations could lead to restrictions on
export of mixed plastics shipments to Asia. To manage the risks related to this issue and ensure compliance
any material not meeting the green list criteria should either be further sorted to comply and/or be shipped
under the ‘amber list’ classification as appropriate. Both of these interventions would reduce the net value of
such shipments but would not fundamentally change the underlying market demand for the material.

There is lobbying from different interest groups on the issue of regulatory controls and standards for plastics
waste trade as these have significant commercial outcomes. European recyclers have identified enforcement
of higher quality standards as an opportunity to improve their competitive position and access greater
volumes of materials and argue for tighter standards. Exporters and traders lobby for light regulation.

If tighter export controls are applied to UK plastics waste then additional handling infrastructure and labour
would be required to sort material to the revised higher standards, with associated costs.
ES5
Risks, Risk Management & Recommendations
Risks

The study considered risks that would limit the predicted growth in UK supply and global market
availability/demand for used plastics during the period to 2015. The main risks have been identified, assessed
and actions identified to mitigate these risks. These are summarised in table ES.3 and the risks presented
graphically in section 14, figures 14.1 and 14.8.

In table ES.3 recommended actions are considered primarily from the perspective of policy makers and
delivery agencies seeking to achieve the identified national growth levels in plastics recycling. Risks are rated
by probability and impact on a scale of 1-5, with 1 being a very low likelihood of impact and 5 representing a
very high likelihood of impact.

Many of the risks identified relate to regulatory objectives and controls. The growth in supplies of plastics for
recycling has been accelerated by national and international government policy. The most significant risks to
supply of plastics for recycling are believed to be associated with availability of sorting technology for mixed
plastics, national recycling targets, other related environmental policies and their economic instruments.

A significant drop in recycled polymer pricing is not considered a major risk to supplies of identified plastics
streams as this should be counteracted by increased financing from producer responsibility programmes for all
the main waste streams considered in this report. For example, if market prices for recycled materials decline
(e.g. as a result of declining virgin pricing), PRN values should increase to compensate operators and to
maintain economically viable supply chains to the target levels. Assuming current material pricing remains
broadly at current levels or higher, the long-term trend is likely to be a decline in the value of PRNs to a level
that covers administrative costs (this issue is discussed in detail on page 48.)

Changes in waste processing infrastructure represent both an opportunity and a risk. For example,
introduction of increased pre-sorting of waste could generate larger supplies of plastics suitable for recycling.
However, some technologies will not generate a recyclable stream and instead will generate outputs of
plastics more suitable for energy recovery. It is important to ensure that support for development work
encourages the extraction of recyclable streams prior to generating lower grade plastics streams suitable for
other recovery processes.

There are no ‘high probability, high impact’ risks identified for the export trade.
Of the recovered plastic markets, the unprocessed and mixed post-consumer plastics trade is the most
vulnerable to additional regulatory intervention. These shipments are a small subset of the overall trade but
attract most of the regulators’, NGO and press attention. China’s most recent import standard effectively bars
import of such material, but enforcement is still variable. More far-reaching regulatory change in China that
would cut off demand for all recovered plastic imports is arguably increasingly less likely as China’s industry
becomes more dependent on recovered plastics as a source material.
Key Recommendations
The most important recommendations to address the major risks to a sustainable increase in plastics recycling in
the UK, taken from table ES.3, are:

Ensure current and proposed statutory recycling targets remain in place (e.g. for ELV).
Encourage development of technology for effective separation of plastics for recycling from WEEE, ELV and
mixed waste streams.

Develop/ensure availability of UK handling capacity capable of upgrading plastics materials to European
market standards to mitigate risks of tighter import controls in China and other markets.

Lobby for implementation of REACH regulation in a manner that does not undermine competitiveness of
European plastics recyclers.

Review export market profile at least biannually to ensure ongoing awareness and management of risks in a
rapidly changing global market.
In addition, the following recommendations are also considered important to ensure that good quality information
is available to accurately track performance and inform policy:

Improve PRN reporting to include more information on the sources of plastics recycled to aid data
reconciliation and auditing.

Review data capture methods used by different agencies (e.g. Customs, Environment Agency, SEPA) with the
aim of achieving improved data coherency.

Clarify how the requirement for ‘broadly equivalent standards’ of recycling will be implemented to comply with
EC recycling targets.

Review whether UK plastics recyclers compete on a level international playing field and revise policies
accordingly (e.g. does Climate Change Levy on plastics recyclers achieve the desired environmental
outcome?).

Review the wider environmental, social and economic merits of recycling in the UK compared to recycling in
Asia to inform BPEO. (This review would be useful to inform the interpretation of the ‘broadly equivalent
standards’ requirement of the revised Packaging Waste Directive.)
Table ES.3
Summary of risks & recommendations to mitigate risk
Risks
Chinese waste imports
substituted by domestic
supplies of plastics waste
Probability
Impact
(a)
(b)
Net
risk
(1 –5)
(1-5)
(a x b)
2
4.5
Comments
Recommendations to mitigate risk
(1-25)
9
Increasing collection of plastics waste generated in China and other
Asian countries could displace imports from Europe and North
America.
There is evidence of substantial collections of waste plastics in Asia
undertaken on a commercial basis.
The probability of these collections significantly displacing supplies
from the UK is considered relatively low for two reasons: the
projected growth of plastics demand in Asia remains large; the
producer responsibility systems in the UK and mainland Europe
would be able to finance discounting of the price of relevant plastics
waste until it became competitively priced to the available market
(i.e. UK material could be priced below local material, or below
material from less regulated countries such as the USA).

Monitor the trends in supply/demand balance
in China and India on a biannual basis to
review risks to market availability.
Plan alternative market options as required.
Changes to current ELV
targets reduce recycling
requirements
3
3
9
The 2015 EC targets of ELV recycling and recovery are under
review. Producers are arguing for lower recycling rates or the
removal of the recycling target and a focus on ‘recovery’ only. A
change in the current targets would undermine investment in
separation technology for the recycling of plastics from ASR
streams.

Argue for retention of current targets.
Ensure producer responsibility implementation
provides financial underpinning required for
investment in ASR separation technology.
Adverse implementation
of REACH
3
3
9
The currently proposed implementation of the REACH regulation
would introduce expensive, commercially unsustainable testing
regimes for recyclers producing flake and pellets (but not those
making finished products on the same site).
The impact would be to further reduce competitiveness of European
plastics recyclers and potentially limit EU capacity for collected
materials.
Ironically the implementation proposed would drive more plastics
outside the EU for recycling, where the REACH requirements are not
present.

Lobby for REACH implementation for recycled
plastics based on generic data requirements,
rather than batch testing.
Encourage vertical integration of product
manufacture and recycling to avoid the
requirement for intermediate testing.

17
Enforcement of stricter
controls on imports of
waste plastics materials
to China
4
New manufacturing
technologies for PET
fibre in Asia result in
substitution of recycled
material with virgin
polymer
2
Inadequate technologies
for separation of plastics
from mixed waste
2
for plastics separation
from shredder residues
Incorrect PRN and trade
statistics provide
incorrect/unreliable data
2
3
2
3
3
3
2
8
6
6
6
6
Consultation suggests that most of the waste plastics trade is
uncontroversial. However, the Chinese authorities have been
concerned about low quality materials (for example mixed plastics
or plastics contaminated with organic matter).
Tightening standards could disrupt the markets for lower quality
waste plastics sales to China.
PET fibre accounts for over 75% of all markets for PET collected.
Contradictory views were expressed on the potential for ‘in line’ PET
fibre production in Asia to shift to greater virgin use and displace
demand for recycled PET.
Achievement of the high projections for supplies of plastics from the
domestic waste stream will rely on effective separation of plastics
from mixed waste, for example, as part of an MBT process.
Some of the ‘new technologies’ for mixed waste treatment appear
capable of extracting plastics for recycling. Others are less effective
or aim to use the plastics in energy recovery (e.g. RDF production).
It is not yet clear which mixed waste treatment technologies will be
implemented or how rapidly they will be introduced.
Achievement of the targets for ELV and WEEE recycling will rely on
effective separation of plastics from shredder residues. Suitable
technologies are developing but not yet commercialised. Some
uncertainty surrounding the implementation of the associated
regulations is likely to be slowing investment.
It has not been possible to reconcile the sources of 100kt of plastic
packaging PRNs from 2005 data.
The trade statistics for UK plastics waste exports are not consistent
with the associated PERN data.
Reported exports of plastics from the UK to Hong Kong are
significantly different from the same imports received from the UK
by Hong Kong.

Develop links between the UK regulators (EA,
etc.) and SEPA to ensure good communication
on current and intended import controls and
identify emerging risks to trade.
Ensure availability of alternative markets.
Develop UK based sorting capacity capable of
upgrade all materials to anticipated
international import standards.
Review PET fibre market trends in Asia with
major producers to identify extent of risk.
Stimulate the growth of recycled PET use in
other market sectors such as bottles and sheet
packaging.
Encourage development of technology for
plastics separation for recycling within new
waste technologies (e.g. through WIP New
Technologies programme).
Evaluate and promote effective technologies to
local government and contractors.
Review biannually the UK’s ability to achieve
long-term packaging recycling targets based on
anticipated developments of this technology.
Encourage investment and commercialisation
of required technologies.
Evaluate and promote effective separation
technologies.
Finalise long term statutory objectives,
associated regulations and financial
arrangements for WEEE and ELV.

Improve PRN reporting to include further
information on the sources of plastics. This will
aid reconciliation of data.

Review relevant data capture methods used by
different agencies (e.g. customs and EA) with
the aim of achieving improved coherency of
18
UK trade data are thought to significantly over-state polyethylene’s
share of waste plastic exports. This is because of the way that
export declarations are being completed and the fact that
polyethylene happens to be the first on the available list of
commodity codes. Some shipments to buyers in Europe (e.g.
Rotterdam) are then routed to non-EU markets, so EU recycling is
probably overstated by the available trade data.
Tracking arrangements for recycling of agricultural, ELV and WEEE
plastics under producer responsibility requirements are not clear.
These points highlight that the reliability of baseline recycling data
remains a concern.
Plastics collection
schemes develop at a
slower rate than
anticipated
2
Declining
competitiveness of UK
plastics recycling
industry limits local
markets
3
Negative environmental
and/or social impacts
2
3
2
2.5
6
6
5
The main reasons for failure to achieve collection levels predicted
would be market collapses or other financing collapses (e.g. removal
of funds for recycling). These are considered unlikely.
There are some specific risks to achieving supplies of mixed plastics
and post-shredder plastics and these are described separately.
This study shows confidence in capacity being available for plastics
collected. There is also evidence, however, of UK recyclers
struggling to compete in the international market – particularly
against the low labour costs and regulatory controls of the Asian
market.
Sustained damage to the UK plastics recycling industry in
combination with tighter controls on exports would present
challenges in finding markets – particularly for lower quality and/or
mixed plastics waste.
Currently export trade is driven almost exclusively by economic
considerations within agreed regulatory frameworks.
The relative environmental and social merits of recycling in Europe
compared to in Asia play little part in current decision making.
The EC requirements that recycling should count towards targets
only if it is undertaken under ‘broadly equivalent standards’ to
Europe may lead to restrictions in access to some export markets.
How this requirement will be implemented/enforced remains
unclear.
Some suppliers of plastics – particularly from the public sector –
may determine end markets with greater emphasis on non-price
issues.
Greater consideration of non-price issues when selling plastics for

data.
Procedures for completing plastics export
paperwork should be examined for consistency
with other trade data.
Examine opportunities for consistent approach
to measuring plastics recycled through various
producer responsibility systems to maximise
efficiency and minimise likelihood of
misreporting.
Consider cost/benefit of reporting polymer type
as part of obligated business’ packaging
obligation returns.
Maintain current/planned recycling targets and
levels of investment in recycling infrastructure
and communications.
Maintain landfill tax escalator.
Ensure availability of local sorting capacity to
upgrade low quality, mixed materials
Review competitiveness of UK recyclers in the
global market, consider whether the ‘playing
field is level’ and take further action as
required
Review the relative environmental, social and
economic merits of recycling in UK and Asia to
identify BPEO.
Clarify how the ‘broadly equivalent standards’
requirement will be implemented in Europe.
Review requirements to manage risk based on
the outcomes of above two actions.
19
recycling (either as a result of national or organisational policies)
would influence flows of materials to export and into domestic
markets.
Prime price collapse
Tighter enforcement of
Transfrontier Shipment
of Waste Regulations
2
2
2.5
2
5
4
Although viewed as unlikely, large falls in virgin plastic pricing would
depress pricing for recycled plastic materials. This could make
collection less economically viable.
Producer responsibility obligations and improving recovery
technology provide an underpinning mechanism to mitigate the
effects of such price changes.
Tighter enforcement of TFS export controls could limit UK shipments
of mixed plastics or contaminated single streams of plastics to
export markets

Recovery technologies
displace recycling
activities
Exchange rate
movements
Chinese freight rate
hikes
1
2
1
3
1
1
3
2
1
The adoption of waste to energy technologies at a larger scale than
anticipated could displace material suitable for recycling.
Changes to environmental regulations that place more emphasis on
‘recovery’ and lower emphasis on ‘recycling’ would impact on the
relative economics of recycling (e.g. if the ELV Regulations were
amended to reduce or remove recycling targets).
Increasing availability of LCA evidence of the superior environmental
benefits of many recycling technologies mean this risk is considered
low. It is considered more likely that energy recovery technologies
will displace landfill.
Significant changes in the $/£/€/Yuan exchange rates will affect the
relative value of UK scrap plastics on the global market.
For example, a reduction in the value of the Chinese Yuan against
the pound might reduce the £-equivalent price paid by Chinese
buyers for scrap plastics, however it would also make Chinese
finished products more competitive and this would drive demand.
Increased shipment costs to China would make this market
relatively less attractive to European sellers.
China’s imbalance of physical trade is expected to continue and the
balance of expert opinion is that freight rates will decline in the
period to 2008.

Ensure producer responsibility targets are
matched to collection levels to ensure growth
in collections can be maintained.
Invest in development of lower cost recovery
technologies.
Maintain links with UK regulators to assess
risks and ensure clarity of acceptable quality
standards for export.
Quantify materials potentially effected by
tighter controls.
Develop plan based on availability of local
sorting capacity to handle any material
identified as ‘at risk’.
Continue development of LCAs and associated
economic assessments to accurately identify
the BPEOs for waste plastics.
Lobby for appropriate national and
international environmental management
policies (e.g. recycling and recovery targets)
based on BPEO.

Monitor trends in currency exchange rates as
required to manage risks.

Enterprises concerned with this risk could buy
options on future currency prices as required.
• No action proposed.
20
Contents
ES1
ES2
ES3
ES4
ES5
1.0
2.0
Objectives ................................................................................................................................ 1
Methodology ............................................................................................................................ 1
Conclusions .............................................................................................................................. 2
ES3.1 UK collection rates of plastics for recycling & future trends.........................................................2
ES3.2 Packaging...........................................................................................................................3
ES3.3 Agricultural plastics .............................................................................................................4
ES3.4 End of life vehicles ..............................................................................................................4
ES3.5 Waste electrical and electronic equipment (WEEE) .................................................................5
ES3.6 Other plastics wastes...........................................................................................................5
ES3.7 UK plastics reprocessing capacity, market demand & trends....................................................6
ES3.8 UK exports of plastics for recycling .......................................................................................7
ES3.9 The global market in recovered plastic ..................................................................................7
ES3.10 Anticipated trends in the global market in recovered plastic ..................................................13
Regulatory issues for the export & import of plastics waste ................................................. 13
Risks, Risk Management & Recommendations ...................................................................... 14
Introduction ........................................................................................................................... 25
1.1
Objectives of the study ......................................................................................................25
1.2
Scope of study ..................................................................................................................25
1.3
Approach and method .......................................................................................................26
Domestic supply & collection of plastics ................................................................................ 28
2.1
Consumption of plastic packaging in the UK.........................................................................28
2.1.1
Introduction .........................................................................................................28
2.1.2
Estimates of current arisings by waste stream .........................................................30
2.1.3
Changes in the plastic packaging market 2008, 2010, 2015. .....................................31
2.2
Arisings of plastic packaging waste in the UK .......................................................................32
2.2.1
Processing scrap, filling/packing waste & rejected packed product.............................32
2.2.2
Future trends in process losses ..............................................................................33
2.3
Regulatory Drivers.............................................................................................................34
2.3.1
Plastics Packaging Waste .......................................................................................34
2.3.2
Projected minimum required collection levels...........................................................35
2.3.3
Recovery targets for plastic packaging ....................................................................36
2.3.4
Statutory targets for local authorities and waste generators......................................36
2.3.5
Transfrontier Shipment of Waste Regulations 1994 ..................................................38
2.3.6
REACH (Registration, Evaluation and Authorisation of CHemicals) Directive 67/548/EEC .
...........................................................................................................................39
2.4
Current supplies for recycling – plastic packaging.................................................................39
2.4.1
Supplies by polymer type & application ...................................................................39
2.4.2
Sources of UK plastic packaging recycled in 2005.....................................................40
2.5
Future collections for recycling – household sources.............................................................40
2.6
Future collections for recycling – commercial, industrial & other sources ................................43
2.7
Future collections for recycling – ‘Away from home’; offices, schools, public facilities, etc. .......44
2.8
Future collections for recycling – agriculture, horticulture & construction ................................44
2.9
Summary of supplies of plastic packaging & performance versus targets ................................44
2.10
Agricultural plastics ...........................................................................................................49
2.10.1 Consumption and arisings of agricultural plastics in the UK waste stream...................49
2.10.2 Agricultural Plastics: Trends in future consumption ..................................................49
2.10.3 Agricultural Plastics: Regulatory drivers...................................................................49
2.10.4 Agricultural Plastics: Current levels of recycling and recovery ....................................50
2.10.5 Agricultural plastics: Technological and economic trends ..........................................51
2.10.6 Agricultural plastics: Forecast of future rates of collection for recycling and/or recovery .
...........................................................................................................................51
2.10.7 Agricultural Plastics: Further research .....................................................................52
2.11
Plastics from End of Life Vehicles (ELVs) .............................................................................53
3.0
4.0
5.0
6.0
7.0
2.11.1 Arisings in UK ELV waste stream ............................................................................53
2.11.2 ELV plastics: Trends in future consumption .............................................................54
2.11.3 ELV plastics: Regulatory drivers..............................................................................55
2.11.4 ELV plastics: Current levels of recycling and recovery...............................................57
2.11.5 ELV plastics: Techno-economic trends & future developments in recycling & recovery
technology........................................................................................................................57
2.11.6 ELV plastics: Forecast of future rates of collection for recycling and/or recovery .........58
2.12
Plastics from waste electrical and electronic equipment (WEEE) ............................................59
2.12.1 WEEE: Current plastics consumption and arisings in UK............................................59
2.12.2 WEEE: Trends in future consumption......................................................................60
2.12.3 WEEE: Regulatory drivers ......................................................................................61
2.12.4 WEEE plastics: Current & forecast levels of recycling and recovery ............................62
2.12.5 WEEE: Assessment of current practices of a sample of WEEE recyclers ......................64
2.12.6 WEEE: Techno-economic trends and future developments in recycling and recovery
technology........................................................................................................................64
2.12.7 WEEE: Technology for separation of BFR from WEEE ...............................................65
2.13
Summary..........................................................................................................................66
UK demand for recovered plastics ......................................................................................... 71
3.1
Characterisation of UK plastics recycling industry .................................................................71
3.1.1
Available capacity .................................................................................................72
3.1.2
Product integration ...............................................................................................72
3.1.3
Reported plans for 2006-7 .....................................................................................73
3.2
Summary..........................................................................................................................73
UK market outlets for recovered plastics............................................................................... 74
4.1
Characterisation by sector..................................................................................................74
4.1.1
Packaging ............................................................................................................74
4.1.2
Agricultural plastics ...............................................................................................75
4.1.3
ELV .....................................................................................................................76
4.1.4
WEEE ..................................................................................................................76
4.1.5
Construction industry ............................................................................................77
4.2
Summary..........................................................................................................................77
The Export Market for Recovered Plastics ............................................................................. 78
5.1
Introduction......................................................................................................................78
5.2
Overview of the global trade in recovered plastics ................................................................78
5.3
Structure & drivers of the recovered plastics trade ...............................................................79
5.3.1
Summary .............................................................................................................79
5.3.2
EU .......................................................................................................................79
5.3.3
UK.......................................................................................................................83
5.3.4
NAFTA .................................................................................................................85
5.3.5
Japan ..................................................................................................................86
5.3.6
China...................................................................................................................86
5.3.7
Hong Kong ...........................................................................................................88
5.3.8
India....................................................................................................................88
5.4
Impacts............................................................................................................................89
EU ........................................................................................................................................... 91
6.1
Trade profile.....................................................................................................................91
6.1.1
Intra-EU Trade .....................................................................................................91
6.1.2
EU Trade with the Rest of the World.......................................................................91
6.2
Market Profile ...................................................................................................................94
6.2.1
Packaging waste ...................................................................................................95
6.2.2
PET .....................................................................................................................96
6.2.3
PET prices ............................................................................................................96
6.3
Outlook ............................................................................................................................96
6.4
Summary..........................................................................................................................97
UK........................................................................................................................................... 98
7.1
Trade profile.....................................................................................................................98
7.1.1
Imports................................................................................................................98
7.1.2
Exports ................................................................................................................99
7.2
Market Profile ................................................................................................................. 101
7.2.1
Plastic consumption and recycling ........................................................................ 101
8.0
9.0
10.0
11.0
12.0
7.2.2
The UK plastics recycling industry......................................................................... 101
7.2.3
UK export market................................................................................................ 102
7.2.4
Plastic Prices ...................................................................................................... 102
7.3
Outlook .......................................................................................................................... 103
7.3.1
Current and future export markets ....................................................................... 103
7.3.2
Future risks to the export market ......................................................................... 104
7.4
Summary........................................................................................................................ 104
NAFTA................................................................................................................................... 106
8.1
Trade Profile................................................................................................................... 106
8.1.1
US ..................................................................................................................... 106
8.1.2
Canada .............................................................................................................. 109
8.2
Policy & regulatory situation and outlook ........................................................................... 112
8.3
Market Profile ................................................................................................................. 112
8.4
Outlook .......................................................................................................................... 116
8.5
Summary........................................................................................................................ 117
Japan .................................................................................................................................... 119
9.1
Trade Profile................................................................................................................... 119
9.2
9.3
Market Profile ................................................................................................................. 125
9.4
Outlook .......................................................................................................................... 126
9.5
Summary........................................................................................................................ 126
China .................................................................................................................................... 128
10.1
Introduction.................................................................................................................... 128
10.2
Demand ......................................................................................................................... 129
10.2.1 Introduction ....................................................................................................... 129
10.3
Supply............................................................................................................................ 130
10.3.1 Prime resin......................................................................................................... 130
10.3.2 Recovered Plastics - overview .............................................................................. 135
10.3.3 Recovered plastic imports .................................................................................... 137
10.3.4 Recovered plastic from the domestic market ......................................................... 143
10.3.5 Contribution of recovered plastic to overall plastic consumption .............................. 146
10.4
Policy & regulatory situation ............................................................................................. 146
10.4.1 Regulation of Trade in Waste ............................................................................... 146
10.4.2 Regulation of Reprocessors.................................................................................. 152
10.5
Future demand for plastics in China .................................................................................. 153
10.6
Outlook for recovered plastic imports ................................................................................ 156
10.6.1 Demand............................................................................................................. 157
10.6.2 Prime prices ....................................................................................................... 158
10.6.3 Domestic supply of prime plastics......................................................................... 158
10.6.4 Regulatory change .............................................................................................. 158
10.6.5 Domestic supply of waste plastic .......................................................................... 159
10.6.6 Technological change .......................................................................................... 159
10.6.7 Summary ........................................................................................................... 159
10.7
Summary........................................................................................................................ 161
Hong Kong............................................................................................................................ 162
11.1
Trade profile................................................................................................................... 162
11.2
11.3
Market Profile ................................................................................................................. 166
11.4
Outlook .......................................................................................................................... 167
11.5
Summary........................................................................................................................ 168
India..................................................................................................................................... 170
12.1
Introduction.................................................................................................................... 170
12.2
Overview of the plastics industry in India .......................................................................... 170
12.3
Plastic waste recycling in India ......................................................................................... 171
12.3.1 Introduction ....................................................................................................... 171
12.3.2 Trends in the import of plastic waste .................................................................... 172
12.3.3 Characteristics of waste importing firms ................................................................ 174
12.3.2 Regulations on import of plastic waste .................................................................. 175
12.3.3 Assessment of future trends in waste imports........................................................ 177
12.4
Summary........................................................................................................................ 178
13.0
Future export demand ......................................................................................................... 180
13.1
Introduction.................................................................................................................... 180
13.2
Outlook .......................................................................................................................... 182
13.2.1 General pattern of trade ...................................................................................... 182
13.2.2 Location of demand ............................................................................................ 183
13.2.3 Demand drivers .................................................................................................. 184
13.3
Scenarios and Projections ................................................................................................ 184
13.3.1 Projections ......................................................................................................... 184
13.3.2 Implications for the supply side............................................................................ 188
13.4
Summary........................................................................................................................ 189
14.0
Risks & Risk Mitigation ........................................................................................................ 190
14.1
Introduction.................................................................................................................... 190
14.2
1Domestic market ........................................................................................................... 190
14.2.1 Supply side ........................................................................................................ 190
14.2.2 UK domestic demand risks ................................................................................... 193
14.3
International market risks ................................................................................................ 195
14.3.1 Market factors .................................................................................................... 195
14.3.2 Non-market factors ............................................................................................. 201
14.3.3 Summary of international market risks .................................................................. 202
14.4
Summary of key risks ...................................................................................................... 203
15.0
Conclusions .......................................................................................................................... 205
15.1
Domestic supply.............................................................................................................. 205
15.2
Domestic demand ........................................................................................................... 208
15.3
The export market .......................................................................................................... 210
15.4
Export outlook ................................................................................................................ 211
15.5
Balance between supply and demand................................................................................ 212
16.0
Recommendations................................................................................................................ 213
Annex A Packaging........................................................................................................................... 218
Annex B Agricultural Plastics ........................................................................................................... 229
Annex C End of Life Vehicles (ELV) .................................................................................................. 231
Annex D Waste Electric and Electronic Equipment (WEEE) ............................................................. 235
Annex E UK Market Demand........................................................................................................... 240
Annex F Summary of global market in waste plastics by country/region ....................................... 242
Annex G Chinese regulation of trade in waste ................................................................................. 245
Annex H Chinese Environmental Protection Standard for Imported Scrap Plastics ........................ 247
Annex I AQSIQ Registration Needed for Overseas Suppliers of Waste Material Imports ............... 254
Annex J UK-based firms on the AQSIQ list of accredited companies............................................... 257
Annex K OECD Member Countries .................................................................................................... 260
Annex L Consultees .......................................................................................................................... 261
Annex M Bibliography ...................................................................................................................... 265
M.1
Supply Side Analysis ............................................................................................................ 265
M.2
Demand Side Analysis .......................................................................................................... 269
M.3
Websites............................................................................................................................... 270
Annex N Currency Conversion Factors ............................................................................................. 272
Annex O Glossary of terms ............................................................................................................... 273
1.0
Introduction
1.1
Objectives of the study
The UK’s collection of waste plastics is increasing rapidly as separated collection schemes spread and the measures
adopted in pursuit of the Packaging Directive and other targets take hold. This material needs a market, something
WRAP is heavily engaged in promoting. Historically a share of collected recovered plastic has been exported for
processing abroad, mostly with our EU neighbours. However, in recent times there have been some marked changes in
the pattern of exports, with ever-larger volumes being shipped outside the EU, and to Asia in particular. In 2004 three
quarters of the UK’s recovered plastic exports went direct to either Hong Kong or China, and further Asia-bound material
was shipped via intermediaries in Belgium and Holland. Understanding the Asian export trade and whether it is likely to
continue, expand, contract or expire is key to determining the likely balance in aggregate demand for waste plastics and
hence the balance, prices and stability of the UK market.
The objectives of the study were:

To identify and assess the current export market for UK recovered plastics, to include a description of the types of
market served (e.g. end products), the geographical destination, tonnes recycled, the types of plastics and the prices
paid. Whilst focusing on China as the end market, export to India, Pakistan and Africa, and any other significant
current or projected markets must also be considered and discussed, as should intermediate reprocessing in Vietnam,
Korea, etc.

To provide projections for future demand for recovered plastic by each destination and material type over
the next 3, 5 and 10 years (years 2008, 2010 and 2015 respectively). In addition, a statement of assumptions, for
example stability of economy, domestic collection, etc and an assessment of the validity of the assumptions should be
provided.

To provide projections for future UK growth of collection rates for plastics for recycling, over the next 3, 5
and 10 years (years 2008, 2010 and 2015 respectively) under a number of different economic scenarios, e.g.
consumption, government policy, legislative targets, etc. In addition, a statement of assumptions, for example,
stability of economy, domestic collection and an assessment of the validity of the assumptions should be provided.

To provide projections for future UK growth of domestic end markets for plastics recyclate, over the next 3,
5, 10 years under a number of different economic scenarios e.g. consumption, government policy, legislative targets,
etc. In addition, a statement of assumptions, for example, stability of economy, domestic collection and an
assessment of the validity of the assumptions should be provided.

To provide an assessment of the balance between collection and end markets for the next 3, 5 and 10 years.
To identify and assess the uncertainties associated with the projections.
To provide an assessment of the risks associated with any of the key end markets, for example impact of changes in
indigenous processing capacity, future prices paid, etc. and the balance between supply and demand.

To identify possible risk mitigation measures that could be taken.
1.2
Scope of study
The study’s scope was the following plastic waste streams:

Packaging
Waste electronic and electrical equipment (WEEE)
End of life vehicles (ELV)
Agricultural plastics waste
These waste streams have (or will shortly have) statutory recycling targets in the UK.
demand, future trends and associated risks. 25
It is acknowledged that there are other streams of waste plastics that are beyond the scope of this study but that are
relevant in consideration of the total UK plastics recycling sector. For example, recycling of plastics process waste from a
range of manufacturing industries, waste from collections from the construction industry and from deconstruction /
demolition projects. The report highlights the need for these streams to be similarly characterised to quantify and gain a
full understanding of the UK plastics recycling market.
This document reports the findings of the research and analysis undertaken. The project was delivered by a consultant
team of GHK Consulting working in association with Recoup and was commissioned to provide WRAP with a better
understanding of the dynamics and future prospects for the export trade in waste plastics.
1.3
Approach and method
This study is tasked with producing forecasts to 2015 for markets that have changed dramatically over the past five
years, and which are continuing to evolve at a rapid rate, both in the UK and overseas. While the domestic market is
relatively well mapped and understood, the export market has not been heavily researched or modelled in the past,
either in the UK or overseas, and there are inevitably many unknowns.
The primary objective was to develop an understanding of the market, how and why it is changing. This understanding
forms the basis for construction of scenarios in the later stages of the project. The methodology is summarised below.
This study has been developed using an extensive range of interviews, contacts, primary research and references. Over
120 organisations have contributed information to the study between October 2005 and March 200616. In addition over
150 references have been drawn upon to provide the review and analysis presented17.
The UK supply and demand information is constructed based on discussions with over 40 relevant consultees and with
reference to more than 80 published sources. The UK demand analysis is constructed from primary research involving
some 65 plastics recyclers and UK-based traders of plastics waste.
The review of international market demand and associated analysis has been carried out following interviews with 20
businesses, trade bodies and regulatory organisations in Europe, over 25 organisations in Hong Kong and China, 13
organisations in India and over 20 organisations in North America. Research included local visits in Hong Kong and
China. The demand analysis is supported by a review of a wide range of published trade data from over 75 referenced
sources.
The initial findings of the research were presented both to a project steering team and to a study group made up of
relevant UK stakeholders for review and comments prior to finalisation.
The consultation programme was constructed with the aim of providing a cross-section of suppliers, intermediaries and
end-users involved in the recovery and use of plastics in the UK, and for the export trade. The emphasis of the primary
research on the demand side has been on exports to Asia, and China/Hong Kong in particular, as this is less well
documented than the European market and represents the majority of trade volume. The report benefits from
interviews conducted with companies, trade associations and official bodies in both Hong Kong and China.
The study focuses on the main types of waste plastic traded today – polyethylene (PE), polyethylene terephthalate
(PET), polypropylene (PP), polyvinyl chloride (PVC) and polystyrene (PS). As well as established plastic waste streams it
considers two ‘emerging’ waste streams - the waste plastics arising from dismantling of waste electronic and electrical
equipment and of end-of-life vehicles.
The study workflow is shown in Figure 1.1. The work was divided into two main work streams:

analysis of the present and future supply of recovered plastics in the UK, and future domestic demand for this
material (led by Recoup); and
16
Annex L
17
Annex M

examination of the present and future export market for recovered plastics, including investigation of its likely future
development (led by GHK).
These two strands are brought together in this Final Report which, as well as reporting the current state of the market,
looks forward towards 2015. The ‘building blocks’ from which the aggregated UK market and export market analysis
have been constructed are provided in the Annexes.
Figure 1.1
Study workflow
Export Demand
Net Supply
Recovered
plastics
trade analysis
Baseline UK
supply
Importer
profiles
Regulatory, technical
& economic drivers
Exporter
profiles
Demand
projections
Working
Papers
Waste stream
Changes & outlook
Study management
group
UK end
market analysis
Consolidation &
market outlook
Final reporting
2.0
Domestic supply & collection of plastics
2.1
Consumption of plastic packaging in the UK
2.1.1 Introduction
Packaging is the main application for plastics and is the largest plastics waste stream arising in the UK. The UK is a net
importer of plastic packaging both for domestic packing and in the form of packaging for imported goods. UK waste
arisings of plastic packaging are larger than UK production and polymer consumption figures.
An assessment of packaging arisings and future trends has been developed with reference to a wide range of industry
sources. Market data have been derived from information sourced from six trade associations, four market research
organisations specialising in the plastics and packaging markets, and directly from a range of large businesses
specialising in particular market areas. In addition, a review of trade media was undertaken to identify specific market
data and trends. In the main, information has been sourced specifically showing UK consumption. In a limited number of
instances only European consumption figures have been available and have therefore been assessed ‘pro rata’ for the
UK, primarily based on population. It has been possible in most cases to cross-reference various sources of information
on both applications and polymer types to within 5-10% of each other.
It is important to identify that the analysis of packaging presented in this section is provided at three distinct levels:

Total plastics entering the packaging manufacturing chain – this includes material that later is ‘lost’ as process scrap
and is not regulated as Packaging Waste.

‘Finished’ plastics packaging supplied onto the UK market in a given year. This is the total amount described in the
above bullet minus the assumed process scrap loss.

Plastics waste arisings in a year. This is calculated as the finished plastics packaging amount above minus an
allowance for increases in the renewable plastic packaging pool (i.e. the waste arising that is deferred to future
years).
The breakdown of the assessment of total current plastic packaging-related plastics consumption for 2005 (including
process scrap) is shown in Table 2.1. A more detailed breakdown of the data is provided in Annex A. The tonnages
shown represent the polymer input to the manufacturing process (except for net imports, which reflect finished
packaging weight). The result of the analysis suggests that in 2005 some 2,474kt of plastic was used in the manufacture
and supply of UK plastic packaging.
Process scrap losses at different stages of the production and supply process may account for around 150kt of plastic.
Therefore it is assessed that approximately 2,324kt/a of plastics are currently used to produce packaging that ultimately
arises as waste in the UK.
Most plastic packaging waste is assumed to arise in the same year of the packaging production. This is likely to be true
for the significant majority of packaged items. Returnable Transit Packaging (RTP), intermediate bulk storage (IBS) and
other reusable packaging may have several years of service life before becoming waste. Actual waste arisings in the year
are therefore perhaps c.40kt lower than this total – broadly 2,284kt/a.
Different levels of data quality in the various sectors and polymer types could vary the overall total tonnage by up to
c.10%. The weakest data areas are believed to be those for PP and PS sheet and trays; it is also suspected that the
HDPE/PP use in returnable packaging systems may be understated.
There is a notable difference between the assessment of polymer use discussed above and the figures used by Defra to
quantify packaging for assessment of targets (2079kt in 200618). Several factors can help to explain the difference
between this analysis and the plastic packaging quantities reported under the Producer Responsibility obligations (and
assumed as present in UK waste by Defra). These are: the impact of production and packing losses within the supply
chain (assuming these are not recycled and used in packaging); the use of data from the previous year to determine
18
Derived from Defra, 2005
obligated tonnage; some producer under-reporting or an underestimate of quantities of plastic packaging falling under
the ‘de minimis’; the inherent margin of variability of data.
Table 2.1
Polymer demand by application in production of packaging for consumption in the UK
(2005), ktonnes
Application \ Polymer LDPE/ HDPE
LLDPE
OPP
PP
UnPET
specified
Polyolefins
(PO)
PS
PVC
Biopolymers
Total
Bottles
-
220
-
10
-
300
5
13
-
548
Closures
-
-
-
-
50
-
-
-
-
50
EPS transit packaging
-
-
-
-
-
-
28
-
-
28
Film
408
-
68
-
-
-
-
10
-
486
Film - bags
392
19
-
-
-
-
-
-
-
411
-
-
-
70
-
-
-
-
-
70
-
42
-
-
-
-
-
-
-
42
-
-
-
37
55
-
-
-
-
92
Injection moulded
RTP19s, crates, etc
Other HDPE packaging
Pails, drums &
industrial
Semi-rigid sheet
-
-
-
-
-
25
-
101
-
126
Strapping
-
-
-
20
-
10
-
-
-
30
Thermoformed packs
20
-
-
-
112
-
60
85
-
-
257
-
-
-
15
-
-
-
-
-
15
Fibre for packaging
-
-
-
3
-
-
-
-
-
3
Various applications
-
-
-
-
-
-
-
-
3
160
40
54
20
5
15
10
10
960
321
122
287
110
410
128
134
Injection moulded
rigids
Net packaging imports
(estimated)21
Total
3
314
3
2,474
Source: Annex A, Table A.1
The view that the actual level of plastic packaging in the UK is currently nearer 2,356kt/a is reinforced by a review of the
detailed obligated packaging data submitted to Defra. Actual reported “raw material” obligations for plastics in 2005 were
2,151kt 22 and imports of transit packaging on finished goods were 69kt (together 2,220kt). There are some additional
adjustments to consider: some of the polymer sold will not end up in UK packaging; it would be reasonable to assume
(based on analysis of the sales obligated data for plastics) that at least 10% of the imported packaging is not captured
by obligations; some plastic packaging (such as franchise and lease packaging) was not captured in returns. For these
reasons it appears that around 2,250kt would be a credible assessment of actual consumption although it is recognised
that there will be a margin of error on this assessment that could be around 5%.
19
Returnable Transit Packaging (RTP)
20
There is evidence of recent rapid growth in PET thermoforming applications. It is possible that this may be counterbalanced by some
slowing growth rates in the use of other polymers in thermoforming. However, it was not possible to verify this hypothesis within the
study. As a result the thermoformed market may be overstated in total; this would be compounded in the long term projections.
21
Estimated for films net imports derived from PIFA data; allocation between LD/HD films and exports may have wider error but total
tonnes remains consistent with PIFA market statistics; other net imports estimated based on comments from businesses – to be
reviewed against obligated tonnage returns
22
ACP, personal communication
2.1.2 Estimates of current arisings by waste stream
To inform strategic planning, the points at which this packaging enters the waste stream have been assessed, as shown
in Table 2.2. Due to the generally inconsistent data on the plastic composition of commercial and industrial (C&I) waste
arisings23, the following should be treated as a fairly broad assessment. The waste generation figure is lower than the
consumption figure for the year due to the growth in the returnable packaging pool (assumed at 40kt).
An attempt has also been made, in very broad terms, to assess the kind of packaging that is likely to make up the C&I
arisings. It should be emphasised that the limited data means that this is only a very rough assessment and would
benefit from further investigation. However it does allow some general points on target waste streams to be
highlighted.
Table 2.2
Notional plastic packaging arisings by waste stream (est. 2005)
Waste stream
kt (2005)
Domestic plastic packaging waste
1,332
Domestic-like packaging arisings; e.g. in
offices, leisure, schools, etc24
250
Agricultural packaging waste
32
Plastic packaging in construction
10
Post-use C&I arisings
647
Production scrap
105
Pack/fill waste & redundant stock
59
TOTAL WASTE
2,435
Source: Recoup based on various references
Table 2.3 Characterisation of C&I plastic packaging arisings, exc. ‘domestic-like’ arisings (est. 2005)
Arisings
Total kt (2005)
Bottles & closures
42
14
Fibre
3
Film
318
Film - bags
127
Injection moulded rigids
2
Injection moulded RTPs, crates, etc
38
Other HDPE packaging
42
Pails, drums & industrial
52
Semi-rigid sheet
48
Strapping
27
Thermoformed packs
20
30
Process loss/supply chain losses not
accounted for already in above tonnages
91
Grand Total
854
Source: Recoup based on various references
23
For example different C&I waste analyses imply quite widely different amounts of plastics arisings. AEA et. al. (2003) found 1.5% of
all C&I waste was plastic bottles – this would equate to c. 274kt of bottles in C&I arisings alone and seems highly unlikely based on the
quantities going into the market; waste analyses of C&I waste tend to consider ‘plastics’ rather then detailed subdivisions so it is often
difficult to extract the plastic packaging arisings from these figures.
24
This is described as “away from home” arisings, and refers to plastic packaging arisings that are in composition similar to the plastic
packaging arising in the domestic waste stream – for example, plastic bottles, tubs, bags, trays etc for food and drinks consumed in
workplaces.
2.1.3 Changes in the plastic packaging market 2008, 2010, 2015.
Factors affecting market growth
Growth in consumption is driven by a number of factors. Population growth in the UK accounts for about 0.3% p.a. of
growth; increasing numbers of households, smaller household sizes, growth in GDP and associated consumer spending
power and lifestyle choices also are increasing demand for certain kinds of goods packaging in plastics.
Within the plastic packaging sector, individual materials and sectors are growing or contracting at different rates. Some
of the possible trends in the marketplace have been considered, notably:

Relatively high growth in convenience foods – e.g. ready meals and fresh food, resulting in increased consumption of
trays and pots

Relative maturity of plastic bottle markets, although some substitution of glass and can markets is still possible,
particularly in the beers, wines and spirits sector

Reduction in pallet shrink film and hoods, increase in stretch film consumption
Increase in RTP systems
Increase in shelf ready packaging
Biodegradable polymers
The potential impact of biodegradable polymers (BDPs) must also be taken into consideration. At this stage no major
shifts in the market share of polymers are anticipated, certainly in the period to 2010. Although biodegradables are
showing double digit percentage growth, they start from a low tonnage. This low figure shows that the market is still in
an early stage of development. Estimates of consumption of biodegradable/degradable plastics packaging in the UK in
2005 are between 1-3 kt25.
Key considerations will be pricing against oil-based polymers and technical performance in major markets. Sustained high
pricing of oil and oil based polymers is likely to accelerate adoption of biodegradable polymers.
While EU Eco-labels and standards such as the EN 13432 standard for biodegradability/compostability have been
developed to allow packaging and other materials made from BDPs to be easily recognised, any move to a greater
reliance on BDPs will require actions from many sectors of society.
European and national agencies will need to make more people and organisations aware of biodegradable products and
help to establish supply chains. National policies such as introduction of market penetration programmes that improve
consumer awareness would facilitate this. Industry has many incentives to use crop derived materials, that can be cost
competitive and which may assist in regulatory compliance. Additional supportive political frameworks for funding and
research may also encourage wider use.
A working group on Renewable Raw Materials26 have predicted that in 2010, without national policies, biodegradable
polymers will hold a 2% share of the total national UK polymer market. With the implementation of national policies, this
share could account for around 7%. Other estimates show that this figure may easily reach 10% and in the long term
the market share may be even higher.
The impact of biodegradable polymers on recycling streams is not yet fully established. Some commentators suggest that
biopolymers could contaminate existing recycling streams if arising in sufficient quantities. Suppliers of biopolymers
respond arguing that the polymers can be separated from other polymers using common technology (e.g. near infra red
spectroscopy) and can in some cases be mechanically recycled. For the purposes of this study it is assumed that
biodegradable polymers will not be recycled in significant quantities and that measures will be put in place to ensure that
the quality of existing plastics streams is not compromised (as arguably required under Annex II to Directive 94/62/EC).
25
Personal communication.
26
ERRMA, 2002
Growth projections
Two growth projections are provided based on a number of assumptions. Analysts of the manufacturing industry put
growth in plastic packaging consumption in the UK at around 1.5-2% per annum27. Although units sold may be
increasing at a faster rate than this, continued lightweighting is a counterbalancing influence and is slowing the growth in
consumption of plastics. This overall level of growth (just under 2%) has been used to calculate future plastics waste
streams (with different levels of growth assumed for different polymers and applications).
A more rapid level of growth (at 5% pa.) has also been applied to provide what may be considered a ‘high’ scenario. The
rationale behind projecting this higher level of growth is that it reflects more closely the historic trends: obligated
tonnage has grown at just over 5% pa. since 1998, and actually averaged 6.4% over the period 2003-2005. In part this
may be due to better data collection, however – strikingly – much of this growth is driven by an apparently dramatic
increase in the import of packaging for filling, and the import of packed finished goods. These have averaged growth of
around 15.5% pa. each over the last 8 years; reported imports of packaging around finished goods grew by a striking
23% pa. in the last three years, from 210kt to 390kt28. These levels of growth in packaging imports and retail sales are
perhaps less likely to be picked up by the UK manufacturing trade associations. For these reasons a second growth
projection, based on 5% pa. increase29 is included.
The likely quantities of plastic packaging (as defined by the Packaging Directive) on the market from 2008-2010 are
shown below based on these assumptions. See Annex A.1 and A.2 for details of these calculations and for tables showing
the polymer consumption assumptions at 2% growth.
Table 2.4
Plastics used in packaging - projections 2008-2015
Description
kt 2008
kt 2010
kt 2015
Plastic packaging growth at c. 2%
2,490
2,586
2,853
Plastic packaging growth at c. 5%
2,675
2,934
3,814
Source: Annex A, Tables A.1 and A.2
As noted previously it is suggested that there is probably c. 5% margin for error on these figures. On this basis the
lowest assessment of growth is still a little higher than the figure used by Defra to assess setting of 2008 business
targets. Although the analysis carried out in this report does not directly contradict the data used by Defra it does
highlight a risk that the data are understated.
2.2
Arisings of plastic packaging waste in the UK
2.2.1 Processing scrap, filling/packing waste & rejected packed product
The characterisation of plastic packaging waste arisings in the UK, and their changing profile, is important when
assessing potentially available supplies for recyclers and when considering compliance with packaging recycling targets.
Arisings of waste from packaging production, filling and product rejection have been considered as well as waste arising
from tertiary and secondary packaging during intended use, and finally the waste arisings from primary plastics
packaging.
Net production scrap arisings vary markedly depending on both the packaging type (e.g. film, bottles, thermoformed
trays), the production method, run size and the efficiency of individual businesses. Having reviewed benchmarking data
provided by Envirowise and consulted industry specialists, it is concluded that c.164kt of waste plastics packaging is likely
27
Various estimates range from c. 1% p.a. to growth in line with GDP; certainly growth has slowed considerably from that evidenced in
the period to 2002. BPF and PIFA have suggested 1.5-2% growth. 2% growth is assumed by Defra in packaging target analysis
28
Personal communication from ACP, breakdown of DEFRA obligated tonnage returns 1998-2004
29
Another example of higher growth rates is the ‘cook-chill’ market, which has grown by approximately 60% in the 6 years between
1999 and 2005
to be generated within the packaging supply chain as waste prior to fulfilling their intended purpose (i.e. delivering
product effectively to the final customer). This is shown in more detail in Table 2.5 below.
Of the ‘in supply chain’ waste generated, it is estimated that approximately 40% (c.60kt) may be eligible for PRNs/PERNs
if recycled. The remaining material is classed as production scrap and should not count towards packaging recycling
targets. However, discussions with recyclers make clear that there is concern that some packaging production scrap particularly scrap generated in film printing/labelling processes – may be wrongly counted towards PRNs or PERNs by
some enterprises. Others have suggested that some non-packaging material (e.g. regrind from construction and
automotive applications) may be wrongly being counted towards the packaging targets.
Table 2.5
Estimated net production and supply chain losses (kt/a) of plastic packaging (i.e. preconsumer)
Application
Net
Printing &
conversion labelling
losses
Filling
/packing
Redundant
stock &
returns
Bottles
11
6
11
Films
TOTAL
(kt/a)
3
31
19
55
26
5
105
Sheet &
thermoformed
5
2
9
2
18
Injection moulded
4
3
2
1
10
39
66
48
11
164
TOTAL
Source: Recoup based on personal communications with sector specialists
2.2.2 Future trends in process losses
A combination of business, technology and process improvements, as well as ‘just in time’ systems where stock levels are
kept low, has been reducing the quantities of process loss plastic packaging that are available to the existing recycling
business.
Consolidation of businesses has also led to larger packaging businesses that are able to introduce more sophisticated ‘in
house’ recycling systems. During the research, comments from both the film and rigids sector have been received
highlighting this trend. More manufacturing businesses are using in-house granulators and extruders to recycle
production scrap that then never reaches ‘third party recyclers’. The production scrap available to third party recyclers
has declined, and availability of this material is likely to continue to decline. A combination of higher raw material prices,
greater support for process improvement (e.g. PICME, Envirowise) and low technology costs will all lead to continued
reductions in ‘first pass’ production scrap levels and the evolution of ‘in house’ recycling systems.
The relative increase in quantities of imported finished or semi-finished packaging, and of packaged goods, also means
that the amount of UK plastics scrap from packaging manufacture is likely to decline relative to overall levels of plastic
packaging waste generated.
As a result of the above factors it can be assumed that packaging waste generated in the production process and
available for third party recyclers will not increase during the period 2006-201530.
30
It is acknowledged that trends for shorter run lengths, speed to market issues and shorter product life cycles could have a counter
effect - increasing available levels of production scrap. However, for the purposes of this analysis we have assumed absolute levels of
available production scrap will remain constant.
2.3
Regulatory Drivers
2.3.1 Plastics Packaging Waste
The statutory requirements for the recycling of plastic packaging waste stem primarily from the Producer Responsibility
Obligations (Packaging Waste) Regulations 2005. These regulations are the implementation of EC Directive on Packaging
and Packaging Waste 94/62/EC (as amended by the new Directive 2004/12/EC). This Directive, amongst other targets,
requires 22.5% of plastic packaging placed on the market to be recycled by 2008.
The UK implementation assigns these targets to businesses based on how they contribute to the quantities of packaging
placed on the market. A calculation is made based on both the businesses’ role in the supply chain (polymer supplier,
converter, filler, retailer) and the quantities of plastics used in packaging applications. Not all businesses are covered by
the regulations – only those with a turnover of more than £2m which handle over 50 tonnes of packaging are required to
contribute to the overall Directive targets (and are termed ‘obligated’). The targets for individual businesses that do fall
under the regulations are slightly higher than the EC target to compensate for the packaging that is used by small
businesses that are not covered by the regulations.
In November 2005, the UK targets for recycling of obligated plastic packaging waste up to 2010 were confirmed (see
Table 2.6).
Table 2.6
Plastic packaging recycling targets for obligated businesses
2006
Obligated plastics
packaging
recycling target
23%
2007
2008
24%
24.5%
(this is assumed to
achieve the 22.5%
EC target)
2009
25%
2010
25.5%
Source: Defra
The second 5-year phase of EC Packaging & Packaging Waste Directive targets ends in 2008. There has been an
expectation that the targets would be reviewed during 2007 and new targets would be set for 2009 onwards. Research
conducted during this study has suggested that at present there is no pressure within the Commission to notably
increase targets post 200831. The tone of discussions suggests an emphasis on optimisation of current systems rather
than implementation of further targets, particularly given that recent new EU members already have considerable work
to do to achieve existing targets. The European Parliament is likely to be more keen to raise targets than the
Commission, so it is possible that there will be more pressure to raise targets as 2009 approaches.
The current Thematic Strategies relating to waste recycling and resource use may result in changes to the nature of
target setting for packaging recycling in the longer term. However, the responses from stakeholders during the research
suggested that in practical terms the impact of the Thematic Strategies was unlikely to be seen in relation to packaging
targets certainly before 2010, and most likely after the next 5 year phase of targets (i.e. later than 2013).
On the basis of the current information it has been assumed that the Packaging & Packaging Waste Directive target for
plastic recycling will increase to 26% by 2013 and will be 27.5% by 2015. Any variation in these longer-term targets,
once confirmed, will impact on how supplies of plastic packaging for recycling are underpinned by producers. However, it
is unlikely at the currently anticipated target levels, that the Producer Responsibility Obligations will be the most
significant driver for growth in supplies of recyclable plastics at these target levels. This is discussed in more detail in
following sections of this chapter.
31
EU DG Environment and a range of Brussels-based stakeholder organisations representing both producer and environmental interests
were consulted as part of the research. The views expressed suggested that a significant increase in recycling targets was unlikely.
Some consultees expected no increase in plastic packaging recycling targets to 2012. Regardless of the Directive target revisions for
2008-2012, it was suggested by some UK stakeholders that UK recycling targets would continue to increase progressively. Our
assessment of future targets has been based on the views expressed. The projections on targets could be updated once the actual EU
2008-2012 targets have been confirmed.
2.3.2 Projected minimum required collection levels
The future required collection levels were assessed in two ways:

Figure 2.7 is based on the current obligated packaging tonnage currently used by Defra and 2% growth projections
to 2015. The actual and anticipated target recycling rates have then been applied. This quantifies a minimum likely
required supply of plastic packaging for recycling.

A second approach is based on the detailed assessment of total plastic packaging flows in the UK (summarised in
table 2.6) and stated assumptions of future Packaging Directive targets. This assessment is likely to reflect a
maximum amount required to meet future Directive targets, subject to any significant policy shift or intervention by
the European Parliament. The outcomes of this approach for 2% and 5% pa. growth in packaging are shown in
tables 2.8 and 2.9 respectively.
Table 2.7
Minimum likely supplies of UK plastic packaging for recycling to hit target based on
reported obligated tonnage32
2008
2010
2015
Obligated plastic packaging (kt) (a)
2,078
UK business recycling target – plastics (b)
24.5%
25.5%
28.7%
Total plastic packaging required (kt) (a x b)
509
551
685
2,160
2,385
Source: packaging obligation, Recoup derived from Defra (2005); targets from Defra
Table 2.8
Maximum likely required supplies of UK plastic packaging for recycling to hit target
based on total market (based on 2% pa. market growth)
2008
33
Total plastic packaging forming basis for targets
(kt)
2,490
2010
2015
2,586
2,853
EU recycling target (or assumed interim requirement)
22.5%
24%
27.5%
Total plastic packaging required (kt)
560
621
784
Source: total packaging, see Annex A.1, targets; 2010-2015 estimates following consultation
Table 2.9
Maximum likely required supplies of UK plastic packaging for recycling to hit target
based on total market (based on 5% pa. market growth)
2008
34
2010
2015
Total plastic packaging forming basis for targets
(kt)
2,675
2,934
3,814
EU recycling target (or assumed interim requirement)
22.5%
24%
27.5%
Total plastic packaging required (kt)
602
704
1,049
Source: total packaging, see Annex A.2, targets; 2010-2015 estimates following consultation
*assumed for year based on pro rata 5 year targets
32
These figures are based on an obligation 43.2 kt/a higher than that reported in the Defra Packaging Regulations Consultation Paper
August, 2005. This is the difference between the predicted 2005 obligation and the higher actual reported 2005 obligation, published in
November 05 by Defra. Assumed growth rates are the same – 2% per annum.
33
This figure excludes net process waste that would not be eligible for PRNs/PERNs and would be deducted from reported obligations.
34
This figure excludes process waste that would not be eligible for PRNs/PERNs and would be deducted from reported obligations
By 2010 the collections of plastic packaging for recycling will need to be 550-700kt; most probably 575kt (+/-5%). For
the reasons stated earlier, the 2015 predictions are more uncertain – some commentators would argue that this report
overestimates the likely statutory 2012 targets. However, it appears unlikely that the supplies of plastic packaging
required by 2015 for recycling targets would be significantly less than 704kt and could be in the range 750kt-1,000kt.
2.3.3 Recovery targets for plastic packaging
Only recycling is included in the scope of this review. However it is important to comment on the potential impact of
recovery targets, as these may impact on future waste management decisions for plastics.
The recovery target in the Directive requires at least 60% of all packaging to be recovered by 2008. The UK
implementation requires 70% recovery of obligated packaging, of which 95% must be recovered by recycling.
It is possible, given the thrust of the Thematic Strategies referred to earlier, that there may in the future be a specific
requirement to recover a larger quantity of plastics packaging. This could be through energy recovery operations, use in
cement kilns and feedstock processes such as diesel production. A regulatory requirement to recover a larger proportion
of plastics would have implications for sourcing of plastics streams for recovery. The UK, which has a relatively low level
of energy recovery capability compared almost all other European countries, would need to invest more significantly in
methods of extracting plastics for recovery, and this could mean additional supplies of plastics packaging to those noted
above would have to become available for mechanical recycling.
2.3.4 Statutory targets for local authorities and waste generators
Plastic packaging waste recycling levels will also be driven by more general requirements to reduce waste disposal to
landfill and to promote recycling. In all parts of the UK it appears that domestic recycling targets for 2010 will be at least
40-45%, with higher targets for 2015 signalled for England and Scotland. A summary of the main current regulatory
drivers for municipal waste recycling is provided below.
England
The England Waste Strategy Consultation35 sets out a vision of national household waste recycling and composting rates
of 40% in 2010 and 45% in 2015. If this is reinforced in statute then it will prove important in driving forward plastics
collections from domestic sources, as these higher recycling targets will require comprehensive recyclables collection
services from households throughout England. Plastic bottles, and potentially other household plastics, will need to be
targeted in many more instances.
The Government has also indicated the possibility of measures that would provide a financial incentive for individual
households to participate in recycling programmes, through a combination of ‘carrots’ and ‘sticks’. It is possible that
some form of householder charging for waste generation could be introduced in the next 10 years. This would have a
significant impact in increasing the quantities of material captured for recycling, as has been demonstrated in Ireland
where direct charging is commonplace.
The England Waste Strategy Consultation also strongly signals measures to increase recycling of commercial and
industrial waste. The Government is considering a target of reducing this waste to landfill from 53% (2002) to 37% in
2010 and 36% in 2015. Although plastics packaging represents only a small amount of total C&I waste, a requirement to
reduce waste to landfill would stimulate both in-house waste reduction measures and the further implementation of
recycling-led waste management systems within businesses.
Wales
The National Waste Strategy for Wales replaces the Waste Strategy 2000 (England and Wales) and sets out targets for
the next ten years. The programme will be led by the Assembly Government working in close partnership with local
government and stakeholders.
35
Defra, 2006
There are 3 different targets set in the strategy:

UK targets where Wales must meet targets set for the UK in EC Directives
Primary Wales-specific targets where Assembly Government and local government have a direct influence:
o
Public bodies to reduce waste produced to at least 10% of 1998 arisings figure
o
Minimum recycling and composting targets for each local authority to deliver
o
2006/2007 achieve at least 25% recycling/composting MSW with a minimum 10% composting and
10% recycling
o
2009/2010 and beyond achieve at least 40% recycling/composting of MSW with a min. 15%
composting and 15% recycling; composting must only be derived from source segregated materials

Secondary Wales-specific targets where Assembly Government influence is less:
o
Stabilise and reduce household waste: by 2009/2010 and beyond waste arisings per household should
be no greater than in 1997/1998; by 2020 waste arising per person should be less than 300kg/annum.
The Assembly encourages businesses to join with the public sector and sets further targets for solid, hazardous and
biodegradable industrial and commercial waste reduction, recycling and diversion (including construction and demolition
waste).
Scotland
Scotland’s National Waste Plan 2003 is the keystone to implementing the National Waste Strategy. This is to be
continuously developed through a series of 11 local groupings known as Waste Strategy Areas (WSAs) which will each in
turn develop an Area Waste Plan that forms part of the Strategy in line with national targets and objectives.
Local authorities in these strategy areas will represent each group, as well as other interested stakeholders.
Organisations and authorities may contribute to more than one group. Local solutions should be sought as far as
possible for each waste stream.
Overall the National Waste Plan sets out an increase in recovery of MSW by composting, recycling and conversion to
energy from levels of 9% in 2003 to 30% in 2006, 45% in 2010, 69% 2020.
Recovery by composting and recycling alone will be: 27% by 2006, 38% by 2010, 55% by 2020. Quantities of waste
landfilled will reduce from 70% in 2006 to: 55% in 2010, 42% in 2012, 31% in 2020.
The individual WSA plans will contribute varying targets to these overall outcomes, with each best practicable
environmental option taking into consideration local circumstances and need.
By 2010, 85% of all Scottish households will be offered a segregated kerbside collection scheme for dry recyclables. This
will require householders to separate on average 20% by weight of household waste arisings. In 2020 this will rise to
90% of households that will be required to separate nearer 25% of household waste arisings.
Progress reports will be produced by SEPA. If progress is not sufficient, statutory targets may be introduced.
Landfill tax escalator
In addition to specific recycling focussed policies, the acceleration of landfill tax to £35/tonne will act as a driver for
diversion of waste from landfill to other routes.
Landfill Directive
The Landfill Directive (99/31/EC) bans disposal of tyres and other materials to landfill, stop co-disposal (landfilling of
hazardous and non-hazardous wastes in the same site) and sets targets for diversion of biodegradable municipal wastes
from landfill.
As part of the development of the EU Thematic Strategy on the Prevention and recycling of Waste, the European
Parliament in 2004 sought a ban on landfilling of all waste by 2025, notably bans on:

landfilling of untreated biodegradable waste by 2010
landfilling of recyclables by 2015
landfilling of recoverable waste by 2020
landfilling all residual waste by 2025 – except where ‘unavoidable’ or hazardous
This wider scope called for by the European Parliament is not statutory but does highlight the broader vision of the
members of the European Parliament. Clearly introduction of landfill bans for recyclable plastics at a future point would
have a major impact on the supplies of materials for recycling.
Finance and technical support to enable local government to achieve these targets is being made available through
central Government. For example, the Waste Implementation Programme (WIP) is directing funds to enable achievement
of – in particular – targets associated with the Landfill Directive. A result of this is finance for new technologies such as
MBT, which could result in increased plastics streams for recycling/recovery as described above.
Other EU regulations drive the trade in recycled plastics in the EU. These are described below. The regulations relating
to specific plastics waste sources such as agriculture, ELVs and WEEE are presented under the relevant sections.
2.3.5 Transfrontier Shipment of Waste Regulations 199436
Transboundary movements of wastes are controlled under this regulation. Transboundary movements are divided into
those destined for disposal and those destined for recycling, and rules are established for controlling both types of
movement. Solid plastics wastes are named on the Green List (non-hazardous wastes) which means that no notification
is necessary for the transboundary movement of these wastes destined for recycling within the EU and in other non-EU
OECD countries.
For exports of Green List wastes destined for recycling in non-OECD countries, the Regulation requires that a copy of the
list be shown to all applicable countries. It also requires written confirmation to be obtained to the effect that such
waste is not subject to control in the country of destination and that the latter will accept categories of waste to be
shipped without procedures that apply to hazardous wastes. If a country has not responded to the request for written
confirmation, export of recycled plastics to this destination is prohibited. Answers have been received from some
countries requesting prior notification and from others banning imports of certain substances. Thus China and Hong
Kong have confirmed that waste plastics (separated polymer streams) will not be controlled, but India has requested that
all waste plastics apart from PET and PP should be controlled. A change in India’s response to the Green List to request
that all waste plastics should not be controlled would make India a strong competitor to China and Hong Kong as a
destination of UK waste plastics.
Some countries have not sent written confirmation so waste plastics from the EU can not therefore be exported to these
destinations. Informal talks with exporters suggest that there is demand from some of these countries and that
response to the regulation would open up further markets.
Mixed plastics can be exported for recycling as ‘green list’ waste provided that they are not mixed with other wastes and
are prepared to specification in accordance with the relevant Transfrontier Shipment of Waste regulations.
There is evidence that a proportion of the international trade in mixed plastics shipped for recycling does not fully comply
with the requirements for green list shipment. It is believed that there is not full enforcement of this requirement by the
appropriate regulatory agencies.
To manage the risks related to this issue and ensure compliance any material not meeting the green list criteria should
either be further sorted to comply and/or be shipped under the ‘amber list’ classification as appropriate. Both of these
interventions would reduce the net value of such shipments but would not fundamentally change the underlying market
demand for the material.
36
http://www.legislation.hmso.gov.uk/si/si1994/Uksi_19941137_en_1.htm
2.3.6
REACH (Registration, Evaluation and Authorisation of CHemicals) Directive 67/548/EEC
REACH is an EU regulatory framework for chemicals (Registration, Evaluation and Authorisation of CHemicals). This new
EU regulation will replace 40 existing legal acts and create a single system for all chemical substances. REACH will
require manufacturers and importers to gather comprehensive information on properties of their substances produced or
imported in volumes over 1 tonne per year and to submit the necessary information to demonstrate their safe use in a
registration dossier to the European chemicals agency. Failure to register will mean the substance cannot be
manufactured or imported to the EU market.
In current form it could stop recyclates from being sold in Europe as a raw material in a manufacturing process as the
composition of chemical in the waste plastics would be difficult to identify. It is unclear at this stage whether this would
also affect the export to the EU of goods manufactured in China from plastics recyclates.
The risks to the recovered plastics trade associated with REACH are discussed in further detail in Section 14.2.2.
2.4
Current supplies for recycling – plastic packaging
Published Defra data for 2005 show that declared packaging recycling in 2005 was 414kt37.
2.4.1 Supplies by polymer type & application
The most comprehensive reconciliation of UK plastic packaging recycling activities was carried out by WRAP38 in 2003.
This positively identified c.165kt of plastic packaging that was being collected and recycled in the UK from a total
reported level of UK recycling of 225kt39. This survey captured 47% by number of identified plastics recyclers. It
therefore appears reasonably plausible that the other 53% of business that did not respond may account for the balance
of 60kt of plastic packaging recycling. The LDPE film recycling level is consistent with PIFA data on levels of purchased
recycled PE for film extrusion for 2002 of 92kt.
Initially reported 2002 plastics packaging recycling rates triggered accusations of PERN/PRN fraud and this has led to
increased investigation and to revision of the initial official data downwards by 35kt (15% of the total). The declared
levels of UK packaging recycled in 2003 were notably lower than 2002, and more in line with 2001 data (203kt and 207kt
for UK packaging recycling in 2001 and 2003 respectively). This suggests that there may have been an over-declaration
of plastics packaging recycling levels in 2002, even following the downgrading of reported data. The breakdown of
plastic packaging recycling by material/application identified for 2002 is shown in Table A.6 (Annex A).
The Defra data suggest that packaging recycling has increased from 360kt in 2002 to 414kt in 2005, an increase of
c.54kt. Growth in domestic plastic bottle collections account for at least 30kt of the growth in plastic packaging
collections during this period. Even allowing for possible overstatement of 2002 data, it is likely that domestic bottle
collection accounts for around half the reported growth in plastic packaging recycling between 2002 and 2005.
Current collection of post-use LDPE/LLDPE packaging films40 is estimated at c. 165kt. An assessment by PIRA for WRAP
suggests that the recycling of films from the retail and manufacturing sectors could potentially generate c. 210kt of postuse LDPE/LLDPE for recycling.
37
http://www.defra.gov.uk/Environment/waste/topics/packaging/pdf/package-waste2005.pdf. Note the 414kt figure represents plastic
packaging declared as ‘accepted for recycling’; only 407kt of PRNs & PERNS were issued in 2005. This may be due to issues such as
load rejection or deductions made for contamination.
38
WRAP, 2003c.
39
The Environmental Agency revised the figure to 225kt from 260kt in 2002 due to identified PRN fraud.
40
Classified as ‘packaging waste’ under the Producer Responsibility Regulations.
2.4.2 Sources of UK plastic packaging recycled in 2005
Figure 2.1 shows the estimated volumes of plastic packaging recycled by application in 2005. Further details are provided
in Table A.7 in Annex A. The information here is derived from a variety of sources. These primarily include the original
WRAP 2003 study referenced above; DEFRA 2005 data on PRN and PERNs issued, the survey of 2005 household plastics
recycling and from discussions with over 10 major plastics recyclers and traders to ‘reality check’ this data based on their
specialist knowledge of particular sectors. For example, several large films recycling business were interviewed to gain
opinions on market size, as were specialists in PS recycling, crates, industrial packaging, etc.
Figure 2.1
Plastic packaging recycled by main applications (2005)
Filling line scrap
redundant stock
7%
Unidentified PRNs &
PERNs
24%
Other
1%
PP pails
1%
Drums & large
containers
1%
Films - post-use
41%
Plastic crates &
pallets
6%
Trays
2%
EPS
1%
Bottles & other
household
16%
Source: Annex A, Table A.6, A.7
Post-use plastic films and bottles make up at least 57% of plastic packaging recycled (based on PRNs and PERNs issued).
The reported data raise questions about the composition of the ‘unidentified’ flows of packaging recycling both in the UK
and export markets. Even after reviewing available market data and circulating initial market assessments to a number of
plastics recyclers for comment, it was not possible to reconcile the physical source of almost a quarter of all PRNs/PERNs
issued. Although this does not mean that all these ‘unaccounted’ PRNs and PERNs were issued inappropriately, it raises
questions about what these PRNs and PERNs were actually issued on and certainly highlights a serious weakness in the
current capture of data on packaging recycling achievements.
In 2002 around 180kt (half the declared tonnage) was in unidentified flows. Qualitative information confirms that
shipments of films account for a large proportion of the export market. This assessment of packaging film collections, at
around 165kt/a, suggests that there is still a relatively large supply of unidentified material (around 100kt) being
declared as recycled plastic packaging in the above figures which it would be helpful to reconcile. A relatively simple
amendment to the PRN/PERN issuing arrangements, to broadly identify the type/source of material could facilitate such
reconciliation. The introduction of electronic PRN/PERNs would further facilitate this arrangement.
2.5
Future collections for recycling – household sources
An analysis of data from over 95% of UK local authorities supplied between December 2005 and February 2006 has
shown a large increase in collection levels during 2005 and continued strong growth anticipated in 2006-7. It seems that
household plastics collections have reached a ‘tipping point’ and significant growth could reasonably be anticipated over
the next 10 years. Previous estimates of growth trends must be revised upwards significantly.
Much of the growth comes from expansion of kerbside schemes and from improved householder participation/capture
rates. It is expected that there will be continuing growth in capture rates, as a result of sustained communications work,
improved convenient access to collection facilities and a ‘culture shift’ towards recycling behaviour.
Currently the majority of collections from households are based around bottles only. However, the number of councils
offering collections of mixed rigid plastic packaging, and in some cases ‘mixed plastics’ collections, has increased. It is
anticipated that there will be continuing expansion of more mixed plastics collections from domestic sources from both
kerbside and bring systems provided market availability is maintained for the non-bottle plastics.
New technologies for separating recyclables and for processing mixed waste will also lead to increased separation of
domestic plastics streams for recycling and recovery. The requirements of the Landfill Directive and the higher recovery
targets proposed, for example in the England Waste Strategy, will result in new recovery infrastructure for mixed waste.
Several of the ‘new technologies’ (often grouped under the heading ‘MBT’) can provide a physical separation of a
proportion of the plastics input from mixed waste in a format that is suitable, in whole or in part, for mechanical
recycling. For example, the Sterecycle and Themesave autoclaving processes generate a separate stream of plastics with
an output rate ranging from 3% (est.) to 11% of input mixed waste41. Some of these autoclaving processes for mixed
waste, when combined with existing screening and Near Infra-Red (NIR) separation systems, are capable of generating
large volumes of plastic containers in a form suitable for mechanical recycling. Other technologies will generate plastics
rich streams that are more suited to energy recovery options, including gasification. These technology opportunities are
discussed in more detail in Chapters 4 and 5.
The rate of growth of mixed waste processing, and the selection of the processing technology will be significant variables
in the likely availability of separated plastic packaging from the domestic waste stream, particularly in the 2010-2015
period. Three different scenarios for growth in supplies of domestic plastic packaging have been developed, as shown in
Table 2.10.
The breakdown of the supplies of material by source and scenario is shown in Table 2.11. The equivalent 2005 collection
level is estimated at 67kt, of which almost all is from kerbside and bring collections of plastic bottles42.
The format in which this material might appear on to the market can also be estimated. Currently most bottle sales are
based on sale of mixed polymer bales. This assessment assumes that there will be an increase in sorting by polymer type
as sorting technology costs reduce and economies of scale make polymer sorting attractive to higher throughput material
recovery facilities (MRFs). It is also assumed that most ‘other bottles’ – mainly PP - will be sorted into HDPE bales where
sorting occurs.
The projections (detailed in Table A.8) suggest that mixed plastic bottles will be available and require a market of at least
80kt in any of the scenarios considered.
41
42
WIP Waste Technology Data Centre http://www.defra.gov.uk/environment/waste/wip/newtech/index.htm
WRAP (2006)
Table 2.10
Predicted supplies of plastics from domestic sources – scenarios & outcomes
Dry recyclables
infrastructure
Scenario 1 - Low
Scenario 2 –
Medium
Scenario 3- High
Plastics collected43
Mixed waste
extraction
Limited expansion from
2008 collection levels;
15m homes on kerbside
collections including
plastics by 2010; 16.5m
by 2015; yields grow to
7.5kg/hh
No significant
extraction from mixed
waste
2008
114kt
(47kt)
2010
138kt
(71kt)
2015
180kt
(113kt)
Continued expansion from
2008 collection levels:
collections by 2010; 20m
by 2015; growth in
participation during period
to 8.5kg/hh
Extraction of plastics
from mixed waste
covering 1.5m
households by 2015;
extraction of mainly
bottles
2008
137kt
(70kt)
2010
183kt
(116kt)
2015
282kt
(215kt)
Continued expansion from
2008 collection levels:
collections by 2010; 21m
by 2015; growth in
participation during period
11kg/hh, including some
mixed plastics collections
Extraction from mixed
waste covering 3m
households by 2015;
good extraction
efficiency
2008
159kt
(92kt)
2010
250kt
(183kt)
2015
522kt
(455kt)
Source: Recoup estimates, see Annex A, Table A.8
Table 2.11
Separated domestic plastics streams available for recycling by scenario, source & year
Scenario
Current
Scenario 1
Scenario 2
Scenario 3
Year
2005
2008
2010
2015
2008
2010
2015
2008
2010
2015
kt/a
kt/a
kt/a
kt/a
kt/a
kt/a
kt/a
kt/a
kt/a
kt/a
Bottles from domestic
kerbside
47
77
92
125
95
121
173
113
164
241
Bottles from domestic
bring
20
31
38
42
33
39
44
34
41
48
Mixed plastics
(excluding bottles)
from kerbside
<1 (est)
6
8
13
8
13
20
8
15
38
Bottles from mixed
waste extraction
-
-
-
-
8
29
4
15
68
Mixed plastics
(excluding bottles)
from mixed waste
extraction
-
-
-
-
3
16
1
15
127
114
138
180
136
183
282
159
250
522
Total plastics (kt/a)
67
Source: Recoup estimates based on WRAP (2006), WRAP (2005j)
43
Number in brackets shows additional tonnage to 2005 collection level
2.6
Future collections for recycling – commercial, industrial & other sources
As the data on current commercial and industrial arisings and recycling rates are less robust than domestic waste data44,
predictions about future collections from commercial and industrial sources are likely to be less reliable. Notwithstanding
this point, the drivers are firmly pointing towards increased supply of post-use C&I packaging for recycling from these
sources. A summary of main reasons is noted below:

Increased cost of disposal (including landfill tax escalation)
Increasing handling infrastructure for collection source-segregated recyclables & to extract recyclables from mixed
commercial/industrial waste

Increasing availability/scope of ‘recycling’ offered by waste management contractors
Improving economies of scale for contractors providing wider recyclables collections for C&I premises
New national initiatives to encourage waste reduction and recycling in businesses (e.g. BREW)
Possible national targets for C&I waste reduction
Business emphasis on waste reduction, often as part of quality programmes such as ISO14001
It is expected that the availability of process packaging scrap for third party recyclers will decline slightly in relative
terms, as process efficiencies continue to improve and as businesses extend measures to recycle process losses ‘inhouse’. Similarly, the relative availability of redundant stock should decline as a result of improving purchasing efficiency.
Large retailers, especially supermarkets, have already established systems to capture retail and distribution films and
other packaging. There is also increasing emphasis on RDCs and other reusable distribution systems. The growing
importance of shelf-ready packaging could result in an increase in “straight on” trays; although it has also been
suggested that there may be slower growth in the use of plastics in secondary collation packaging as cardboard shelfready cartons may gain a greater share of this market45. These factors will reduce the quantities of one-way tertiary and
secondary plastic packaging in the supply chain relative to the weight of primary packaging. Growth of supplies of film in
this sector is therefore expected to be relatively limited – it is difficult to envisage more than a 20% increase on current
levels to c.210kt by 2015.
The largest and most defined sectors outside of packaging film are reusable trays, crates & RTPs, industrial drums and
large containers, and ‘straight on’ trays.
The significant increase in the use of RTPs will increase the availability of HDPE and PP crates for recycling, although the
increase of available material for recycling will probably grow more slowly than the pool itself. A growth in crate recycling
by 10kt to 2015 has been assumed.
The growth of shelf-ready packaging will lead to increased volumes being recycled. It is also likely that retailers will
specify greater consistency of polymer use to enhance opportunities for recycling. A growth in recycling of shelf-ready
and other trays by 10kt to 2015 has also been assumed.
These trends in RTP and shelf ready packaging use, combined with the existing retail and RDC films recycling activities
suggest that the multiple retailers are probably the owners of c.100kt of the plastic packaging waste that is being
recycled. This quantity will increase for the reasons noted above. A large proportion of the current retailer plastics
recycling obligation is, for some, broadly offset by their supplies of waste packaging plastics for recycling.
The next most identifiable large plastics packaging market is the drums and industrial containers sector. Here there is
potential to increase recycling as well as reuse: the markets are well known, there is a limited number of businesses
supplying into these markets and the unit weights of the packaging are high. The hazardous contents of some of the
containers may limit opportunities for recycling, however there will remain a relatively large amount of HDPE that could
be recycled from these sources. Specialists in the sector have suggested that 20kt/a more material could reasonably be
44
see comments & footnotes in section 2.1.2 on page 31 re. data quality
45
source: personal communications from packaging businesses
recycled from this sector. The IPA has also highlighted that current functioning of the packaging regulations does not
adequately recognise the nature of the industrial packaging market. Reuse arrangements are discriminated against: they
are not counted due to the manner in which third party drum reconditioning is handled under the regulations.
Pack design innovations could also stimulate waste reduction. Some filling systems for industrial bulk containers (IBCs),
drums, large tubs and other containers already use film liners. Changes in packaging design/filling practices to encourage
use of liners for such containers could reduce container contamination from contents such as fatty foods, paints and
chemicals that currently restrict reuse and recycling opportunities for these containers.
Capture of specific packaging plastics from other commercial and industrial sectors is poorly documented. There is little
consistent published research in this area and a lack of published information that reconciles PRNs and PERNs issued to
other reports of recycling activity. There remains a strong concern within the UK plastics recycling industry – again
reported during interviews - that the information provided by PRNs and PERNs is not yet a reliable indicator of the actual
packaging recycling activity undertaken. It can however reasonably be assumed that a combination of targeted sourcing
activities by recyclers, specific waste-related initiatives (e.g. NISP, Envirowise, BREW, WRAP), increased segregation of
waste by businesses and their waste management contractors will lead to increases in both rigid, foam and film
packaging extracted for recycling generally in these sectors.
2.7
Future collections for recycling – ‘Away from home’; offices, schools, public facilities, etc.
It is possible that there is a substantial quantity of plastic packaging in non-domestic waste that is not directly
manufacturing or retail/distribution waste and which is similar in nature to domestic arisings. Examples are the plastic
bottles, bags, pots, tubs and wrapping which enter the waste stream in offices, cafes, pubs and restaurants, leisure
facilities, schools and public buildings.
To illustrate, there are 29 million people in employment and a further 6.5 million students in secondary and tertiary
education46. If each person uses one plastic packaging item, such as a 500ml plastic bottle or a yoghurt pot each
working day, this would generate around 150kt of rigid plastic packaging47.
Attempts to reconcile overall packaging flows suggest that there may be perhaps 250kt of plastic packaging in this
category. It is recognised that there is probably a relatively wide ‘error’ on this estimate but that the true figure is more
likely to be larger than significantly smaller.
There is a growing number of initiatives to recycle more waste from these kinds of locations. 30kt growth in plastic
packaging flows from this sector can be assumed by 2015, although this is ultimately likely to prove a conservative
estimate.
2.8
Future collections for recycling – agriculture, horticulture & construction
Agricultural, horticultural and construction waste streams all contain plastic packaging waste. Initiatives for these waste
streams are already developing; a farm plastics collection programme is underway, to be supported by statutory
producer responsibility, and there are a variety of projects to recover materials from construction sites that can be
expected to stimulate further expansion in this area.
Collectively these sources could generate 25kt of new plastic packaging for recycling by 2015.
2.9
Summary of supplies of plastic packaging & performance versus targets
The above assumptions can be consolidated to create a projection of anticipated collection levels for plastic packaging
and how these relate to the targets. The outcome, perhaps surprisingly, is that the producer packaging recycling targets
are likely to generate relatively limited ‘pull’ compared to the ‘push’ of improved availability and economics of
‘recyclables-led’ waste management practices.
46
http://www.statistics.gov.uk
47
based on average item weight of 20g
Table 2.12 shows the anticipated profile of plastics packaging collection for recycling based on the lowest ‘scenario 1’
assessment for household collection, and based on the lower targets consistent with current levels of reported business
obligations.
The background to the baseline 2005 figures is shown in Annex A6 and A7.
Table 2.12
Anticipated profile of plastics packaging collected for recycling 2005-2015 by
application, based on scenario 1 (low) household collection projection & currently
anticipated statutory recycling targets
Application
Films - packing rejects
kt 2005
kt 2008
kt 2010
kt 2015
15
15
15
15
Packaging/filling rejects - bottles
6
6
6
6
Other filling/packing/redundant
stock rejects
10
10
10
10
165
180
200
210
<1
3
8
30
2
3
4
4
67
114
138
180
6
8
10
11
<1
1
1
1
Films - post-use
‘Away from home’ office &
commercial collections –
additional
Carrier bags – FOS
Bottles & other household
EPS
Cups
Trays (e.g. ‘Straight on’)
Plastic crates & pallets
Drums & large containers
PP pails (e.g. catering)
7
12
15
20
25
30
35
40
5
8
18
25
3
4
6
8
PP bulk bags
<1
1
1
1
Agricultural & horticultural
packaging
<1
7
11
20
Construction site packaging
<1
0.5
2
5
Other packaging – unidentified
100
100
100
100
TOTAL (kt)
414
503
580
686
Packaging Target (kt)
409
509
550
685
5
(6)
30
1
Surplus (shortfall) (kt)
Source: Recoup from various industry consultations, WRAP (2005j), WRAP (2006), WRAP (2004c), Valpak (2005), et al
The rationale for the different growth assessments is described at various points in this report. In summary, the following
factors assumed to lead to the projected growth in collection of non-domestic waste:

Continued implementation of more recycling-oriented waste management practices by waste contractors and
business; partly driven by rising disposal costs and partly enabled by improved handling technologies and economies
of scale. This will result in continued improvements in recycling rates, e.g. for post-use films48.

Development of new and relatively extensive targeted collections from defined waste streams; notably ‘away from
home’49, ‘straight on’ trays50 and drums51. The recent growth in the returnable packaging pool will also lead to
increased quantities of crate and tray recycling as these reach the end of their service life.
48
Levels of film recycling projected in the long term are broadly consistent with earlier research (e.g. PIRA for WRAP).

Producer responsibility for agricultural waste and changes to waste management legislation will lead to increases in
collection facilities. These will capture packaging as well as non-packaging plastics.52

New initiatives in the construction sector will lead to a growth in the recycling of packaging plastics.53
A sensitivity analysis has been undertaken to explore the impact of increased performance from household collections,
and to consider the impact of targets higher than the current reported packaging levels (shown earlier in this section as
‘maximum’ targets).
Depending on the household collection levels, the future collection tonnages are projected in Table 2.13. It is assumed
that the main variable in future collections will be the extent of development of domestic packaging collections. This is
because household plastic packaging is both a significantly larger waste stream and starts from a lower level of actual
recycling than commercial and industrial plastic packaging recycling. The three ‘total collection’ scenarios set out below
(low, mid, high) are based on the levels of non-domestic recycling projected in Table 2.12 added to the projected
domestic collection levels shown in the three scenarios in Table 2.10.
Table 2.13
Total projected collections of UK plastic packaging waste for recycling
kt 2008
Collection – low, scenario 1
503
kt 2010
580
kt 2015
686
Collection – mid, scenario 2
525
625
788
Collection – high, scenario 3
548
692
1028
Source: derived from Table 2.10 and Table 2.12
Summary of predicted performance against future packaging targets
The shortfall/surplus on packaging targets is shown in Table 2.14.
This analysis is significant because it suggests that based on the current level of reported obligation, the UK is likely to
significantly exceed the 2010 targets and possible 2015 targets. It appears to be broadly on track for the 2008 targets
assuming current momentum is maintained both in domestic and C&I collections.
The analysis also suggests that large volume growth in collection of plastic streams from domestic waste in the period
2010-2015 is more likely to be sustained in the long term by: an emphasis on successful extraction from mixed waste
and, to a lesser extent, mixed plastics collection from kerbside dry recyclables schemes.
The current basis for calculating targets suggests that the incremental growth in kerbside and bring collections from
households will be sufficient to achieve most of the increase required for target purposes. However, if packaging waste
arisings grow faster than is currently being anticipated within the Defra assessments for packaging targets, then the
projections show that extraction of plastics from mixed waste for recycling will become critically important to hitting
higher targets. Perhaps more importantly, it is also an area that will offer increasingly attractive opportunities for landfill
diversion of plastics.
49
There is already evidence of growing collection systems in this sector. There is also new support from BREW to accelerate take-up of
these projects.
50
Reported efforts by retailers to specify trays made of single identified polymer type will improve opportunities for recycling this
application.
51
Growth in drums recycling based on personal communication with IPA representative citing previous research in this area.
52
See more detailed discussed in section 2.10
53
Research on waste composition the Building Research Establishment (BRE) used to make an assessment of likely arisings
Table 2.14
Summary of projected plastic packaging consumption, targets and collection rates
kt 2008
kt 2010
kt 2015
Total packaging - low (c. 2% growth p.a., based on
current reported obligations)
2,202
2,323
2,565
Total packaging - mid (c. 2% growth p.a.)
Total packaging - high (c. 5% growth p.a.)
2,490
2,675
2,586
2,934
2,853
3,814
Recycling target – low
Recycling target – mid
Recycling target – high
509
560
602
551
621
704
685
784
1,049
Total collection – low, scenario 154
Total collection – mid, scenario 2
Total collection – high, scenario 3
Collection vs Target – low
Collection vs Target – mid
Collection vs Target – high
503
525
548
(6)
(35)
(54)
580
625
692
29
4
(12)
686
788
1028
1
4
(21)
Max potential shortfall (high target, low collection)
(99)
(124)
(363)
39
141
343
Max potential surplus (low target, high collection)
Source: derived from Table 2.7, 2.8, 2.9. 2.13
The different potential collection levels and targets are summarised graphically in Figure 2.2.
Figure 2.2
Summary of projected plastic packaging collections and potential statutory
targets
1200
1200
1000
1000
800
800
600
600
400
400
200
200
kt
kt
0
0
2008
2010
2015
year
Collection - low
Targets - low
Collection - mid
Targets - mid
Collection - high
Target - high
Source: Table 2.14
54
Collection projections from table 2.13
Assumptions in projections
The above projections are based on several important assumptions:

Budgets for waste management activities by councils and businesses remain broadly comparable to recent levels in

Communications programmes to promote recycling behaviour nationally and locally are sustained
real terms during the period
The planning application process for new recyclables handling infrastructure is not unduly restrictive
There is an available market for mixed plastics sourced from mixed waste extraction processes
Market prices for currently collected plastics remain broadly within historic trends and averages
There is no significant over-declaration in the current level of PRNs/PERNs issued that may be identified at a later
point and reduce the 2005 baseline
Discussion of implications for compliance costs
This analysis suggests that, in the most likely projection scenarios, packaging producer responsibility targets are likely to
offer a ‘safety net’ rather than act as a major economic driver in the development of plastic packaging recycling rates to
2010 and probably beyond.
The value of plastic recycling PRNs and PERNs in Q1 2006 was approximately £25-30/tonne. During Q2, the price has
fallen to around £15/t due to Q1 performance data published by Defra indicating likely oversupply in 2006. In the period
2006-2010 landfill tax is scheduled to increase by £15/tonne. During this period there will also undoubtedly be gains in
operational efficiency in delivery of recyclables collection and handling, and process improvements to increase the value
of collected plastic packaging waste.
The increasing landfill avoidance benefits and efficiency gains in recycling processes will almost certainly exceed the
value offered by PRNs and PERNs. It can be concluded given a broadly stable recyclable sales value that between 2008
and 2010, if not earlier, plastic PRN values could, based on current baseline collection performance, tend to a nominal
level that will cover administrative costs of issuing and verifying that recycling has been achieved.
Even if sales prices for recyclable materials decline and require support from the PRN mechanism, businesses obligated
under packaging producer responsibility are unlikely to experience increased overall business costs. As an illustration of
this point, a £60 fall in recyclable plastic prices would certainly require more than a £100 fall in comparable virgin plastic
prices.
With recycling targets at around 25%, an increase in PRN subsidy of £60/t that a producer might need to pay to
compensate for a £60 fall in the price of a tonne of collected recyclable plastics would be counterbalanced by the
producer saving more than £400 in virgin polymer costs.55 Packaging costs to the consumer should therefore decrease
even though higher recycling subsidies are paid. Conversely, if virgin polymer prices increase then recycling becomes
increasingly economically viable – supplies will increase and the value of PRN subsidies will tend towards a level that
covers administrative costs of the system only.
One of the recognised sensitivities in the projections is that some of the growth of mixed plastics collection suggested
may be directed to recovery processes, e.g. diesel production and gasification. Some of these technologies appear to be
economically viable or close to market viability with sustained high oil prices, increasing disposal costs and more modern
technology offering modular processes at smaller throughputs (e.g. 7 kt/a upwards). The impact on the above
projections could be that the volumes sent to recycling decrease or slow in 2010-2015, particularly from sources of mixed
or more contaminated plastics collections. Alternatively the commercialisation of these technologies could lead to
increased collection levels during the period 2010-2015 but with a greater proportion used for these recovery processes,
provided that they offer a sustainable alternative to landfill and traditional incineration technologies.
55
Example assumes that 25% target means that every 4t of polymer used for packaging requires 1t of plastic recycling, and that
recycled material value drops at 60% of virgin pricing decrease: i.e. £60x4t/60%=£400/tonne.
2.10
Agricultural plastics
2.10.1 Consumption and arisings of agricultural plastics in the UK waste stream
Agricultural plastic waste arisings are approximately 93kt/a and represent c.12% of all agricultural waste56.
The main polymer types and amounts used in agriculture are represented in Figure 2.3.57 A more detailed analysis of
arisings is given in Annex B.
Figure 2.3
Plastic waste from farms by polymer type and use
Non-packaging
other
33%
Plastic packaging
35%
Non-packaging
films
32%
Source: see Annex B, Table B.1
2.10.2 Agricultural Plastics: Trends in future consumption
The quantity of plastics materials used on farms is probably close to its peak58 and is unlikely to rise significantly over the
next 10 years. Reductions in farming and land-use for agriculture will also prevent growth in plastic. However only a
very small quantity of farm plastic arising in the UK is currently being recycled so there remains plenty of material to
source if the legislative and economic environment is in place to give incentive for collectors and recyclers to do so.
2.10.3 Agricultural Plastics: Regulatory drivers
Current Legislation
The purpose of ‘The Waste Management (England and Wales) Regulations 2005’ that mainly affect agricultural waste is
to transpose the requirements of the Waste Framework Directive and the Landfill Directive to ensure that farm waste is
disposed of in ways which protect the environment and human health. Separate regulations to fulfil the Hazardous Waste
Directive have been issued in 2004.
Burying waste on farms must be stopped with immediate effect while only burning of crop residue in the open will be
permitted. Until early 2007, use of drum incinerators to burn rinsed polyethylene pesticide containers remains legal. The
56
It is suggested that the accuracy of waste estimates are low (Environment Agency, 2001). This has been a result of little or no
monitoring of farm wastes, which up until 2005/6 have been excluded from a controlled waste regime. This shortage of data has led to
the development of the Environment Agency commissioned report ‘Improving Data on Agricultural Waste and Resources’ in which an
‘Agricultural Waste And Resource System (AWARE)’ is proposed to compile a consistent and regularly updated data set. However, this
remains a proposal and no time-scale has been set for its implementation.
57
Environment Agency 2001, 2005
58
BPI, 2006
options open to farmers following the introduction of the 2005 regulations are summarised in Annex B.2. In essence, the
impact of the regulations will be to require formalised waste management systems that are likely to enable collection of
plastics for recycling.
Significantly, the Government has announced that statutory producer responsibility is to be introduced for non-packaging
farm plastics. Although details of the scheme were not available at the time of finalising the report, it is clear that it will
cover items such as silage wrap and should provide further financial and organisational underpinning for growth in farm
plastics recycling.
2.10.4 Agricultural Plastics: Current levels of recycling and recovery
Much non-packaging plastic waste is produced by dairy farming and horticultural holdings, where large volumes of
polyethylene sheet or film are used for silage wrap bales and crop cover. Animal feed bags and fertiliser bags account for
over 80% of the total packaging waste generated.
In addition, a range of other wastes arise on all types and sizes of holdings. Respondents to the Environmental Agency’s
Agricultural Survey 2003 reported scrap metal, batteries, oils, tyres, agrochemical packs, syringes and general building
waste. Hazardous wastes are also generated.
In this same survey current waste management practices were also defined. 83% of farmers disposed of at least one
waste stream by burning, either in the open or in a drum incinerator, with the waste stream most commonly burned
being silage and packaging plastics. Alternative disposal routes for farm waste were by inclusion in household dustbin, by
disposal using an unprepared ‘farm dump’ or burial elsewhere, or by transporting waste to a civic amenity site.
98% of respondents reported that at least one waste stream was re-used (silage sheet can be used for more than one
year) and 72% of holdings store at least one waste stream, especially those wastes that are not low-cost or convenient
to dispose of in small quantities. Waste streams stored included metals, tyres, batteries and some hazardous waste
materials - oil, agrochemical concentrate and similar.
The introduction of new waste management controls to agricultural waste and non-mineral waste from mines and
quarries will determine whether existing waste management practices are possible in future. This will determine material
volumes likely to be directed for recycling.
Plastics recovery schemes
Encouraging the collection and recovery of agricultural plastics through recycling is important. Intensive use of plastics is
reflected in high contamination levels, making them more difficult to manage and dispose of. It is thought that either a
future national voluntary or statutory producer responsibility scheme in the UK will ensure that higher volumes of plastic
non-packaging waste are collected59.
A number of voluntary schemes have been set up by UK farmers to collect material from farms and transport it to a
reprocessing facility. The main schemes in the UK are detailed below. It is thought that through these schemes 6kt of
farm plastics were collected for reprocessing in 2005.
UK collection schemes for farm plastics & areas covered

Cumbria - Cumbria Farm Plastic Recycling
Devon - Devon Farm Plastic Recycling
Scotland - Solway Recycling
North Lincolnshire, Yorkshire, Cleveland, Durham and Northumberland - Agriplass
Northern Ireland - Emerald Isle Recycle
Pembrokeshire - Haven Plastics Recycle
Somerset - Somerset FWAG
Wales and the border counties - Second Life Plastic
59
Packaging waste from farms (pesticide containers, feed/other sacks) is controlled as far as producers are concerned under the
Producer Responsibility Packaging Waste Regulations 1997 – the ‘Packaging Regulations’.

Worcester, Gloucester and Shropshire - Farm Plastics Recycled
Yorkshire - Recovered Agricultural Plastic Scheme (RAPS)
Yorkshire, Nottinghamshire, Lincolnshire - Crop Cover Recycling
While some schemes accept most types of packaging and non-packaging plastics, some farmers do not have a collection
scheme for non-packaging plastic waste available to them. This means that under the new options available to farmers it
is likely that this waste will be disposed of away from farm premises at licensed sites, where the potential for landfill and
incineration exists. As farm waste becomes classified as industrial waste, gate fees for landfill will apply. These vary by
region: in the north-west for example the typical fee was £35/t in July 2004, rising by £3 per tonne per year in line with
landfill tax increases60. Special hazardous wastes will be subject to higher additional charges of around £20 per tonne,
excluding landfill tax.
While there would be environmental benefits to maintaining voluntary schemes, the introduction of a national regulatory
producer responsibility scheme for the collection and recycling of non–packaging farm plastics waste would increase
volumes of recovered farm plastics further. This scheme could either be introduced as a voluntary producer responsibility
scheme in the UK, where manufacturers of farm plastics pay a levy to fund collection schemes61 or as a statutory
scheme, where regulatory target levels for collection and recycling are established. Producers (manufacturers or
importers or distributors of non packaging farm plastics) would be required to collect and recycle a certain proportion of
non packaging farm plastics that might arise as waste annually62.
In determining what the targets should be, available capacity for reprocessing waste farm plastics should be considered,
although at present collection and transport systems are the main issues that challenge such a scheme63. While many
local voluntary schemes are funded with grants and subsidies, real costs of these options cannot be compared.
The recovery of farm plastics is dependant on the provision of a well organised, efficient collection service (either from
the farms or at centralised collection points), a willingness from farmers to pay for the service, the use of efficient
handling and transport options, and the availability of a suitable UK reprocessor. Without these elements farm plastic
collection schemes will continue to be heavily subsidised and will not allow the UK to realise the full value of the plastic
arisings from this sector. It remains clear, however, that when comparing costs to other recovery methods, the recycling
and recovery of farm plastics will become increasingly competitive.
2.10.5 Agricultural plastics: Technological and economic trends
It is assumed that there will be no significant technological developments for the collection and handling of agricultural
plastics waste but that existing models of farm collection will be rolled out more widely. These will benefit from
increasing economies of scale and evolution of efficiency through a ‘good practice’ network.
Unit costs of reprocessing plastics waste from these sources are likely to decline over time with incremental
improvements to process technology and with improved utilisation.
The benefits of landfill avoidance will increase during the period. It is anticipated that farmers will increasingly opt for
separate collection of plastics for recycling as the economics of this will be comparable to or better than alternative
disposal options. The economics of this will be underpinned by forthcoming producer responsibility regulation.
2.10.6 Agricultural plastics: Forecast of future rates of collection for recycling and/or recovery
A model had been produced as part of the study to determine how waste farm plastic recovery, on either a voluntary or
statutory basis, will modify existing agricultural waste streams. Using 1998 estimates of agricultural waste64 and
60
Environment Agency, 2005
61
Idea based on Farm Film Producers Group (FFPG) Scheme operated 1994-1997 but collapsed under influence of free-riders.
62
Results of consultation document will indicate what decision is to be made. Defra, 2005a.
63
Cost of collection per tonne is estimated at £48, this includes baling, handling and transport costs. Environment Agency, 2005.
assumptions from previous models65 it is projected that 17kt of waste plastic will be available for recycling in 2008, 26kt
in 2010, and 49kt 2015.
Table 2.15
Amount of farm plastics recycled
2006
2008
2010
2015
Packaging plastics collected
(kt)
2.4
7.0
11.1
20.5
Other plastics (kt)
3.3
9.7
15.3
28.3
Total plastics (kt)
5.7
16.7
26.4
48.8
Source: Recoup following industry consultation, BPI et. al.
The assumptions are as follows:

Contamination of 50%66 by weight is not included in projected figures of material recovered.
Plastic waste streams that are deemed as hazardous have not been included in the estimates (agrochemical
containers, oil containers, animal health packaging) as these in time may be dealt with through different schemes.

Allowing for a 30% rejection rate of less recyclable material (tree guards, bale twine net wrap) it is assumed that
70% of total farm plastic waste collected is recycled, of which 43% is packaging.

No major disruption to normal scheme operation (e.g. foot and mouth or other disease outbreak that would
discourage movement of waste materials from and between farms).

Effective enforcement of the legal framework by the relevant regulatory agencies (EA, SEPA, EHS).
There is recycling capacity for this material67.
A separate assessment made in 2004 was that by 2010, 20kt of farm plastics could be recovered for recycling68. A 30%
more optimistic forecast has been made, as there is more evidence of organised schemes, interest in services, and
financial pump priming than perhaps was apparent in 2004. Due to the disparate nature of publications about agricultural
waste arisings, of which many seem to be solely based on the 1998 estimates, it is not possible to observe and
determine trends in agricultural waste production on which to base a model.
2.10.7 Agricultural Plastics: Further research
Based on the review of existing publications69 and production of the model, areas for research into agricultural farm
plastics, and other waste arisings have been identified. These recommendations are based on a gap analysis between
existing research papers and the requirements of the AWSF Vision and Strategy Objectives for Sustainable Agricultural
Waste Management.
64
These estimates were calculated by deriving a unit waste estimate for each specific waste stream. This value links the quantity of a
specific waste or by-product generated each year to a single agricultural unit (e.g. the quantity of agrochemical packaging per hectare,
or the quantity of manure per livestock head). Environment Agency, 2003.
65
Environment Agency, 2005. An economic model for a national network of collection schemes assumes that not all farms will be
accessible and that not all waste will be collected economically. Percentage of waste arising to be collected is 80%.
66
67
New capacity for agricultural waste plastics is being provided by Evolution Polymers and BPI; other companies are also reporting
investments in the UK. On the basis of current and proposed capacity growth there is capacity available for likely supplies until well
beyond 2010.
68
Andrew Green (2004) British Polythene Industries, Dumfries. Presentation at 'Action Towards Nationwide Farm Waste Plastics
Recovery' conference.
69
The accuracy of waste estimates is low70. This is because there has been little or no monitoring of farm wastes that up
until 2005/6 have been excluded from a controlled waste regime. This shortage of data has led to the Environment
Agency report ‘Improving Data on Agricultural Waste and Resources71’ in which an ‘Agricultural Waste And Resource
System (AWARE)’ was proposed to compile a consistent and regularly updated data set. However, this remains a
proposal and no time-scale has been set for its implementation.
The impact of the Regulations and other measures to address agricultural waste will need to be measured and
understood by the introduction of a ‘whole farm approach’ and use of relevant performance indicators. Further research
is needed to raise farmer awareness and produce best practice guidance documents.
Only in 2003 were the amounts and quantities of stockpiled material on farms addressed72.
Outlets for recovered material appear to be concentrated in Scotland and South Wales, with some potential reprocessors
located in the north-west and other developments planned. Although current reprocessing capacity is not sufficient to
meet the long term projected collections, there is sufficient capacity for likely growth for infrastructure and that
additional reprocessing capacity for likely growth for several years. It is believed that recycling rates are constrained by
limited collection infrastructure and that the additional reprocessing capacity will be developed as supplies of agricultural
plastics increase.
Translating EU best practice to the UK would involve the development of a single stream material recovery scheme
utilising municipal waste collection facilities and civic amenity sites. Elsewhere in the EU a change in practice of farm
waste management has only occurred where well communicated, convenient and cost effective waste transfer routes
have been made available to farmers (EA 2002 P1-399/2). Development of single stream collections contrasts with
opinions gathered from supply industries who felt that including film wastes with packaging waste in a single stream
would be more practical.
A new research project managed by CIWM on behalf of the AWSF aims to investigate, develop and promote a producer
responsibility farm plastics collection and recovery programme in England. BREW programme funding will support this.
2.11
Plastics from End of Life Vehicles (ELVs)
2.11.1 Arisings in UK ELV waste stream
Some 2 million vehicles reach the end of their life each year in the UK and require correct treatment and disposal in
accordance with specific environmental standards. Plastics accounts for an average 10% of total vehicle weight.
Several different polymer types and many grades are used for automotive plastics, tailored to the requirements of
individual parts. The most common are: polypropylene (PP) in bumpers and many other parts; acrylonitrile butadiene
styrene (ABS) in seats, dashboards and parts casings; polyethylene (PE) for wash/liquid tanks; polyamide (PA);
polyurethane (PU); and polyvinylchloride (PVC) for electrical casings, interior upholstery, and trim. Figure 2.3 shows the
material composition of a standard delivery van as a percentage of the vehicle by weight, with the plastic fractions
further broken down into polymer type where possible.
70
Environment Agency, 2001 P1-399/1.
71
Environment Agency, 2002.
72
Environment Agency Agricultural Waste Survey, 2003.
Figure 2.4
Material composition by % of vehicle by weight (2002)
Fluids
2%
Batteries
1%
Glass
3%
Tyres
3%
Textiles
1%
Rubber Other
2%
2%
Plastics
10%
Non Ferrous Metal
8%
Source: Assurre, see Annex C, Table C.1
Ferrous Metal
68%
73
2.11.2 ELV plastics: Trends in future consumption
As vehicles have changed in shape and size and acquired more add-on features, their material composition has also
changed. While there are many reasons for this, the main ones are lightweighting for emission reduction, technological
developments in material performance and safety improvements.
Research by Camanoe Associates74 provides estimates for key materials used in the automotive sector and forecasts of
vehicle material composition. Estimates were based on literature, private communication and modelling/analytical work.
The most important assumed trends in material use for cars and light duty vehicles are summarised by material type
below.
Metals
It is assumed that higher specification performance materials such as aluminium (in castings and vehicle structure) and
high strength steel will gradually replace ferrous metals, mild steels and cast iron. It is estimated that the substitution of
high-strength steel for conventional steel accounts for about the same total amount of vehicle mass reduction as
aluminium for ferrous metals.
More electrical and electronic equipment in vehicles will increase use of copper, lead and nickel. Lead is classified as a
hazardous substance and its use in the manufacture of new vehicles and automotive components must be limited.
Plastics
Plastics use in cars is increasing in absolute terms. Changes in the amount of polymers in vehicles will increase the
amount of plastics available for recovery during the period 2008-2015.
The increase in use of thermoplastics is attributable to the increased number of electrical components that require
housings. One of the main trends in polymer consumption within the automotive industry is the growing use of PP. This
is expected to increase rapidly over the next 10 – 15 years. There are opportunities for some of this consumption to be
sourced from recycled PP compounds. The Plastics Reprocessing Validation Exercise (PRoVE) research carried out by the
BPF Automotive Recycling Task Force and Consortium for Automotive Recycling (CARE) demonstrates that PP from ELV
can be recycled back into automotive applications that meet high grade specifications.
73
http://www.assurre.org/downloads/archive/afeaf9c1-86cb-4232-a4cb-49fb477a05e5.xls
74
Camanoe Associates, 2003
Around 15% of the plastics used are thermosetting plastics. The Society of Motor Manufactures and Traders (SMMT) and
BPF are supporting a research project at Exeter University, funded by the Department of Trade and Industry (DTI) and
led by Sims Group UK Ltd, into the reusability of thermoset composites in the automotive industry. The primary aim of
the research project, Recycling Thermoset Composites (RECCOMP) is to determine how composites should be ground to
enable them to be recycled.
Overall, consumption of all materials for vehicles is projected to increase, and while the polymer use of different plastics
may vary, the overall percentage shows an increase. These findings are summarised in Table 2.16.
Table 2.16
Projected changes in vehicle material composition as a % of vehicle by weight – EU
1990 to 2020
Material
1990
2000
2010
2020
(%)
(%)
(%)
(%)
Ferrous
63.51
62.91
62.55
62.42
Non-ferrous
11.24
11.33
11.41
11.54
PE
0.46
0.52
0.50
0.50
PP
2.93
3.02
3.08
3.11
PVC
1.23
1.25
1.29
1.34
Other TP
3.23
3.38
3.44
3.47
Total
Thermoplastics
9.24
9.64
9.83
9.91
Thermosets
1.39
1.47
1.51
1.49
Rubber
4.77
4.86
4.88
4.81
Glass
3.39
3.31
3.30
3.26
Other
7.85
7.95
8.03
8.07
Source: Assurre75
2.11.3 ELV plastics: Regulatory drivers
Current Legislation
The End of Life Vehicles (ELV) Directive (2000/53/EC) that entered into EU law in October 2000 requires Member States:

to meet specific rising re-use and recycling targets
o
85% recovery 80% recycling for all ELVs by 1 January 2006,
o
95% recovery 85% recycling in 2015
o
There is an optional lower target of 75% recovery & 70% recycling for pre-1980 vehicles
to ensure that ELVs are treated and de-polluted prior to dismantling, recycling or disposal by authorised dismantlers
or shredders

to provide collection systems for last owners to have their complete ELVs accepted free of charge (even if they have
a negative or nil value) from January 2007
75
http://www.assurre.org/downloads/archive/afeaf9c1-86cb-4232-a4cb-49fb477a05e5.xls
Review of 2015 targets
The ELV targets are not material specific. Trials by the UK DTI have shown that a 75% metal recovery rate can be
assumed in the UK, and that to meet 2015 targets attention must be concentrated on recovery of non-metal fractions.
The DTI has proposed that the recovery/recycling rate for the metallic fraction can be assumed at an agreed level, and
that enforcement will concentrate on non-metal fractions of ELV such as plastics.
It appears that, aside from the bureaucracy of demonstrating compliance, the 2006 targets may not require plastics to
be recycled in particularly large quantities. Depollution activities and tyre recycling could add 4%-5% to the existing 75%
metals level, putting the recycling level at or close to 80% before any plastics are recycled. The European Automobile
Manufacturers Association is quoted as claiming that the industry has already exceeded the 80% recycling rate76,
although this is understood to include ‘feedstock recycling’ as a recycling process.
The
definition of recycling is inconsistently applied and will be a key area of debate. There is a strong lobby for post-shredder
blast furnace applications to be counted towards the recycling targets. There is a strong counter-argument that this is
not the case, and that there should be consistency and this is likely to be reinforced as a result of revision of the EU
Waste Framework Directive.
Discussion with a UK shredder suggests that some quantity of ELV plastics will be required to meet the current targets,
although this may be relatively limited and could potentially be achieved by export of a PO-rich stream of shredded
plastics that has been through a relatively basic mechanical separation process.
Consultations with recycling associations in Europe uncovered different views as to the potential increase in recycled
plastics from end of life vehicles. Most suggested that the amount of plastic generated from the collection and sorting of
ELVs would be very little compared to the amount of plastic from packaging waste. However other associations,
including the Netherlands’ trade association for packaging waste, suggested that these materials would be a new source
of recycled plastic and would encourage new recycling initiatives in Europe over the next ten years.
On the basis of the current targets, at European level this implies a requirement to find markets (recycling and recovery)
for a substantial proportion of the 600kt-800kt/annum of ASR plastics generated.
A further review of proposed 2015 targets is suggested to be scheduled for 2010. Review of the targets is expected
based on levels of recycling achieved in 2006. It is thought that producer obligation responsibilities for achieving the
recovery and recycling targets could be implemented. These would be based on total weight of ELV scrapped in 2006,
not weight of individual vehicles. In March 2007 (and each year after), producers or uncontracted material treatment
facilities would be required to provide evidence of achieving required tonnage for the previous year’s targets.
There appears to be extensive lobbying from some business representatives to simplify and/or reduce the 2015 targets.
For example, the European Shredder Group view on the best option for revision of targets77 suggests that targets should
be postponed or simplified to one target for both recovery and recycling, with each material to have specific targets.
If a 95% recovery targets is specified, this will not be a driver for increased plastics recycling from ELV. It will reduce the
likely investment in sorting technology advancements, as the specification of output plastics for recovery will not be as
demanding as the specification necessary for mechanical recycling.
Other options include banning materials with a high calorific value from landfill and that 2006 targets should be
maintained for the future, although this would perhaps fail to recognise and restrict the possibility of technology
improvements.
The current pressure to reduce targets may fail due to evidence of 80% recycling rates already being achieved by
several Member States. It is agreed that any amendments should be consistent with other EU directives, particularly the
WEEE and Packaging and Packaging Waste Directives, that have introduced specific targets for both recovery and
recycling.
76
Reinhart, A., 2005
77
http://www.assurre.org/downloads/archive/5d11a2fb-def8-4971-ae4f-1aa1384b820b.pdf
The material composition of vehicles available for recycling beyond 2015 will be different to those available at the
formulation of the Directive, with implications for 2015 target attainment.
2.11.4 ELV plastics: Current levels of recycling and recovery
Although vehicles are one of the most effectively recycled products in the UK only a small percentage of waste plastics is
recycled. In 2000 less than 1% of ELV plastics waste was recovered for reuse and recovery78. While some plastics can
be recovered at the dismantling stage (e.g. bumpers and battery casings), this process is labour-intensive and relatively
expensive.
When ELVs are recycled, they are first de-polluted to remove fluids, tyres and batteries, then the remaining hulk is
dismantled and shredded. As noted earlier the composition of a car means that currently between 74-80% of the weight
of a typical ELV is re-used or recycled simply by recovering the metal content. The ferrous metals can be passed to steel
works and the non-ferrous metals to metal reprocessors. The remaining fraction of non-metal fractions is classed as
automotive shredder residue (ASR).
Figures from Assurre79 estimate national arisings of 400kt of ASR from ELV in the UK and it is thought that ASR contains
from 5% to 20% recoverable polymer fraction80. This equates to 80kt per annum of available polymer.
ASR contains a mix of many composite materials, as well as plastics, and up until now separation and or reuse has
generally been uneconomic. Traditionally ASR has been landfilled, but it is now realised that the greatest potential for
increasing recycling and recovery rates lies in developing single polymer streams and recovery from shredder residue.
Sims UK81 have produced material specification sheets detailing content of approximately 26kt/a of available shredded
plastics concentrate from recycling of cars and white goods at UK locations. The plastic is predominantly PP (48%) ABS
(16%) HIPS (16%) and also some PE and PC blends, and a 9% ‘other’ category.
Markets for recovered plastics from ASR are currently limited and capacity to process shredder residue (where
technologies exist) is lower than national arisings. There is opportunity for pellets to be sold to the plastics moulding and
reprocessing industry as raw materials for new products in the automotive sector as well as many others.
2.11.5 ELV plastics: Techno-economic trends & future developments in recycling & recovery
technology
There are many different technologies for the treatment and recovery of non-metals fractions of shredder residues in
Europe that may be adopted by the UK in the future. Mechanical recycling of material based on both dismantling and
post shredder treatment is the most common way to recover polymer fractions, although methods to separate polymers
into single streams are varied.
Technology for separation and sorting of polymers from ASR
To facilitate the process of depollution and dismantling, car manufacturers have collaborated to develop an information
database called IDIS (International Dismantling Information System). IDIS contains data on the material composition of
vehicle components, on the draining of fluids and on the handling of components, etc., as well as information on any
special tools needed. IDIS information is available on CD-ROM and online via the IDIS website82. The database is
updated twice a year, ensuring that the information on end-of-life vehicle handling for the dismantlers and operators is
always current.
78
TRL Ltd, 2002
79
Assurre, 2005
80
http://www/plastics-technology.com/articles/200410cu3.html, Work by Galloo has identified content of plastics in ASR as 10% (APME
2003, Plastics in End of life vehicles; Galloo shredder residues treatment line) and work by Brighton University estimates 4% plastics in
ASR (Waste and energy research group, undated, Polymer processing; B Towards processing polymers from ASR)
81
http://www.sims-group.com/uk/solutions/content/plastics/Shredder%20Plastic%20UK.pdf
82
http://www.idis2.com
Recycling of ELVs is based on manual dismantling, and separation of ferrous and non-ferrous metals using eddy currents
and magnets. The most common way to recover polymer fractions is through further treatment of post shredder residue.
Once separated, polymers can be moved to compounding extruders, or bagged and sold to reprocessors. Methods to
further separate polymers into single streams vary and are discussed in Annex C. A review of the technology highlights
that there are a range of commercial/near commercial technologies that generate streams of plastics from ASR. There is
still some uncertainty regarding optimal technologies and economics. However it is believed reasonable to anticipate that
continuing improvements in these technologies, increases in alternative disposal costs and potential financing from
producers (subject to 2015 targets) will lead to viable economics for plastics separation at large scale shredder
operations during the period considered.
Figure C.2 in Annex C, produced by Assurre, shows both advanced mechanical sorting and thermal processing facilities,
some in operation, some planned and shows the ability of Member States to process shredder residue. The data also
show the estimated gate fees for Si-Con process at an estimated 80-100 Euros, or £52 - £66. Given the rising cost of
landfill disposal, it is clear that cost-competitive recovery of polymers from shredder residue in the longer term can be
achieved.
Future post shredder separation technology may include further development of laser and x-ray technologies. Although a
non-recoverable fraction will always remain, it can be assumed that as technology progresses this will be reduced. At
present there remains a non-homogenous legal framework across the EU, potentially creating different timings, and
favouring different technologies.
2.11.6 ELV plastics: Forecast of future rates of collection for recycling and/or recovery
A projection model has been built based on data provided by SMMT83 and industry sectors. The following assumptions
were made:

weight of the average car is 1000kg
plastics content of car is 8% in 1984, increasing by 1 – 2 % in subsequent years
low recovery rate of polymers required to hit 2006 target
plastics recycling from ASR contributes at least 4 percentage points to targets by 2015
The maximum available quantity of plastics, based on 10% plastics by weight in a vehicle, is assumed to increase to
c.250kt in 2015.
As it is assumed that 75% of a car by weight is potentially recoverable simply by extracting the metals, a minimum of 10
additional percentage points are required to meet the target levels of 85% recycling in 2015. Through depollution and
tyre recycling activities, approximately half of this requirements may be met. The remaining c. 5% could be acquired
through recovery of plastics for recycling.
On this basis the amounts of plastics that must be recycled to meet 2015 targets can be supposed to be between 4%
and 7% of the total vehicle weight, depending on the effectiveness of non-plastic recycling (e.g. tyres, fluid, glass, etc.).
The actual quantities recovered will be primarily dependent on the effectiveness of ASR separation technologies. The
initial estimated projections are shown below:
83
SMMT, 2002
Table 2.17
Forecast of plastics volumes from ELV
2005
ELVs (kt)
2008
2010
2015
2,173
2,272
2,341
2,522
Plastics available (kt)
196
204
234
252
ASR (kt)@21%
456
477
492
530
Est. plastics extractable (kt)@25% ASR
114
119
123
132
0%
1%
2%
4%
-
23
47
101
0%
3%
5%
7%
-
68
117
177
SCENARIO 1 - LOW
Percentage points required from plastics
Est. plastics required/extracted (kt)
SCENARIO 2 - HIGH
Percentage points required from plastics
Est. plastics required/extracted (kt)
Source : Recoup based on various industry sources
Consideration of technology available to recover plastics content from shredder residue suggests that it is possible to
meet the levels of plastics separation for recycling in 2008 shown in Table 2.17. However, current technology does not
appear able to achieve the ‘high’ scenario requirement shown for 2010 and 2015, for example, VW Si-Con indicate that
the capture rate from their process is 27%. Additional separation technology development may be necessary to achieve
the high separation rates projected for 2010-2015.
The plastics extracted will be a polyolefin (PO) rich stream – mainly PP. There is a high variability on these projections.
The determining factor will be investments by major shredder operators (primarily Sims, EMR, Jordans) in additional
separation technology. A combination of improved process technology efficiency, increased landfill charges and some
financial incentives resulting from producer responsibility will trigger investment from such businesses in separation of a
plastics-rich stream, particularly in the period 2010-2015.
Recovery of larger quantities will be strongly dependent on the outcome of ongoing review of targets and of
measurement protocols. There are major problems of statistical certainty; a Lower Saxony commission in Germany has
suggested that due to the cumulative sources of data errors in measuring and reporting, a spread of 77-94% recovery
could be statistically compliant with a 5%+/- precision on the 85% target.
2.12
Plastics from waste electrical and electronic equipment (WEEE)
2.12.1 WEEE: Current plastics consumption and arisings in UK
Waste electrical and electronic equipment (WEEE) is growing three times faster than any other municipal waste category
element in the waste stream,84 increasing at a rate of 3-5% per annum85. It is thought that between 12 and 20 kilograms
of WEEE are generated per person per annum across Europe86. It has been suggested that an average of c.7kg/person
of WEEE is already separately collected, although this is not all currently treated to the standards required in the
Directive.
Electrical items contain materials chosen for their functional performance. Innovation and product design have increased
the use of plastics in this sector to 20% of all electrical and electronic equipment (EEE) by weight87.
84
Realise Network, 2003
85
European Commission, 2005b
86
European Recycling Platform
87
APME, 2001
http://www.erp-recycling.org
By weight different styrenics and polypropylene together account for over 70% of all plastics used in EEE. The most
commonly used polymer types are polypropylene and polyurethane (large household appliances) and styrenics (HIPS,
ABS,ASA-SAN) (computer housings, IT and telecommunications equipment). The use of many other small parts in these
items produces a complex waste stream that has many implications for separation of parts for recovery and recycling.
Figures 2.5 and 2.6 show plastics consumption in EEE by sector and polymer type. Household appliances, brown goods
and IT equipment make up over 90% of WEEE.
Figure 2.5
Plastics consumption in EEE by sector
Small household
appliances
10%
Automatic dispensers
1%
Medical equipment
1%
Toys
1%
E&E tools
1%
IT and
telecommunications
39%
Consumer equipment
15%
Large household
appliances
32%
Source: PlasticsEurope (www.plasticseurope.com)
Additional projects reviewing contents of samples of WEEE have provided some more specific assessments of
compositional data for plastics in particular applications (e.g. refrigeration, CRT products, etc).
2.12.2 WEEE: Trends in future consumption
It can be assumed, given the life span of products and trends in sector growth, that the largest area of plastics
consumption (household appliances and IT telecommunications) will produce the most waste by number of items.
Growth assumptions are in the range of 3-5% per annum of waste. Some changes in polymers in WEEE are likely to
occur – e.g. increased proportion of ABS in WEEE refrigeration arisings88. There are also ongoing changes in the type of
WEEE collected – for example the shift from CRT TVs and monitors to flat screens89.
88
Zolotor, A ‘Composition, Properties & Economic Study of Recycled Refrigerators’ (APC)
89
It has been suggested by some commentators that this trend will result in slower growth rates in WEEE arisings than those used here.
Figure 2.6
Plastics consumption in EEE by polymer type
PE
PBT
PET
POM
PA
UP
PC
PVC
EP
PU
PP
PS
ABS-ASA-SAN
0
5
10
15
20
25
30
35
Source: PlasticsEurope (www.plasticseurope.com)
2.12.3 WEEE: Regulatory drivers
The Waste Electrical and Electronic Equipment Regulations (‘the WEEE Regulations’) implement provisions of the
European Parliament and Council Directive on Waste Electrical and Electronic Equipment (2002/96/EC) (‘the WEEE
Directive’) and address waste that is currently untreated and sent to landfill or incineration.
The Directive aims to reduce the quantity of waste from the electrical and electronic sector and increase its reuse,
recovery and recycling. The main requirements of the WEEE Regulations90 are:

Systems are set up to encourage separate collection of WEEE and which will allow the return of WEEE free of charge
to the final holder.

It is requested that co-disposal of WEEE and other waste is minimised and appropriate behaviour encouraged that
facilitates WEEE treatment and recovery processes. There is no requirement for householders to separate all WEEE.

Retailers are to ensure that WEEE is taken back when a new, equivalent type, product is supplied; alternative
arrangements made by retailers91 with business users are acceptable e.g. compliance schemes. When there is no
purchase made the business user is responsible for financing correct treatment and recovery of equipment purchased
prior to summer 2005.

To achieve, by 31 December 2006, a collection rate of at least 4 kilograms on average per head per year of waste
electrical and electronic equipment from private households.

90
Ensure that all WEEE collected from private households is transported to authorised treatment facilities.
http://www.defra.gov.uk/environment/waste/topics/electrical/index.htm
91
Retailers and producers providing take back must ensure that the WEEE they collect is delivered to a designated collection facility and
sent for further treatment and recovery.

Systems are set up by producers to provide for recovery and re-use of separately collected WEEE according to set
recovery, re-use and recycling targets based on their market share. Targets are set as a proportion of collected WEEE
from private households and producers are to provide guarantees for the financing of future waste.

There are significant data reporting obligations for producers who must be registered.
Draft targets for recovery and recycling will require 70-80% recovery and 50-75% recycling for all collected WEEE.
Effective management of end–of-life electrical and electronic waste will be necessary to achieve these targets.
The Directive was adopted by the EU in February 2003. It covers a broad range of electrical and electronic equipment.
The full list of categories covered and targets for each sector are set out in Table 2.18.
Table 2.18
WEEE Directive recovery targets by category
Category
Recovery %
Recycling %
Large household appliances
80
75
Small household appliances
70
50
IT & telecommunications equipment
75
65
Consumer equipment
75
65
Lighting equipment
70
50
Electrical and electronic tools
70
50
Toys, leisure and sports equipment
70
50
Medical devices
TBC
TBC
Monitoring and control instruments
70
50
Automatic dispensers
80
75
Source: www.weeedirective.co.uk
There is uncertainty as to when main provision of the regulations will come into force in the UK. The producer
responsibility and retailer take-back obligations are currently under review. Commentators are now expecting the
regulations to be implemented by spring 2007. The Directive’s recovery and recycling targets are based on amounts of
WEEE material collected and are expected to be reviewed in 2008. A report by the Industry Council for Electronic
Equipment Recycling (ICER) is due to be released to coincide with the implementation of the WEEE Directive and will
provide greater clarity of total WEEE arisings and amounts of WEEE recycled in 2004/5.
Consultations with exporters suggest that there is currently demand for the ABS plastic found in computer frames, but
these are difficult to reprocess due to the presence of fire retardants and lack of labelling of the variety of polymers
making up the frames. This may change in the future due to the requirements not to use hazardous substances in the
manufacture of electrical and electronic equipment.
2.12.4 WEEE plastics: Current & forecast levels of recycling and recovery
The uncertainties of the WEEE legislation implementation, of measurement of current flows and of future logisitics for
recycling, mean that the position of development for recycling and recovery for WEEE in general, and for the plastics
components in WEEE in particular, is complex and unclear.
Plastics recycling schemes, such as those set up for mobile phones, are largely results of initiatives for WEEE metal
recovery and while there is an increasing number of charities (Computers for schools, RENEW, Computer Aid, Remploy,
etc.) collecting material for reuse, there is much evidence that large quantities (up to 50% of equipment) is exported for
re-use or recycling instead of being recycled in the UK (ICER 2004).
To achieve the requirements set by WEEE Directive there will be an increase in facilities for consumer collections of all
WEEE materials including plastics. Of this, it has been suggested that more than 50% of plastics waste will need to be
recycled mechanically.92
In Switzerland, 11kgs of material per head have been collected, suggesting that successful collection of WEEE is possible.
The Restriction of Hazardous Substances Directive, (2002/95/EC) will ban excess use of hazardous substances in new
EEE (cadmium, mercury, hexavalent chromium, polybrominated biphenyl (PBB) and polybrominated diphenyl ether
(PBDE) flame retardants) from 1 July 2006, making options for recycling less hazardous. Manufacturers will need to
ensure that products and components comply with these restrictions.
At the time of writing, the quantification of the current levels of WEEE recycling remains problematic due to many
uncertainties; access to data has proved difficult. A model for future arisings has been pieced together using several
different available information sources.
Some of the collected WEEE is reused and effectively ceases to be WEEE. Information on export of WEEE for reuse and
recycling is currently limited, affecting certainty of projections. Where reuse is occurring outside the UK then it is
assumed that this is discounted from UK WEEE arisings.
At the present time these projections are extremely uncertain, especially for items falling outside the ‘large household
appliance category’. The framework presented is helpful and informative and allows for development. The outcomes are
illustrative of the approach, rather than final estimates of projections.
Tables D.1 – D.4 in Annex D show in detail the projections made on arisings. The projection model is based on the
following assumptions:

Plastics content of WEEE remains broadly around 20%
Growth in arisings per year is 3-4%
Improvements in availability of collection infrastructure will result in growth in collections during the period
Efficiency of plastics extraction from shredder residue will improve to 60-75% of input plastics
The focus of small appliance plastics recycling will be around styrenic polymers
Growth in collections of smaller household appliances will be most evident in the period 2010-2015
Note there will be other commercial and industrial WEEE that may not be currently accounted for in these data.
The broad ‘headline’ of the projections summarised in Table 2.19 is that it is likely that the available plastics component
of the dismantled smaller household WEEE and CRT applications from households is likely to remain relatively small,
even in the long term forecasts. The main bulk of available plastics will come from shredder residue. Effective postshredder separation of plastics would almost certainly ensure compliance with the recovery/recycling targets of the
Directive for large household items. At this point it is unclear what quantities of plastics might need to be recycled to
achieve the minimum 50% recycling target for the smaller household items, toys, etc.
92
ICER, personal communication
Table 2.19
Summary of estimated and projected supplies of plastics from WEEE recycling
2003
2008
2010
2015
Total WEEE arisings (kt)
937
1100
1174
1275
Large household appliances (kt)
445
545
653
783
Small household appliances/other WEEE (kt)
25
60
121
228
Total collected WEEE (kt)
480
605
774
1,011
Equivalent kg/person
8
10.08
12.9
16.9
Total exports for reuse (kt)
37
50
72
209
Plastics available for recycling (kt)
72
68
89
104
Source: Recoup projections, Annex D
2.12.5 WEEE: Assessment of current practices of a sample of WEEE recyclers
A selection of WEEE recyclers listed on the ICER website were contacted and questioned regarding plastics recovery from
WEEE. Generally both organisations processing fridges and those dismantling IT equipment, CRT equipment, etc. were
positive about their ability to extract and sell plastics from WEEE sources. Most outlets appear to be outside the UK.
Examples of comments from different WEEE ‘recyclers’ are given below (each quote is a different company):

“We manually sort and granulate plastics. We send separate polymer types to different reprocessors.”
“Plastics from WEEE are identified and separated at dismantling stage. Plastic is baled and sent to Integrated
Polymers. Plastics are not difficult to separate from WEEE, but the process is time consuming.”

“After mechanical disassembly, material is classified and cleaned before shredding. Plastics are segregated from
metals and glass, etc. Typically 24% by weight of input fridges is plastic - PU foams and rigids – that can be
recycled.”

“We dismantle and send our plastics to a local recycler. Some of the material is used in extruded profiles; some is
granulated and sold on. We recycle over half the plastics.”

“Manual dismantling of polymers that are baled and exported via an agent. 15t/week of mixed plastics are sold, and
currently £220/tonne is paid for the material.”

“More export is occurring to China and India due to the manufacture base also being in these areas.”
“Our fridge reprocessing operation is based on dismantling and shredding. Plastics are then granulated to 8-10 cm
size. This material is sold to a UK company who export it. We have the ability to recover 99% of plastics from WEEE,
of which 90% is sourced from domestic arisings.”

“Plastics from fridges are sold to Holland as granulated mixed polymer jazz. TV and IT monitor plastic is separate at
dismantling stage and sold to UK brokers, who likely export for reprocessing. We are currently building a 10t/hour
plant for WEEE. WEEE will be fragmented by machine and sent through a picking line where material can be
separated. No specific markets for this material have been identified at present, but it can be assumed that same
brokers will be used and material exported.”

“Fridge PU and PS fractions are separated for sale, recovery rates are 75%.”
2.12.6 WEEE: Techno-economic trends and future developments in recycling and recovery
technology
There are several challenges in the recovery of different polymers from WEEE. It could be assumed that developments to
sort plastic fractions from WEEE would be similar to those used to recover polymer from ASR. Modification would have to
be made to account for differences in shredder composition.
Magnetic, eddy current and air separation systems are the most common methods used to separate material obtained
from large, household WEEE items; such as fridges and televisions, that have been dismantled, degassed and shredded
into metal and non-metal fractions. In addition to these methods PU and PS foam can be separated after WEEE is
shredded using powerful air jets.
Plastics from WEEE shredder may potentially be sorted through a process of ‘electro-static separation.’ Different plastics
are known to have different electrostatic charges, and assume either a positive or negative charge. Hamos technology
reportedly achieves single plastic streams from two component mixtures that are fed into high voltage separation units
and passed through electrodes that will determine the charge and separate material according to polarity into single
fractions. This approach is currently unproven.
2.12.7 WEEE: Technology for separation of BFR from WEEE
Techniques for detection of BFRs
Brominated flame retardants (BFR) allow plastics to be used safely in electrical and electronic equipment but when
heated during the recycling process they can emit dioxins and furans. If non-permitted BFRs from WEEE are removed to
comply with the WEEE Directive, plastics can be recycled into new products safely.
Using the same process as ASR sorting, granulated WEEE plastics can be separated by polymer. Airstreams can separate
foam and hydrocyclones/centrifugues can separate PP and PE fractions. Density separation can be used to separate
denser flame retardant plastics.
A recent major European research study has shown that it should be technically, economically and environmentally
feasible to recycle plastics containing BFR in the UK at a process capacity of 10kt/a. It has also shown that it is possible
to manually separate BFR containing plastic components from other plastic components using relatively low-cost
detectors. 93
Examples of commercially available systems suitable for use on WEEE dismantling lines are:

PolyAna Avatar using Fourier Transform Mid Infrared Spectroscopy (FT-IR)
Sony Plastics ID system using MIR Spectroscopy 99% accuracy rate, 35 seconds sampling time
SlideSpec-52 sliding spark spectrometer – samples emissions from polymer surface vapour
Iosys SSS3 Sliding spark detector
Niton XRF – portable X-ray fluorescence instrument
Spectracode RP-1 – laser lights produce a molecular barcode on contact with polymer molecules, 1 second analysis
time, 100% accuracy

Mid infra-red acousto-optic tunable filter (MIR AOTF)
Laser induced plasma spectroscopy (LIPS)
Technologies are similar in price (£25,000) and able to be transferred into purpose-built commercial instruments that can
operate as part of integrated sorting lines. LIPS equipment is generally not free standing, and for the purpose of BFR
detection on a WEEE recycling line, application is perhaps more limited.
In independent trials conducted for WRAP the Niton and Iosys units have both been shown to be capable of BFR
detection.
BFR treatment process options
Following identification of BFR in WEEE polymers these processes aim to obtain a high value, clean polymer, for direct
recycling and also extract bromine compounds in concentrated form for recovery or disposal.
93
WRAP 2005,6L
The Creasolv® process is one method of extracting bromine compounds. This process dissolves granulated feed plastic
using a high boiling point solvent. A series of filtration, precipitation and particle formation extracts BFR from the
polymers into the solvents which are recovered by crystallisation. The polymer is extruded to form a product with a
bromine content of less than 0.1%.
The WRAP project on BFR separation from polymers concludes that the Creasolv® process should be able to compete
with landfill disposal or incineration (£35/te gate fee) as a treatment method for segregated polymer streams for BFR
removal. The process will compete with export of the BFR-containing polymer outside the EU (current sales value of
around £100/te) if the finished high grade compounded recyclate can be sold at about 80% of virgin compound price94.
Other potential process methods of BFR extraction include:

Matsushita kneader-based BFR debromination process
Development of ionic liquids for a selective dissolution of BFR’s or polymers
Use of supercritical CO2 to aid extraction
Use of high pressure sub or supercritical water for BFR extraction and debromination
The research by WRAP has concluded that these are less suitable for commercialisation than the Creasolv process.
As a comparison, alternative solutions exist which divert bromine-containing material from landfill, but which destroy
polymers include:

Haloclean feedstock recycling process
Incineration
The commercialisation of techniques to deal with BFRs in plastics is likely to be important in determining which WEEE
plastics are recycled and can be use in remanufacture activities in Europe. WRAP’s project to develop a process to
separate brominated flame retardants from WEEE polymers exemplifies work in this area.
2.13
Summary
Packaging arisings

Packaging is the main application for plastics and the largest waste stream arising in the UK. In 2005 UK consumption
of polymer for manufacture and supply of packaging related applications was 2,474kt. Of this most was used in the
production of films and bottles.

It is likely that some 2,200kt/a of packaging plastics arise as post-use waste in the UK. The waste figure is lower than
the consumption figure due to pre-consumer process losses and the growth in the returnable packaging pool.

The UK is a net importer of plastic packaging both for domestic pack filling and in the form of packaging around
imported goods. Based on reported packaging obligations the historic annual rate of growth of imported packaging
and packaged goods (>15%) is significantly higher than the growth in domestic production (1.8%). It is important to
consider this issue when projecting future trends. Planning assuming an overall growth rate of packaging ranging
from 2%-5% per year appears prudent.

The total quantity of plastic packaging in the UK market is expected to increase to at least 2,490kt in 2008, 2,586kt in
2010 and 2,853kt in 2015 (based on 2% growth pa). These figures could rise to 2,675kt (2008), 2,934kt (2010) and
3,814kt (2015) if 5% growth pa is sustained.

The Directive on Packaging and Packaging Waste requires 22.5% of UK plastic packaging placed on the market to be
recycled in 2008. There appears to be no significant pressure to notably increase targets beyond 2008 when the
second 5-year phase of EC Packaging and Packaging Waste Directive targets ends.
94
WRAP 2005,6L
Packaging recycling

It is estimated that 165kt/a of waste plastics packaging is likely to be generated in the packaging supply chain as
waste, of which 40% may be eligible for PRNs/PERNs and the remainder classed as production scrap.

In 2005, based on the relatively balanced market for PRNs/PERNs, it is estimated that 409kt of plastic packaging
were reported to be recycled. Based on PRNs/PERNs issued, post-use plastic films (165kt) and bottles & other
household plastic packaging (67kt) make up at least 57% of plastic packaging recycled.

The study was able to reconcile sources of approximately 75% of the currently reported packaging recycling activity
based on other evidence from recyclers and waste generators. Approximately 100kt of the recycling reported was not
able to be reconciled within the scope of this study. This issue warrants further consideration. Additional reporting on
the PRN/PERN about the nature of the plastics recycled could aid future reconciliation. This is discussed in the
recommendations section.
An analysis of UK local authorities has shown a large increase in collection levels of both bottles and ‘mixed plastics’ from
households by local authorities. Strong growth in these supplies is probable in the next ten years. A new recovery
infrastructure is likely to be created, with an increase in availability of new technologies for sorting both recyclables and
mixed household waste, leading to better separation of all mixed domestic plastic streams for recycling.

It is estimated that between 180kt/a and 522kt/a of post-domestic plastics will be recovered for recycling by 2015, of
which probably between 36kt and 164kt will be ‘mixed plastics’. The range is determined by stated assumptions on
future performance improvements in capture rates (i.e. householder “recycling behaviour”) and infrastructure growth,
particularly in mixed waste separation technology. A market for at least 165kt for plastic bottles, including 80kt for
mixed baled polymer bottles, will be required by 2015.

The analysis shows that the development of extraction of plastics for recycling from mixed waste processes will be
essential if growth rates of packaging tend towards the higher end of the projections. The extraction technology will
also be important if the targets ultimately set for packaging recycling post 2008 are higher than those assumed in
this study.

Potential future variable charging systems for household waste will have a significant impact in increasing the
quantities of material captured for recycling towards the high end of this range.

‘Away from home’ initiatives to recycle more waste from offices, schools, cafes, leisure facilities and public buildings
are growing. A 30kt growth in collections for recycling is assumed by 2015.

Data on commercial and industrial arisings and recycling rates are less robust than domestic waste and predictions
about future collections from these sources may therefore be less reliable. Increased segregation of wastes by
businesses and waste management contractors will lead to increases in both rigid, foam and film packaging extracted
for recycling. An increase in supply of post-use C&I packaging for recycling of c.140kt is estimated by 2015. This
growth is predicted to come primarily from increased films recycling, and development of additional recycling of
industrial drums, shelf-ready trays, crates and agricultural packaging plastics.

Landfill tax escalation to at least £35/tonne will act as an important driver to divert waste to recovery technologies
and will increase collections for recycling from all sources.
Packaging recycling targets

It is estimated that between 550kt and 620kt of plastics packaging material will need to be collected in 2010.
However, amounts required beyond this to provide continued underpinning are less certain. Based on current levels
of reported obligation, the UK is likely to exceed statutory targets in 2008, 2010 and the anticipated 2015 targets. In
relation to the above comments and the Directive targets, although providing an underpinning mechanism,
PRN/PERN revenues look unlikely to be the major driver for increasing the supply of plastic packaging to the recycling
industry. Improved recyclables-handling infrastructure, development of a ‘recycling culture’ and the impact of other
economic factors, such as landfill tax, are likely to be more influential on recycling levels achieved.

Agricultural plastic waste arisings are approximately 93kt/a and represent c.12% of all agricultural waste. This is
comprised primarily of plastic sheet, wraps, bags and drums. The quantity of plastic materials on farms and
agricultural holdings is unlikely to rise significantly over the next 10 years.

The implementation of The Waste Management (England and Wales) Regulations 2005 changes the classification of
agricultural waste and it is no longer possible for farmers to bury of burn waste plastics on site, without a licence
exemption. Statutory producer responsibility for non-packaging agricultural plastics is also being introduced. Both
these changes will drive up separate collections of agricultural plastics for recycling.

It is projected that 17kt of waste plastic will be available for recycling in 2008, 26kt in 2010, and 49kt 2015. Of this
quantity just over 40% is packaging plastics, the remainder is non-packaging including silage wraps and crop covers.

Current expansions in recycling capacity for agricultural plastics suggest there will be sufficient capacity in the UK for
all non-hazardous materials collected.
End of life vehicles

End of life vehicles contain c.10% plastic by weight. Based on current arisings of ELVs this amounts to potentially
c.200kt of plastics per annum in ELV waste, rising to an expected c.250kt per annum by 2015.

The ELV Directive (200/53/EC) currently requires a 95% recovery 85% recycling rate of total ELV weight by 2015.
These targets are not material specific, but will require increasing efforts to be concentrated on non-metal fraction
recovery. Technologies for recovery of single stream polymer fractions from automotive shredder residue that may be
adopted by the UK are key to increasing recycling rates in this sector.

It appears that the economic conditions are not yet sufficiently attractive for shredder operators to take investment
risks by major investment in new separation technologies. The current debate about recovery targets for 2015 is not
likely to give confidence to those considering investments in ELV plastics recycling based on fulfilling a producer
responsibility “need”.

The amounts of plastics that must be recycled to meet 2015 targets can be supposed to be between 4% and 7% of
the total vehicle weight, or c.100-175kt. It is likely that almost all this material will be generated by post shredder
extraction of plastics, in particular through separation of the polyolefin rich stream.
Waste electrical and electronic equipment

It is estimated that plastics account for 20% of all WEEE waste. Styrenics and polypropylene account for over 70% of
plastics used in the manufacture of electrical and electronic equipment.

Growth of WEEE arisings is predicted at the rate of 3-5% per annum.
Targets for recovery and recycling will require 70-80% and 50-75% recycling for all collected WEEE.
Quantification of current levels of WEEE recycling remains problematic. Projections suggest that the main bulk of
plastics arising will remain in shredder residue from recycling of large appliances. Small amounts of plastics will be
generated from the recycling/dismantling of small household appliances and CRT applications.

Effective BFR removal and post shredder separation of plastics are important factors in maximising plastics recycling
from these sources. Investment in sorting technologies will increase volumes of source separated materials.

It is estimated that over 100kt of WEEE plastics will be available for recycling by 2015, although it is acknowledged
that the figure could be significantly higher than this depending on how the WEEE Directive is implemented and on
the separation technologies developed and implemented for plastics.

The report sets out a framework that could be used to more accurately assess flows of plastics, as more robust data
becomes available. A number of new WEEE processing plants are being established both in the UK and internationally
integrating various separation technologies. The success of these in capturing plastic streams should be monitored. It
would be worthwhile to revisit the supply assessments made here as such information become available.
Consolidated supply projection

On the basis of the supply projections, taking into consideration changing legislation and techno-economic factors,
material volumes recovered for recycling will increase in all industry sectors. A summary of this is presented in table
2.20.
Table 2.20
UK supplies of plastics for recycling (ktonnes)
Sector
Packaging95
ELV97
WEEE available for
recycling98
Total
Projections
2005
2008
2010
2015
Plastics waste
arisings (kt/a)
2,0402,200
2,2022,675
2,323 2,934
2,565 3,814
Collected for
recycling (kt/a)
414
503-548
580-692
686-1,028
% recycled (minmax)
19-20%
19-25%
20-30%
19-40%
Plastics waste
arisings (kt/a)
60
60
60
60
Collected for
recycling (kt/a)
<3
10
15
29
% recycled
<5%
17%
25%
48%
Plastics waste
arisings (kt/a)
196
204
234
252
Collected for
recycling (kt/a)
Low
23-68
47-117
101-177
% recycled
Low
11-33%
20-50%
40-70%
Plastics waste
arisings99 (kt/a)
219
242
258
281
Collected for
recycling (kt/a)
Low
68
89
104
% recycled
Low
28%
34%
37%
Plastics waste
arisings (kt/a)
2,5152,675
2,7083,110
2,8753,405
3,1584,300
Collected for
recycling (kt/a)
c.425
604-695
731-913
920-1338
% recycled
16-17%
19-27%
21-32%
21-42%
Source: Various published data and Recoup analysis, as detailed in this section
95
96
Agricultural packaging arisings and recycling rates are included in packaging data in this table, but are identified separately on page
54, Table 2.15
97
98
99
Asumes 22% of WEEE is plastics (ICER 2000)

All the above plastics waste streams will be covered by producer responsibility obligations. This will necessitate
certification mechanisms to prove plastics have been recycled/recovered. Such mechanisms already exist for
packaging in the form of PRNs and PERNs. One of the current considerations at an EU level is whether ultimately to
move to material recycling targets (i.e. for ‘plastics’). It appears highly desirable that the process of certification of
recycling for these different waste streams is as consistent as possible – particularly if at a later point there is the
possibility that they will be of equivalent value in achieving future targets. A common approach would also simplify
regulation and inspection/audit controls.
3.0
UK demand for recovered plastics
3.1
Characterisation of UK plastics recycling industry
Detailed information provided for Recoup in 2005 by 65 UK recyclers and traders was analysed in the construction of a
profile of the industry. Of these, 55 (c. 85%) had a reprocessing operation based in the UK. 48 (c.75%) of the
businesses were traders in recyclable plastics, either entirely (n=10) or as part of a wider business activity including
reprocessing (n=38).
Responses from recyclers and traders were reviewed and, where appropriate, further information to clarify data was
sought. However, it is not possible to independently verify information provided about quantities handled or reprocessing
capacities. The information is analysed in good faith and should be taken as a guide to likely market sizes,
rather than a full and definitive assessment.
The analysis below includes, unless otherwise identified, only those companies that have provided a positive response to
the survey. The sample incorporates probably 50% by number of the regular UK-based buyers of recyclable plastics and
may account broadly for 70% by tonnage handled.
Table 3.1
Reprocessing capabilities of UK reprocessors
What quantity of plastics does your site typically reprocess in a year?
(tonnes per annum)
Do you reprocess
plastics on-site, or are
you a trader?
(a)
< 400
(b)
4012,500
(c)
25015000
(d)
5001-10,000
(e)
10,00115,000
(f)
>15,000
(g)
not
supplied
Grand
Total
5
8
2
38
Reprocessor and
trader
1
9
4
9
Reprocessor only
1
6
1
5
3
1
18
6
Trader only
Grand Total
2
14
1
1
2
17
1
1
4
10
7
10
8
65
The above information was extrapolated to generate the following profile of demand by the UK recyclers and traders
participating in the survey.
Table 3.2
Profile of estimated handling rates of UK recyclers and traders in 2005
Quantity of plastics typically (a) <400 (b) 401handled per annum
2,500
Estimated average quantity
handled per site (tpa)
(c)
25015000
(d)
500110,000
(e)
(f)
10,001- >15,000
15,000
200
1500
3750
7500
12500
17500
Total
2
18
6
14
7
10
57
Reprocessor and trader (est.
tpa)
200
13500
15000
67500
62500
140000
298700
Reprocessor only (est. tpa)
200
9000
3750
37500
12500
17500
80450
0
4500
3750
0
12500
17500
38250
400
27000
22500
105000
87500
175000
417400
Number of companies in
category
Trader only (est. tpa)
Total plastics handled (est tpa)
This suggests that the 57 companies which provided data on quantities handled account for some 420kt of plastic
recycling activities. Of these approximately 380kt (90%) is represented by businesses who operate reprocessing activities
in the UK.
3.1.1 Available capacity
Responses provided by companies about their current maximum capacity to handle recyclable plastics were reviewed. 53
companies identified their capacity within the given parameters, offering at least 640kt of available capacity (both UK
and export) for collected recyclable plastics – mainly from packaging sources. Even a pessimistic assessment, based on
the minimum capacity in each of the capacity bands, implies almost 500kt of capacity. The results are shown below.
It is worth highlighting that 90% of this declared capacity was by UK based reprocessors (including those with trading
activities), rather than by those with only a trading activity.
Table 3.3
Capacity by type & numbers of businesses
Maximum capacity (tpa)
4012,500
2,5015,000
5,00110,000
10,001- 15,001- >20,000
UnGrand
15,000 20,000
specified Total
Reprocessor and traders
7
1
7
5
4
10
4
38
Reprocessor only
1
4
5
0
4
0
3
17
Trader only
1
0
2
0
0
2
5
10
Grand Total
9
5
14
5
8
12
12
65
Table 3.4
Estimated total recycling capacity (tpa) by type of businesses
Maximum capacity (tpa)
4012,500
2,5015,000
5,00110,000
10,001- 15,001- >20,000
15,000 20,000
Grand
Total
Reprocessor and trader
(tpa)
10500
3750
52500
62500
70000
250000
449250
Reprocessor only (tpa)
1500
15000
37500
0
70000
0
124000
Trader only (tpa)
1500
0
15000
0
0
50000
66500
Total estimated capacity
(tpa)
13500
18750
105000
62500
140000
300000
639750
N=53
Most of the available capacity is for material with little or no contamination. Processing of post-user bottles, film and
other materials will typically require washing plant. Ten companies said that they operated washing plants. Collectively
these have a capacity of more than 120kt/a.
Table 3.5
Maximum
capacity range
(tpa)
Companies
identifying
washplant
availability
Number of washplants for plastics
4012,500
2,5015,000
5,00110,000
1
1
2
10,00115,000
1
15,00120,000
1
>20,000
4
N=10
3.1.2 Product integration
The research showed that 19 of the 65 recycling businesses responding had some degree of integration into a product
manufacturing process. For these businesses the recycling activity was primarily a source of raw material for their
products. Examples of ‘product led’ businesses include those manufacturing injection moulded pots and tubs, drainage
pipe, packaging bags and films, damp proof membranes, decking, signage, pallets and street furniture. Responses from
these businesses suggest that at least 120kt per annum of plastics are used in integrated manufacturing processes.
Table 3.6
Number of business with integrated ‘end product’ manufacturing by tonnes
handled/year
(a) <400 (b) 401- (c) 2501- (d) 5001(e)
2,500
5000
10,000
10,00115,000
(f)
>15,000
(g) not
supplied
Grand
Total
Sell intermediate
raw materials
1
11
5
9
4
8
8
46
Sales include ‘end
products’
1
7
1
5
3
2
0
19
Grand Total
2
18
6
14
7
10
8
65
3.1.3 Reported plans for 2006-7
A number of respondents made comments about their plans for development in 2006-7. Thirteen of the 65 companies
responding made specific statements about planned expansions. Mainly these involved reprocessing capacity expansion,
but also included plans for investment in sorting and baling equipment. A selection of comments is provided below:

“Major expansion of capacity in 2006 planned”
“Installing sorting plant”
“Installing materials reclamation facility”
“£0.5m investment programme underway”
“New washplant and increased compounding capacity”
“Hoping to add 5-10kt of capacity in next 12-18 months”
“New 1 tonne/hour extruder planned”
“Increasing capacity for bumper recycling”
“Additional extruder planned”
“From January 06 capacity will increase by over 5,000 tonnes” (this has now occurred)
“New washplant and move to a larger site”
“Relocating site to increase capacity”
In addition to these responses are at least two additional significant plans for investment in new PET bottle recycling
capacity in London and the North West. Two other developments for films recycling, not captured in the above survey
will add at least 25kt of film washing capacity. Arguably the current developments are in response to new regulatory
requirements for several waste streams containing plastics (e.g. WEEE, agriculture, packaging, etc). It should be noted
that there is currently a particularly high level of regulatory activity driving these changes.
As well as expansions in capacity there may be businesses leaving the sector or scrapping existing equipment which have
not been picked up by this survey. The net increases in UK capacity may therefore not be as high as the above
assessment.
3.2

Summary
Despite the challenging trading conditions reported by UK recyclers, a number of businesses are planning
investments that will collectively add well in excess of 100kt of new reprocessing capacity during 2006-7. On this
basis, the recycling businesses responding to the survey should offer well over 700kt/a of capacity (domestic and
export) before 2008.

There are other UK recyclers that did not respond to the survey which should add well over 75kt/a of capacity. Even
recognising that this capacity covers recycling of not only packaging but other applications, the bulk of the capacity is
capable of handling packaging. On this basis it can be concluded that there is unlikely to be a reprocessing capacity
barrier to achieving 2008 packaging targets, or indeed 2010 targets.

If anything the UK, like Europe as a whole, suffers from overcapacity in some sectors of plastics recycling.
4.0
UK market outlets for recovered plastics
4.1
Characterisation by sector
This section considers the potential ability of UK markets to make use of the quantities of recovered plastics generated
by the various sectors at the previously identified collection levels.
An assessment of future UK market opportunities has been made based on current/forecast plastics consumption
information and potential market applications in key areas from plastics sources such as rigid packaging applications,
food and non-food, mixed plastic processes, pipes, profiles, WEEE and post shredder residue plastics.
Recyclate is used as a substitution for virgin plastics, concrete, wood or natural fibres in a wide range of products. Use of
recyclate in manufacturing, and its introduction into the market place, is driven primarily by economic considerations. In
some cases the performance or features of the finished product can be enhanced by replacement with recycled plastics
(e.g. light-weight construction products). Post-use plastics generally are lower priced than virgin polymers and the end
product can sometimes be marketed against competitors to those buyers that recognise environmental considerations in
procurement. Pressure from the government for public sector departments, local authorities and industry to buy
products with a recycled content is expected to increase.
Previous studies100 have consistently reported potential growth in a number of UK industry sectors using post-use
recycled plastics. Annex E.1101 gives an indication of existing market sizes by application, an estimate of the potential for
market growth and the extent to which that growth that could occur.
Improvements in process technologies for recycled materials are expected to continue for the period to 2015. This will
enable better quality recyclate to be supplied more reliably at lower processing costs relative to virgin polymer. As a
result recycled materials should become increasingly competitive with virgin plastics – particularly oil based polymers - in
many bulk polymer markets. In particular it is reasonable to believe that use of recycled plastics for food grade plastics
applications is likely to accelerate. Many of the technical and consumer acceptance issues have been resolved and
process costs are decreasing.
For these reasons it is anticipated that penetration of recycled material into packaging markets will grow faster than the
overall growth of the total volume of the identified markets.
4.1.1 Packaging
The projections show that the UK has the potential to be substantially self-sufficient in the use of recovered plastics
expected to be generated from packaging by 2015. However, this assessment assumes that material is not purchased by
international buyers for non-UK markets at more competitive prices.
Technically, recycled plastics can be used in many applications. It may therefore be expected that if demand from
international markets declined, the sales price of recovered plastics would be discounted until they reached a sufficient
level compared to virgin prices to enter current production processes. The assessment also assumes that external finance
from producer responsibility schemes would meet any resulting financial shortfalls and investment needs up to the
recycling rates required by statutory targets identified in earlier sections.
Market studies have already demonstrated the potential for the use of recycled PET and recycled HDPE in new packaging
applications. These include food grade packaging (certainly for PET and potentially for HDPE within the period under
consideration).
Based on the ability to substitute 30%102 by weight of bottles with recycled content, the potential domestic markets for
2015 in containers would be approximately 100kt in PET for bottles103.
100
Enviros (2003), Closed Loop London (2004), IVV (2005)
101
From Enviros (2003)
102
WRAP (2005), ‘The Development of a Food Grade PET recycling Process’ states that multi-layer PET bottles can be manufactured
with 40-60% recycled PET. Lower percentage level of recycled PET may currently be used by other technologies.
Use of recycled PET in sheet and strapping applications would add a further 30kt of potential domestic markets for PET
(assuming imported recycled PET was displaced from these applications). Together these applications could potentially
provide sufficient market outlets for practically all the PET anticipated to be collected (equivalent to around 140kt of PET
polymer, after recycling process losses).
HDPE bottle collections would similarly generate around 140kt of HDPE polymer. Demand from new bottle manufacture
could provide outlets for at least 110kt of this material – potentially more. Competitively priced recycled HDPE would also
be in demand for construction applications, for example land drainage pipe, inspection chambers, kerb systems. The pipe
market alone could potentially absorb the remaining 30kt of recycled HDPE. Other markets including profiles, decking,
some film products and products such as bins, boxes, etc would provide outlets for suitably priced recycled HDPE.
The main growth areas for packaging collections from non-domestic streams104 are PP from crates and trays (c.10kt),
HDPE from drums (c.20kt) and an increase of c.50kt in film collections.
The potential UK domestic market for HDPE is not considered a significant limiting factor at the quantities identified. The
increase of 10kt of good quality PP from crates should find ready markets. The 50kt from film collections should also be
absorbed into film markets and markets for decking, timber substitutes if pricing is competitive: 50kt growth represents
an increase of c.30% on current levels. The market demand for film products is assumed to grow at around 20% during
this period and so organic growth in market share is likely to incorporate the extra reclaimed material.
In the above scenarios the limiting factors would be price and investment in the necessary sorting, reprocessing and
bottle manufacturing technology/infrastructure, rather than the inherent viability of the technologies. A key assumption
in the market assessment is that regulatory arrangements would not limit the use of recycled materials in these markets
in the future.
In the ‘high’ collection scenario there is a large quantity of mixed domestic plastics (127kt) available for recycling. It is
less clear where this material would find large volume markets for mechanical recycling in the UK. There is demand for
post-use films, pots and tubs from some markets in the UK but this is mainly based on material being pre-sorted by
polymer type.
In the ‘low packaging growth (c.2%)’ scenario the impact of the mixed plastics collections appears not to be significant in
meeting the statutory recycling targets and it is possible that this material could find markets in recovery processes such
as the production of diesel fuel, in gasification or other recovery processes. Suppliers of “plastics to diesel” technology
already assess the potential UK market for such plants at significantly more than 150kt/a and mixed domestic plastics
waste is believed to be suitable for these processes. In the period 2010 to 2015, a combination of process
improvements, long term increased oil pricing, financial benefits from Renewable Obligation Certificates (ROCs) and
higher disposal costs are likely to make these recovery processes attractive. The possibility of technology also emerging
to mechanically recycle this mixed stream into products for a greater environmental gain could be considered a bonus at
this stage.
In the ‘high packaging growth (c. 5%)’ scenario the impact of mixed plastics collection would be a significant factor in
achieving statutory recycling targets. In this case the current lack of volume markets for non-bottle domestic plastics
combined with greater future regulatory uncertainties associated with exporting this material would present a major
long-term challenge to secure compliance with possible targets.
4.1.2 Agricultural plastics
Non packaging agricultural plastics collections could represent a further c.30kt of plastics collected for recycling by 2015.
This material would potentially be suitable for various applications including film manufacture and extruded profile
applications. It is expected that this would find a market without major problems. For example, displacement of current
imports of price-discounted farm plastics from Ireland could occur which it is estimated currently accounts for
approximately 8kt of polymer. The key issue is relative pricing of UK supplies, not availability of markets for the material.
103
Based on the consumption data in section 2.
104
Excluding the ‘away from home’ collections of primarily plastics bottles which are considered in the bottle market assessment.
As non-packaging agricultural plastics are not covered by any specific recycling targets, they could equally form a
feedstock for recovery processes such as diesel or syngas production and be processed in local plants.
4.1.3 ELV
Quality of recycled plastics will be critical to the scope for both recycling within the automotive industry and into other
applications. Trials on development of standards for use of recycled PP in the automotive industry (PROVE) have
concluded that engineering grade polymers can be developed from PP sourced from ELVs. The use of recycled PP in the
automotive sector is becoming more common, with some ELV recyclers producing pellets from polymers recovered from
shredder residue, although not in the UK. Recycled content of automotive components currently manufactured in the UK
ranges from 5-60%, although the ProVE project suggests that in some cases 75% recyclate can be used. The RECCOMP
programme is also making progress on the recycling of thermoset composites. The process developed by Argonne
Laboratories claims to generate high quality grades of various polymers from ASR although the commercial viability is
uncertain.
The market for PP in the UK is large – over 800kt per annum – so there appears to be some potential for good quality
recycled plastics to be used within a market of this size; perhaps in applications such as plastic crates or other injection
moulded products. However, many of the PP applications that make up this tonnage (e.g. food contact packaging, OPP
films, trays) are highly unlikely to be suitable for the recyclate generated from ASR extracted plastics.
At this stage there is insufficient evidence to conclude whether the UK could be self-sufficient in providing a market for
ELV plastics waste it generates to achieve mechanical recycling targets. Currently it appears unlikely at the ‘high’ target
projection and more probable at the ‘low’ target projections. The commercial development of high quality ASR plastics
separation technologies will be a critical success factor. The current review of long term targets for recycling of ELVs is a
fundamental uncertainty that undermines investment confidence in research and development of solutions. The UK
could be self-sufficient in a variety of recovery processes for this type of material, through ‘plastics to diesel’ and other
feedstock technologies already outlined.
4.1.4 WEEE
The opportunities for self-sufficiency in WEEE plastics remanufacture is less clear. The tonnages that will arise from the
implementation of the WEEE Directive are, as previously stated, uncertain, especially for the items outside the ‘large
household appliance’ category. The UK has a relatively small indigenous electrical and electronics manufacturing
industry. As a result there is a lack of a sizeable UK manufacturing base that would be the best fit with the arisings
generated from WEEE plastics. For example, combined ABS & SAN consumption for manufacturing in the UK is 60-70kt.
There is, however, evidence of some UK demand. For example, Brother and Axion Recycling have produced a trial
internal fax machine component using plastic from waste electrical and electronic equipment (WEEE), another UK
reprocessor has indicated sales of 300 tonnes of ABS regrind from WEEE into the UK market. Although these represent
anecdotal snapshots of developments they highlight that r-ABS is capable of being used in markets in the electronics
industry in the UK and it could be anticipated that this level would increase.
The RoHS Directive restricts the recycling of plastics containing certain brominated flame retardents (BFRs), lead and
cadmium into electric and electronic products within the European market105. Separation technologies are potentially
available but not currently commercialised. It is therefore likely that Asia will remain the main outlet for WEEE plastics
containing BFRs unless regulations intervene.
105
The restrictions apply only to certain BFRs: e.g. penta and octa-brominated bisphenol esters are not permitted, deca-brominated
bisphenol esters is permitted for future use. However many OEMs are going beyond the RoHS Directive and requiring bromine-free
compounds.
4.1.5 Construction industry
The Government’s Sustainable Buildings Task Force recommends that at least 10% of a construction projects material
should consist of reused/recycled material. This sector could use recycled material from all the above sectors. It is also
likely to form a growing source of supplies of plastics for recycling (e.g. increasing collection of PVC through the
Recovinyl programme).
Market growth for recyclate in the construction sector is thought to be somewhat difficult due to the risk-averse nature of
the industry where products are required to meet high specifications and be tested to stringent standards.
Opportunities for products currently manufactured in the UK include development of recycled PVC for use in sustainable
urban drainage systems (SUDS) and PE in turf reinforcements and ground stabilisation. This is in addition to established
markets for plastic lumber, piping and construction film.
The construction sector is the strongest growing area of plastics consumption in the UK – as well as being a key growth
sector in many developing economies. It is expected that the construction sector will increase use of post-use plastic in
applications such as pipes, cladding and interior decoration, road construction, for roof and flooring and as a wood
polymer composite.
4.2

Summary
The UK industry could potentially use a large quantity of the plastics collected for recycling in the period under
evaluation. In most cases the barriers to domestic self-sufficiency relate to pricing, rather than technical limitations.

The shift in plastics manufacturing out of the UK to lower cost manufacturing bases, in Asia, in Eastern Europe and
elsewhere will erode the opportunity for domestic use of recycled materials. This is most evident when considering
the shift of the electronics and electrical industry but is also potentially a longer term factor in the packaging sector,
where an increasing proportion of UK consumption is met by imported packaging. High volume, lightweight items
such as bottles (i.e. those which it is most costly to ship long distances) are potentially better long-term opportunities
than markets for products which can be shipped more efficiency (sheet, stacking trays, bags, etc), all other factors
being equal.
5.0
The Export Market for Recovered Plastics
5.1
Introduction
This chapter presents an overview of the global trade in recovered plastics, assessing the drivers and structure of
the market. The impacts of the trade and its significance for the UK and at a global level are examined. The
details and dynamics of the export market in the UK and the major trading blocs are discussed in outline in
sections 5.3.2 to 5.3.8. This information is developed in more detail in the trade profiles in Chapter 6 to 12.
Annex F provides a tabular summary of the main market features of the regions and anticipated trends described
in the following chapters.
5.2
Overview of the global trade in recovered plastics
A simple representation of the main trading blocs and global trading patterns in the recovered plastics trade is
shown in Figure 5.1. There is trade of recovered plastics within Europe (with the EU and between the EU and its
neighbouring countries) and within the Americas (especially among the USA, Canada and Mexico). These regions
are also net exporters of recovered plastic to Asia.
Within Asia, the largest single source of demand (by a considerable margin) is China. Recovered plastic reaches
China either direct, or via Hong Kong which functions as a transhipment, trading and temporary storage hub for
the trade. The largest single supplier to China is also in Asia – Japan.
There are other sources of supply to the international market (e.g. Australia) and other importers (e.g. India,
Middle Eastern countries), but these are of a lesser scale. The trade within and to these regions (including the
UK) is described in more detail in section 5.2 and in the following chapters.
Figure 5.1
Main components of the global trade in recovered plastics
EUROPE
EUROPE
HONG
KONG
CHINA
AMERICAS
AMERICAS
USA
USA
Canada
Canada
Mexico
Mexico
South
South America
America
Intra
-regional
trade
Intra
-regional
trade
Germany
Germany
UK
UK
Netherlands
Netherlands
Belgium
Belgium
Other
Other EU
EU
Ban on direct
trade lifted 09/05
Su
pp
ly
Co
S id
mp
e
eti
tio
n
JAPAN
JAPAN
OTHER
OTHER
India
India
SE
SE && SS Asia
Asia
Australasia
Australasia
Middle
Middle East
East
Source: GHK
5.3
Structure & drivers of the recovered plastics trade
5.3.1 Summary
Demand for material to feed the large increases in output of the Chinese manufacturing sector has, within the
past five years, helped to create a dynamic international market in recovered plastics. This is now challenging
the economics and operations of traditional recycling markets within the EU, North America and Japan.
Although markets for recovered plastic are increasing in Eastern Europe, South America and elsewhere, it is
demand from China that dominates. India’s consumption and production of plastic is smaller than that of China,
and at present India has much more restrictive controls on import of recovered plastics.
A map of the global trade is provided in Figure 5.2. The main recovered plastic flows are from Japan, North
America and the EU to China – the larger share of this transiting via Hong Kong rather than being shipped direct.
Hong Kong’s hub role in the recovered plastic trade is a result of a combination of geographical, economic and
regulatory factors. It has a strong trading sector with access to excellent trade and logistical services, and good
links to the source markets. It is well integrated with the reprocessing and manufacturing sectors in Guangdong
that buy and consume the secondary plastic material. Vendors can sell to Hong Kong firms without having to
obtain accreditation or customs pre-clearance from the Chinese authorities. Customs procedures for cargoes
routed from Hong Kong are less demanding than on direct shipment and Hong Kong traders are familiar with
Mainland customs procedures.
Since 2003 the baseline increase in demand for recovered plastic material caused by the rapid expansion of
Chinese industrial output and consumption of plastics has coincided with a period of comparatively high prime
plastic prices. This has given an added incentive to manufacturers to cut costs by incorporating secondary plastics
into their production processes where possible, especially in factories serving the domestic Chinese market,
segments of which will accept lower quality and performance standards than export buyers.
China’s imbalance in physical trade with the EU, NAFTA and Japan has also meant that the cost of shipping
containers back to China is comparatively low – further facilitating a trade in recovered products of which plastics
forms only one part. For the UK export trade, large upward shifts in east-bound freight rates seem unlikely as
the trade in goods between Europe and China continues to grow, and large increases in the available capacity of
the container shipping fleet in the years ahead raise the prospect of over-supply in the market.
5.3.2 EU
Plastics consumption in Western Europe is one of the highest in the world. Around 42,000kt of plastics (including
both virgin plastics and around 2,000kt of recycled plastics) were consumed in 2003, an increase of 5.6% since
2001106.
The plastics recycling industry in Europe has grown over the last decade, mainly stimulated by packaging waste
recycling. In 2003, 14.8% of all recovered plastic was recycled, a 24% increase since 2001107. Figures for 2004
suggest that almost 3,000kt of recovered plastic were recycled in Europe. Most of this is packaging waste, from
both municipal household waste and industry sources such as production scrap.
Packaging waste makes up the majority of plastic recycled in the EU. Packaging waste collection and recycling
systems are one of the main drivers for recycling plastics in the EU, as packaging is the most important source of
plastics. Progress in meeting the targets of the Packaging Waste Directive in those countries lagging behind will
mean a greater volume of recovered plastics being collected and potentially traded within and outside the EU.
There is a significant intra-EU trade of recovered plastics with major imports from other EU countries to the
Netherlands, Belgium, Italy and Germany. These countries are also the major exporters outside the EU,
reflecting the movement of recovered plastics within the EU which is then transhipped to other non-EU
destinations, including Hong Kong and China. It is believed that much of France and Germany’s recovered
106
PlasticsEurope, 2004
107
Ibid
plastics are being transhipped through the Netherlands and Belgium for export to Asia, in addition to direct export
from these countries.
These days the EU is of much less significance to the UK market than has been in the case in the past – in 2004
for every one tonne of recovered plastic shipped to an EU country, another five tonnes were exported to the Far
East. Trade flows within the EU are shown in Figure 5.3.
The volume of exports from the EU has increased by 129% between 1999 and 2004 from just over 1,000kt/a to
2,360kt/a, from a value of £171 million to £439 million108. In 2004 Hong Kong and China made up almost two
thirds of total EU exports by volume and exports to this region have more than tripled since 1999. Polythene is
the largest declared plastic material exported from the EU.
108
EU Eurostat online
Figure 5.2
Global trade flows in recovered plastics
Other Asia
Canad
Europe
US
China
Africa &
Middl E
Japan
Hong Kong
t
Central &
S
2004 TRADE
FLOWS
10-
th A
i
Australasia
50200500+
Source: Eurostat
81
There is consensus that the export market to China is set to continue for at least the next 5 years due to high
demand and expected high prices. It is difficult to predict what might happen beyond then. If regulations
change, there may be an increase in exports to countries such as India and Pakistan, with potential demand from
countries in South America or North Africa emerging.
Figure 5.3
Main intra-EU trade flows in recovered plastic
Outside
2004 TRADE
EU
FLOWS
10
20
50
100+
i l
d
Swede
Outside
EU
Denmark
Poland
N th
l
d
Germany
Belgium
b
A
t i
Switzerland
Ital
S
i
Source: Eurostat
5.3.3 UK
Approximately 4,700kt of plastic were consumed in the UK in 2002, an increase of 250kt since 2000. This trend is set to
continue and the 5,000kt/a mark is expected to be reached in the next few years.109
UK imports of waste plastics have been increasing rapidly over time, and have grown by 130% from 11kt in 1999 to
44.7kt in 2005. Plastic waste imports in 2005 were valued at £11.8 million.
The UK is a large net exporter of recovered plastics. Exports far outweigh imports each year. UK exports of recovered
plastics have increased six-fold since 1999. UK trade data record recovered plastic exports of 344kt in 2004, up from
48.3kt in 1999. Figures for 2005 show a slight decrease on 2004, with exports of 324kt110. These figures do not cover
all plastic recyclate exports. For example a study on the recycling of PVC waste in Europe111 shows that PVC is leaving
the UK in other forms, such as plastic casing around metal cables, the export of which is driven by the scrap metal trade.
Such trades are not captured in the ‘waste plastic’ trade data.
The share of UK exports going to Hong Kong and China has increased from 43% in 1999 to 74% in 2004. When
transhipment via Hong Kong and Netherlands is included, exports to China are estimated to account for at least 75%
(more than 254kt of the UK’s recovered plastic exports). This compares with a total of 47 kt exported from the UK to all
European Union countries.
Although China is of great importance to the UK’s recovered plastic market, the UK is estimated to account for just 5%
of China’s imports of recovered plastic, which were between 4,750kt and 5,000kt in 2004. The UK is a price-taker in a
large global market.
The strong growth in total UK exports of recovered plastics is being driven by the growth of exports to Hong Kong and
China. All the exporters consulted in the study exported all or a majority of their recovered plastics to Hong Kong. Most
plastic collected for recycling sent to China via Hong Kong is mixed scrap and PET. Prices obtained for these were
quoted to be at least £20-£30 higher than in the UK.
The UK is also not alone in Europe in sending recovered plastic to China. The UK is estimated to account for 20% of the
EU’s exports, compared with 28% for Germany, 17% for Belgium and 16% for the Netherlands.
As of July 2005, 43 UK companies were Environment Agency accredited exporters of plastic waste. The majority of
these (over 75%) export over 0.4kt of material per year. There are also 83 UK-based companies which are on the
General Administration of Quality Supervision, Inspection and Quarantine of China (AQSIQ) list of companies accredited
by the Chinese authorities to export recycled goods (not just plastic) directly to China. Only 18 companies appear on
both lists. UK companies that export to China via intermediaries in Hong Kong do not require accreditation to the
Chinese system.
Consultations in the UK, and in Hong Kong and China have confirmed that industrial scrap forms a major part of the
international market, and that such materials are being exported from the UK to the Far East. There is also anecdotal
evidence of some plastic packaging being exported by non-accredited businesses without PERNs being claimed. The
relative contribution of different industries to these scrap exports is not easily determined. The trade in industrial scrap
is purely market-driven. In contrast, the legislation and policy are driving investment in collection of packaging waste.
Figure 5.4 shows the exported plastic packaging recorded by PERNs and total exports of recovered plastics from 2001 to
2004.
While the recovered plastic market is often thought of in terms of packaging waste, a much wider range of recovered
plastic products are in fact being traded. In 2005 PERNs were issued for 238kt of recovered plastic but total UK
recovered plastic exports for the year stood at 324kt. Figure 5.4 also highlights inconsistencies between the PERN and
109
British Plastics Federation
110
UK Trade statistics website
111
AJI-Europe, 2006
trade data sources – for example, in 2002 PERNs issued exceeded reported exports, in 2004 and 2005 there are large
differences in the export quantities not covered by PERNs.
Figure 5.4
PERNs exports as a proportion of total recovered plastics export, 2001-2005
400,000
350,000
Tonnes
300,000
250,000
200,000
150,000
100,000
50,000
0
2001
2002
2003
Exports
2004
2005
PERNs
Source: UK trade statistics website & Defra
Basic information on the material composition of exports should be provided by trade data, drawing on customs
declarations, but a comparison of declarations to UK customs authorities for Hong Kong-bound exports and those (for
imports from the UK) to the Hong Kong authorities show significant differences. This is shown in Figure 5.5.
Figure 5.5
PP
4%
PVC
2%
Comparison of UK exports to Hong Kong and Hong Kong imports from the UK, by
commodity code
Total: 191,000t
Total: 160,000t
Other
9%
PS
0%
Other
35%
PE
85%
UK exports to Hong Kong, 2004
PE
35%
PP
15%
PVC
9%
PS
6%
Hong Kong imports from the UK, 2004
Source: Consultants’ analysis of data from www.uktradeinfo.com and Hong Kong Census & Statistics Department.
Research for this study suggests that UK trade statistics do not provide a reliable guide to the material content of
exported recovered plastics. The high proportion of PE in the UK recovered plastic trade statistics appears to be an
artefact of the completion and coding process for export declarations.
Shipping companies are responsible for completion of the forms for which an 8 digit HS code describing the shipment is
required. Consultation suggests that suppliers rarely provide a description of the shipment that is more detailed than
‘scrap plastic’. In the absence of further information, this is being coded in the system into the HS code 39151000,
which is supposed to only apply to ‘polymers of ethylene’.
The information system for PERNs can confirm only the total volume of recovery notes issued in a given year and does
not record the origin or type of the plastics involved, or the destination of PERN-related exports.
India and Pakistan are also growing markets for UK recovered plastic exports and are becoming increasingly significant,
particularly the Indian market. Barriers to increasing exports to other countries include stricter regulations and prices
lower than China and Hong Kong buyers are prepared to pay.
Many exporters also trade with other European countries, where there is demand for high quality recovered plastic and
recycled plastic granulates.
5.3.4 NAFTA
There is extensive trading of recovered plastics within the NAFTA region (the USA, Canada and Mexico), and also a net
outflow of this material to East Asia. Whilst information is available about the recovery and recycling of PET bottles from
the municipal stream, data on trends within the wider recovered plastic market are not readily available.
The US is one of the world’s largest importers and exporters of recovered plastics. It imported 396kt and exported 745kt
in 2004. Imports increased by 27% between 1999 and 2004 in terms of volume but by only 7% in value terms112.
Imports from Mexico almost doubled during this period and Mexico is now the largest source of US recovered plastic
imports. Canada is the second largest source. The vast majority (86%) of US recovered plastic imports are declared as
‘other waste plastics’ rather than polyethylene, polystyrene or PVC.
Over the past 5 years US exports of recovered plastics have increased much more quickly than imports, growing by
112% and 133% in terms of volume and value respectively. This growth has been driven by a rise in exports to Hong
Kong and China. Exports to Canada (more than 90% of total Canadian imports arrive from the US) and India have also
increased substantially.
Six of the ten largest recovered plastic export markets for the US are in Asia. These account for more than two-thirds of
US recovered plastic exports. The US’s close neighbours, Canada and Mexico, receive most of the remainder.
Whereas the UK exports far more recovered plastic to Hong Kong than it does direct to China, the US exports more
direct to China than to Hong Kong. Values per tonne of recovered plastic from the US to Hong Kong and China are
higher than for the UK and Germany (another significant exporter to China). The reason for this is unknown.
Consultations reported strong demand from buyers for the China market. There is also strong demand from within the
NAFTA region itself, typically for high quality, sorted scrap plastic. Export markets are reportedly more forgiving on
quality. The US has not ratified the Basel Convention and there is no US equivalent to the Trans Frontier Shipment
regulations. The quality of shipments is thus influenced by end-market requirements (such as AQSIQ accreditation and
CCIC inspections for China).
Research has not identified any federal policy initiatives on the horizon that would significantly transform either the
supply of recovered plastic into the market, or the controls on trade in this material. Neither the US, Canada nor Mexico
has a federal law on packaging recycling equivalent to the EU’s Packaging Directive or Japan’s Container and Packaging
Recycling Law.
112
UN Trade statistics
Beyond the market-driven recycling of scrap by industry, which is significant, the impetus for plastic recycling from the
municipal waste stream appears to come from state and municipal initiatives. State laws are also mandating the use of
recycled plastic, which is increasing demand for products such as recycled PET. Indeed, the significance of the role of
large corporations (particularly soft drink manufacturers) in driving the market for recycled materials is a common theme
in this segment of the market.
5.3.5 Japan
Japan is the largest single source country for recovered plastics exports to the China market. It exported 850kt of
recovered plastic in 2004113, about 250% more than the UK, but significantly less than the total recovered plastic exports
of the EU as a whole. After the introduction of a ban on direct import in May 2004 the proportion of this material that
was routed through Hong Kong has increased. The ban was lifted in September 2005, and a recovery of direct trade is
now expected.
Japan’s resource and recycling laws set recovery targets and specify the treatment that is required before material can
be exported. Post-consumer waste is supposed to be sorted and washed before it is permitted to be exported.
Although some of the Japanese literature suggests that there may be some circumvention of these requirements, Japan
has a strong reputation in China and Hong Kong for reliable supply of high quality plastic, both industrial scrap and postconsumer plastic recyclates. Many of the firms in Hong Kong focus exclusively on Japan-sourced material.
5.3.6 China
China is the driving force behind the huge worldwide growth in the trade of recovered plastics and the ultimate
destination of most of the recovered plastics that are exported from the European Union and NAFTA regions.
Chinese official statistics show imports of 4,096kt of recovered plastics in 2004, approximately three times the volume of
imported waste plastics in 1999114. This figure is equal to the combined exports of the US, Canada, the EU and Japan.
The growth in value terms is even larger; import values have increased more than five-fold between 1999 and 2004.
Recently published official figures for 2005 show an increase of almost 1,000kt on 2004 data, with 4,957kt of recovered
plastics imported by China. Figure 5.6 shows the growth in China’s imports of recovered plastics from 1999 to 2005.
Figure 5.6
Imports of recovered plastics to China (kt)
6000
5000
4000
3000
2000
1000
0
1999
2000
2001
PE
113
2002
PS
PVC
2003
2004
2005
Other
UN Trade Statistics
114
China Customs Statistics (CCS) Information Center
Source: China Customs Statistics (CCS) Information Center.
There is a substantial variance between Hong Kong records of the waste plastic exports to China, and the imports to
China from Hong Kong of the same materials as recorded in Chinese official statistics, with the Hong Kong figures
consistently showing a larger number. The difference was some 744kt in 2004 – equivalent to more than twice the UK’s
total exports of waste plastics, or 18% of total declared Chinese imports. Figure 5.7 compares the two sets of figures
from 1999 to 2004.
Consultations in China and Hong Kong suggest that the Hong Kong data provide the more reliable estimate of the scale
of the trade. Chinese data on waste trades have improved but do not provide a full picture of activity. Adjustment on
the basis of this Hong Kong-China point-to-point trade alone therefore moves the estimate of China’s import of waste
plastic to 4,700kt rather than the 4,000kt shown in official statistics. Consultations with industry in the region suggest
that China’s actual imports in 2004 were in the range of 4,700kt – 5,000kt.
The recovered plastics are absorbed, via the Chinese plastics reprocessing sector, into a wide variety of secondary uses,
from textiles to toys to kitchen utensils. The end-user manufacturers are seeking to shave production costs by finding
cheaper sources of plastic inputs. The extent to which they are able and willing to do so varies according to the
production process involved and the specification of the markets that they are serving. Various end markets in China
itself are more forgiving on quality than export buyers. At the same time, the ‘waste plastic’ label covers everything
from the cleanest production scrap to post-consumer waste.
Figure 5.7
Comparison between Hong Kong waste plastic exports to China and China’s waste
plastic imports from Hong Kong
Trade in waste plastics (kt)
3000
2500
2000
1500
1000
500
0
1999
2000
2001
Hong Kong exports to Mainland China
2002
2003
2004
China imports from Hong Kong
Source: Hong Kong & China trade statistics, 1999-2004.
The Chinese government has introduced a series of measures over the last ten years in an effort to control the
undesirable elements of the waste trade, including that in recovered plastics, while (for the time being at least)
preserving the plastic product industry’s access to lower cost inputs. It has retained a comparatively broad Green List
schedule for plastics, in contrast to India where imports are much more restricted. These efforts have had some success
but evidence suggests that unauthorised imports and variation in the enforcement of the regulations continue.
The extension of central laws into local jurisdictions is a challenge on many fronts in China and is captured in the old
Chinese phrase, “The mountains are high and the emperor is far away”.
5.3.7 Hong Kong
Hong Kong is a point of transhipment and temporary storage for recovered plastics that are ultimately destined for the
China market. It remains a free port and, under the ‘One Country, Two Systems’ formula, a separate customs zone that
is not subject to China’s import duties and customs law.
Hong Kong is the largest single destination for UK recovered plastic exports, receiving 191kt of the 344kt exported direct
in 2004 (and an additional, unknown, quantity indirectly via Holland and other countries). Although the UK was the
fourth largest single source of recovered plastic imported to Hong Kong in 2004, it accounted for only 6%-7% of Hong
Kong’s 2,730kt of recovered plastic imports for the year.
Almost all Hong Kong’s recovered plastic imports are subsequently re-exported to China. Hong Kong trade data estimate
exports to China at 2,500kt in 2004. Comparative analysis of China and Hong Kong trade data indicate that official
Chinese trade statistics understate imports from Hong Kong and consultations on both sides of the boundary suggest
that significant quantities of recovered plastic imports do not appear in the customs data.
Hong Kong companies link vendors worldwide with buyers in China, principally in the adjoining Guangdong province.
Firms vary in the extent to which they specialise in particular types of recovered plastic, and/or particular source
markets. Some are pure trading operations. They exploit their networks of contacts in Europe, North America, Japan
and elsewhere to source material, and then resell it through other networks in China – both trading companies and
reprocessors. Most of the trading firms involved are small and their sourcing is based on the business network of the
owner. Other Hong Kong-based buying operations are integrated with plastic reprocessing factories in China.
Often the overseas vendors ship plastic to the Hong Kong quayside and the China buyers arrange the forwarding of
freight into the Mainland. Recovered plastic often travels into China by barge up the Pearl River to one of the many river
ports, which is a cheaper and preferred option for low-value cargoes not prone to damage in transit. The remainder is
trucked over the Hong Kong-Mainland boundary. Anecdotal evidence suggests that mixed waste plastics are sometimes
illegally imported to China. The nature of these goods (the import into China of which is not legal) is not always
truthfully declared, usually under the direction of the Chinese importer. It should be noted that mixed waste plastics
leaving Hong Kong jurisdiction are within Hong Kong law.
Hong Kong’s hub status in the global recovered plastic trade is a function of its traditional role as a conduit in the world’s
trade with China and the associated traffic in containerised cargo and its proximity to the plastic-consumer
manufacturing base of the Pearl River Delta. Also, the regulatory risk when moving waste over the Hong Kong-China
boundary is lower than for direct shipment to China from the source country, especially for lower quality waste. Preclearance customs inspections in Hong Kong are supposed to involve the opening of the doors of each container, but
there is no requirement for three photographs of the container being loaded as for shipments from the UK.
The role of the Hong Kong-based trader as broker and deal-maker, bridging the gap between buyers (mainly) in
Guangdong and vendors in source countries such as the UK, is set to erode over time as increasing numbers of buyers
begin to acquire the international business skills and connections to source direct.
Should Mainland import regulations be tightened, such as enforcing more strictly the requirements for cleaning and preprocessing of post-consumer waste, then it can be expected that some intermediate processing will emerge in Hong
Kong. One firm has already invested in sorting and shredding facilities near the Hong Kong-Mainland boundary in
anticipation of such a change. There is no indication that Hong Kong will itself introduce similar requirements for preprocessing, which would push the sorting/washing/grinding activity further back towards source countries and/or
countries such as Malaysia.
5.3.8 India
India is not a significant player in the recovered plastics trade. This would change if current import restrictions are
eased. India’s plastics industry is five decades old and historically has grown significantly faster than GDP. Demand for
polymers grew from less than 100kt in 1970 to an estimated 4,500kt in 2005. In the last decade India moved from being
a net importer of polymers to having a substantial export surplus, and this trend is set to continue. The industry grew at
nearly 20% in 2004. Industry sources have predicted trend annual growth rates of around 12% - 15% in coming years.
India continues to import plastics despite its growing capacity for virgin plastic production. These imports include some
virgin plastic raw material, speciality polymers not produced by Indian manufacturers, and a certain amount of plastic
waste. Tariff barriers have been systematically reduced in recent years, with the present customs duty being 15% for
most polymers. Industry sources expect that tariffs to fall to 5-6% within next few years.
Imports have grown at a compound annual growth rate of 7.6% over the last six years. Official trade statistics show
that 99.4kt of recycled plastic were imported in 2004. The USA, Holland and Germany were the largest exporters to
India, accounting for 54% of its recovered plastic imports. Unfortunately, while it is clear that a certain volume of illegal
plastic recyclate continues to enter India, it is very difficult to assess either the scale of the trade due to its (semi)
clandestine nature, or its potential rate of future growth.
There is also a smaller, though growing trade in export of recovered plastic from India. 15.1kt of recovered plastic was
exported from India in 2004, an increase of 14.9kt since 1999. The main export destination for recovered plastic is
China and Hong Kong.
The Indian government are considering easing scrap import restrictions, but only on a case by case basis. Imports of
scrap (e.g. industrial trimmings might be allowed). The current thinking is that any exceptions to rules should be
carefully specified, e.g. with scrap imports specifically allowed for recycling for a particular product.
Overall, consultations suggested that the overall policy presumption against import of recovered plastics will stay in
place. However, an existing exemption for PET recycling, previously obtained after industry lobbying, and the discussion
of making exceptions in some other cases suggest that a moderate additional amount of scrap imports will be allowed in
the future.
5.4
Impacts
The main regulations on packaging recycling in the EU and Japan were designed before this export market emerged.
The transition has required adjustment in various areas, a process that is not yet complete as the debates over
standards of traded recovered plastics in both exporting and importing countries illustrate.
The increase in demand for material from the Far East, and the favourable prices offered for export, have put pressure
on domestic firms in the source markets. In the US, Japan and Europe there are reports of scarcity of material and a
domestic sector with over-capacity. Anecdotal reports suggest some reprocessors, unable to compete, are switching
their focus to the export trade.
Labour costs in China are a small fraction of what they are in OECD115 countries and there is a large and varied demand
for material that centres on the provinces of Guangdong and Zhejiang. In a globalised economy where so much
manufacturing has migrated to these regions it should not be a surprise that recycling markets, and especially the more
labour-intensive processes, are subject to the same competitive pressures. Figure 5.9 illustrates how these new
globalised recycling loops are structured using PET bottles as an example.
115
Note: Please see Annex K for full list of OECD member countries
Figure 5.9
Source
Country
Roles in a globalised recycling market: the example of PET bottles
Factory
Household
Collecting
Company
(Broker, Trading
Collecting
Company
Company etc)
Export
Collecting
Companies
China
Dismantling Plant
PET Flakes
Domestic
Recycle
Pellets
Remanufacturing Plant
Polyester Fibre
Moulded Plastic
Products
Domestic Market
Source: Adapted from Kojima et al, 2005
While the export trade has clearly had an impact on domestic recycling operations within the source countries, and
created new headaches for trade regulators. It also represents a strong pull factor that supports recycling and probably
reduces the cost of attaining recycling targets. In 2004 China consumed 1,250kt of recovered plastic material from the
EU which otherwise would have had to find markets elsewhere, or be disposed of.
A common feature of trade between Europe and China is regulators’ concern about standards. This is an area where
there is scope for greater communication and, possibly, collaboration between national regulatory agencies, to reduce
the regulatory uncertainty faced by the firms involved in both the supply and demand sides of the trade. This would also
raise public confidence that environmental and health risks are being properly controlled.
6.0
EU
6.1
Trade profile
6.1.1 Intra-EU Trade
Intra EU trade in waste plastics totalled approximately 850kt in 2004 and was worth almost £179 million. The major EU
importers of waste plastics from other EU countries in 2004 were the Netherlands (164kt), Belgium (149kt), Italy (133kt)
and Germany (120kt). The combined total imports of these four countries accounted for approximately two-thirds of all
intra EU imports in 2004. This reflects the reprocessing capacity found in the Netherlands, as well as the use of both
Belgium and the Netherlands as transit ports for recycled plastics exported to non-EU destinations such as Hong Kong
and China.
The largest exporters of waste plastics to other countries in the EU are Germany (225kt), France (201kt), the
Netherlands (129kt) and Belgium (73kt). These four countries account for almost three-quarters of all intra EU exports.
The most significant trade flows of waste plastics within the EU in 2004 were from Germany to the Netherlands (77kt),
from France to Italy (65kt) and from the Netherlands to Belgium (58kt).
6.1.2 EU Trade with the Rest of the World
Imports
Intra-EU imports of waste plastics accounted for five times the quantity of imports from outside the EU in 2004,
reflecting the trend over at least the last 5 years. EU total waste plastic imports have grown by 43% between 1999 and
2004. The highest non-EU provider of EU waste plastic imports is the US.
Table 6.1 EU imports of waste plastics
1999
2004
Rank
Order
Exporting
Country
Trade Value (£)
Exporting
Country
Trade Value (£)
120,475,898
Net
Weight
(kt)
695.9
TOTAL
195,554,062
Net
Weight
(kt)
993.3
TOTAL
1
2
3
4
5
6
7
8
9
10
Germany
France
Netherlands
Belgium
UK
Switzerland
Italy
Austria
Spain
Sweden
Others
28,252,865
24,732,570
24,581,278
9,354,773
7,259,602
4,115,356
3,671,811
2,393,588
1,854,261
1,605,880
12,653,912
208.3
137.4
119.8
51.4
35.7
25.6
13.2
17.6
5.3
17.1
64.4
Germany
France
Netherlands
Belgium
UK
Switzerland
Italy
Sweden
Austria
Spain
Others
44,558,142
42,337,911
31,657,559
12,824,150
10,338,267
8,190,449
7,381,755
4,786,160
4,319,948
3,899,451
25,260,271
225
201.7
128.9
72.8
36.3
71.5
28.4
29.1
20.9
13.5
165.3
Source: EU Eurostat online, http://epp.eurostat.cec.eu.int
PE used to be the largest single plastic type to be imported into the EU. However ‘other waste plastics’ has been the
fastest growing material group between 1999 and 2004 and has overtaken PE to become the largest import group.
Figure 6.1 below shows the import in waste plastic by material for 2004. This may to some degree reflect inconsistencies
in completion of records; i.e. some component of Eurostat’s ‘other waste plastics’ category may include PE and other
specified polymers.
Figure 6.1 EU imports of waste plastic by material 2004
Other Waste
Plastics
39%
PE
37%
PP
12%
PVC
8%
PS
4%
Exports
Total EU waste plastic exports are significantly larger than EU imports and have been growing more rapidly. The volume
of EU exports (both intra and outside the EU) has increased by 129% between 1999 and 2004 from just over 1,000kt to
2,360kt, from a value of £171million to £439million.
Trade data show that the majority of EU countries export more waste plastics to other EU countries than to countries
outside the EU. For example, the vast majority of French waste plastics trade takes place within the EU. However most
of the larger players in waste plastics trade tend to have much larger exports to countries outside of the EU. This is true
of Germany, Belgium, the Netherlands and Italy.
These figures mask what is actually happening to waste plastics generated and collected in the EU. As mentioned
above, Germany, Belgium, the Netherlands and Italy are also the greatest importers of waste from the rest of the EU.
Waste plastics are collected in other countries in the EU and exported to these countries as a transhipment destination
before being finally exported to other non-EU countries such as Hong Kong and China. It is believed that much of
France and Germany’s exported waste plastics are being transhipped through the Netherlands and Belgium for export to
Asia, in addition to direct export from these countries.
The destination of EU exports has also experienced great change between 1999 and 2004. The major change has been
the increase in direct EU exports to China. China was not included in the top ten destinations of EU waste plastic
exports in 1999, yet in 2004 China was ranked a clear second behind only Hong Kong. Figure 6.2 shows the change in
volume of exports to Hong Kong and China compared to other destinations from 1999 to 2004.
Figure 6.2
Change in EU exports from 1999-2004
2500
2000
kt
1500
1000
500
0
1999
2000
2001
HK & China
2002
2003
2004
Other
EU exports of waste plastics to India have also increased over this period. The US has fallen down the rankings: EU
waste plastic exports to the US were of a similar level in 2004 to 1999 and have since been overtaken by China and
some growing European markets. The figure below shows the destinations of EU exports in 2004. Hong Kong and
China make up almost two thirds of total EU exports by volume.
Figure 6.3
Destination of total EU exports in 2004 (ktonnes)
Others, 37
India, 89
Ireland, 57
Belgium, 79
Spain, 51
US, 70
Hong Kong, 720
Germany, 159
Netherlands,
187
Italy, 154
China, 526
PE is the largest declared export from the EU. Polystyrene exports from the EU have declined between 1999 and 2004
but all other materials have increased. The total EU waste plastic exports of 2,400kt in 2004 was split between
polythene (58.4%), polypropylene (5.6%), PVC (5.3%), polystyrene (1.6%) and ‘other waste plastics (29.1%).
Figure 6.4
EU export of waste plastics by material 2004
Other Waste
Plastics
29%
PE
58%
PP
6% PVC
PS
5%
2%
6.2
Market Profile
Plastics consumption in Western Europe is a one of the highest in the world. Around 4,200kt of plastics (including both
virgin plastics and around 2,000kt of recycled plastics) were consumed in 2003, an increase of 5.6% since 2001116.
Unsurprisingly the average per capita consumption (98.1kg in 2003) is significantly higher than the world average of
21.5kg.
The plastics recycling industry in Europe has grown over the last decade117, mainly stimulated by packaging waste
recycling as countries adopted waste management systems to implement the Packaging Waste Directive. In 2003,
14.8% of all recovered plastic was recycled, a 24% increase since 2001.
According to figures from Plastics Europe,118 around 3,100kt of European waste was mechanically recycled in 2003. This
reflects a 10.5% increase in European recycling since 2002119. Plastic packaging is recovered from municipal household
waste and industry sources such as production scrap. The breakdown in composition of the total plastic packaging
recycling in Europe is shown in Figure 6.5 below:
116
PlasticsEurope, Plastics in Europe – An analysis of plastics consumption and recovery in Europe, 2004
117
ibid
118
ibid
119
There is some debate over this data. Plastics Europe quote 3,100kt tonnes recycled, whereas EuPR suggest the figure is 2,200kt in
2004. EPRO have identified at least 1,800kt of packaging recycled in 2004.
Figure 6.5
EU domestic recycling of waste plastics by material, 2005
PP, EPS &
PVC
20%
LD/LDPE
38%
PET
22%
HDPE
20%
Source: EuPR
6.2.1 Packaging waste
Many EU countries including France, Belgium, Germany, and Luxembourg are part of a Green Dot Scheme which was
established to organise the collection, sorting and recycling of used sales packaging (this system was in place before the
Packaging Waste Directive came into force). In these countries, packaging recycling targets are met principally through
the collection and recycling of post-consumer plastic bottles (PET and some HDPE). This is one of the reasons why
there is more information on PET collection and recycling in Europe than other plastic waste materials.
The Netherlands and Italy are not part of the scheme, and targets are met through recycling of PET bottles and other
plastic waste such as LDPE film and plastic crates. In Belgium, industrial film is also collected and recycled to meet the
packaging directive objectives.
Plastic waste collections from packaging waste in Western Europe continue to increase as the coverage of the collections
(percentage of the population targeted) and the amount of waste produced increases. However, over the last few years
the proportion of plastic that makes up packaging has decreased. It is possible that the rate of increase in collection of
plastic packaging may also decrease in the future.
The fate of plastic packaging in the EU varies from country to country. For example, France and Italy have been
committed to supplying their domestic recycling market: France’s declared export of packaging waste (bottles) in 2004
was 5%, and Belgium 10%.
In the same year in both Italy and Spain, all collected plastic packaging (both from household and industrial waste) was
recycled domestically120. These figures are very different to the export figures shown in Section 6.1, which take into
account all types of plastic waste.
The reason why some of other European countries have supplied higher levels of material to domestic recyclers primarily
stems from the implementation of the Packaging Directive in these countries. Most mainland European countries had
and/or retain one main compliance organisation, creating more quasi-monopolistic management arrangements than exist
in the UK. As a result the strong central control, organisations in, for example, France, Germany and Italy were able to
place a stronger emphasis on long term compliance plans and associated risk management measures (at increased
financial cost). This enabled them to commit to long-term contractual arrangements with suppliers of waste plastics and
with recyclers121. Historic concerns about security of markets, accountability of recycling practices and practicability of
managing long-term partnerships led these organisations to contract with local recycling businesses, which could be
readily audited, and often contracts lasted several years. Contracts guaranteed supplies at fixed or formulaic prices and
often at below global market rates. These organisations also in effect funded market development work in their
countries as part of the contractual/financial arrangements implemented. This kind of arrangement has become less
120
EPRO
121
For example, in France Valorplast has until recently controlled the sales contracts for almost all plastic bottles collected in France (i.e.
>100ktpa). In Gemany DKR controlled the sales arrangements for all plastics collected by DSD (over 350ktpa).
common for two main reasons: concerns raised by competition authorities are being addressed; also the customers of
these compliance organisations wish to reduce their costs by embracing the international market more fully. As a result
European recyclers are now being guaranteed less material from these sources and often only at prices that are, from
the local recyclers perspective, at historically high levels prices but which are more representative of Asian market
pricing.
6.2.2 PET
In 2004, 665kt of plastic PET were collected in Europe, an increase of almost 48% since 2002122. Most PET bottles are
recycled domestically or within the EU. Most of the PET imports can be attributed to deposit bottles from Germany123.
The Netherlands is the main destination for the EU recycling of PET bottles, with 3 PET reprocessing plants currently
operating. Most of the PET bottle recycled here come from other EU countries. Despite the presence of reprocessing
capacity in the country, most PET bottles collected in the Netherlands are exported within the EU and to the Far East.
This is because none of the three reprocessors in the Netherlands were successful in winning a tender put out by a
multi-national soft-drinks company for the reprocessing of PET bottles consumed in the Netherlands. This situation may
change in the future.
6.2.3 PET prices
Recovered PET can be sub-divided into 4 categories of descending quality; Clear, Blue mixed, Green and Mixed colour.
There is great demand in Europe for high quality PET, and correspondingly higher prices. China and Hong Kong
importers are not willing to pay a premium for the high quality material, however these countries will offer a higher price
for mixed PET than European reprocessors. There is demand for this lower quality material in China as labour costs are
lower and the infrastructure for sorting mixed PET has been set up.
Recycled PET prices have increased over the last two years. These high prices and the low barriers to entry in this
market have led to many reprocessors recently entering the market, creating overcapacity for PET reprocessing in the
EU. In 2003 there were 50 to 60 PET reprocessing companies across Europe. This has increased to around 90. The
export of PET to the Far East has further exacerbated the lack of raw material for reprocessing. This creates pressure
for the industry in Europe, which is directly in competition with reprocessors in the Far East.
6.3
Outlook
The trade data show that EU exports to China and Hong Kong have been increasing year on year since 1999. The
China/Hong Kong export is driven by the higher prices for mixed and scrap plastic. Although there is some demand in
the EU, reprocessors are unable to compete with the prices for scrap and unsorted waste plastics obtained from Hong
Kong and China.
The trade associations consulted in the study agreed that the export market to China is set to continue for at least the
next 5 years due to high demand and expected high prices. They found it difficult to predict what might happen
beyond then. Although demand from China is unlikely to drop, it is possible that lower prices for recycled plastic in the
future will mean that reprocessors in the EU or in other countries in North Africa or South America can compete for
waste plastics. It was reported that there are recycling plants in Egypt, Tunisia and Morocco, and some exports from
Italy are being sorted in Tunisia.
India is also a strong export market and any relaxing of the regulations allowing the import of waste plastics other than
PET and PP would increase the market share for destination of European waste plastics.
122
ibid
123
ibid
Several consultees also stated that harmonisation across EU member states allowing recycled PET to be used for food
packaging would reinvigorate the European market. This would in turn reduce export to China of PET bottles from
Europe.
There are reports that reprocessors are setting up plants in Eastern European states where the cost of labour is lower
than in the rest of Europe (e.g. German companies are shipping their waste to Bulgaria for sorting124). These countries
are also ideally placed for trade between Western Europe and Russia.
In conclusion, EU exports both within the EU and to non-EU destinations such as Hong Kong and China are set to
continue over the next 5 years. There may be increasing exports to countries such as India and Pakistan, with potential
demand from countries in South America or North Africa emerging.
6.4
Summary

Plastics consumption in Western Europe is a one of the highest in the world. Around 42,000kt of plastics (including

The plastics recycling industry in Europe has grown over the last decade, mainly stimulated by packaging waste
both virgin plastics and around 2,000kt of recycled plastics) were consumed in 2003.
recycling as countries adopted best waste management systems. In 2003, 14.8% of all recovered plastic was
recycled, a 24% increase since 2001. Figures for 2004 suggest that almost 3,000kt of plastic packaging waste were
recycled in Europe.

There is a significant intra-EU trade of waste plastics with major imports from other EU countries to the Netherlands,
Belgium, Italy and Germany. These countries are also the major exporters outside the EU, reflecting the movement
of waste plastics within the EU that is then transhipped to other non-EU destinations, including Hong Kong and
China.

The volume of exports from the EU has increased by 129% between 1999 and 2004 from just over 1,000kt to
2,360kt, from a value of £171 million to £439 million. In 2004 Hong Kong and China took almost two thirds of total
EU exports by volume. Exports to this region have more than tripled since 1999. Polythene is the largest declared
plastic material exported from the EU.

Packaging waste makes up the majority of waste recycled in the EU. Packaging waste collection and recycling
systems are one of the main drivers for recycling plastics in the EU as packaging is the most important source of
plastics. Progress in meeting the targets of the Packaging Waste Directive in those countries currently lagging
behind will mean a greater volume of waste plastics being collected and traded within and outside the EU.

There is consensus that the export market to China is set to continue for at least the next 5 years due to high
demand and expected high prices. It is difficult to predict what might happen beyond then.
124
Wellman, personal communication
7.0
UK
7.1
Trade profile
7.1.1 Imports
UK imports of waste plastics have been increasing rapidly over time, and have grown by 130% from 11kt in 1999 to
44.7kt in 2005. Plastic waste imports in 2005 were valued at £11.8 million.
Table 7.1 gives a summary of the top 10 providers of waste plastic into the UK. The vast majority of UK waste plastic
imports (more than 92% in 2004) are imported from other EU Member States. The bulk of it comes from the UK’s
closest neighbours. Ireland accounts for more than a quarter of UK waste plastic imports (7.1kt), while the other major
countries include Belgium (4.9kt), Germany (4.4kt), the Netherlands (4.3kt) and France (2.7kt). Despite ranking only
fifth in terms of import volume, the waste plastic imports from France actually have the highest trade value of £1.5m.
Table 7.1
UK imports by source country
1999
Rank Order
2004
2005
Exporting
Trade
Net Weight
Exporting
Trade
Net Weight
Exporting
Trade
Net Weight
Country
Value (£)
(kt)
Country
Value (£)
(kt)
Country
Value (£)
(kt)
TOTAL
4,704,661
11.7
TOTAL
6,738,073
26.9
TOTAL
11,754,543
44.7
1
Netherlands
1,737,932
2.8
France
1,476,161
2.7
Irish
2,824,950
16.1
2
3
Belgium
548,972
1.8
Germany
1,111,147
4.4
Germany
1,986,681
7.6
USA
445,147
1.0
Netherlands
913,378
4.3
Netherlands
1,979,588
6.8
4
5
Germany
400,639
1.1
Belgium
891,697
4.9
Belgium
1,220,620
4.5
Italy
339,501
1.2
Irish
834,849
7.1
France
942,091
3.0
6
7
Austria
300,703
1.0
Italy
397,315
0.5
USA
725,676
0.7
Irish
214,434
1.5
USA
391,042
0.4
Denmark
420,676
0.5
Republic
Republic
Republic
8
9
10
Russia
206,573
0.1
Denmark
261,288
0.8
Italy
402,967
1.0
Norway
114,448
0.2
Hong Kong
94,809
0.2
Hong Kong
367,038
0.9
Denmark
111,986
0.5
Dubai
81,775
0.1
Switzerland
131,988
2.1
Others
284,326
0.5
Others
284,612
1.5
Others
752,268
1.5
Source: UK trade statistics website, http://www.uktradeinfo.com
Imports of all different materials have grown between 1999 and 2004 but PE imports have really been driving this
growth. The share of UK waste plastic imports accounted for by PE has increased from 44.6% in 1999 to 50.8% in
2005. PVC imports are the next largest single material import into the UK, representing 7.7% of waste plastic imports in
2004, followed by PS (4.3%) and PP (2.4%). Other waste plastics contributed 37.2% of the total figure in 2004,
increasing markedly since 1999, and showing further growth in the latest 2005 data (Table 7.2).
Table 7.2
UK imports by waste plastic type
1999
2004
2005
Waste
Trade
Net Weight
Waste
Trade
Net Weight
Waste
Trade
Net Weight
Plastic
Value (£)
(kt)
Plastic
Value (£)
(kt)
Plastic
Value (£)
(kt)
Type
Type
Type
TOTAL
4,704,661
11.7
TOTAL
6,738,073
26.9
TOTAL
11,754,543
44.7
PE
1,390,373
5.2
PE
2,232,096
13.6
PE
4,013,249
16.1
PS
8,348
0.02
PS
464
1.2
PS
1,112,342
1.9
PVC
405,953
1.5
PVC
468,497
2.0
PVC
1,780,831
10.7
PP
74,069
0.2
PP
108,721
0.7
PP
1,331,291
7.3
Other Waste
2,825,918
4.7
Other Waste
3,465,031
9.3
Other Waste
3,516,830
8.7
Plastics
Plastics
Plastics
7.1.2
Exports
The UK is a large net exporter of waste plastics. Exports far outweigh imports each year. Over the last five years
exports have grown even more rapidly than imports.
Figure 7.1 UK exports of waste plastic, 1999 – 2005
400,000
344,000
350,000
324,234
Tonnes
300,000
250,000
195,889
200,000
150,000
100,000
81,293
86,919
109,543
48,227
50,000
0
1999
2000
2001
2002
2003
2004
2005
Figure 7.1 shows that UK exports of waste plastics have increased six-fold since 1999. UK trade data records waste
plastic exports of 344kt in 2004, up from 48.3kt in 1999. Exports in 2005 were 324.2kt. Export values have also been
growing rapidly (four-fold over the same five year period), albeit at a slightly slower rate than the quantity, so the
average value of waste plastic exports has fallen slightly over time.
The total of 344kt in 2004 is significantly higher than the volume of waste plastic packaging exports recorded via the
PERN system. PERN data for 2001 to 2004 are shown in Table 7.3. In 2004 these accounted for 173.9kt of the 344kt
tonnes of waste plastic exported.
Table 7.3
PERN export data for plastic packaging waste
Exported waste plastic (kt)
2001
2002
2003
2004
2005
66.8
135.2
114.4
173.9
237.8
Source: Defra
Consultations with UK exporters help to explain the origin of the remaining 87kt exported in 2005. These volumes are
partly made up of packaging waste that is not recorded (through unaccredited exporters) and exported. However
consultations with exporters show that a large proportion of export plastics are post-production scrap (injection
moulding) collected directly from the manufacturers of plastic bottles, car components and other products. Many of the
exporters consulted stated that a large proportion, in some cases all, of their exported plastic waste was industrial scrap.
Some of the plastics exported under the ‘waste’ category will include semi-finished reprocessed material, for example
granulated plastics scrap and washed flake PET.
The destination of these recovered plastics is shown in Figure 7.2. The share of exports going to Hong Kong and China
has increased from 43% (20.8kt) in 1999 to 74% (254.2kt) in 2004. The strong growth in UK exports of waste plastics
is being driven by the growth of exports to this region. India is a growing, but much smaller market for UK waste plastic
exports. The share of UK exports going to EU countries has declined.
Figure 7.2
UK waste plastic exports by destination (2004)
North America
1%
India
4%
EU
14%
Other
6%
Europe other
1%
HK & China
74%
The composition of UK recovered plastic exports by commodity code is shown in Figure 7.3. The largest single
component is PE followed by ”Other” and PP. PE is the main driver of the growth in UK exports, having increased from a
20.3% share of all plastic waste types in 1999 to 72.6% in 2004.
Figure 7.3
UK exports by waste plastic type (2004)
Other
15%
PVC
7%
PP
5%
PS
1%
PE
72%
The extent to which these data (drawn from exporters’ declarations to the UK authorities) can be used as a reliable
guide to the contents of the containers in question is uncertain. As shown in Chapter 5, there are significant differences
in the declarations made to UK and Hong Kong customs authorities about the type of plastic being shipped between the
two destinations. Hong Kong data record 26.1kt of waste plastic arriving from the UK than the UK exports to Hong
Kong, and a significantly different polymer composition.
Year-end effects may account for some of the quantitative difference (e.g. a shipment that leaves in the UK in December
03 but arrives in Hong Kong in January 04), but the material differential is less easily explained. The consultations have
not revealed a specific reason for this material difference. The same comparisons for other exporting countries do not
reveal such startling discrepancies. This suggests that the difference is not necessarily due to Hong Kong reporting
practices.
7.2
Market Profile
7.2.1 Plastic consumption and recycling
Approximately 4,700kt of plastic were consumed in the UK in 2002, an increase of 250kt since 2000. This trend is set to
continue and the 5,000kt mark is expected to be reached in the next few years.125
Packaging represents the single largest sector of plastics use in the UK economy. An estimated 2,200kt of plastics were
used in packaging applications in 2005. Plastic packaging tonnage is growing at 2-5% pa.
A full profile of the UK’s consumption of plastics and supplies for recycling is provided in section 2.
7.2.2 The UK plastics recycling industry
The UK plastics recycling industry is made up of several business types, outlined below. Around 200 UK companies dealt
in the processing of packaging waste in 2003126.
125
British Plastics Federation
126
WRAP, 2003c

Reprocessors: reprocess waste plastics into secondary raw materials for use by the plastics industry.
Reprocessors may depend on waste management companies and suppliers to sort out and clean materials prior to
reprocessing. Many companies involved in reprocessing plastics are small businesses with less than 50 employees.

Manufacturers: use recyclate in the production of e.g. pipe, film sheet, etc.
Reprocessors/manufacturers: Many companies are both reprocessors and manufacturers. The advantage of this
is to guarantee the supply of recyclate or to ensure a market for products made from recycled materials. Such
companies tend to be equally split between small businesses and companies that are part of larger groups.

Distributors – either offering a range of products made from recycled plastics, or importers of a niche product
manufactured abroad.
Since the introduction of the Producer Responsibility Obligations (Packaging Waste) Regulations in 1997 the reprocessing
industry can be divided into those companies that are accredited reprocessors of packaging waste and those that are
not. Reprocessors and exporters of packaging waste undergo voluntary accreditation (carried out by the Environment
Agency or SEPA) that allows them to generate and sell packaging recovery notes (PRNs – UK reprocessors) and
packaging export recovery notes (PERNs – for exported material).
It is not clear what proportion of the UK companies recycling waste plastics are Environment Agency accredited
reprocessors of packaging waste. 70% of the companies surveyed in the Enviros 2003 report were accredited. A certain
amount of plastic packaging waste recycled (either in the UK or exported) will therefore not be accounted for in official
PRN/PERN data (this is also true for waste produced by non-obligated producers).
A profile of the UK plastics reprocessing industry is provided in Section 3.
7.2.3 UK export market
As the trade figures show, the UK export market in waste plastics is healthy and has been growing over the past 5 years
(despite a small drop in 2005). As of July 2005, 43 UK companies were Environment Agency accredited exporters of
plastic waste. The majority of these (over 75%) export over 400 tonnes of material per year. There are also 83 UKbased companies that are on the AQSIQ list of companies accredited to export recycled (not just plastic) goods directly
to China. Only 18 companies appear on both lists. UK companies can export to China via Hong Kong and don’t require
accreditation to the Chinese system.
7.2.4 Plastic Prices
The export market is driven by the price paid for waste plastic. The following chart shows the trend in average UK
prices since 2002 for unprocessed waste plastics from LDPE and HDPE film, as well as PET, HDPE bottles and mixed
plastic waste from bottles. Prices for LDPE and HDPE film are generally higher than for bottles. Single colour plastics
also fetch a higher price than coloured or mixed in both types of material. As expected, the price for mixed plastic bottle
waste remains much lower than for unmixed plastics. For all plastic types, prices in 2002 were stable followed by a
slight downturn in 2003-2004 then a sharp increase in 2005. The exception was the price for bottle mixed plastic waste
which rose in mid-2003 to mid-2004 then softened, before rising again in 2005.
All the exporters consulted suggested an increase of around £20-£30 per tonne on these prices could be obtained for
export.
Figure 7.4
Price per tonne for different recovered packaging plastics 2002-2005
300
Price per tonne (£)
250
200
150
100
50
Nov-05
Sep-05
Jul-05
May-05
Mar-05
Jan-05
Nov-04
Sep-04
Jul-04
May-04
Mar-04
Jan-04
Nov-03
Sep-03
Jul-03
May-03
Mar-03
Jan-03
Nov-02
Sep-02
Jul-02
Mar-02
May-02
Jan-02
0
Month
HDPE mixed colour film
HDPE single colour film
LDPE mixed colour film
Clear and light blue PET
Coloured PET
HDPE single colour bottle
Mixed
Source: Letsrecycle.com http://www.letsrecycle.com/
7.3
Outlook
7.3.1 Current and future export markets
The current trend in export of waste plastics to China and Hong Kong is growing and expected to continue. All the
exporters consulted exported all or a majority of their waste plastics to Hong Kong. Only one of these exported
exclusively to China direct. This was because he had contacts in China and dealt with clean post-industrial waste. This
exporter also stated that prices obtained for the PP and PVC exported to China were only 80% of what could be
obtained in the UK. However he believed that the UK market was not big enough and business conditions were better in
China.
There are several reasons for going through Hong Kong rather than China directly given by the exporters:

China regulations are stricter (no mixed waste and PET bottles allowed)
Traders in Hong Kong are able to sort and organise transhipment of waste to China
Traditional good and trusted business links with Hong Kong traders
Current demand from other countries was also mentioned such as the Middle East and South American countries.
Barriers to increasing exports to these countries included stricter regulations and lower prices than China and Hong Kong
were prepared to pay.
India was identified as an important destination for some UK exports. Many exporters expressed the wish that India
would open up regulations to accept all Green List waste (not just PET and PP).
Although other countries in Europe and the US were competitors for export, the exporters consulted did not consider this
to be a serious concern. Many exporters also traded with other European countries, where there is demand for high
quality waste plastic and recycled plastic granulates.
All exporters were confident that demand and high prices from China would continue in the foreseeable future, and
certainly the next 5 years. It is more difficult to predict what might happen after that in terms of prices and competition
from other countries. Most exporters agreed that demand from China was likely to remain high even in the longer-term.
7.3.2 Future risks to the export market
A major risk identified through the consultation was that regulations in China might be tightened so that plastics waste
currently exported will no longer be accepted. Two exporters said that they were installing sorting facilities on site so
that they would be able to export higher quality waste.
One future risk to the export market in the UK identified was a future lack of supply due to the efficiency of the
packaging and manufacturing industry, as well as the use of lighter packaging leading to less plastic wastes. One
exporter reported that it was becoming more difficult to find suppliers. Another reason for this was reported to be that
some Chinese importers were coming to the UK to buy waste directly from the supplier, thus leaving out the
intermediate UK traders.
Volatility in plastic waste prices was mentioned as a risk to business. There was a sharp decrease at the end of 2005
after a year of high prices. Prices are expected to stabilise in 2006, which may change the volumes of waste being
exported. Exporters were nevertheless confident that prices for recycled plastic would rise over the longer term, in
parallel with oil and virgin plastic prices.
7.4

Summary
Approximately 4,700kt of plastic were consumed in the UK in 2002, an increase of 250kt since 2000. This trend is
set to continue and the 5 million tonne mark is expected to be reached in the next few years.

UK imports of waste plastics have increased from 11kt in 1999 to 44.7kt in 2005. In 2004 more than 92% of imports
came from other EU Member States.

The UK is a large net exporter of waste plastics. Exports far outweigh imports each year. UK exports of waste
plastics have increased six-fold since 1999. UK trade data record waste plastic exports of 344kt in 2004, up from
48.2kt in 1999. Figures for 2005 show a slight decrease on the 2004 figure, having achieved exports of 324.2kt
tonnes.

The 2004 export total is significantly higher than the volume of waste plastic packaging exports recorded via the
PERN system. In 2004 PERNs for packaging waste accounted for 173.9kt of the 344kt of waste plastic exported. In
2005 PERN for packaging waste accounted for 238kt of the 324kt exported. This difference can be partly accounted
for by the export of non-packaging plastic waste (post industrial waste) and some packaging waste exported outside
the PERN system, although there are clearly other anomalies in the data over the period 2002-2005.

As of July 2005, 43 UK companies were Environment Agency accredited exporters of plastic waste. The majority of
these export over 0.4kt of material per year. There are also 83 UK-based companies on the AQSIQ list of companies
accredited to export recycled (not just plastic) goods directly to China. Only 18 companies appear on both lists. UK
companies can export to China via Hong Kong and don’t require accreditation to the Chinese system.

The share of UK exports going to Hong Kong and China has increased from 43% in 1999 to 74% in 2004. The
strong growth in UK exports of waste plastics is being driven by the growth of exports to this region. All the
exporters consulted in the study exported all or a majority of their waste plastics to Hong Kong. Most plastic waste
sent to China via Hong Kong is mixed scrap and PET. Prices obtained for these were quoted to be at least £20-£30
per tonne higher than in the UK.

The Indian market is becoming increasingly significant. Many exporters expressed the wish that India would open up
regulations to accept all Green List waste (not just PET and PP).

Barriers to increasing exports to other countries include stricter regulations and prices lower than those available
from China and Hong Kong. Many exporters also trade with other European countries, where there is demand for
high quality waste plastic and recycled plastic granulates.

All exporters were confident that demand and high prices from China would continue in the foreseeable future, and
certainly the next 5 years. It is more difficult to predict what might happen after that in terms of prices and
competition from other countries. Most exporters agreed that demand from China was likely to remain high even in
the longer term.
8.0
NAFTA
8.1
Trade Profile
8.1.1
US
The US is one of the world’s largest importers and exporters of waste plastics. It imported 396kt and exported 745kt of
recovered plastic in 2004, worth £107m and £200m respectively.
Imports
US import data for waste plastic are presented in Figure 8.1. These show that imports increased by 27% between 1999
and 2004 in terms of volume, but by only 7% in value terms. Imports from Mexico almost doubled during this period.
Mexico is now the largest source of US waste plastic imports. Canada is the second largest. The US imported 40kt of
waste plastics from China in 2004. All other significant sources of scrap plastic imports are European – Germany, Italy,
Spain, Belgium, France, the Netherlands and the UK (Figure 8.2).
Figure 8.1
US imports of waste plastic, 1999-2004
450
400
350
kt
300
250
200
150
1999
2000
2001
Canada
2002
Mexico
2003
2004
Other
Source: UN Trade Statistics, http://un.org/unsd/comtrade SITC 579: Waste, Parings and Scrap of Plastics
Figure 8.2
US waste plastic imports by country of origin, 2004
Mexico
28%
Other
29%
China
10%
Germany
11%
Canada
22%
Source: UN Trade Statistics, http://un.org/unsd/comtrade. SITC 579: Waste, Parings and Scrap of Plastics
The vast majority (86%) of US waste plastic imports are declared as ‘other waste plastics’ rather than polyethylene,
polystyrene or PVC. The material composition of the trade (based on customs declarations) is shown in Figure 8.3.
Figure 8.3
Composition of US waste plastic imports, 2004
PE
36%
Other
53%
PVC
8%
PS
3%
Exports
Over the past five years US exports of waste plastics have increased much more quickly than imports, growing by 112%
and 133% in terms of volume and value respectively (see Figure 8.4).
Figure 8.4
US Exports of Waste Plastic, 1999-2004
900
800
700
kt
600
500
400
300
200
100
0
1999
2000
2001
HK
China
2002
Canada
2003
2004
Others
This growth has been driven by a rise in exports to Hong Kong and China. Exports to Canada and India have also
increased substantially. Six of the ten largest waste plastic export markets for the US are in Asia. These account for
more than two-thirds of US waste plastic exports. Canada and Mexico receive most of the remainder.
Whereas the UK exports far more waste plastic to Hong Kong than it does direct to China, the US actually exports more
direct to China than to Hong Kong. Based on the market and risk analysis covered elsewhere in this report, we expect
the direct trade to be concentrated in post production scrap rather than post-consumer waste plastics (where the risk of
shipments being rejected is higher).
More than half of US waste plastic exports are declared as ‘other waste plastics’ (53% by tonnage, 59% by value). In
2004, polyethylene accounted for 36% of export volume and 32% of the value. Direct exports to China have a slightly
higher share of PVC and lower share of ‘other’ than do exports to Hong Kong (which are shown in Figure 8.5). Exports
to Canada, on the other hand, have a larger PVC and ‘other’ share than exports to Hong Kong.
Figure 8.5
Composition of US Exports to Hong Kong of Different Waste Plastic Materials, 2004
PE
40%
Other
55%
PVC
3%
PS
2%
Source: UN trade statistics, http//unstats.un.org/unsd/comtrade
8.1.2
Canada
Imports
Canada is a net importer of waste plastics, importing 207kt and exporting 159kt in 2004, with values of £47m and £37m
respectively. Imports increased by 46% between 1999 and 2004 in tonnage terms and 65% by value.
More than 90% of Canadian imports (by both volume and value) arrive from the US (see Figure 8.6). Most of the
remainder is sourced from Europe. The material composition of imports and exports is similar to the US, which is
unsurprising given the major role that the US plays in the Canadian waste plastics trade (Figure 8.7).
Figure 8.6
Canada Imports of Waste Plastic, 1999-2004
250
200
kt
150
100
50
0
1999
2000
2001
US
2002
2003
2004
Other
Source: UN trade statistics, http//unstats.un.org/unsd/comtrade. SITC 579: Waste, Parings and Scrap of Plastics
Figure 8.7
Canada Imports of Different Waste Plastic Materials, 2004
PE
30%
Other
55%
PVC
10%
PS
5%
Exports
Canadian waste plastic exports have increased more slowly than imports (see Figure 8.8). Exports have risen 27% by
volume over the same period, but have changed significantly in shape. Hong Kong and China now account for more
than 40% of exports, compared to 21% in 1999. The US’ share has fallen from 76% to 54%.
Exports to India have also increased significantly but continue to lag a long way behind exports to the US, Hong Kong
and China. Small volumes are also exported to Europe and some other Asian countries including Vietnam and Korea.
Figure 8.8
Canadian exports of waste plastic, 1999-2004
180
160
140
kt
120
100
80
60
40
20
0
1999
2000
2001
HK
China
2002
US
2003
2004
Other
Figure 8.9
Destination of Canadian Exports of Waste Plastic, 2004
Other
3%
China
11%
USA
54%
Hong Kong
32%
Source: UN trade statistics, http//unstats.un.org/unsd/comtrade. SITC 579: Waste, Parings and Scrap of Plastics.
Most of the material shipped to Hong Kong and China is described as ‘other waste plastics’. This includes PET bottles,
one of the waste streams known to be imported to Hong Kong from Canada. The composition of exports to Hong Kong
is shown in Figure 8.10.
Figure 8.10
Composition of Canada’s waste plastic exports to Hong Kong, 2004
PE
11%
PS
2%
PVC
2%
Other
85%
PE
PS
PVC
Other
8.2
Policy & regulatory situation and outlook
USA
In the US the key federal policies governing recycling come from Executive Orders issued by the President. An example
is Executive Order 13101 - ‘Greening the Government Through Waste Prevention, Recycling and Federal Acquisition.‘127
These orders go little further than establishing the principle that local agencies must set goals for recycling, and measure
and report progress towards such goals. None of the interviewees expected to see more detailed federal regulation in
the foreseeable future. However, legislation at state level has the potential to both increase the supply of plastic bottles
and the demand for waste plastics.
Recycling initiatives have so far been concentrated in California and on the north-eastern seaboard of the US. However,
other states are now contemplating legislation on recycled content, including Bottle Bills (laws requiring minimum
refundable deposits for bottles) and bans on landfill of plastic bottles. For instance, North Carolina is introducing a
complete ban on the landfill of plastic bottles by mid-2009. However it was suggested that the ban could only be
expected to have a 10% impact on the recycling rate in its first year, largely due to the publicity that would surround it.
California and Wisconsin have both introduced Rigid Plastic Packaging Container (RPPC) laws, which specify that all nonfood rigid plastic packaging, must contain a certain percentage of post consumer plastic. The impact of California
enforcing this has been a trebling in the use of recycled PET in non-food containers in 2004128. The extension of similar
policies to other states could have substantial effects on the US demand for recycled plastics.
Canada
In Canada there is little in the way of national regulation of waste plastics. Provincial regulations in terms of recycling in
the municipal waste stream vary. Most provinces focus on voluntary regulations such as beverage container deposit
systems. There are comprehensive kerbside collection schemes for recyclables in major cities and municipal bottle
collection schemes are known to be feeding export markets. Meanwhile, Canadian industries are integrated into the
complex North American market for industrial scrap plastics.
Mexico
In Mexico the attention of the regulators has been focused on PET bottle collection from waste disposal sites. Widely
fluctuating prices for PET have made it undesirable to collect, but a new law introduced in 2004 provides a minimum
price for every PET bottle collected. The hope is that this minimum price, along with the establishment of a processing
organisation (ECOCE) will encourage enough collection to ensure a stable supply of PET plastics. It is then hoped that
this stability will help to create a stable PET recycling industry in Mexico.129
It is assumed, though it has not been corroborated, that waste plastic from industrial sources is also being collected and
recycled.
8.3
Market Profile
There is little information or literature available about the US plastics recycling market in the public domain. The last
official study appears to be a 1997 report by the Environmental Protection Agency. There is more information on the
recovery of PET bottles from the municipal waste stream (where intervention by municipal governments is involved and
there is a dedicated association), than on the much larger commercial markets for scrap plastic.
It is estimated that 80% of plastics in the waste stream come from industrial and commercial entities.130 The market is
growing. However, since industrial waste plastics are not generally subject to government targets or reporting
127
http://www.ofee.gov/eo/13101.htm
128
NAPCOR 2004 report page 8
129
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/02/17/BUGRI51VNU1.DTL&type=printable
130
Denton Plastics, quoted in the Portland Business Journal.
requirements, very little collated information or data is available about the market. Additionally the heterogeneous
nature of post-industrial waste plastics supply makes the market far more ad hoc than the markets for post-consumer
waste plastics. There are a very large number of suppliers offering highly differentiated waste plastics and an equally
large number of organisations looking to purchase them - recyclers, brokers and exporters.
The agricultural sector is a major source of waste plastics and has features that are common to the market as a whole.
Large quantities of different types of waste plastics are generated - bailing twine, HDPE pots, styrene trays, pesticide
bags and the film covers from greenhouses. Due to the dispersed nature of this supply, a specialist broker typically
collects the material. For instance Agri-Plas, based in Oregon, specialises in collecting, cleaning and sorting agricultural
waste plastics. In 2004 it processed 8kt of waste plastics from the agricultural industry in Oregon alone. The firm sells
this on to a combination of brokers, recyclers and end users that either process the material themselves or sell it on to
brokers and recyclers, either locally or around the world.
The presence of closed-loop recyclers complicates the picture further. These are manufacturers that produce waste
plastic, but recycle it themselves and return it to a state where it can again be used as a raw material. Across North
America there are many organisations that work with manufacturers to achieve closed-loop recycling. Interviews with
such companies have shown this to be a particularly strong market. Rises in the price of virgin resins have had the effect
of forcing many companies to look to their scrap plastic arisings.
Consultees admitted however that this type of recycling is only suitable for large organisations, and certain types of
plastics. For instance, large factories processing vinyl are ideally placed to use their scraps since this polymer can easily
be recycled.
Contacts in the post-industrial plastics market agreed that there was demand for all types of waste plastics and recycled
resins from Asia, in particular China, Hong Kong, and India. Though no official figures exist it was estimated that
between a quarter and a third of all material collected is exported.
Published data and consultations confirm a clear trend of rising prices in both the US and Canada over recent years. The
price rise was generally attributed to an increase in the prices of oil affecting virgin resin prices, and the prices of virgin
resins in turn affecting the prices of waste plastic.
PET
The quantity of post-consumer PET bottles collected in the US increased from 352kt in 1995 to 455kt in 2004131. The
quantity of recovered bottles reprocessed within the US, however, has barely changed over a decade. Over the same
period exports have increased 118% (see Table 8.1). The National Association for PET Container Resource (NAPCOR),
the trade body, estimates US and Canadian PET processing capacity at 425kt by the end of 2004. However these
facilities operated well below capacity in 2004. At the same time, market prices are at their highest levels since 1996
(Figure 8.11).
Although the volume collected has risen, the overall recycling rates for these bottles have fallen because over the same
period the quantity of bottles placed on the market has increased from 885kt in 1995 to 2,100kt in 2004. The US and
Mexico have the world’s highest per capita consumption of carbonated soft drinks, and increasingly buy drinks packaged
in small individual servings132.
131
NAPCOR. 2004 report.
132
Quoted from Reuters at htpp://www.planetark.com/dailynewsstory.cfm/newsid/31660/story.htm
Table 8.1
Post-Consumer PET Bottle Recycling in the US, 1995 – 2004
Post Consumer
Bottles
Gross Weight
Purchases (kt)
1995
Purchased by US
Reclaimers and
Others
274
Purchased by
exporters
Total US Material
Recycled
Post Consumer
Bottle Imports
Total Post
Consumer Bottles
used by US
Reclaimers
1996
1997
1998
2000
2001
2002
2003
2004
249
263
298
272
272
237
236
286
77
67
50
40
77
106
125
146
169
352
316
313
338
349
378
362
381
455
21
39
30
46
31
32
26
28
48
295
288
293
343
303
304
263
264
334
Source: NAPCOR, annual report 2004
Figure 8.11
£/tonne
500
450
400
350
300
250
200
150
100
50
0
M
ay
-8
M 9
ay
-9
M 0
ay
-9
M 1
ay
-9
M 2
ay
M 93
ay
-9
M 4
ay
-9
M 5
ay
-9
M 6
ay
-9
M 7
ay
-9
M 8
ay
-9
M 9
ay
-0
M 0
ay
-0
M 1
ay
M 02
ay
-0
M 3
ay
-0
M 4
ay
-0
5
£ / Kg
PET bottles, clear post-consumer flake, clean regrind or flake
Source: PlasticNews
The US market for recycled PET has become increasingly strong. It grew 61kt in 2004 to reach 398kt. This was 64kt
more than the total weight of post consumer bottles handled by US reprocessors in 2004133. It is estimated that Mexico
recycled only 30kt of the 460kt of PET it consumes annually134. Historically, widely fluctuating prices for PET have made
it undesirable to collect, but new regulations are set to change this.
133
NAPCOR 2004 report, page 6.
134
Mexican Officials, as quoted in the San Fransisco Chronical 17th February 2004 http://www.sfgate.com/cgibin/article.cgi?f=/c/a/2004/02/17/BUGRI51VNU1.DTL
Figure 8.12
Reprocessing of post-consumer PET bottles in the USA, 1995-2004
500
450
400
350
kt
300
250
200
150
100
50
0
1995
1996
1997
1998
1999
purchased by us firms
2000
2001
2002
2003
2004
purchased by exporters
Source: NAPCOR, 2004.
PE
The American Plastics Council reported North American HDPE bottle collection rates at 25.9%. Utilisation of the HDPE
capacity in 30 companies equipped to process it in the US and Canada was 70% in 2004. Eighty percent of this was
processed by the eight largest companies. Of this, only 16% of the total HDPE recovered was exported for recycling in
other countries.
Firms in this industry appear to face far less competition from China than PET processors. According to one HDPE
processor, the Chinese market is absorbing 33% of US PET and only 10% of US HDPE. HDPE and LDPE prices have
nonetheless climbed to historic highs on the back of high prime plastic prices (Figures 8.13, 8.14)
Figure 8.13
Prices of HDPE, Mixed Colours Post-Consumer Flake, clean regrind or flake.
400
350
300
£/t
250
200
150
100
50
Ju
n8
Ju 9
n9
Ju 0
n9
Ju 1
n9
Ju 2
n9
Ju 3
n9
Ju 4
n9
Ju 5
n9
Ju 6
n9
Ju 7
n9
Ju 8
n9
Ju 9
n0
Ju 0
n0
Ju 1
n0
Ju 2
n0
Ju 3
n0
Ju 4
n05
0
Source: PlasticNews
Figure 8.14
LDPE Film coloured post-consumer flake, clean regrind or flake.
250
200
£/t
150
100
50
Au
g
-9
2
Au
g93
Au
g94
Au
g95
Au
g96
Au
g97
Au
g98
Au
g99
Au
g00
Au
g01
Au
g02
Au
g03
Au
g04
Au
g05
0
Source: PlasticNews
Table 8.2
ABS
ABS
PC
PC
HDPE
HDPE
LLDPE
PET bottles
PP
PVC
US market prices of various recovered industrial plastics, Jan 2006 (£/t)
Mixed Colours Industrial Flake, Clean regrind or flake
Mixed Colours Industrial Pellets
Clear Industrial Flake
Mixed Colours Industrial Flake
Natural, Post-consumer flake
Natural, Post-consumer pellets
Stretch film pellets
Clear Post-Consumer flake
Industrial pellets
Clear Industrial Flake
Low
240
360
650
300
490
550
390
470
410
350
High
270
410
750
350
540
600
450
560
510
450
Average
255
385
700
325
515
575
420
515
460
400
Source: PlasticNews
8.4
Outlook
Consultations highlighted the impact of competition for waste plastics from Asia. There is strong demand for all forms of
waste plastics, particularly from China. Every single recycler contacted for this study identified this as a key issue in the
industry and it is evident that many US firms feel unable to compete. There are reports of an “exodus”135 of North
American plastics processing companies to China. The CEO of one such company, which has recently set up a plant in
China, explained that in addition to cheap labour not only is much of their market for recycled plastics now in China, but
there is also a supply of post-consumer plastics from Asia (Japan, Taiwan, Korea, and now China).
Most recyclers feel that China will soon dramatically increase its capacity to produce virgin resin, but respondents were
split on the impact that this would have on the export market. Some respondents felt that this extra supply would curtail
China’s demand for waste plastics. For instance, the recent approval of an 800kt/a expansion in the ethylene capacity of
Guangzhou Petrochemical alone (eight times the current weight of ethylene pairings exported to China) is likely to have
135
Ben Benvenuti, CEO of Commercial Plastics Recycling Inc., quoted in Plastics News, 22nd Nov
an impact on demand. However, most saw the Chinese market growing at such a rate that the demand for plastic resins,
both virgin and reclaimed, would continue to grow faster than the supply. One recycler went so far as to voice the
opinion that trade would “continue to tighten as prime resins face shortages of their own feed stocks to manufacture
resin. This creates higher prices and thus more demand on recycled plastics.”
Consultations suggest that it is generally accepted by the industry that incremental changes in regulation will continue to
increase the supply of waste plastics. Some measures (such as the Oregon example in section 8.3 above) will also
increase demand.
In discussion, the impact of domestic regulation on the recycling of plastic was seen as coming a distant second to
changes in the attitudes of key corporations. It was generally felt that there was now a new ‘corporate conscience’ in
place, and that corporations were moving towards more environmentally sound modes of production. As one recycler
put it: ”There seems to be a renewed corporate commitment to product stewardship and environmental responsibility,
which includes recycled packaging”.
For example, the large drinks manufacturers are using more waste plastics in the fabrication of their bottles. In fact, the
demand from the large drinks manufacturers is reportedly so strong that research suggests it is almost impossible to
obtain post-consumer waste bottles, unless the organisation concerned is tied to one of these key companies.
In Mexico Coca-Cola have recently opened the first bottle-to-bottle recycling plant in Latin America. It has the capacity to
process 23kt of waste PET per year and the potential to double the amount of PET currently being recycled in Mexico136.
Such a plant will inevitably have a significant impact, both on the market for waste PET within Mexico, and on the supply
of plastics to the US from Mexico.
Some consultees saw international regulations as a potential risk – that changes in custom and environmental
regulations in China could curtail the export demand for waste plastics. This was usually in the context of making a case
for government support to the local plastics recycling industry.
The development of the plastic and plastic-composite lumber market was seen as important for future use of plastic
recyclate. The key feature of this industry (currently a 1 million tonne market in North America137) is that it can consume
a wide range of post-commercial and post-industrial waste plastic types. The historically strong demand for lumber
decking (a US$4 billion market in the USA alone138) and the development of new ways in which plastic lumber can
replace traditional pressure treated lumber, such as railway sleepers (train track ties), is making the production of plastic
lumber an increasingly important market for waste plastics.
Market dynamics in the packaging sector are also relevant, particularly trends in packaging and virgin plastic use which
make recycling more difficult. Use of PET is no longer restricted to (mainly) clear and un-pigmented one and two litre
drinks bottles. PET is now used to package a wide variety of products, demanding different sizes, pigments, label
materials, barrier coatings, layers, fillers and blends. All of these changes make the plastics more complex and less costeffective to recycle.
8.5

Summary
There is extensive trading of waste plastics within the NAFTA region (the USA, Canada and Mexico), and also a net
outflow of this material to East Asia. Whilst information is available about the recovery and recycling of PET bottles
from the municipal stream, data on trends within the wider waste plastics market are not readily available.

Consultees reported strong demand from buyers for the Chinese market. There is also strong demand from within
the NAFTA region itself, typically for high quality, sorted scrap plastic. Export markets are reportedly more forgiving
on quality.
136
http://www.cokefacts.org/news/news_aw_articles_recycling.pdf
137
http://www.plasticsnews.com/subscriber/fyi.html?id=1110567485
138
http://www.plasticsresource.com/s_plasticsresource/sec.asp?TRACKID=&CID=128&DID=230

The US has not ratified the Basel Convention and there is no equivalent to the Trans-Frontier Shipment regulations.
The quality of shipments is thus influenced by end-market requirements (such as AQSIQ accreditations and CCIC
inspections for China).

Research has not identified any federal policy initiatives on the horizon that would significantly transform either the
supply of waste plastic into the market, or the controls on trade in this material. The US, Canada and Mexico do not
have federal laws on packaging recycling equivalent to the EU’s Packaging Directive or Japan’s Container and
Packaging Recycling Law.

Beyond the market-driven recycling of scrap by industry, which is significant, the impetus for plastic recycling from
the municipal waste stream appears to come from state and municipal initiatives. State laws are also mandating the
use of recycled plastic, which is increasing demand for products such as recycled PET. Indeed, the significance of
the role of large corporations (particularly soft drink manufacturers) in driving the market for recycled materials was
a common theme in this segment of the market.
9.0
Japan
9.1
Trade Profile
Exports
In 2004, Japan exported 10.9kt of waste materials, 8% of which was waste plastic139. There is also an export trade in
used equipment, such as domestic appliances, which will contain recyclable plastics.
Figure 9.1
Japan’s exports of waste materials, 2004, (kt).
Waste plastic,
850
Waste paper /
paperboard,
2840
Aluminium
scrap, 81
Scrap iron,
6810
Copper scrap,
329
Source: UN Trade Statistics, http://un.org/unsd/comtrade
Waste plastic exports have increased significantly since 1999, moving from 191kt per year to 849kt (Figure 9.2). 90% of
Japan’s exports of waste plastic went to either Hong Kong or China in 2004 (see Figure 9.3). Hong Kong’s share of
Japan’s waste plastic export trade increased in 2004. This followed the introduction by the Chinese authorities of a ban
on direct imports of waste plastic from Japan in May of that year because of an incident involving a falsely labelled
consignment of waste plastics that was found to contain large volumes of unrecoverable wastes140.
139
Ministry of Finance trade statistics, quoted in Terazono, 2005.
140
The ban was lifted in September 2005, see www.ccc-us.com/aqsiq.htm
Figure 9.2
Japan’s exports of waste plastic by destination, 1999-2004 (kt)
900.0
800.0
700.0
kt
600.0
500.0
400.0
300.0
200.0
100.0
0.0
1999
2000
2001
HK
2002
China
2003
2004
Other
Figure 9.3
Japan’s exports of waste plastic by destination, 2004
Malaysia
1%
Others Rep. of Korea
1%
9%
China
19%
Hong Kong
70%
There is a reasonable level of consistency between the Japanese and Hong Kong data in terms of the material
composition of waste plastic trade between them (Figure 9.4). 20%-25% appears to be polyethylene, around 20%
polystyrene, PVC accounts for 1%-5%, polypropylene around 12% and the remainder (40%-45%) is classified as ‘other’
(this would include PET).
Figure 9.4
Comparison of Japanese & Hong Kong Trade Statistics’ Description of Composition of
their Plastic Waste Trade
Japan’s exports to Hong Kong
Hong Kong’s imports from Japan
PE
25%
PE
20%
Other
45%
Other
52%
PVC
1%
PS
18%
PS
22%
Source: Source: UN Trade Statistics,
PP
12%
PVC
5%
Source: Hong Kong Census & Statistics Department
http://un.org/unsd/comtrade
Imports
Japanese imports of waste plastic are minimal – less than 4kt per year for the last few years. The largest source of
imports (recognising that quantities are very small) is Korea.
9.2
Landfill costs in Japan are extremely high, in large part due to the geology which makes construction of landfill sites
difficult. This has created the incentive for a high percentage of waste to be diverted from landfill, and is reflected in the
high tonnage of recycled waste.
Japan has a comprehensive set of laws governing recycling and waste management. The rules on what should happen
to different materials in different circumstances are not entirely straightforward. This section attempts a summary based
on Japanese (English language) articles from recent publications.
The Fundamental Law for Establishing a Sound Material-Cycle Society of Japan defines ‘wastes, etc.’ according to the
structure shown in Figure 9.5. Materials are classified as valuable or valueless. Legislation is used to transform the
status of wastes from class to class within this hierarchy. As an example, the Packaging Recycling Law requires waste
PET bottles to be converted into PET flakes or pellets, thereby changing their status from ‘valueless’ to ‘valuables’. In
cases of trans-boundary movement of wastes for recycling the criteria for valuable and valueless resources differ
considerably, depending on whether the buyer is domestic or foreign141. The Law defines recyclable resources as ‘those
wastes that are useful’ – i.e. those that can be used cyclically, or with the potential to be used cyclically.
Resources & Recycling
There is a series of specific laws governing recycling of particular products, analogous in some ways to the various EU
Directives on packaging, WEEE, ELV’s, etc. These include:

Law for the Promotion of Sorted Collection and Recycling of Containers and Packaging (the ‘Container and Packaging
Recycling Law’)

141
Law for Recycling of Specified Kinds of Home Appliances (the ‘Home Appliances Recycling Law’)
Law for the Promotion of the Effective Utilisation of Resources
Law for the Recycling of End-of-Life Vehicles
Terazono, 2005
Table 9.1 provides a summary of the origins and requirements of these laws, drawn from Terazono (2005).
Figure 9.5
Definitions of waste
Valuables
Articles that will be
Cyclically used
(recycled)
Nonvaluables
(Waste, under the
Waste Management
Law
Articles that will be
disposed of
Byproducts
Discarded articles
(including end-ofLife products)
Source: Research Group on Sound Material Cycle Society Legislation, 2000, quoted in Terazono (2005).
Container and Packaging Recycling Law
This law was introduced in 1995 to promote recycling of container and packaging waste with the intention of reducing
the volume of municipal waste subject to final disposal and uses a form of producer responsibility model. The context
for the law was pressure on landfill capacity and the fact that containers and packaging accounted for approximately
60% of all municipal solid waste by volume. In the law recycling is defined as the transformation of used containers and
packaging into products and raw materials that are traded for value142. The law does not specify whether these
transactions should occur in Japan or overseas. It was drafted before the emergence of the China export trade, and
worked on the assumption that recycling would be undertaken domestically.
Permissible methods of recycling are defined. By example, PET bottles should be recycled into flakes, pellets or
polyester raw materials. The law does not say whether this should happen in Japan or overseas. There is no legal
specification on the qualifications or limitations defining the businesses that use the products generated by recycling and
thus the handling of waste after recycling.
However, as a means of establishing requirements for recycled material users, the Containers and Packaging Recycling
Association143 (effectively a compliance scheme that was established after the introduction of the packaging law) defined
a system that precluded easy export144. The requirements differ for each resource (see final column of Table 9.1).
Thus, according to the Association, contracted users of recycled PET flakes are limited to manufacturers that process
flake inside Japan. Export of recycled PET pellets is, however, allowed. Export of flakes is not allowed because the
impurities in the flake could then lead to it being considered as exports of waste. This regulation is not legally binding
but contracted recyclers are required to give prior notification upon registration, and contracts are cancelled in the event
of a violation.
142
Yoshida, 2005
143
See http://www.jcpra.or.jp/eng/
144
Ibid
Waste export
When the Basel Convention came into force Japan amended its Waste Management and Public Cleansing Law so as to
incorporate a ‘domestic disposal principle’. Under the law export and import of waste is controlled. Those exporting
general or industrial waste (excluding economically valuable material) are required to obtain a certificate from the
Ministry of Environment stating that

The wastes to be exported are deemed difficult to treat properly in Japan by available treatment techniques.
The waste to be exported will be recycled in the country to which they are exported.
In August 2002 the Ministry issued ‘technical standards relating to the confirmation of exports of general and industrial
waste’ which provided some relaxation of the ‘domestic disposal principle’. The revised standards allow ministerial
confirmation for export of wastes “where it is certain that such will be utilised in the destination country”, even where
appropriate disposal within Japan is not difficult. These provisions do not apply in the same way to non-hazardous
economically valuable material, such as waste plastic, which is exported in large volumes.
Table 9.1
Summary of Japanese laws related to resources and recycling
Articles covered
Definition of Recycling
Recycling Methods
Four types: glass bottle,
PET bottles, plastic
containers and
packaging, and paper
containers and
packaging
To utilize raw materials or
assigning them, with or without
charge, to those who will utilize
them. Or to use as products or
assigning them, with or without
charge, to those who will use them
(Concrete procedures for recycling) Glass
None
bottles: cullet processing PET bottles:
recycling into flakes, pellets, or polyester raw
materials. Plastic containers and packaging:
recycling into products, pellets, flakes, EPS
granules, ingots, fluff, etc. oil, gasification,
coke-oven chemical raw materials, use as
blast furnace reducing agents. Paper
containers and packaging: recycling as solid
fuel, paperboard and other products, paper
raw materials.
None
(The Containers and Packaging
Recycling Associations only permits
exports of PET pellets. Export of
plastic
containers and packaging are
prohibited.
The Association recognises that no
other
recycled material are substantially
exported)
TV sets, refrigerators,
washing machines,
air-conditioners
To utilize parts or raw materials,
or assigning them, with or
without charge, to those who
will utilize them.
(Excl. heat recovery. Termed
recycling, etc. (recycling in the
broad sense), where included.)
Not stipulated
Sets the following
recycling rate targets:
Air-conditioners: 60%+
TV sets:55%+
Refrigerators: 50%+
Washing machines: 50%+
None
(Home appliance recycling facility
operating companies seem to have
established export policies)
Pressure on landfill
Law for the Promotion of capacity; potential for
Effective Utilization of resource depletion
Resources
(est. 2000; enacted for
office computers in
2001;
enacted for home
computers in 2003)
As specified resourcerecycled products:
personal computers
(home and office),
compact rechargeable
batteries
To utilize as recycled parts and/or Not stipulate
materials
Sets the following
recycling rate targets:
personal computers:
Desktop PCs: 50%
Notebook PCs: 20%
CRT displays: 55%
LCDs: 55%
None
Law for the Recycling of
End-of-Life Vehicles
(est. 2002, enacted
2005)
All vehicles except
two-wheeled and
special motor vehicles
(as specified products
for recycling: shredder
residues illegal
dumping
To use as parts or raw materials
for new products, or to utilize as
heat
(recycling that includes
destruction of CFCs is termed
"recycling”. (recycling in the
broad sense))
Background
The Law for the
capacity; large ratio
Promotion of Sorted
Collection and Recycling of container and
packaging
of Containers and
waste to municipal solid
Packaging
waste
(Container and
Packaging Recycling
Law, est. 1995: enacted
1999)
The Law for Recycling
Specific Kinds of Home
Appliances
(Home Appliances
Recycling Law,est.
1998; enacted 2001
capacity; difficulty of
disposal at municipal
services; existing
valuable resources
contained (in home
appliances
capacity (controlled
landfill site); need for
proper disposal; to
prevent illegal
dumping
Criteria or Targets for
Recycling
Sets the following
CFCs: destruction
recycling target rates for
Airbags: recovery / actuation, etc.
Shredder residues: material recycling or heat shredder dust and airbags:
Shredder dust: 30%+
recovery
In addition to the above, pressed and sheared(from FY05), 50% +(from
ELV can be cast into electric furnace or steel FY10), 70%+ (from FY15)
converters (whole recycling) or exported as Airbags: 85%
scrap metal
Export Regulations
With the exclusion of the following
sets
no controls on exports
Recycling charge is refundable to the
owners in the case of exports of
second-hand vehicles, that is
exempted
from the Law (Article 78)
Exports as scrap metal are
considered to
represent entire use (Article 16,
Enforcement Regulation 10)
Source: Kojima et al, 2005
124
9.3
Market Profile
The trading relationship between Japan and China in East Asia’s secondary material markets has been researched in
several recent studies published by Japanese researchers. A report for the Japan External Trade Organisation provides
the best available overview on the dynamics in these markets145.
Waste PET bottles are collected and baled/compacted by municipalities. The Containers and Packaging Recycling Law
obliges recycling companies to process them into PET flakes or pellets for further use. If the Regulations laid down by
the JCPRA are followed, post-consumer bottle waste should be processed before leaving Japan. However, reports146 in
the Japanese literature suggest that in some cases waste PET bottles are not converted to flake or pellet before export.
To avoid the costs of processing in Japan (including domestic transportation costs) some recyclers buy up PET bottles for
export, and some municipalities export directly.
JCRPA data on packaging recycling are provided in Tables 9.2 to 9.5. As is typical for the markets around the world,
there are not the same detailed data on recycling of industrial waste, including scrap plastics.
Table 9.2
PET bottles
Plastics
Volume of requested recycling by JCPRA under the Container & Packaging Recycling
Law (kt/a)
2000
96.6
151.5
2001
196.3
256.4
2002
230.7
311.8
2003
236.2
441.6
2004
253.4
546.6
2005
252.1
594.7
Source: Japan Containers and Packaging Recycling Association
Table 9.3
PET bottles
Plastics
Volume of take-back from municipalities by JCPRA under the Container and
Packaging Recycling Law (kt/a)
2000
96.7
67.1
2001
131
168.7
2002
153.9
259.7
2003
173.9
368
2004
191.7
446.9
2005
117.3
576.5
Table 9.4
PET bottles
Plastics
Number of recyclers
2000
42
41
2001
51
65
2002
56
86
2003
58
79
2004
59
74
2005
48
84
145
Kojima et al. 2005. International Trade of Recyclable Resources in Asia. ID Spot Survey No. 29. Japan External Trade Organisation.
Available online at http://www.ide.go.jp/Japanese/Publish/Spot/29.html
146
Ibid
Table 9.5
Use of Recycled Packaging Products through JCPRA (kt/a)
PET bottles
Textiles
Plastic sheet
Bottles
Molded products
Others
Plastics
Plastics
Molding materials
Synthetic oil
Reducing agent
in blast furnaces
Chemical raw materials
for the coke oven
Synthetic gas
Tray
Molding materials
Synthetic oil
2000
2001
2002
2003
2004
68.6
38.3
23.4
0.326
3.8
2.7
43.9
43.3
4.9
3.3
24.7
94.9
48.7
37.5
0.381
5.3
3
118.5
117.6
9.2
7.9
42.3
112.5
58.9
45.6
0.606
5.3
2
180.2
179.2
23.2
6.8
46.6
124.3
57.4
50
11.3
3.9
1.6
256.2
255.1
41.6
5.8
58.8
147.7
63.6
54.6
23.4
4.2
2
309.5
308.5
56
6.4
55.9
9.8
50.6
91.2
120.8
138
0.638
0.533
0.520
0.013
7.5
0.872
0.777
0.095
11.2
0.924
0.921
0.003
28.1
1
1
0
52.2
1
1
0
9.4
Outlook
The outlook for waste plastic exports from Japan appears similar to that for the EU, albeit with some different
requirements for domestic processing. Recycling and resource recovery laws are helping to drive collection rates from
the municipal waste stream, and the industrial sector is well equipped to maximise the value of production scrap.
Japan’s waste plastic export trade survived a ban in May 2004 on direct trade (see page 119) with China (its largest
export market) by routing material through Hong Kong. Now that import restrictions have been relaxed a resumption of
direct trade can be expected. Japan’s own waste laws set requirements on the pre-processing of post-consumer waste.
Japan has a good reputation for quality and this, plus its geographical proximity to the China market, seems likely to
support its strong position in the secondary plastic market.
The concerns raised by EU and US recyclers regarding difficulty in competing for supplies are mirrored in Japan. The
Japan Times recently reported that one-third of Japanese firms using recycled plastic are reported to be in danger of
failing in 2006, due to the shortage of bottles147. An industry group of 41 recycling companies (out of the 59 licensed
recyclers) projects their average factory utilisation rate will fall to 36 percent in fiscal 2006 from 55 percent in fiscal
2005, with the likelihood that this will trigger a contraction of the domestic Japanese plastic recycling industry.
9.5

Summary
Japan is the largest single source country for waste plastics exports to the China market. It exported 850kt of waste
plastic in 2004, about 250% more than the UK, but significantly less than the total 2004 waste plastic exports of the
EU as a whole.
147
http://www.resourcesnotwaste.org quoting The Japan Times

After the introduction of a ban on direct import in May 2004 the proportion of this material that was routed through
Hong Kong increased. The ban was lifted in September 2005, and a recovery of direct trade is now expected.

Japan has a set of resource and recycling laws that have set recovery targets and specify the treatment that is
required before material can be exported. As an example, post-consumer waste is supposed to be sorted and
washed before it is permitted to be exported. Although some of the Japanese literature suggests that there may be
some circumvention of these requirements, Japan has a strong reputation in China and Hong Kong for reliable supply
of high quality plastic, both industrial scrap and post-consumer plastic waste. Many of the firms in Hong Kong focus
exclusively on Japan-sourced material.
10.0 China
10.1
Introduction
China’s consumption of plastics has increased rapidly over the last ten years. The demand for input material into the
Chinese plastics processing industry has been met by a mix of

domestic plastic production
imports of synthetic resin
waste plastic collection in China
import of waste plastic from overseas.
Imports of waste plastic are therefore only one part of the wider picture.
The following sections explain the status and development of the Chinese plastics market, covering both prime resin and
recovered plastics. They are based on

a consultation exercise carried out in Guangdong and Hong Kong in early 2006
a review of the international literature and trade press
interrogation of Chinese official publications relevant to the sector
additional unpublished data obtained in Beijing.
They cover:

the source of demand for waste plastic
the sources of material supply to meet that demand
the main market dynamics, broken down by plastic type as far as possible
expected future development of the market.
A generalised representation of material flows in the waste plastic market is shown in Figure 10.1. It provides a
framework for the analysis that follows.
Figure 10.1
Material flows for new and waste plastics
Applications
Input materials
Exemplar
influencing
factors,
Demand,
tech change
Film (packaging etc)
Demand,
tech change
Fibre (to textiles, toys, etc.)
Demand,
tech change
Casting for electronic &
electrical appliances
Demand,
tech change
Wood fibre plastic
composite product
e.g. pallets &
playground accessories
China resin
manufacture
Investment,
oil prices
Imported resins
Import duties
Prices
China waste plastics
Waste policy
Transport costs
Imported waste
plastic
Waste trade
Policy, supply
New resin
Waste plastics
Source: GHK
10.2
Demand
10.2.1 Introduction
China’s consumption of plastic, whether prime or secondary, is driven by the requirements of the principal various
manufacturing sectors involved. These include textiles, electronics, packaging and toys. Over the last five years output
across all these sectors has increased dramatically. The industry expects continued strong growth across a range of
plastics markets including agricultural plastics, packaging material and construction applications.
The application to which prime plastics are put is changing as the market develops. By example:

Polyethylene (PE): According to official data most of the LDPE used in China is made into films (76.4%), or
injection moulding products (9.5%). Applications of HDPE include blow moulding (19.3%), films (18.5%), monofibre (18.8%), and injection moulding (17.0%). The proportion of PE that goes into films for agricultural use is
expected to decline in the future, while new film applications such as food wrap are expected to increase.
Consumption of HDPE is increasing. The main HDPE applications are blow moulding, film product and injection
moulding. In 2004, these accounted for 19%, 18% and 19% of HDPE consumption respectively.

Polypropylene (PP): In 2004, 7,650kt of PP were consumed in China. 3,430kt/a of PP (44.7% of total
consumption) were used as raw material for textile manufacture. 1,150kt/a were used to produce BOPP film.
Injection moulding consumed about 1,320kt/a of PP in 2004. The documents reviewed suggest that the structure of
demand is not expected to change significantly, but that there may be some change in the percentage of PP used in
film and injection moulding.

Acrylonitrile-Butadiene-Styrene (ABS): China is the world’s largest consumer and importer of ABS. Official data
estimate that in 2004 consumption was 2,940kt (52% of the world total), of which 1,963kt were imported. The
electronics and electrical sector in Shenzhen and Guangdong is a large user. In 2004, more than 900kt/a of ABS
were used for producing electrical appliances for domestic use, which accounted for 31% of total ABS consumption.
512kt/a of ABS were used for producing electrical appliances for commercial use, some 17% of total consumption.

Polyethylene terephthalate (PET): The total consumption of PET in 2004 was 12,540kt of which 10,450kt
(88.1%) was used for production of fibre. 1,100kt/a (9.3%) were used to produce bottles. 200kt/a of PET (1.7% of
consumption) went to film applications while 120kt/a (1%) were used as plastics for engineering purposes.
Official data on plastics production provide only a guide to activity. Smaller companies are not covered and coverage of
the state-owned sector may be better than that of private enterprises. These data show that in 2003 there were 8,237
companies producing plastic products in China. Output of plastic products is estimated at 18,500kt in 2004 (Table 10.1).
The plastics sector is concentrated in Guangdong and Zhejiang (Figure 10.2).
Figure 10.2
Location of plastic products production, 2004
Zhejiang
20%
Guangdong
25%
Jiangsu
11%
Fujian
4%
Shandong
7%
Other
33%
Source: China Chemical Industry Information Centre
Table 10.1
Production of plastic products, 2004
Category
Films
of which agricultural films
Boards
Pipes
Fibre
Artificial leather
Synthetic leather
Foam
Packaging
Household products
Other
Total
Quantity (kt)
3,658.9
728.7
1,688.1
1970
2,023.9
659.9
345.5
859.5
845.5
2,247.8
4,157.1
18,456.2
Source: CPPIA
10.3
Supply
Demand from the end-users is met by a combination of prime and recovered plastics, both imported and domestic.
10.3.1 Prime resin
China’s petrochemical sector is receiving around US$30 billion of new investment each year, around half of that being
foreign capital148. The sector has seen substantial year-on-year increases in output (Figure 10.3). Production of plastics
in China from outside the state-owned sector increased at 20% per annum between 2000 and 2003.
148
KPMG, 2004.
Figure 10.3
China’s domestic production of plastics, 1997-2004
18,000
16,000
Production, kt
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1997
1998
1999
2000
PE
PP
2001
PS
2002
2003
2004
PVC
However, consumption of prime resins is increasing even more rapidly. Imports therefore continue to account for a
large share of plastic consumption. Trends vary for specific polymers, but the double-digit annual increases in demand
mean that imports are expected to form a major part of the story for some years to come.
Supply options available to consumers of resin have increased. The accession of China to the WTO brought reduction of
import duties and abolition of quantitative restrictions on imports. Resin consumers are now better connected to the
global market, and global prices, than was the case previously. Further increases in domestic capacity will enhance
competition.
Table 10.2
PE
PP
PVC
PS
ABS
Total
Apparent consumption of five major synthetic resins (prime), 2003 (kt)
Domestic output
Import
Export
4130
4269
3994
1010
486
13889
4690
2734
2292
1564
1790
13070
26
12
45
54
21
158
Apparent
consumption
8794
6991
6241
2520
2255
26801
Import share (%)
53.3
39.1
36.7
62.1
79.8
48.8
Note: official figures rounded to nearest kt. Source: Liao, 2004
Figure 10.4
Production and net import of five major synthetic resins (PE, PS, PVC, ABS, PP), 2004
10,000
9,000
Consumption (kt)
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
PE
PP
PVC
Domestic Production
PS
ABS
Net Imports
Source: Liao, 2004
Details of the current production and import situation for the major plastics are provided in the following paragraphs.
Polyethylene/PE
Consumption of prime PE resin in 2004 was approximately 8,800kt. About 45-50% of demand was met by local
production, with the rest serviced by imports.
Table 10.3
PE
1999
2000
2001
2002
2003
Polyethylene production, imports, exports and apparent consumption, 1999-2003, kt/a
NameplatePr
oduction
capacity
2,610.5
2,647
3,104
3,651
3,881
Production
2,714
3,000
3,083
3,552
4,129.6
Import
2,599
2,967.1
4,112.5
4,559.4
4,690.1
Export
11.4
9.3
7
10.7
14.5
Consumption
5,301.6
5,957.8
7,188.5
8,100.7
8,805.2
Import
%
51
50
57
56
54
Source: 2005 Petrochemical Market Annual Report by the China Petrochemical Consulting Corporation
Production has grown at an average of 14.3% p.a. over the period 1995 to 2004. China’s PE production capacity
reached 4,000kt in 2004. The structure of capacity and output is shown in Table 10.4.
Table 10.4
Capacity and Output of PE in China, 2004 (kt)
Sets
Nameplate
capacity
Output
High pressure
LDPE
8
883
995
HDPE
11
1,333
1,486
Linear LDPE
12
1,795
1,843
In 2004, China imported 4,800kt of PE. Imports grew at an average annual growth rate of 13.0% from 1999 to 2004.
China’s PE imports are sourced mainly from Korea (19.5% of the total), Singapore, Saudi Arabia, Taiwan, Japan, and
India (see Figure 10.5).
Figure 10.5
Source of PE imports to China
Thailand
3.6%
Korea
19.5%
Others
23.2%
U.S.
5.0%
Japan
5.1%
Saudi Arabia
14.2%
India
5.2%
Malaysia
6.9%
Taiwan
7.2%
Singapore
9.9%
Source: 2005 Petrochemical Market Annual Report. China Petrochemical Consulting Corporation.
Polypropylene/PP
China produced 4,750kt, imported 2,900kt and consumed 7,600kt of polypropylene in 2004. More than 70 plants are
equipped to produce PP, with a cumulative production capacity of 4,820kt, but 10 firms account for the more than half
the industry’s output. 1,600kt of capacity has been added since 1999 but demand continues to exceed domestic supply.
Table 10.5
PP
1999
2000
2001
2002
2003
Polypropylene production, imports, exports and apparent consumption (kt/a)
NameplatePr
oduction
capacity
3,056
3,157.5
3,371
3,960
4,260
Production
2,687.7
3,239.5
3,339.5
3,741.7
4,268.2
Import
1,472.7
1,640.3
2,086.5
2,442.3
2,734.3
Export
8.7
10.2
9.3
12.5
11.9
Consumption
4,151.7
4,869.6
5,416.7
6,171.5
6,990.6
Import
%
35
34
39
40
39
2004 imports were equivalent to 39% of consumption. Imports grew at an average annual rate of almost 15% between
1999 and 2004. The sources of imported PP are shown in Figure 10.6, the largest single supplier being Korea.
Figure 10.6
Source of PP imports to China
India
5.31%
Others
12.80%
Korea
30.74%
Japan
7.13%
Thailand
8.72%
U.S.
9.55%
Taiwan
15.64%
Singapore
10.10%
Polyethylene terephthalate/PET
PET production capacity reached 16,500kt/a in 2004, of which 10,360kt (63%) was produced by the top 20 companies.
In 2004, domestic PET production reached 11,800kt, 66% of this from the same top 20 enterprises. The average
annual growth rate in production capacity from 1999 to 2004 was 33.1%. On average 2,000kt/a in capacity has been
added each year since 1999, with almost 4,000kt/a added in 2004. Consumption in 2004 was estimated at 11,860kt.
Output increased by almost 25% per annum between 1999 and 2004 but as a result of over-investment in PET
production plants, only 71.5% of production capacity was utilised in 2004, compared to 99.5% in 1999. The high cost
of raw materials in 2004 also contributed to the lower utilisation rate. The fact that trading in recycled PET has grown
and remained relatively strong in China and has not been displaced by availability of locally produced virgin PET
reinforces the view that the demand for recycled plastics has little to do with virgin supply. It is much more closely linked
to the price difference between virgin and recycled grades. This point is developed further in this reports conclusions’.
Trade in PET is much smaller, pro rata, than that in PE. Prime PET imports in 2004 were 172kt (see Table 10.6).
Taiwan is by far the largest source of PET. Together the imports from Taiwan, Korea and Japan account for 85% of
total PET imports (see Figure 10.7).
Table 10.6
China’s PET imports, 2003 & 2004 (kt)
2003
2004
PET
100
43
PET for further processing
68
115
High viscosity PET
N/A
14
Total
N/A
172
Figure 10.7
Source of China’s PET imports
Indonesia U.S.
1%
7%
Others
7%
Korea
23%
Taiwan
58%
Japan
4%
Source: 2005 Petrochemical Market Annual Report, China Petrochemical Consulting Corporation.
116kt of PET were exported in 2004, about 40% down on 2003 (a change attributed to EU anti-dumping duties).
Exports of high viscosity PET were down 35% on 2003, at 79.8kt. Exports to Western Europe have declined significantly
(to 34.5kt) as a result of the EU’s anti-dumping taxes. Central and Eastern Europe became the largest importer of
China’s PET – taking some 37kt of PET in 2004 (32% of total). The third largest destination was the Middle-East (13% /
15kt). Jiangsu Province was the major PET exporting province – accounting for 62% of PET exports.
Acrylonitrile-Butadiene-Styrene/ABS
Nine firms were producing ABS in China in 2004, with collective annual output capacity of 1,170kt per annum. In 2004
they manufactured 992kt of ABS. Domestic production of ABS has increased significantly year-on-year but China
remains reliant on imports to meet demand. 1,963kt were imported in 2004, up almost 10% on 2003. Net imports have
grown at an average rate of over 9.6%p.a. over the period 1997-2003. Taiwan and Korea were the major sources
(Figure 10.8).
Figure 10.8
Source of ABS imports to China
U.S.
0.9%
Thailand
4.5%
Malaysia
6.8%
Others
2.7%
Korea
33.2%
Japan
7.6%
Taiwan
44.3%
10.3.2 Recovered Plastics - overview
Consumption of prime resin (whether imported or produced in China) is complemented by use of recovered plastic.
Recovered plastic comes from both domestic sources (municipal and industrial) and from imports. A plastic reprocessing
industry has emerged to supply the demand for this material. It has attracted foreign investment as well as domestic
companies, including firms from Japan and the USA. Official data provide a guide to the size of the sector, but not the
complete picture because only firms with sales in excess of RMB 5 million (around £370,000) are included. In Shenzhen,
for example, around thirty firms are involved in plastic recycling, excluding trading companies149.
This sector has its origins in the 1960s and 1970s. Formal recovery systems were organised to collect material from
(what were then exclusively) state-owned factories for re-use. The formal sector was complemented by an informal
system of collectors, often unemployed rural labourers, who would scavenge material from the post-consumer waste
stream.
In the last twenty years the erosion of the state-owned sector and changes to urban waste collection systems have
undermined the ability of both of these systems to play their former roles. The result is that the overall collection rate
has fallen150. The recovered plastic import trade originally emerged in response to the lack of domestic virgin plastic
production and limited collection capacity of the domestic recovery systems.
Today reprocessors dealing in recovered plastic imports source material via their own (or independent) trading
operations in China and Hong Kong. Some also source direct - plastics factories can be found advertising for material on
the internet.
Consultations in China and the UK suggest that in the export market there is a gradual trend towards more direct
sourcing as reprocessors become more familiar with the markets and more confident in dealing with suppliers overseas.
They sell their products to plastic consuming companies in the local economy. There are very many of these, serving a
very wide range of markets – from high-end export manufacturers to factories producing low grade products for the less
discriminating end of the domestic market.
There is specialisation in the market, with firms concentrating on particular sub-sectors. Much of the waste plastic
imported is industrial production scrap (it is assumed that domestic production scrap is also widely used, though data on
this are scarce). The best recovered material is equivalent to prime plastic in performance and trades at a discount of
just 10% to the prime polymer. Discounts on poorer quality material are much higher.
While some waste markets are in decline, a commonly cited example being the styrenes used in audio and video
cassettes, others are in strong demand (e.g. polycarbonate). As online waste exchanges illustrate (Box 10.1), CDs and
DVDs are being imported via Hong Kong for the recovery of the polycarbonate (for which prices are reportedly in the
order of £600/t in Hong Kong). There is also a market for mixed waste plastic with a high percentage of recyclable
material. This trades at around USD100/t (£58/t) and is used in applications such as plastic ‘wood’.
Box 10.1
Online ‘wanted’ advert for scrap CDs
We are the end user of PC CD Scrap or Regrind in Hong Kong. We are looking for:
1. PC CD Runner (Sprue) [uncrush]
2. PC CD Clear Disk [uncrush]
3. PC CD/DVD with metalized (Regrind or Whole disc form)
4. PC CD Lump
We need these above materials for long term basis (at least buy them for 3 years). So we hope to find a reliable
supplier for our long term business. Please feel free to contact me if you have the above materials. We can accept as
many quantity as you offer. Looking forward to receiving your offers. HINKI
Source: online waste exchange, 2005.
It was apparent from consultations in Shenzhen and Guangdong that sourcing imported material is a major issue and
factories are very interested in getting information on new suppliers. While some of the heat had come out of the
149
pers comm., Shenzhen Plastics & Rubber Association.
150
See the various papers by van Beukering et al referenced in the bibliography for a more detailed history and analysis.
market after the high prices (and speculation) of 2004, there remains a strong underlying demand and many firms are
looking for new, reliable sources of good quality material.
Quality of material was a common theme in consultations. The market rewards quality with a price premium; a severalfold difference in price for the same plastic is possible depending on its condition. There are more outlets for high
quality material, and the risk of rejection by customs on import is lower. Lack of control over quality and unreliability of
supply was cited by one consultee as reasons why imported PET was preferred to domestic supplies.
Japan has a strong reputation in China and Hong Kong as a source for waste plastics. This reputation appears to be
based on consistent high quality of supply, both for production and post-consumer waste (Japan’s recycling laws and
market are described in Chapter 9).
Buyers consulted for this study generally saw the UK as having a much weaker reputation for quality, especially on postconsumer waste, although this is not to say that no reliable, quality supplies were available. The UK’s lower levels of
sorting of post-consumer waste is widely recognised.
The presence of a price premium for higher quality material is not inconsistent with there being a demand for lower
quality wastes, such as mixed bottles, and UK reports that buyers would take material ‘whatever the quality’. It appears
that in the face of very strong demand, some firms in the Chinese reprocessing industry found that they could make
money by

importing lower grade material
accepting the import risk (or paying a premium to circumvent the risk)
processing it in China
accepting the lower yields and/or lower prices of saleable material that would result.
In terms of research, little has been published on this trade in recent years until the release of a series of papers by
Japanese researchers over the last couple of years. They have looked at China’s waste plastic sector as part of a
broader examination of waste markets in the region151 (Japan is a major supplier of waste materials to China). These
studies are available online and provide a useful briefing on the general situation. A report by the Japan External Trade
Organisation released in 2005 and available online, provides the best available overview of the regulation and operation
of China’s trade in waste material152.
10.3.3 Recovered plastic imports
China is the driving force behind the huge worldwide growth in the trade of waste plastics. Official statistics show
imports of 4,096kt of waste plastics in 2004, approximately three times the volume of imported waste plastics in 1999.
This figure is equal to the combined exports of the US, Canada, the EU and Japan. The growth in value terms is even
larger; import values have increased more than five-fold between 1999 and 2004.
The composition and growth trend of these imports is shown in Figure 10.9. ‘Other waste plastics’ account for 42% of
import by volume and 44% by value. These are thought to comprise mainly PET and polypropylene153. The next largest
waste plastics material is polyethylene, accounting for 35% by volume (33% by value), followed by PVC (15% of volume
and value) and polystyrene (8% of volume and value).
151
See Terazono, 2004, Terazono et al, 2004 and Yoshida et al, 2005
152
Kojima et al, 2005.
153
See for instance: Terazon A et al, 2004
Figure 10.9
China Imports of Waste Plastic Materials, 1999-2004 (kt)
6000
5000
kt
4000
3000
2000
1000
0
1999
2000
2001
PE
2002
PS
2003
PVC
2004
2005
Other
Hong Kong is the largest source of waste plastic imports, accounting for almost 40% of Mainland Chinese imports by
volume and value in 2004 (Figure 10.10). Imports are also sourced from a wide variety of other countries and regions,
including North America, Europe, Asia, and to a lesser extent Australasia and Central and South American countries.
Figure 10.10
Origin of China’s waste plastic imports
HK
42%
Others
33%
United States
8%
Canada
6%
Taiwan
11%
China from Hong Kong of the same materials as recorded in Chinese official statistics. The Hong Kong figures
consistently show a large number (see Figure 10.11). The difference was some 744kt in 2004 – equivalent to more than
twice the UK’s total exports of waste plastics, or 18% of total declared Chinese imports.
Consultations in China and Hong Kong suggest that the Hong Kong data are likely to provide the more reliable estimate
of the scale of the trade. Chinese data on waste trades have improved, but are unlikely to provide a full picture of
activity.
Adjustment on the basis of this Hong Kong-China point-to-point trade alone therefore moves the estimate of China’s
import of waste plastic to 4,700kt rather than the 4,000kt shown in official statistics. Consultations with industry in the
region suggest that actual imports in 2004 were likely to be in the range of 4,700kt – 5,000kt.
Reasons for this differential are discussed in more depth below but consultations conducted in the region suggest that
the discrepancy can be attributed to circumvention of import duty and Chinese customs controls, an issue not unique to
the waste plastic trade.
Figure 10.11
Trade in waste plastics (kt)
3000
2500
2000
1500
1000
500
0
1999
2000
2001
Hong Kong exports to Mainland China
2002
2003
2004
Chinese data show direct imports from the UK of around 20kt in 2004 (see Figure 10.12). These compare with declared
UK exports to China of 63,000t in the same year. Most of the difference is in what is declared to UK customs as
polyethylene, though there is uncertainty about the reliability of those figures. It takes the total difference between UK
declared exports and the quantities declared at import in Hong Kong and China to about 75kt for 2004 (see Hong Kong
chapter for discussion of UK-Hong Kong trade).
Table 10.7
PE
PS
PVC
Other
Comparison of UK and China trade statistics on waste plastic, 2004 (kt)
UK (declared exports)
53.9
0
1.6
7.5
China (declared imports)
12.7
0.05
1.6
6.4
Source: China Customs Statistics (CCS) Information Center, and uktradeinfo.com
Figure 10.12 China imports of waste plastic from the UK by commodity code, 1999-2004
25
20
kt
15
10
5
0
1999
2000
2001
PE
2002
PS
PVC
2003
2004
Other
The southern province of Guangdong accounts for more than 60% of waste plastic imports to China as a whole (Figure
10.13). Official statistics record imports to Guangdong of 2,560kt in 2004, though for reasons stated elsewhere in this
report, the actual total is likely to have been significantly higher.
Guangdong’s share of imports varies somewhat by plastic type; the eastern province of Zhejiang (south of Shanghai) is a
centre for prime plastics production and staple fibre manufacture and attracts PET imports. A breakdown of waste
plastic imports by commodity code and province is given in Table 10.8.
Table 10.8
Waste plastic imports by type & location of importer, 2004 (kt)
Guangdong
Zhejiang
Shandong
Tianjin
Shanghai
Fujian
Others
Source: Based on
PE
PS
PVC
Other
801.6
285.2
515.2
957.4
40.2
19.9
39.9
267.7
196.0
1.0
9.0
61.8
115.2
0.15
5.1
48.7
31.0
3.6
3.0
111.6
109.1
0.54
3.0
24.0
138.1
28.1
49.1
231.6
data provided by the Customs General Administration of P. R. China in
Total
2,559.3
367.6
267.8
169.0
149.1
136.6
446.9
Beijing.
Figure 10.13
Waste plastic imports, 2004, by location of importer (tonnes)
Zhejiang,
367.62
Shandong,
267.8
Tianjin,
169.0
Shanghai,
149.1
Guangdong,
2,559.3
Fujian,
136.65
Others,
446.9
Source: Based on data provided by the Customs General Administration of P. R. China in Beijing.
Figure 10.14
Port of custom clearance, 2003
Other
5%
Xiamen
3%
Qingdao
11%
Gunagzhou
13%
Shenzhen
68%
Table 10.9 presents some data on who is importing this material.
Table 10.9
Polystyrene imports by type of importer, 2003
State-owned enterprises
Private
Collective owned
Unspecified
Import USD
US$k
32,218.5
15,130.3
3,093.7
11,259.10
Import quantity
kt
123.9
58
11.8
37.90
Exports
Declared Chinese exports of waste plastics are small: 40kt, worth £4.1m, in 2004. However these figures also represent
a large increase since 1999 with export volumes increasing five-fold, and export values increasing three-fold. Figure
10.15 shows that almost all of the Chinese exports fall into the ‘other waste plastics’ category, which accounts for 96%
of export volume and 93% of export value.
There are again discrepancies in the data – Hong Kong data record about 96kt of imports from China, compared to
about 12kt in the Chinese data on exports to Hong Kong. This level of import to Hong Kong is in itself counter-intuitive
given that the demand for the material is in China, not Hong Kong. Consultations with the Hong Kong Government
suggest that there is a level of cross-boundary ‘churn’, the logic of which is not known.
Figure 10.15
China Exports of Different Waste Plastic Materials, 1999-2004
25
20
kt
15
10
5
0
1999
2000
2001
PE
2002
PS
PVC
2003
2004
Other
The majority of Chinese exports go to other Asian countries although a small proportion are imported by the US, and
European and Middle Eastern countries. The breakdown of Chinese exports is presented in Figure 10.16 below.
Figure 10.16
China Waste Plastic Exports by Destination, 2004
Hong Kong
30%
Japan
2%
Others
66%
Korea
2%
10.3.4 Recovered plastic from the domestic market
The quantity of recovered plastic supplied from domestic sources is less easily determined than imports - there appear to
be few data in official Chinese publications covering this activity. This may reflect the fact that, at least in respect of the
municipal waste stream:

abstraction of waste materials has been a largely informal activity
collection through the old formal state-owned systems has not kept pace with market changes.
Waste pickers and scavengers are known to scour domestic waste for plastic materials, such as PET bottles, and waste
material markets have been established in some major cities, but there appears to be little information on the volume of
recovered material in circulation. This is likely to change as new policy initiatives to encourage recycling and to address
China’s large municipal waste management problem come into effect. Demonstration projects on recycling in major
cities, such as Beijing, are the exception rather than the rule for the time being.
From 1950 to 1978 recovery was dominated by the formal sector, and recovery rates of over 20% were achieved. Since
the economic reforms of 1978, the formal sector (based around the command economy and state-owned industries) has
weakened and the recovery rate fallen154.
The formal sector mostly collects waste from industrial sources. The informal sector (akin to waste pickers in India) are
self-employed and focus on post-consumer wastes. A 1997 study estimated that 80% of the 1,300kt of plastic waste
recovered was collected by the informal sector. Consultations with, for instance, PET recyclers suggests that the
informal sector is still the main source of plastic.
In the 1990s, plastic recycling was the domain of collective and township factories, rather than the large state-owned
firms that dominate the primary plastic sector. The operations were highly labour intensive. The same (1997) study
estimated employment in plastic recycling in the mid 1990s at 200,000-270,000.
Plastic waste arisings in China are increasing as consumer consumption and industrial output increases. As highlighted
in a recent World Bank study155, China recently surpassed the US as the world’s largest municipal solid waste (MSW)
generator. In 2004, urban areas generated about 190,000kt of MSW and by 2030 this is projected to reach at least
480,000kt.
No country has ever experienced as large or as rapid an increase in waste generation. The total of 484,000kt is
projected to include about 68,000kt of plastic waste. Assuming that formal and effective separated collection of plastics
from municipal waste is established across the country over the medium to long term, the supply of domestic waste
plastic material will increase. It will be recovering only a fraction of what will be a very large level of consumption.
Official policy is to encourage plastic recycling within China, as part of a wider resource efficiency drive and in the
interests of reducing imports of synthetic resins. Provisions for the support of waste plastic recycling in China have been
incorporated into the latest Five Year Plan. These provisions are for both recycling by industry and collection from the
municipal waste stream.
Some firms consulted for this study used waste plastic that had been recovered in China but looked to imports for
greater stability of supply and quality. China’s per capita consumption of plastics is increasing but is still low by OECD
standards, and formalised collection infrastructure for post-consumer plastics is not well developed. Transport costs
within the country can be comparatively high.
154
van Beukering et al, 1997.
155
World Bank, 2005.
Applications for recovered plastic
Manufacturers use recycled plastics to cut production costs. Waste plastic trades at a 10% discount to the prime (for
best quality production scrap) to a more than 50% discount (for lower quality material).
Generally, the ability and willingness to use waste plastic sources is affected by the quality and product performance
requirements of the product. These vary widely from product to product, and from market to market. As such there is
no single ‘norm’.
Consultees in south China suggested that recovered plastic, once processed, is used more extensively by domestic
companies than it is by foreign firms. This fits with feedback from Hong Kong-owned export manufacturers. They
explained that in many instances the quality and performance standards applied to export products prohibit use of
recovered plastic in these markets. This is in addition to the export manufacturers nervousness about how recovered
plastic may affect quality leading to batches being rejected or contracts cancelled.
Quality standards for the domestic market tend to be lower and reportedly some small firms in Guangdong may use up
to 100% waste plastic. Garbage bag manufacturers reportedly use 30%-40% recycled content. Applications for
recovered plastic include;

For PET - polyester fibre used stuffing for toys and furniture, textiles.
For PVC - construction applications.
For ABS - electronics and electrical equipment and household appliances.
For PE - packaging and agricultural plastics.
For PC - DVDs.
The most recent official data on applications of recovered plastic date back to 1994 and are shown below.
Table 10.10
Secondary plastic consumption, 1994
Recovered plastic consumption (kt)
Industrial plastics
Household plastics
Total
500
700
100
1300
Share of total recovered plastic
consumption (%)
38
54
8
100
Source: Information Centre of the Ministry of Chemical Engineering (1995) reported in van Beukering et al 1997
The results of consultations in Hong Kong and China are reported below, by plastic type.
Polyethylene/PE
Consultation with the China Plastics Processing Industry Association suggests annual LPDE imports are now around
1,500kt, with a further 1,000kt of HDPE. PE is imported as film, production scrap, HDPE bottles, etc.
Whereas there was a consensus on the main outlets for recovered PET and ABS, it has proved more difficult to
determine the application of secondary PE, despite the large volumes involved. This may just reflect the large number
of factories and diverse applications of this plastic. Processed waste PE is extruded and turned into pellets. It then goes
into injection moulding and blow moulding processes for multiple possible uses. At least some HDPE is understood to go
into packaging. Construction applications are also likely end-uses.
Indicative prices for baled, unprocessed PE film were USD100/t (£60/t). Sorted industrial scrap (e.g. HDPE and PP) is
bought in at USD300-500 per tonne (£175-300/t). Prices vary depending on the quality of the input material.
ABS
Good quality scrap ABS is in heavy demand, especially in Guangdong. Applications for processed secondary ABS include
electronic/electrical products and toys. ABS from post-consumer sources is being sourced as well as production scrap.
Samples of shredded computer casings from Japan and Korea were seen during consultations. The variation in the
specification of plastic blend (including flame retardants) used in computer casings was cited as an issue by a couple of
consultees. The extent to which consultees were concerned about the consistency and quality of material varied.
Indicative prices for ABS of different grades are given in Table 10.11.
Guangdong is home to one of China’s largest WEEE dismantling industries, centred on the township of Guiyu. The
dismantling complex has been the subject of a number of reports by international environmental groups and
international press coverage156. The extent to which plastic is recovered here and supplies the regional waste plastic
industry is unknown, but it seems likely that it would contribute to it.
Table 10.11
Indicative ABS prices, Shenzhen
Quality
Virgin
Best quality production scrap
Poor quality post-consumer waste
Local price, Reminbi/t
RMB14,500
RMB13,500
RMB7,000
Sterling equivalent, £/t
£1035
£964
£500
Source: Consultations, Shenzhen.
PET
Consultation with the reprocessing specialists at the China Plastics Processing Industry Association suggests PET imports
are in the 1,200kt – 1,400kt range. PET imports come mainly in bottle form (separated or mixed) but also other
packaging, e.g. blister packs. Production scrap and surplus inventory stock are traded as well as post-consumer bottles.
Consultees had a particular interest in knowing about potential UK sources of PET.
The bulk of secondary PET collected is converted to polyester fibre. Much of China’s fibre production is centred around
Shanghai. PET is therefore imported to Zhejiang for processing as well as to Guangdong. The major application for the
fibre is in textile manufacture.
China’s output of clothing and textiles for export has increased dramatically in recent years as the Multi-Fibre Agreement
international quota system was finally abolished, as well as there being growth in the domestic market. Other factors
influencing demand include the Chinese cotton crop, with which demand for fibre has an inverse relationship (all else
being equal).
Consultees reported that some PET is available from the domestic recycling systems, but that supply and quality are
unstable and so there is a preference for overseas sources. The reported demand for PET has been so strong that
buyers have preferred to sacrifice quality in order to obtain material. They will invest in additional cleaning and
processing locally to render the material useable. One tonne of mixed bottles typically yields 800-850kg of useable
material.
The import of whole bottles directly to China is prohibited yet still occurs. The uncertainty about the future regulation of
this trade is a significant factor, especially given the concerns of the Chinese authorities about the pollution and infection
potential of post-consumer waste. When the pre-processing requirement was enforced in 2003, a bottle ‘mountain’
rapidly developed in Hong Kong, and a price differential between Hong Kong and the Mainland emerged.
156
Exporting harm, the High-Tech Trashing of Asia. http://www.crra.com/ewaste/ttrash2/ttrash2/
Table 10.12
Indicative waste purchase PET prices, Shenzhen
Quality
Clear, post-consumer
Clear, ground
Virgin
Traded Price, USD/t
USD300
USD600 / RMB6,000
RMB10,000
£175
£350 - £430
£720
Source: Consultations, Shenzhen.
10.3.5 Contribution of recovered plastic to overall plastic consumption
The lack of robust data on use of recovered plastic from domestic sources means that the overall use of recovered
plastic, and thus its contribution to overall plastic consumption in China, is not readily determined with any accuracy.
On the basis that 2004 imports of PE, PVC and PS were approximately 2,500kt (assuming understatement of imports
broadly equates to processing losses), and that consumption of the major five resins was around 30Mt in the same year,
then imported recovered plastic consumption is equivalent to approximately 8% of prime resin demand.
On the assumption that domestic recovery probably contributes a further 1,000kt/a - 2,000kt/a, the overall utilisation
rate for the five major resins could be between 12% and 15%. This excludes PET (which flow mainly into fibre
applications), and ABS and other engineering plastics.
10.4
Policy & regulatory situation
The Chinese government has taken a number of measures over recent years to tighten up the imports of waste into the
country. When customs inspections have found loads to contain mixed municipal waste, it has on occasion led to
complete bans on waste imports from particular countries. This happened with Japanese exports of waste plastic in May
2004 (lifted in September 2005), and with all waste plastic imports in 1996 (rescinded in 1997).
The regulatory environment is set by:

Rules governing what types of waste can legally be imported
A twin-track system to police the quality of waste materials shipped to the country:
o
an accreditation system for foreign suppliers of waste materials and
o
a more rigorous customs inspection regime.
These are complemented by regulation of reprocessors within China. This section provides an over-view of the
regulatory environment. It draws on interviews conducted in China and Hong Kong, online research and a review of the
contemporary literature (which is primarily Japanese).
10.4.1 Regulation of Trade in Waste
Laws & Standards
Dumping, storing or disposing of foreign wastes in China is forbidden under the ‘Law of the People’s Republic of China
on the Prevention and Control of Solid Wastes Pollution to the Environment’157. Only solid waste that can be used as
raw materials can be imported, based on a restricted list. Customs officials and the State Environmental Protection
Administration (SEPA) are entitled to act against unlicensed imports, imports of solid wastes labelled as recyclable
wastes and imports of waste for final disposal. Customs officials can order the country concerned to ship back cargos,
and can impose fines. Unlicensed imports of waste materials are liable to be fined anywhere in the region of 100,000-1
million yuan (£7,000 - £70,000).
157
Terazono et al, 2004
Orders regulating foreign waste flows were issued in 1991 and 1994. In 1996 an Interim Regulation on the
Administration of Environmental Protection in the Import of Waste Materials was issued158 under this law. It identified
ten categories of waste that could be imported as raw materials, including specified plastic wastes. In 2002 a series of
further lists of prohibited items have been issued from 2002 onwards, covering second-hand machinery, municipal
wastes, used batteries, waste electronic and electrical appliances, etc. This was sanctioned by the Ministry of Foreign
Trade & Economic Cooperation, the State Environmental Protection Agency and the Customs General.
An amendment to the Solid Waste Law in April 2005 introduced the Polluter Pays Principle. This adds a provision which
means that where the importer of a rejected waste load cannot be identified, the shipper shall be responsible for
shipping back or disposal of the solid waste cargo. It also requires imported materials to meet SEPA environmental
quality standards159 and pass AQSIQ pre-shipment inspections160.
Standards for various waste materials were set. The standard for waste plastic requires:
Plastics to have been crushed, to be colourless and odourless, and to have been washed to remove any obvious
contaminants.

The mix of agricultural and chemical waste and their containers, liquid wastes, kitchen and toilet garbage, sealed
containers and used plastic (uncrushed) should not exceed 0.01% of total plastic waste volume.

The mix of impurities, including wood chips, waste metal, mud and sand, should not exceed 0.1% of total volume.161
The new standard provides a demanding reference against which the authorities are to assess imported waste. On the
basis of consultations with the China Inspection Co. in Hong Kong it is understood that for import:

Plastic should be recyclable, melt at high temperature and have minimal contamination
Mixing of new plastics with waste plastic is prohibited
Post-consumer waste is required to be processed before entering China – i.e. cleaned, dry and ground
The Chinese authorities have used the laws in place to stop trade in waste plastics. The complete ban in 1996 was the
most draconian. More recently, in May 2004 a 4,000t load from Japan to Tsingdao in China was stopped for violating
Chinese standards; allegedly a small amount of high quality material was concealing a larger volume of contaminated
waste. In the aftermath of this incident, the China government introduced a temporary ban on all waste plastic imports
from Japan162. It was the first time China had banned the import of recyclable waste from a single named country163.
Ship-back of rejected waste loads has also been used. Between 1993 and 1994 China invoked the ‘ship-back’ regulation
on many consignments of imported waste164. It is understood that this practice continues.
The literature references shipments that were legal under Japanese law being returned to Japan, before the ban, for
failure to comply with Chinese standards165.
158
Terazono et al, 2004
159
National Environmental Protection Control Standards for Imported Scrap Materials
160
From Kojima et al. 2005. International Trade of Recyclable Resources in Asia. ID Spot Survey No. 29. Japan External
Trade Organisation
161
Koijima et al, 2005
162
General Administration for Quality, Supervision, Inspection and Quarantine Notice No.47.
163
Kojima et al. 2005.
164
Koijima et al, 2005
165
Koijima et al, 200
Although the new standard is demanding, China’s position vis-à-vis the Green List and the types of plastic that can be
imported under the international controls on trade is relatively liberal. Whereas India has heavily restricted the scope of
waste plastic imports, China allows import of post-production and post-consumer waste across a wide range of plastic
types. The only specific prohibition mentioned in consultation was that expanded polystyrene is not permitted because
of “the risk of explosion during transportation”.
Despite the ban on direct shipment of Japanese waste, the implementation of the regulations issued by the central
authorities (especially on pre-processing of post-consumer waste) has been highly variable. Consultations suggest that
the risk of a load being intercepted and rejected at the border is higher if the waste is dirtier, but import of unwashed
and uncrushed bottles remains the norm, at least as of early 2006.
Unauthorised channels are reportedly used to get mixed or more contaminated loads into the country- generally material
that has transited Hong Kong- in exchange for a premium on the normal freight forwarding fee. Consultations in the UK
and Hong Kong/China suggest that most of this material is routed via Hong Kong. The pre-clearance requirements for
Mainland China and the potential costs of having a direct shipment rejected mean that shipments direct to China are
more likely to be cleaner, less contentious material (e.g. production scrap and pre-processed waste).
Consultations in Hong Kong suggest that before the new standard come into force the regulation on post-consumer
waste was enforced for a period during 2003. This quickly resulted in large stockpiles of bottles accumulating in Hong
Kong and material shortages on the Mainland side of the boundary. Since then, the situation has reverted to ‘normal’.
The uncertainty relating to enforcement of this regulation has had impacts on businesses in the region:

One reprocessor that was consulted in the Mainland had invested in a facility in Malaysia with the intent of
processing bottles from Europe and elsewhere before importing the flaked material to China. This venture failed
when the enforcement of the regulation was relaxed – resulting in it being cheaper to import direct to China and
process the waste in Guangdong;

One company in Hong Kong has invested in bottle processing sites close to the Mainland boundary in anticipation of
a future tightening of implementation of the preprocessing requirement. It is currently carrying out primary
processing (sorting, washing and grinding to a size sufficient to comply with import regulations), and secondary
processing (flaking) in Donguan in Guangdong province;

Several trading and import companies in the region cited uncertainty about the enforcement of rules governing
import post-consumer waste as a factor in their avoiding trade in that material.

Reprocessors within the Mainland cite regulatory uncertainty as one of the key operational issues they face.
AQSIQ Accreditation
A new accreditation scheme for companies exporting waste to China was brought in during 2004. It requires foreign
waste material suppliers to register with the General Administration of Quality Supervision, Inspection and Quarantine of
China (AQSIQ). Companies wishing to export waste to China must apply to AQSIQ giving various details of their
business, systems, environmental quality standards, suppliers, etc. as summarised in Box 10.2 (full details in Annex I).
Site inspections of the companies can be carried out. Under the Solid Wastes Law, AQSIQ is free to revoke the import
licences of exporters that have had cargoes shipped back on environmental grounds twice within any 12 month
period166.
AQSIQ screens the applications and periodically releases a list of approved overseas suppliers and the materials that
they are licensed to supply. As of 1 January 2005, only companies with an AQSIQ registration are able to export waste
to China.
Examination of the most recent available (December 2004) list of AQSIQ-approved overseas suppliers of waste materials
(available online167 from the US office of the CCIC) shows that 83 UK companies have been accredited on the first and
166
Kojima et al, 2005.
167
http://www.ccc-us.com/aqsiq.htm
second lists. These are listed at Annex C2. A new AQSIQ list is expected during 2006. The distribution of AQSIQregistered firms is shown in Table 8.2.
Companies in the UK exporting waste to Hong Kong do not need AQSIQ accreditation. Providing the company exporting
waste from Hong Kong into the Mainland is registered with AQSIQ the import will be allowed. The Hong Kong routing,
therefore, allows UK firms to avoid the cost, delay and uncertainty of registration.
Table 10.13
USA
Hong Kong
Japan
South Korea
Taiwan
Canada
Germany
UK
Netherlands
Australia
France
Russia
AQSIQ registered exporters of waste by country (all wastes)
1st List
335
448
316
147
95
70
64
48
40
31
40
27
2nd List
261
56
129
71
57
58
42
35
27
31
16
27
Total
596
504
445
218
152
128
106
83
67
62
56
54
Source: AQSIQ, quoted in Kojima et al, 2005.
Box 10.2
Summary of AQSIQ requirements
Implementation Details of the Registration Scheme Concerning Overseas Suppliers of Waste Material Imports,
recently promulgated and implemented by the General Administration of Quality Supervision, Inspection and
Quarantine (AQSIQ), make it mandatory for foreign enterprises, including those in Hong Kong, Macau and Taiwan,
which export waste material to the Mainland to apply for registration with AQSIQ. Those which fail to obtain
registration will not be allowed to export waste material to China, nor will their requests for inspection and
quarantine be entertained by the departments concerned. This new rule is believed to ensure that imported wastes
will comply with the environmental protection standards as well as other mandatory requirements and technical
regulations of the state.
The following are the prerequisites for overseas companies wishing to apply for registration according to the
implementation details:
The company is in legal operation in the country or region where it is located;
The company has a permanent office or processing workplace and its business is of a considerable scale;
The company should be familiar with the laws and regulations concerning environmental protection
technology in China, and the associated environmental protection standards; it must also be equipped with the
necessary facilities and inspection capabilities;
The company should implement quality assurance or environmental quality administration systems, such
as ISO14000 certification, or provide corresponding accreditation certification;
The company must have a relatively stable supply source over which it exercises environmental protection
quality control measures;
No major safety, sanitation and environmental protection quality problems have been found in the
company in the past three years.
Within 30 days from the receipt of the registration application documents, AQSIQ will decide whether or not to
entertain the application. After examination and investigation, applicants found to comply with the requirements will
receive a notification signed by AQSIQ informing them that their applications are being processed. AQSIQ will then
form a jury to assess the applicants. Successful applicants will be issued a registration certificate valid for three
years.
Source: Hong Kong Trade Development Council. http://www.tdctrade.com/alert/cba-e0407a-5.htm or
http://www.aqsiq.gov.cn/cms/template/index.html for the original Chinese version
Customs Pre-Clearance
Waste materials imported into China are required to undergo customs pre-clearance inspection. Pre-inspection services
are offered by offices of China Certification & Inspection Group, a company that has authorisation for the purpose from
China’s State Council, and accreditation from AQSIQ and the Certification & Accreditation Administration.
In the UK, exporters can have a pre-shipment inspection conducted by CCIC’s UK office in London168. This inspection is
conducted according to an Environmental Protection Control Standard169 at the supplier or a container yard. Contacts in
the industry suggest that, in the light of the large volumes being processed, inspections will sometimes consider the
state of the depot, its quality systems, etc. rather than involve a physical inspection of the container.
Before customs clearance can be issued, CCIC in the UK requires three photographs taken at various stages of the
loading of the container as evidence that the exporter has not filled only the final segment of the container with paper or
plastic of the proper grade. Should these photographs be missing, the freight forwarder can experience significant
difficulties in getting clearance.
Exporters can alternatively have shipment inspection carried out at the Chinese port, but in so doing run a greater risk of
having to pay the (much more expensive) freight charges for the return of a rejected cargo, plus the failure to deliver to
168
CCIC London CO., Ltd. Address: Central House ,1, Ballards Lane, Finchley London N3 1LQ. 020 83498186.
169
GB164871996. http://www.aqsiq.gov.cn
contract and the administrative overhead. Consultations with CCIC in London suggest a significant growth in requests
for pre-shipment inspection and certification for waste products, including plastics.
Equivalent customs inspection services in Hong Kong are provided by the China Inspection Co. Ltd. According to the
nominated representative for this company, inspections of waste plastic shipments are conducted in specified yards and
quayside locations around Hong Kong. The inspection protocol requires that the container doors are opened, but does
not require photographs of the loading process. There is less likelihood of customs issues when a container of waste
plastics is routed via Hong Kong channels than in direct shipment from Europe to one of the main Chinese container
ports due to the sheer volume of cargo being moved over road boundaries and at river ports. Containers are not
unloaded at inspection and so there is the possibility for better quality scrap near the container doors to screen
contaminated material inside.
Import Duties
Both prime plastic and waste plastic imports to China are subject to import duty. The rate of duty is declining year-onyear in accordance with a programme set out in the agreement by which China joined the World Trade Organisation
(see Table 10.14). At the 2006 duty rate, PET declared at USD700/t would be liable for import duty of USD60/t. Falling
import tariff rates should reduce the incentive to evade normal import processes. It should also marginally improve the
competitiveness of Chinese importers in the global market.
Table 10.14
3915
39151000
39152000
39153000
39159000
Import duty payable on waste plastic imports to China under WTO accession
agreements, 2002-2008
Waste,
parings and
scrap of
plastics:
Polyethylenes
Polystyrenes
Poly vinyl
choride
Other plastics
Bound
rate at
date of
accession
13.9
13.9
13.9
2002
2003
2004
2005
2006
2007
2008
12.8
12.8
12.8
11.8
11.8
11.8
10.7
10.7
10.7
9.7
9.7
9.7
8.6
8.6
8.6
7.6
7.6
7.6
6.5
6.5
6.5
13.9
12.8
11.8
10.7
9.7
8.6
7.6
6.5
Source: Market Access and Compliance. http://www.mac.doc.gov/China/Docs/searchableothertariffs.pdf
In the past much of the waste plastic was reportedly imported under the special, duty-free, terms available to foreignowned export manufacturers who could bring raw materials for export manufacturing processes into China, duty and
VAT free, if they were able to demonstrate that compensating quantities of finished products had been exported.
Current data supports the decline in this activity170. Today almost all waste plastic is brought in under ordinary terms of
trade (see Table 10.15 for data on some of the main provinces).
170
Yoshida et al, 2005.
Table 10.15
Waste plastic imports by trade type, selected provinces, 2004 (kt)
Entrepot trade
by bonded area
Ordinary Trade
Process &
Assembling
Process with
Imported Material
Grand Total
Fujian
-
136.1
0.054
0.431
136.6
Guangdong
0.059
2,420.40
103.1
35.8
2,559.4
Shanghai
-
146.3
-
2.8
149.1
Zhejiang
-
330.7
0.275
Grand Total
0.059
3,033.5
103.4
36.7
75.7
367.7
3,212.7
As described in the Hong Kong chapter and above, there is evidence to suggest that considerably more waste plastic is
imported into China than is shown by the official statistics, which are based on customs data. The apparent reason for
this is though to be evasion of import duty.
The impact of duty on import costs is illustrated by data obtained from a Hong Kong-based trader specialising in
engineering plastics, shown in Table 10.16.
Table 10.16
Import costs across the Hong Kong-Mainland boundary
Material sale price
ABS natural colour pellets
ABS mixed colour regrind
RMB/t
1100
5300
Freight forwarding (Hong Kong – Dongguan, truck)
& Mainland import duty
RMB/t
£/t
1900
64
900
136
Source: industry consultations, Hong Kong
10.4.2 Regulation of Reprocessors
In China enterprises are required to obtain a licence to operate from the appropriate government authority. The licence
sets out the permitted scope of the enterprise’s operation – what it is allowed to do (governing operations, outputs, and
access to inputs). It may also define the permitted scale or ‘capacity’ of the enterprise, and the level of investment to be
made. Obtaining licences, permits and land on which to operate can be an involved process. Reprocessors are subject
to these requirements as well as being subject to various operating and import controls and periodic inspection by the
State Environmental Protection Agency (SEPA). SEPA issues import licences, which are plastic-specific. A limit is set on
the amount of waste that a reprocessor can import, based on its capacity - an estimated quantity of waste plastic that
could be processed annually.
For government-owned companies it is believed that a system of import ‘quotas’ are cascaded down through the stateowned sector from the major petrochemical companies via local import/export corporations. Foreign-owned enterprises
are not affected. The ‘fit’ between this and the permitted import of reprocessors, based on their capacity, is not known.
The authorised import level in previous years has been well above the quantity actually imported, as illustrated in Table
10.17.
Table 10.17
Approved import & actual of waste plastics, kt
2000
2001
2002
2003
Approved quantity
Actual import
3,238
4,580
3,870
5,434
2,007
2,228
2,458
3,024
Import increased over
same period in previous
year
44.6%
11.0%
10.3%
23%
Source: Presentation by Liao Zhengpin, President of China Plastics Processing Industry Association to ChinaPlas. 2004, ‘China Plastics
Industry: Facing the World’.
Consultations in Guangdong suggest that some trading companies linked to large enterprises also get involved in the
import of waste plastic, even though they are outside the normal licence requirements and not engaged in reprocessing.
This may be connected in part to the reports of speculation in the scrap plastic market that affected prices and supply in
Guangdong in 2004/5.
In addition to the site and import controls, there are regulations governing issues such as the use of waste plastic. For
example, waste plastic is not supposed to be used for production of new food and beverage containers.
10.5
Future demand for plastics in China
Movements in the primary plastic markets shape the demand for recovered plastics. Expected trends are reviewed and
the implications for the recovered plastic sector then considered. The following sections report expected changes in
demand and supply of the main plastics. The forecasts are drawn from the 2005 Petrochemical Market Annual Report by
the China Petrochemical Consulting Corporation or the China Chemical Industry Information Centre, and from forecasts
by industry analysts that have been placed in the public domain. There is a large number of research reports available
in the market, provided by specialised vendors on a fee or subscription basis and advertised online.
General outlook
The general outlook for the Chinese plastic sector is characterised by:

Sustained year-on-year growth in demand for all plastics to 2015, e.g.:
Polymer demand increasing at 7% p.a. or more in the next 10 years, compared to 11.7% in the past five171
Consumption of ethylene equivalents growing by 50% (equivalent to 9,000kt/a) between 2005 and 2010172
Large increases in domestic production capacity in key products (e.g. polyethylene, polypropylene)
An expectation that there will continue to be a need for substantial imports of the major 5 resins, and other plastics
Concern in the international market that China’s investment in additional ethylene and other capacity, when put
together with that taking place in the Middle East, will put margins under pressure towards the end of the decade
Analysis by Qu (2006) estimates that demand for the main five polymers will increase from about 30,000kt/a in 2004 to
50,000kt/a in 2010 and above 60,000kt/a by 2015. Growth of ethylene consumption in China of 10.8% p.a. between
2004 and 2014, contrasts with a corresponding projected growth rate of 1.7% p.a. in the USA. The investments
underway in domestic capacity means that imports of the major 5 resins are expected to continue at or above
10,000kt/a over the period to 2010 but do not track the demand curve.
171
Qu, 2006
172
Ibid
Figure 10.17
Projected demand, import and production for the major five polymers in China, kt
Source: Qu/SRI Consulting (2005).
Figure 10.18
Projected imports of the five major polymers, kt
Source: Qu, 2005.
The demand for individual plastics is illustrated by the following:
Polyethylene/PE
Demand for polyethylene is projected to increase by 6MT between 2005 and 2010. With domestic production capacity
expected to grow by a similar amount over the same period, imports seem likely to remain at around 6,000kt/a173.
173
ibid.
The 2005 Petrochemical Market Annual Report forecasts for HDPE and LDPE production capacity, output and overall
market demand are given in Table 10.18. China’s production capacity for PE is expected to reach 14,000kt-18,000kt by
2010. The report estimates that by 2020, on the assumption of 6% GDP growth rate in China, total consumption of PE
will reach 22,000kt/a. The proportion of packaging film in LDPE consumption is expected to continue to increase to
2010. The share of agricultural films is expected to decline and the share of construction applications increase. Blow
moulding, film product and injection moulding will continue to be the major applications of HDPE.
The implied requirement for imports is calculated here as the difference between demand and domestic output. Market
reports from the petrochemical industry do not discuss the use of scrap plastic as a substitute for prime product.
However it is assumed that the demand estimates show prime plastic requirements that are in addition to the demand
met by waste plastic inputs.
Table 10.18
Forecast annual capacity, output demand and imports for PE, kt/a
2010
2015
HDPE
Production capacity
3,560
5,010
Output
4,620
6,240
Demand
6,540
8,600
Implied import requirement
1,920
2,360
Production capacity
7,940
9,790
Output
6,880
8,560
Demand
8,300
10,700
Implied import requirement
1,420
2,140
LDPE
Table 10.19
Year
Forecast Chinese output of packaging plastics
2001
2002
2003
2004
2005
2006
2007
2008
$ billion
3.62
4.07
4.57
5.14
5.78
6.41
7.12
7.90
%
growth
-
12.4
12.3
12.4
12.6
10.9
11.1
11.0
kt
5,940
6,660
7,480
8,420
9,490
10,710
12,100
13,730
%
growth
-
12.1
12.3
12.5
12.7
12.9
13.1
13.3
Source: China Packaging Technology Association/EP Media. Updated forecast is being researched.
Polypropylene
Official forecasts suggest that PP production capacity will more than double between 2004 and 2010, from 4,810kt/a to
10,520kt/a, and rise again to 14,030kt/a by 2015. However this dramatic increase in capacity will not, on the same
projections, remove the need for imports as demand is projected to increase from 7,650kt/a in 2004 to 12,600kt/a in
2010 and 17,400kt/a in 2015. The proportion of PP demand going to textiles and BOPP films is expected to decrease,
and the share accounted for by injection moulding and CPP films rise.
Kinder (2006) projects a similar increase in demand of 4,000kt per year between 2005 and 2010, with increases in
domestic capacity roughly equal to the incremental consumption and so little change to imports. Qu (2005) suggests a
similar polypropylene demand increase from around 7,000kt/a in 2004 to a little over 10,000kt/a in 2009, and then
14,000kt/a in 2014. He projects a slight decline in imports from near 6,000kt/a to a little over 4,000kt/a between 2004
and 2011, before imports increase again.
PET
It is estimated that the consumption of PET will continue to increase from 12,540kt per year in 2004 to 19,500kt per
year in 2010, and further increase to 23,000kt per year in 2015, i.e. at an average annual growth rate of 7.6% between
2004 and 2010. Fibre will remain the major application, the consumption of which will reach 16,800kt per year in 2010,
accounting for 86.2% for total PET consumption in China, which is slightly lower from than the percentage in 2004. Total
demand for PET to produce beverage bottles is also forecast to increase.
It is estimated that the production capacity will increase from the present 16,500kt per year to 25,000kt per year in
2010. PET is therefore in production surplus in China. Utilisation of capacity is expected to suffer as a result.
Zhejiang Province and Jiangsu Province will remain the major exporting provinces of China’s PET. For Zhejiang Province,
the production capacity will increase from 6,400kt per year in 2004 to 9,400kt per year in 2010. For Jiangsu Province,
the production capacity will increase from 5,000kt per year in 2004 to 7,000kt per year in 2010. The production capacity
of other provinces will increase from 5,100kt per year in 2004 to 8,600kt per year in 2010.
ABS
Official forecasts suggest that domestic ABS production capacity will increase from 1,170kt/a in 2004 to 2,060kt/a in
2010, and will remain at about the same level to 2015. Demand for ABS in China was 2,930kt in 2004, and is forecast
to increase to 3,860kt in 2010, with a further increase to 4,400kt in 2015. This suggests that a significant part of
domestic demand will continue to be met by imports.
Demand for ABS is expected to be driven by manufacturing of electrical and electronic appliances for home and
commercial use, and light industrial products. Official projections suggest growth of electrical and electronic appliances
overall, and a proportional shift towards office and small electrical appliances.
10.6
Outlook for recovered plastic imports
Given the terms of the reference for this study, the key issues going forward are:

Will there continue to be a demand for recovered plastic from manufacturing industry in China?
Will the share of imported waste plastic meeting that demand change?
The outlook for waste plastic demand from China can be considered as the composite outcome of a number of different
dynamics:

Changes in overall demand for synthetic resins, a function of output in the plastic-consuming industries (construction,
packaging, textiles, electronics, packaging, toys, etc.)

Prime plastic prices and hence the incentive on manufacturers to use waste plastic in lieu of prime. This increasingly
means international rather than China prime plastic prices – import tariffs are lower than they were and the China
economy is more open.

China’s domestic supply of plastics (while the oil price will largely determine prime prices, China has experienced
over-supply and below-cost pricing in other markets)

Regulatory change – including the possibility that import of specific types of plastic waste currently legal will be
prohibited, or that regulation of reprocessing within China will change

Displacement by domestic recovered plastic supply
Technological change in the plastic-consuming industries that could mediate against use of plastics from secondary
sources
The only economic model of the Chinese recovered plastic market that we are aware of was developed in the mid-1990s
by a team from the International Institute for Environment and Development in London and researchers from Chinese
ministry research centres174. This research explained how the waste trade emerged to meet the gap between demand
in China for plastics and the availability of supply from the local plastics industry, and developed a model that linked
demand for recovered plastic with price and policy factors. However, the IIED work was not developed further and
more recent research on the market has not attempted projections of its future development175.
10.6.1 Demand
The general outlook for plastic demand is very strong. China is, and seems set to remain, the centre of a number of
major export-manufacturing sectors that consume large volumes of plastic. Domestic use of plastic for packaging,
construction, agriculture, etc. is set to continue its rapid increase. The projections below from some of China’s industry
associations illustrate expectations. The consultations and market analysis conducted for this study suggest that the
present demand for recovered plastic will continue and grow, at least for the next five years and probably longer.
The consultations further suggest that this demand is driven, in large part, by price factors. The feedback was that the
main source of demand is manufacturers seeking to reduce production costs while factoring in the quality standards
imposed by the market on the products that they make.
This is in contrast to the situation in the early days of the plastics industry, where it was a quantity problem (lack of
access to prime plastics due to the import restrictions and other trade barriers) which provided the primary stimulus to
plastic recovery. Whilst there may still be differences in firms’ access to foreign exchange and ability to trade, China is
now much more open to the world plastics market than was previously the case. Import tariffs on prime resin are
reducing and quantitative restrictions on imports have been removed.
If this analysis is correct it has significant implications for the projections of developments to 2015. It means that, for
instance, demand for recovered plastic is less related to prime resin imports (i.e. a domestic production deficit) than it is
to prime resin prices (i.e. incentives on manufacturers to shave production costs).
Imports of the main 5 resins are not expected to change significantly in the next five years (Figure 10.18) so the
strength of this theory will become clear over the next few years. If prime resin imports move relatively little but
recovered plastic imports continue to grow, there will be further evidence of the price-drive substitution effect that
appears to be taking place.
Consultations and some of the literature suggest that products with waste plastic content often go into the Chinese
domestic market. Over time quality benchmarks in the domestic market are likely to improve, which may depress
demand (and/or drive up quality requirements for recyclate). At the same time, several consultees in the reprocessing
sector were confident that new applications and technologies for use of waste plastic would be found, expanding the
scope of waste plastic markets. There was a consensus that on a 5-year horizon at least, demand for waste plastics
would remain robust.
The plastic products market in China is evolving rapidly and it can be expected that the recovered plastic market will
change with it, and probably exhibit further instances of the volatility seen in 2004. Beyond 2010 the outlook is, as a
result, increasingly uncertain. It is expected that sustained high prime resin prices will further encourage innovation in
the use of recovered plastic by manufacturers in China, expanding its potential range of applications.
On the basis of a simple extrapolation of the trend in declared exports from 1999 to 2003, official recovered plastic
imports were on track to hit 5,000kt by 2008 and 5,500kt by 2010. However, the added impetus of the higher prime
prices from 2004 onwards pushed the trendline towards 5,500kt by 2008 and 6,500kt by 2010, even allowing for no
increment in 2005.
174
IIED 1997, 1999.
175
See Kojima et al, 2005 and other Japanese research.
As discussed above, past figures have probably under-stated actual imports by 20%-25% so the true demand in the
market is corresponding higher. These sorts of increases are equivalent to average annual growth rates of 10%-12%,
i.e. well within the range of the annual increases in consumption of many plastics in China over the past few years and
those projected for the coming 5 years or more.
Consultees in China did not expect 2006 to see the intensity of buying activity that characterised 2004 and reverberated
through international waste plastic markets, but instead a more normal, steady growth in volumes over the next few
years.
10.6.2 Prime prices
If prime plastic prices fell substantially, waste plastic prices would eventually follow. Lower prices reduce the incentive
on final product producers to substitute scrap for prime. Demand for waste plastic would then soften. However, none of
the businesses or associations consulted expected oil prices to fall back to US$30/barrel or indeed to go much below
today’s levels. Consultees suggested that a 10% increase in prime prices typically leads to a 3%-5% increase in waste
plastic prices.
Some of the current applications for recovered plastic have quality parameters that do not require prime resin to be
used. If prime prices fall significantly, the baseline demand for recovered plastics for such lower grade and less qualitysensitive applications is expected to remain, although prices would be lower.
On top of this baseload demand, the comparatively high prime prices of the past couple of years have helped to drive an
additional move from prime resin to recovered plastic by other manufacturers. Intense competition and fixed contract
terms mean that manufacturers have had only limited scope to pass higher input costs to buyers, so have had to look
hard at production costs.
10.6.3 Domestic supply of prime plastics
China’s domestic production of plastics is increasing and keeping pace with, if not catching up on, demand. Again, the 5
year projections suggest that there will be demand for imports and waste plastic inputs. One of the related issues is the
terms under which the plastic industry operates – there are examples in other markets in China of intense competition
leading firms to sell at minimal margins, or even below cost price for sustained periods. Such activity in the plastics
sector, if it lowered resin prices, would reduce demand for scrap material.
10.6.4 Regulatory change
The waste plastic trade is heavily conditioned by the regulatory framework:

In the countries of origin (e.g. EU member states’ regulation of waste exports)
In countries of transit (Hong Kong)
At the Chinese border (permitted imports, enforcement of regulations)
Within China (licencing of reprocessors etc.)
Reprocessors within China, and traders outside it, regard regulatory uncertainty and change as the largest threat to the
trade. The reprocessors are also looking to technological innovation to help identify reprocessing systems that reduce
pollution output, and hence reduce the concern of regulators. An example quoted was low-water technologies for bottle
sorting and cleaning to reduce the water pollution from washing operations.
Changes in Chinese import regulations are a particular issue. These could in theory terminate segments of the trade
almost overnight. Changes in the enforcement practice on the ground are also potentially powerful in shaping how the
market operates. The most obvious example is the firm application of the pre-processing requirement to post-consumer
bottles. This would push pre-processing out of China into the source countries, or intermediate locations that permitted
it and cause significant disruption to the relevant markets while alternative arrangements were put in place.
In this context, a key issue is communication between China and the exporting countries on matters of trade standards,
enforcement and protocols.
For the next few years at least, Hong Kong is set to remain a favoured import routing, despite the additional cost of
transhipment, due mainly to the reduced regulatory risks at import compared to direct shipment.
10.6.5 Domestic supply of waste plastic
Domestic supply of waste plastic will increase if China invests in the kind of waste management infrastructure that is
being advised to help with the rapid increases in municipal solid waste, and if measures to encourage resource efficiency
in industry prove effective. Over the 5 year horizon, consultees did not expect domestic supply to displace waste plastic
imports. There is the potential for demand increases to accommodate increases from both sources.
10.6.6 Technological change
In consultations in Hong Kong and south China, technological change in plastic product manufacturers was not seen as
posing a threat to demand for waste plastics. It was recognised that in some cases investment in new facilities would
reduce operators’ use of waste plastic.
One example was plastic bag manufacturers who are investing in facilities where extrusion, printing and cutting operate
as a continuous process and reliability of input materials is key.
During the consultation conflicting reports were received on whether technology changes would impact on PET demand.
Some analysts claimed that fibre demand was peaking and fibre plant technology using recycled PET was limited in life
span; others (including buyers and some Chinese fibre companies) were not identifying such concerns. Due to the
conflicting evidence these specific issues should be considered in more detail.
However, ‘waste plastic’ covers a very wide range and quality of materials, the risks of which vary. The general
consensus was that the sheer scale and variety of production of plastic products in the Pearl River Delta (and similarly
for the Yangtze River Delta), buffered the risk of technological change, at least for the next 5 years or so.
10.6.7 Summary
The consensus among those consulted in China and Hong Kong for this study was that over the next five years there will
be continued strong demand for waste plastic. Beyond the five year horizon the outlook is less certain.
The total demand for recovered plastic imports is the sum of demand from a series of separate plastic material markets.
These individual plastic markets have some common features and drivers (e.g. economic and investment climate,
feedstock prices) but many differences. As an example, Chinese demand for PET bottles is driven by the markets for,
and economics of, polyester fibre for toys, furniture, etc. This has very little to do with demand for recovered ABS used
in electronic and electrical manufacturing.
As with the supply side, the analysis is therefore best done on a ‘bottom up’ basis, looking at individual plastics, and
researching:

How demand is expected to change for the specific products where recovered material is used (e.g. future demand
for stuffing for soft toys).

What influences the use of recovered as opposed to prime plastic (qualify, price, supply availability) and how those
factors are likely to change in the future.

How domestic recovered material competes with imported and whether relative shares are likely to change.
This is a data-intensive process that is achievable to a degree in UK markets, but more challenging in China where
the firms are more numerous and supply chains more opaque. These application analyses could be combined with
macro-economic and wider market scenarios, as outlined below.
Looking at the overall market, a ‘Base’ case export demand scenario would be associated with the following general
market conditions:

Continued growth in the Chinese domestic economy on the recent trend line (i.e. annual growth in GDP of 7%-9%).
Sustained export demand for Asian consumer goods from European and North American markets.
Feedstock prices in the range observed in 2004-2006.
No changes to the regulations governing trade in recovered plastic, either in Europe or China, such that material of
an adequate standard can reach end-markets.
A ‘Low’ export demand scenario would be associated with:

A sustained fall-off in US/EU demand for Chinese exports and a slow-down in the Chinese domestic economy.
A significant fall in international prime plastic prices.
Systematic over-supply of resins in the Chinese market leading to heavily depressed domestic prices.
New regulations and enforcement that imposed significant restrictions on the type of recovered plastic legally
importable to China (either in terms of type of polymer or the nature of previous use).
A ‘High’ export demand scenario would be associated with:

Feedstock prices moving higher than recent levels.
Strong economic growth in the world translating into strong consumer demand for Asian exports in key sectors such
as textiles, toys, electronics and plastic products.

Strong growth in Chinese domestic economy and, in particular, above-trend income increases among the rural
population and sustained growth in the construction sector.

Chinese import controls largely unchanged and the gradual opening up of new markets (e.g. liberalisation of Indian
import regime for recovered plastic).

Any measures that substantively reduced Japanese or US supply into the export market (e.g. additional export
controls from Japan or an extension of the mandated recycled content measures in the US that caused US domestic
buyers to out-compete exporters).
For the present, rough-and-ready projections are probably more appropriate given the availability of support data:

On the basis of a simple extrapolation of the trend in declared imports from 1999 to 2003, official recovered plastic
imports were on track to hit 5,000kt by 2008 and 5,500kt by 2010. However, the added impetus of the higher
prime prices from 2004 onwards pushed the trendline towards 5,500kt by 2008 and 6,500kt by 2010, even allowing
for no increment in 2005. As discussed above, past figures have probably under-stated actual imports by 20%-25%
so the true demand in the market is correspondingly higher. These sorts of increases are equivalent to average
annual growth rates of 10%-12%, i.e. well within the range of the annual increases in consumption of many plastics
in China over the past few years and those projected for the coming 5 years or more.

China’s consumption of the five major resins in 2004 has been estimated at a little over 30,000kt. Declared
recovered plastic imports, excluding the ‘other’ category (which is thought to include a large share of PET and other
plastics as well as ABS), in 2004 were 2,300kt and approximately 2,500kt if ABS is included. This is about 7.5% of
prime demand for the same plastics.
If these imported recovered materials did no more than maintain their
existing market share, official imports in 2008 would be 3,000kt and 3,800kt in 2010.

Moving away from the official data, current recovered PE imports are estimated by the CPPIA at 2,500kt. Allowing
for 20% process losses, this suggests that they may contribute 2,000kt/a to manufacturing, i.e. 23% of prime resin
consumption. Inputs from domestic collection (e.g. from agriculture) are unknown. If they grew on a pro-rata basis
(i.e. as a share of PE production), PE imports would reach 4,000kt/a in 2010 and 5,000kt/a in 2015. On the
assumption that domestic collection systems improve, this may be an upper limit on the size of the market. Without
data on current consumption of PE from domestic sources, or better data on its applications, it is difficult to make
firm projections. Basing projections on official customs data produces lower estimates.
These rough and ready approaches suggest potential additional demand of around 500kt each year, spread across all
recovered plastics. However, the headline import figure hides significant movement from year-to-year in the apparent
imports of individual polymers. Even if trade data are discounted as unreliable, anecdotal evidence suggests that submarkets have their own dynamics (as is the case in the UK) as dictated by trends in and out of electronics, intensity of
construction investment, etc.
US and EU controls on imports from China (e.g. of textiles) feed back into reduced demand for the associated plastics.
As discussed above, it would be preferable, in time, to build up material specific projections mapped more closely on to
the demand drivers for individual plastics.
10.7

Summary
China is the driving force behind the huge worldwide growth in the trade of waste plastics and the ultimate
destination of most of the waste plastics that are exported from the European Union and NAFTA regions. When
transhipment via Hong Kong and Netherlands is included, it is estimated to currently account for at least 75% (more
than 254kt) of the UK’s waste plastic exports. This compares with a total of 47kt exported from the UK to all
twenty-five European Union countries.

The waste plastics are absorbed, via the Chinese plastics reprocessing sector, into a wide variety of secondary uses,
from textiles to toys to kitchen utensils. The end-user manufacturers are seeking to shave production costs by
finding cheaper sources of plastic inputs. The extent to which they are able and willing to do so varies according to
the production process involved and the specification of the markets that they are serving.

Various domestic end markets in China are more forgiving on quality than the buyers of finished plastic goods
manufactured in China for export to, for example, Europe. At the same time, the ‘waste plastic’ label covers
everything from the cleanest production scrap to post-consumer waste. The former can be used on a near like-forlike basis with the virgin material, and trades at a modest 10% discount to new synthetic resin. The latter frequently
does not, and is discounted accordingly.

The Chinese government has introduced a series of measures over the last ten years in an effort to control the
undesirable elements of the waste trade, including that in waste plastics, while (for the time being at least)
preserving the plastic product industry’s access to lower cost inputs. It has retained a comparatively broad Green
List schedule for plastics, in contrast to India, where imports are much more restricted.

These efforts have had some success but evidence suggests that unauthorised imports and variation in the
enforcement of the regulations continue. The extension of central laws into local jurisdictions is a challenge on many
fronts in China, nothing new, and captured in the old Chinese phrase, “The mountains are high and the emperor is
far away”.

The demand for waste plastics looks strong for many years ahead. Large increases in consumption of plastic are
expected as domestic consumption rises in line with income, added to which is robust growth in export manufacture.
Both these factors drive growth in packaging use and in consumption of plastics for the products themselves.

The extent to which domestic plastic resin manufacturing capacity is able to meet demand varies from plastic to
plastic but as a general case, imports of synthetic resin are expected to form an important part of overall supply.
The industry foresees a combination of comparatively high oil prices and strong price-based competition among
plastic consumers, which are likely to encourage manufacturers to use some fraction of waste plastic where they can.
If the regulatory environment remains broadly unchanged, demand for overseas sources of waste plastic can
therefore be expected.
11.0 Hong Kong
11.1
Trade profile
Trade data for Hong Kong have been purchased from the Hong Kong SAR Government. This forms the basis of the
analysis reported below.
Imports
Hong Kong imported 2,733kt of waste plastics in 2004. 2005 imports, to the end of October, stood at 2,840kt. The
main sources of waste plastics are Japan and the USA (see Table 11.1). Most of the remainder comes from the EU and
other Asian countries. Canada is a major source of PVC.
Table 11.1: Hong Kong Imports – HS 3915: Waste, Parings and Scrap of Plastics, 2004 (kt)
%Share
PE
PS
PVC
PP
Other
Total
Japan
156.1
135.3
39.2
88.3
348.5
767.4
28%
USA
97.6
25.2
55
118.3
251.7
547.8
20%
Netherlands
89
15.3
21.8
15.2
83.1
224.5
8%
United Kingdom
58.2
10.6
14.8
24
57.5
165.1
6%
Germany
61.2
12.8
13.9
9.4
64.2
161.4
6%
Belgium
51.8
12.7
11.6
13.9
42.8
132.8
5%
China
21.2
6.4
7
6.3
55.4
96.3
4%
Others
133
76.7
46.9
56.9
324.5
638
23%
1,227.8
2,733.2
Total
668.2
294.8
210.2
332.2
Source: Census & Statistics Department, Hong Kong SAR Government.
In direct trade, the UK was the fourth largest source of waste plastic imports, with 165kt recorded in 2004. This
compares with UK data showing exports to China of 191kt for the same year. The source of the difference is not
known. In 2005, the imports from the UK to the end of October stood at 183kt.
Figure 11.1 Hong Kong Imports of Different Waste Plastic Materials, 2004
3,000
2,500
kt
2,000
1,500
1,000
500
0
1999
2000
2001
PE
PS
2002
PVC
PP
2003
2004
Other
Source: Hong Kong Census and Statistics Department
In the customs forms, 45% of the plastic waste imported from around the world is declared as ‘other waste plastics’, and
it is this category that has grown most rapidly in recent years (see Figure 11.1). PE imports (24% in 2004) have
increased significantly while PS (11%), PVC (8%) and PP (12%) imports have grown much more conservatively.
There is a significant difference in the declarations made to UK and Hong Kong customs authorities about the type of
plastic being shipped (see Chapter 7). The cause of the difference is unknown – possible explanations include anomalies
of the classification systems, different traditions/understanding of the codes, or strategic choices by exporters/importers
hoping to reduce the probability of customs inspections.
Exports
Hong Kong is the largest exporter of waste plastics in the world and China is effectively the sole destination, accounting
for 99.6% of Hong Kong volume exports and 99.7% of export value. A tiny fraction of Hong Kong exports are sent to
other Asian countries and North America but these flows are negligible.
Hong Kong exports of waste plastic increased by 84% between 1999 and 2004 by volume (and 83% by value), as
illustrated by Figure 11.2. Available 2005 data suggest that this strong growth is continuing and by the end of October
2005 exports had already exceeded the 2004 totals.
Hong Kong statistics show exports to China of just under 2,500kt of waste plastic in 2004, up from around 1,750kt in the
previous year. Exports in 2004 were therefore 200,kt lower than imports, which may reflect end of year effects,
inventory changes, export smuggling or other factors. Hong Kong waste plastic exports are split relatively evenly
between PE (25%), PP (29%) and ‘other waste plastics’ (30%), with a residual 8% of PVC and 8% PS.
China from Hong Kong of the same materials as recorded in Chinese official statistics, with the Hong Kong figures
consistently showing a large number (see Figure 11.3). The difference was some 744kt in 2004 – equivalent to more
than twice the UK’s total exports of waste plastics, or 18% of total declared Chinese imports.
Consultations in China and Hong Kong suggest that the Hong Kong data are likely to provide the more reliable estimate
of the scale of the trade. Adjustment on this basis of this point-to-point trade alone therefore moves the estimate of
China’s import of waste plastic to 4,700kt rather than the 4,000kt shown in official statistics. Consultations with industry
in the region suggest that actual imports were likely to be in the range of 4,700kt - 5,000kt.
Reasons for this differential are discussed in more depth in Chapter 8, but consultations conducted in the region suggest
that the discrepancy can be attributed to circumvention of import duty and Chinese customs controls. This issue is not
unique to the waste plastic trade.
Figure 11.2
Hong Kong Exports of Different Waste Plastic Materials, 2004
3,000
2,500
kt
2,000
1,500
1,000
500
0
1999
2000
2001
PE
PS
2002
PVC
PP
2003
2004
Other
Source: Hong Kong Census and Statistics Department
Figure 11.3
Trade in waste plastics (million tonnes)
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1999
2000
2001
Hong Kong exports to mainland China
2002
2003
2004
11.2
Trade in Waste
Hong Kong is a signatory to the Basel Convention, originally via the UK, but now through China. It implements the
Convention separately from the Mainland. Hong Kong’s own Waste Disposal Ordinance (WDO) provides for the control
on import and export of waste in Hong Kong. Under the Ordinance, a permit is required before any waste can be
imported into, or exported from Hong Kong, unless the waste is uncontaminated, as specified in the Sixth Schedule of
WDO, and is for the purpose of reprocessing, recycling, recovery or reuse. Waste plastic is included on that Sixth
Schedule and thus excluded from the permitting requirements.
Hong Kong’s Environmental Protection Department has participated in the IMPEL-TFS programme, the network of
representatives from EU enforcement authorities. In the last couple of years, enforcement action in Hong Kong in the
waste trade has tended to focus on waste electronic and electrical equipment, significant quantities of which have been
imported to China via Hong Kong, despite an import ban on the Mainland side.
Although Hong Kong has been part of China since 1997, a feature of the ‘One Country, Two Systems’ formula and its
separate jurisdiction over trade regulation etc. is that Hong Kong companies are treated as overseas operations for the
purposes of Mainland regulations. Hong Kong-based firms therefore need to register as exporters to China with AQSIQ
in the same way that UK firms do (see Chapter 8 for more on this system). Customs pre-clearance on China-bound
cargoes is carried out in Hong Kong by the China Inspection Co. Ltd (equivalent to the CCIC service in the UK).
In general, Hong Kong provides an open and low-risk environment for the waste plastic trade. There are no domestic
standards by which the ‘uncontaminated’ state of imported plastic waste is determined, and there is no requirement in
the Hong Kong legislation for pre-processing of post-consumer waste. Consultations suggest the potential for shipment
rejection associated with bringing, for example, mixed post-consumer bottles into Hong Kong is lower than the risk of
direct shipment of such material from Europe to Mainland China.
Hong Kong’s status as a global hub for the waste trade has attracted attention from environmental NGOs and some
press coverage. At present there is no indication of domestic policy changes that might affect the trade. Consultations
with the Environmental Protection Department have not identified any new policy initiatives or controls that would
impact on its operation. Storage and processing of bottles etc. on sites near the China border poses some issues in
terms of planning control, but these are small compared to larger scale uses such as container storage and vehicle
repair.
Domestic recycling
Hong Kong has historically had a market-driven recycling sector for plastic recyclables. There has been no formalised
system for separate collection of post-consumer recyclables, though consultations suggest that newspapers and some
other recyclables have been recovered through informal networks of waste collectors. The Environmental Protection
Department issues licences for waste collection and waste disposal.
The Government’s Policy Framework for the Management of Municipal Solid Waste (2005-2014) 176 has set a target of
increasing the recovery rate and reducing the proportion of waste that is landfilled. A system of separate collection of
recyclables is now being rolled out, with the aim of serving 80% of the population by 2010, and the supply of plastic
bottles, etc. from Hong Kong itself is therefore expected to increase. With a local population of fewer than 7 million
people, this will have only a limited impact on the volumes of traded material. However, it is likely to prompt the
establishment of sorting, washing and grinding capacity within Hong Kong itself so that the products of local ‘official’
recycling schemes can be exported to China in compliance with Mainland regulations.
176
http://www.epd.gov.hk/epd/msw/htm_en/content.htm
11.3
Market Profile
Trade in goods and services is the foundation of the Hong Kong economy. Hong Kong supports one of the world’s
busiest container ports and has had a key strategic role in the economic development of southern China, especially
Guangdong, the neighbouring Mainland province. The tens of thousands of Hong Kong-owned factories in Shenzhen
and the Pearl River Delta employ millions of workers and form a significant part of what is now becoming known as the
‘world’s factory’: the export manufacturing power house that is increasingly dominating the production of textiles, toys,
household goods and numerous other products. These firms, and a large number of Hong Kong-based trading
companies, handle import of raw materials and export of finished goods. Domestic manufacturing (and exports) are
greatly out-weighed by re-export of goods and materials passing to and from China.
Hong Kong’s function in the global waste plastic trade mirrors this generalised role in the economic development and
trade flows of south China. Waste plastic is imported from around the world and re-exported, almost exclusively, to
China, and most of that goes to Guangdong. At present, little actual processing of the waste takes place in Hong Kong.
Hong Kong’s hub status in the global waste plastic trade is a function of its traditional role as a conduit for the world’s
trade with China and the associated traffic in containerised cargo, and its proximity to the plastic-consumer
manufacturing base of the Pearl River Delta. Hong Kong has very good support facilities for international trade, such as
credit facilities and foreign exchange settlement. It also has a large population of freight forwarders and traders with a
very good working knowledge of Chinese customs requirements and practices.
The number of outward-bound loaded containers has long exceeded the number of loaded inbound containers. The
‘deficit’ of inbound cargo means that shipping lines must reposition large numbers of empty containers back to Hong
Kong. Freight rates to Hong Kong and south China from Europe and the US are much lower than those for the outward
journey. The waste plastic trade ‘piggy-backs’ on this container repositioning.
Hong Kong’s own collection of plastic recyclables makes only a modest contribution to the flows of material passing
through the city: the bulk of the city’s manufacturing sector has now relocated into China and formal systems for the
separate collection of recyclables from the domestic waste stream for the population of around 7 million people are only
now being established.
The Hong Kong firms exploit their networks of contacts in Europe, North America, Japan and elsewhere to source
material, and then resell it through to other networks in China. Some are pure trading operations – with overseas
vendors shipping plastic to the Hong Kong quayside and the China buyers arranging the forwarding of freight into the
Mainland, the broker need only manage the Hong Kong import procedures. Some source for their own plastic factories
in China.
Firms are more or less specialised in particular types of waste plastic, and/or particular source markets. Consultations
were held with, for example, a firm specialising in the import of mixed bottles from Europe and the US, another
importing only film from Japan, one firm specialising in styrenics and engineering plastics and another importing a range
of post-production scrap from Europe, Australia and elsewhere in Asia. Most firms involved are small and their sourcing
is derived by the business network of the owner. Sourcing over the internet is regarded to be much less reliable than
the use of trusted personal contacts.
Waste plastic is typically sourced via a broker/consolidator in the source market. Reliable suppliers able to deliver
material of consistent quality are able to command premium prices. For production scrap, the Hong Kong buyer will
typically obtain a sample and test for material, colour, form, melting point and how clean it is. If accepted, the waste is
normally imported on CIF Hong Kong terms. A schedule of indicative Hong Kong market prices is shown in Table 11.2.
Prime plastic traders exploit day-to-day moves in prices to maximise margins. Waste plastic prices are less volatile.
Exposure to price shifts is nonetheless a factor in the waste plastic trading environment. One Hong Kong trader cited the
longer delivery time (and thus the greater potential to be caught by an unfavourable move in prices) as one of the risks
of dealing in scrap from Europe as opposed to East Asian sources, for which shipping times are shorter.
Table 11.2
Indicative sales prices, Hong Kong, early 2006
Price range, per tonne
ABS
USD500 – 600
WEEE shredded (ABS base)
USD300 – 400
PE
USD200 - 300
PE (90/100 clear/mixed)
USD350 – 450
PC (best quality)
>USD1000
PET (clean)
USD700
PET (dirty)
USD300 – 400
Source: Industry consultations, Hong Kong
£295 - £350
£175 - £235
£115 - £175
£205 - £265
£590
£410
£175 - £235
The buyers, the importers in Mainland China, may be trading companies or reprocessors (see Chapter 8). When material
makes the onward journey into China, the freight forwarder will typically provide customs clearance for the importer as
well as transportation.
Waste plastic often travels into China by barge up the Pearl River to one of the many river ports (such as Nanhai), which
is a cheaper and preferred option for low-value cargos not prone to damage in transit. The remainder will be trucked
over the Hong Kong-Mainland boundary. A number of the Hong Kong-based companies on the AQSIQ register are
trucking operations – the transport company must be registered with AQSIQ to carry imported waste over the Hong
Kong-China boundary.
There is at the present time very little processing of waste plastic in Hong Kong – the reprocessing sector is now located
in China and Hong Kong’s role is limited to transhipment. This could change if enforcement of Mainland import controls
is stepped up, specifically in relation to post-consumer waste (see Chapter 8 for further discussion). Some companies
are investing in sorting, washing and grinding facilities in Hong Kong, partly in expectation that this tightening up will
occur. Exhibit 11.1 shows an example of one firm’s sorting lines in Hong Kong.
The firms consulted in Hong Kong were trading a very wide range of plastics. More were focused on production scrap
than on post-consumer waste. This was, at least in part, because of the risk and ‘hassle’ associated with the postconsumer market. Firms were found to be handling packaging material in various guises (mainly production scrap and
inventory clearance), WEEE shredders residue from east Asian sources (in the form of ABS from computer casings),
lump, fibre and other production scrap. Consultation with the Hong Kong Plastics Recycling Association, the main local
trade body, suggests its members concentrate primarily on the import of film from Japan and are not involved in the
European or post-consumer trade.
11.4
Outlook
The outlook for Hong Kong’s waste plastics trade is tied very closely to demand and regulatory change in the Mainland.
High demand from industries in Guangdong and Zhejiang boosts waste plastic throughput. When the Mainland
introduced a ban on waste imports from specific countries, much of the material was routed via Hong Kong instead (as
happened with Japanese waste plastics in 2004). Relaxation of the ban on imports should now see more material again
routed direct from Japan to China.
The large increase in container liner calls at Mainland China ports in recent years (such as the Shenzhen ports and
Shanghai) has provided new and cost-effective cargo routing options. Use of these ports for waste plastic imports has
been increasing, but restrained by Hong Kong companies’ hold on much of the trade and by the greater risk (and hence
risk of a large cost) of rejection of direct shipments. The gradual ‘internationalisation’ of the Mainland’s reprocessing
sector, improvement in trade support services in China, and the potential for better margins, seems likely to reinforce
recent trends towards more direct shipment. This trend is likely to be more marked for production scrap and preprocessed material than for post-consumer waste.
In the event of greater controls on the import of post-consumer waste to China, establishment of more processing
facilities in Hong Kong seems likely. Although labour costs in Hong Kong are very much higher than in the Mainland,
they are lower than in Western Europe or North America for low-skilled manual labour. A new government scheme
making it easier for Hong Kong employers to obtain employment permits for Mainland workers may also help. However,
facilities in Hong Kong are likely to find themselves competing with processing plants in Malaysia and other locations well
connected to international container shipping routes.
Exhibit 11.1
The exception to the rule: sorting of post-consumer bottles in Hong Kong
Photograph with the permission of Global Plastics Recycle Processing Centre (HK) Ltd.
11.5

Summary
Hong Kong is a point of transhipment and temporary storage for waste plastics that are ultimately destined for the
China market. It remains a free port and, under the ‘One Country, Two Systems’ formula, a separate customs zone
that is not subject to China’s import duties and customs law.

Hong Kong is the largest single destination for UK waste plastic exports. It received 191,000t of the 344,000t
exported direct in 2004 (and an additional, unknown, quantity indirectly via Holland and other countries). Although
the UK was the fourth largest single source of waste plastic imported in 2004, it accounted for only 6%-7% of Hong
Kong’s 2,730kt of waste plastic imports for the year.

Almost all of Hong Kong’s waste plastic imports are subsequently re-exported to China. Hong Kong trade data
estimate exports to China at 2,500kt in 2004. Comparative analysis of China and Hong Kong trade data indicate that
official Chinese trade statistics understate imports from Hong Kong. Consultations on both sides of the boundary
suggest that significant quantities of waste plastic imports do not appear in the customs data.

Firms tend to specialise in particular types of waste plastic, and/or particular source markets. Some are pure trading
operations. They exploit their networks of contacts in Europe, North America, Japan and elsewhere to source
material, and then resell it through other networks in China – both trading companies and reprocessors. Most of the
trading firms involved are small and their sourcing is based on the business network of the owner. Other Hong
Kong-based buying operations are integrated with plastic reprocessing factories in China.

Often the overseas vendors ship plastic to the Hong Kong quayside and the China buyers arrange the forwarding of
freight into the Mainland. Waste plastic often travels into China by barge up the Pearl River to one of the many river
ports, which is a cheaper and preferred option for low-value cargoes not prone to damage in transit. The remainder
will be trucked over the Hong Kong-Mainland boundary.

Hong Kong’s hub status in the global waste plastic trade is a function of its traditional role as a conduit for the
world’s trade with China and the associated traffic in containerised cargo. It is close to the plastic-consumer
manufacturing base of the Pearl River Delta. There is also less risk involved in moving waste over the Hong KongChina boundary than via direct shipment to China from the source country, especially for lower quality waste. Preclearance customs inspections in Hong Kong are supposed to involve the opening of the doors of each container, but
there is no requirement for three photographs of the container being loaded, which is a requirement for shipments
from the UK.

The role of the Hong Kong-based trader as broker and deal-maker, bridging the gap between buyers in China and
vendors in source countries such as the UK, is likely to erode over time as increasing numbers of buyers acquire the
international business skills and connections to source direct. If Mainland import regulations are tightened then it
can be expected that some intermediate processing will emerge in Hong Kong. A possible change is more strict
enforcement of the requirements for cleaning and pre-processing of waste. Some companies have already invested
in sorting and shredding facilities near the Hong Kong-Mainland boundary in anticipation of such a change.

There is no indication that Hong Kong will itself introduce similar requirements for pre-processing, a move which
would push the sorting/washing/grinding activity further back towards source countries and/or countries such as
Malaysia.
12.0 India
12.1
Introduction
This section reviews trends in the recycling of plastic waste in India, including a description of domestic waste and
imported product. The information has been compiled from primary and secondary research. Eleven interviews were
carried out with government officials, waste importing companies, industry associations and an environmental NGO.
Secondary data were obtained through internet searches and from sources suggested by various interviewees.
The only source of hard data on import of plastic waste in India is government statistics. These almost certainly underestimate the scale of the trade. Information provided on general industry trends is more readily available, and comments
by interviewees have made it possible to draw some conclusions. However, there are severe limitations on the
information available and as a result only part of the picture can be provided. The conclusions are therefore tentative in
nature and need to be read as such.
12.2
Overview of the plastics industry in India
India’s plastics industry is five decades old. Demand for polymers grew from less than 100kt in 1970 to an estimated
4,500kt in 2005. In the last decade, India has moved from being a net importer of polymers to having a substantial
export surplus, and this trend is set to continue. The industry grew at nearly 20% in 2004, and various industry sources
have predicted trend annual growth rates of around 12% - 15% in coming years.
Average per capita consumption of plastics remains low by international standards at 3.6 kg per person in 2003,
compared to a global average of 21.5 kg and 10-15 kg in China. However, this picture is expected to change
substantially in the next few years, driven by an economy expanding at 6% – 7% per year and rising consumer incomes.
High growth in segments such as retail packaging and building construction as well as in pipes, bulk packaging and
agricultural use are expected to increase polymer demand to around 12,300kt by 2010. This will make India the third
largest polymer consumer in the world after the USA and China, compared to its current eighth position.
Supply and demand figures for leading polymer categories in 2004 are illustrated in Table 12.1.
Table 12.1
Demand for leading polymers in India, 2004 (kt)
Plastic Type
Local Production
Export
Import
Demand
LDPE
195
0
15
210
EVA
5
0
35
40
LLDPE
550
150
75
475
HDPE
1000
100
70
970
PP
1450
300
100
1250
PVC
800
10
160
950
PS
300
100
10
210
TOTAL
4300
660
465
4105
Source: AIPMA / PlastIndia Foundation / Industry Estimates. Note - not inclusive of all plastics types
The main centres of plastics production are in western India (e.g. in the states of Gujarat and Maharashtra),
corresponding broadly with major petrochemicals industry sectors. Plastics processing is more evenly spread across the
country, being closer to industries using plastics inputs and to consumer markets, rather than being close to raw
material sources. The industry is fragmented across more than 20,000 processors, with around 100 large processors
constituting about 35% of plastics processing output.
India continues to import plastics despite its growing manufacturing capacity. These imports include some virgin plastic
raw material, speciality polymers not produced by Indian manufacturers, and a certain amount of plastic waste. Tariff
barriers have been systematically reduced in recent years. The customs duty is now 15 % for most polymers. Industry
sources expect tariffs to come down to about 5-6% within next few years.
12.3
Plastic waste recycling in India
12.3.1 Introduction
Collection and recycling of plastic and other waste in India involves an estimated 20,000 companies. Recent press
reports valued the industry at approximately £1.3 billion177, although this seems high. No source was provided for this
claim and no study to obtain this figure could be identified through secondary research. A very large proportion, and
perhaps a majority, of recycling companies in India are operating at a small scale in the informal sector, and their output
is unlikely to be accurately recorded in official statistics.
It has been difficult to obtain authoritative figures on the volume of plastics that are recycled. According to the views of
industry trade associations, as reported in the press, (i.e. the All India Plastics Manufacturers Association) around 40%
of total plastics manufactured are recycled. One company gave an apparently accurate figure for total plastics
production in India and followed this up with an estimate of the volume of recycled plastics which was equivalent to
30% of total production. Whatever the precise figure, the industry is clearly large in terms of volumes of waste dealt
with and number of people involved.
Some waste plastic types (e.g. nylon) are sourced directly from factories by dealers, with scrap and cast-off material
being re-ground and re-used. However, a large proportion of plastics recycling derives from post-consumer or packaging
waste and takes place in a complex chain involving waste-pickers, wholesalers, re-processors and end-users. This is
described in the following paragraphs, in order to provide the context for understanding the recycling of plastics in India.
In particular, this description highlights the linkages at the top of the recycling pyramid where large domestic waste
dealers may also import plastic waste if they can see profitable opportunities in doing so. This account relies heavily on
an interview and information in a report by Toxics Link, an environmental NGO based in Delhi178 .
It is estimated that there are around 100,000 people involved in collecting waste in Delhi alone, and perhaps 1 million or
more nationwide. For purposes of reference, Delhi’s population is around 14 million people, so around 0.7% of the
population are involved in waste collection and recycling (not exclusively of plastics).
The industry can be understood as a pyramid, with waste pickers supplying small, medium or large waste dealers, who
in turn supply recycling units that sell recycled plastic back to the processing industry. In this sense the industry
combines both organised segments (i.e. at the top of the pyramid) and a large informally organised workforce. The
bottom of the pyramid and main section of the workforce consists of waste pickers, who collect plastics as well as other
valuable recyclable commodities, such as paper or metal.
Figure 12.1
Schematic view of waste plastic collection/recycling industry structure
Recycling Units
Large Waste Dealers
Medium Waste Dealers
Small Waste Dealers
Waste Pickers
Source: GHK
177
Hindu Business Line: Plastics recycling units form organisation March 13 2005
178
Shristi / Toxics Link (2002) Recycling Responsibility: Traditional Systems and New Challenges of Urban Solid Waste in India, New
Delhi
The industry is highly complex, and it is not uncommon for plastics to be exchanged in as many as twenty transactions
before being recycled. Waste pickers provide recycled products to small, medium or large waste dealers, so defined
according to their storage and holding capacities. Large waste dealers sell either directly to factories or through agents,
and it is not uncommon to find medium size waste dealers doing the same. Small waste dealers sell their waste scraps to
medium or large dealers, depending on their capacity and turnover. The value of waste increases by more than 80% by
the time it reaches the large waste dealers.
A wide range of plastic types are collected and all sections of the workforce have well developed abilities in identifying
different types of plastic waste. One article by an environmentalist suggests that PVC accounts for around 45% of
recycled plastic, LDPE for 25%, HDPE for 20%, PP for 8% and PS for 2%, though the source of this information is
unclear179 .
This chain of collection, sorting and recycling is illustrated in Figure 12.2.
Figure 12.2
The plastic collection and recycling chain
Source: Priya Shah, (2001)
In Delhi, a typical large city, recycling is carried out in the organised and unorganised (i.e. informal) sectors. The scale of
units ranges from small unregistered units to medium-size labour intensive small scale industry, and in the case of PET
recycling, to large automated factories with up-to-date technology. Capacity of firms ranges from 500 kg per day in the
case of smaller units, to 25 tonnes in bigger units in the organised sector. Recycled product is used in a wide variety of
applications including bags, household products, sandal soles, fibres, etc.
12.3.2 Trends in the import of plastic waste
Official data on import of plastic waste and scrap are provided in Table 9.2. According to the UN Statistics Division,
99.4kt was imported in 2004, worth just under £17 million. The USA, Netherlands and Germany were the largest
exporters, accounting for 54% of all plastic waste imports to India. Imports in 1999 were 64.1kt.
179
Priya Shah, (2001) The Plastic Devil : Ecological Menace EcoIndia, Mumbai
Table 12.2
Imports of Plastic Waste and Scrap to India, 2004
Exporting Country
Trade Value (£)
Net Weight (ktonnes)
USA
Netherlands
Germany
China
France
Belgium
Japan
Italy
Mexico
Australia
Others
3,519,406
2,862,855
1,476,314
1,453,560
938,670
870,859
660,622
651,682
604,194
541,648
3,328,927
25.6
14.9
13.6
5.8
4.4
4.4
2.4
5.0
2.3
1.8
19.0
TOTAL
16,908,735
99.4
Source: UN Statistical Division Commodity Statistics Trade Database
Interviews with the industry suggest that there are both supply and demand factors driving this growth. As mentioned,
plastic scrap is considerably cheaper than virgin product. Although several importers pointed to the problem of
unpredictable quality in imported waste, price is clearly a very significant factor in growing import levels. On the supply
side, it has also been suggested that improved waste collection and segregation procedures in Europe and North
America are also increasing the potential supply of waste, allowing large quantities of waste plastics to be sold to Indian
companies for recycling.
Although in value terms waste is a small proportion of plastic imports, in volume terms, the proportion is much larger.
Volume figures on imports from the same (UN) source are not available. However, data on imports provided by the All
India Plastics Manufacturers Association (AIPMA) suggests that waste imports could account for around a fifth of all
plastic imports, as illustrated in Table 12.3.
Table 12.3
Import of waste by product and as % of total imports (kt/a)
Plastic type
Import of
plastic
waste
Total
imports
Total
Imported Imported
domestic waste as waste as
demand
% of
% of
domestic imports
demand
PE
3.99
160
1,655
0.2%
2.5%
PS
0.05
10
210
0.0%
0.5%
PVC
1.67
160
950
0.2%
1.0%
Other
93.7
135
1,290
7.3%
69.4%
Total
99.41
465
4,105
2.4%
21.4%
Source: UN trade statistics; All India Plastics Manufacturers Association
According to the AIPMA, imported plastic scrap is nearly three times cheaper than virgin product. This explains the
attraction of importing waste.
There is also a smaller, growing trade in export of plastic waste from India. 15.1kt of plastic waste were exported from
India in 2004 according to UN statistics. The data suggest that export of plastic waste from India is a new phenomenon,
as the comparable figure for 1999 was just over 0.2kt. The main export destination for waste is China and Hong Kong,
accounting for just over 25% of exports.
The official UN statistics (provided by the Indian authorities) understate the actual quantity of plastic waste imported
into India, due to the mis-labelling and illegal import of plastic waste, which will not register in the official data. This is
discussed in more detail below.
12.3.3 Characteristics of waste importing firms
Seven companies were interviewed for this research, identified from e-trading websites and selected on the basis that
they had offices in Delhi or Mumbai, and were willing to give interviews. While not providing a representative sample of
waste trading companies, the information they provided is useful, giving an alternative indication of industry trends to
statistical data.
The companies usually deal in a variety of different types of waste, including HDPE, LDPE, PP, PS, ABS, PET, Nylon, etc.
They import the waste and recycle it, and then sell this on the domestic market, or re-export the plastic in pellet format
or finished products to the Middle East, Far East and Europe. The volume of waste plastic processed by these companies
amounts to several thousand tonnes per year.
All seven companies were primarily sourcing waste and scrap plastic from domestic sources in India, but were also
looking for additional imported waste. One company had an import licence for waste and one had a factory in a Special
Economic Zone (into which plastic waste can be imported without a licence). Others either said they obtained waste
indirectly from recycling companies based in Special Economic Zones, or were vague as to how they obtained imported
waste.
Most of the companies had in fact been established for a number of years, with the newest one set up three years ago.
The comments of all the companies suggest that demand for recycled plastic is buoyant, and all are looking to increase
their turnover of product. However, information provided on the price of imported plastic waste compared to waste
sourced from domestic sources gives a slightly confused picture of the market. As can be seen from Table 12.4 below, in
some cases imported waste is held to be cheaper than domestic waste, and in other cases more expensive.
Table 12.4
Indicative prices for different waste plastics
Plastic type
Category
HDPE, LDPE, PP
HDPE, LDPE, PP
Virgin scrap
Virgin scrap
LDPE
Used bags
PET
Used bottles
Source: industry interviews
Domestic/im
ported
Domestic
Imported
Price per
tonne, £
380-450
380-450
Domestic
Domestic
90
190
Note
Price includes cost of customs duty,
clearing charge, damage charge
Sourced from waste pickers
Sourced from waste pickers
In addition to the data provided in the table, our interviewee at the industry funded Centre for Plastics in the
Environment said that plastic scrap can be imported at 2 Rupees per kilo (£25/tonne), and that this is cheaper than
domestic scrap.
It is difficult to establish a definite picture of the economics of imported versus domestic trade from a small number of
interviews. However, all companies were actively seeking additional waste plastic from abroad through advertising, and
most of their comments suggested that supply was limited from domestic sources. It may be the case that recycling
companies have capacity to process imported waste and sell it on at a profit, even if imported waste is not particularly
competitive from a price point of view compared to domestic waste.
Box 12.1
Profile of a large waste trader / recycling / waste importing company
Amber Waste Recycling, based in Rajouri Garden, West Delhi is a family run enterprise that has grown rapidly since
starting business three years ago. Their main source of raw material is smaller waste dealers based in various slum
areas in Delhi, from whom they obtain HDPE, LDPE, PET. They also deal in Nylon, though this is sourced only from
textile factories. The company has a plastic recycling (agglomeration) facility near Delhi in Rajasthan, and exports most
of its recycled pellets to Germany where prices for imported plastic are higher than in India. The company advertised
internationally (on www.alibaba.com , a general e-trading website) to import nylon and other plastic waste.
12.3.2 Regulations on import of plastic waste
India currently has strict regulations in place controlling the import of plastic waste. The relevant regulatory authorities
are:
Ministry of Environment & Forests (MOEF);
Directorate General of Foreign Trade (DGFT), part of the Ministry of Commerce & Industry.
MOEF’s Hazardous Substances Management Division frames regulations relating to waste plastic (e.g. including
restrictions on manufacture of plastic bags etc.). The Division’s formal mandate is to promote safe management and use
of hazardous substances including hazardous chemicals and hazardous wastes, in order to avoid damage to health and
environment.
DGFT is responsible for ensuring import regulations correspond to the broader environmental policies established by
MOEF. The relevant regulation for plastic waste is Public Notice 392 (PN)/92-97 dated 1.1.97 according to which import
of plastic waste or scrap is forbidden, except under licence. The single exception to this rule is PET bottle waste/scrap
which can be freely imported without a licence.
Import licences for plastic waste are very hard to obtain and are only allowed for enterprises established after 16 June
1998. According to Public Notice 392 and its supporting notes, various criteria need to be met. In effect, only waste
equivalent to virgin plastic can be imported (e.g. unused cuttings that are an offshoot of the production process). The
appropriate State Pollution Control Board must approve the licence, and only on presentation of detailed documentation
from the importing company, including information on the recycling process and equipment used. Consignments of
plastic waste are also opened at Customs to ensure that only virgin-grade plastic is in fact imported, with samples
subjected to laboratory tests before consignments are released. In addition, import licences are not open-ended, but
need to be periodically renewed.
Several companies we spoke to confirmed this picture. For instance, one company that had obtained such a licence
noted that the officials dealing with his case had been strict and had taken considerable persuasion before agreeing to
grant a licence. The company in question had advertised internationally to import HDPE and LDPE scrap, and had
capacity to process up to 3kt per year. However, the quantity it could import was restricted to much less than this.
According to DGFT officials only 10 – 12 companies have such import licences in India currently. DGFT documentation
on requests for import licences for restricted items in the last four months of 2005 show rejection of one application for
a licence by a Tamil Nadu-based company to import used PVC flakes.
Views of relevant officials on possible change in regulations
We spoke to both DGFT and MOEF officials regarding any possible change in the regulations. According to DGFT
officials, the number of licences granted for plastic waste may increase slightly in future. However, the general position
is that the Indian Government does not want the country to become a dumping ground for plastic waste. While the
DGFT official interviewed did not expect the regulations to change, whether they do or not depends on MOEF policy.
A MOEF official told us that the general presumption is that the existing policy on import of plastic waste as set out in
Public Notice 392 will remain the same in future.
It is worth noting the representation to the Indian government by the All India Plastics Manufacturers Association . This
asks for relaxation of controls to allow the industry to import scrap (post factory waste, rather than post consumer
waste), in order to compete with Chinese products internationally. Some concession is made to environmental concerns
in the same submission, as illustrated below:
“Chapter 39.15 Present Status: Except PET scrap, import of other thermo plastic scrap is banned.
Our Suggestion: Since scrap imports are banned, India imports almost 7 to 8 percent of its virgin polymer requirement
from the international market which, is almost three times more expensive than plastic scrap in the international market.
The only way to compete in this existing scenario where we face competition from countries like China, is on the
strength of pricing. This will not only help reduce quantum imports of virgin polymers, but also, will help us save
valuable foreign exchange and be competitive in the international markets. The scrap can be used for certain domestic
applications as well. Provision should be made for the Industry to import Scrap (Post Factory Waste) to compete with
the Chinese products internationally. Scrap has been an issue of concern for long and to keep a vigilance on its use, we
suggest that special Scrap Processing Zones be created for Plastics Industry in every State. This will help maintain a
strict check since, the imports would directly be brought to this zone alone, to be processed into products for further
supplies internationally.”180
MOEF stated that they are now considering easing scrap import restrictions, but only on a case by case basis. Scrap (e.g.
industrial trimmings), not post-consumer waste, might be allowed in particular instances and officials are currently
studying this to see how it might be allowed. The current thinking is that any exceptions to the rule should be carefully
specified, e.g. with scrap imports specifically allowed for recycling for a particular product. The example given was that
industrial trimmings from PVC floorings might be allowed, but only on condition that their recycling conforms to Bureau
of Indian Standards regulations.
Overall, comments from the two ministries suggested that the overall policy presumption against importing waste will
stay in place. However, the existing exemption for PET recycling, previously obtained after industry lobbying, and the
discussion of making exceptions in some cases suggest that a moderate additional amount of scrap imports will be
allowed in the future. If the compound rate of growth for plastic waste as recorded in the UN statistics between 1999
and 2004 was 7.6%, then the comments of officials suggest this growth rate might increase somewhat in the next few
years.
Alternative and illegal import routes
Despite the very strict regulations on importing plastic waste, our research suggests that a large amount of waste is in
fact entering India through a number of alternative routes including legal loopholes and illegal activities. An example of
such illegal imports made the headlines in India in 2002 when it was found that a 0.4kt consignment of waste acrylic
polymers from Denmark was found to have entered India181.
These routes include:

taking advantage of loopholes in regulations relating to Special Economic Zones (SEZs) and Export Processing Zones
(EPZs)

straightforward corruption i.e. bribing officials to allow prohibited cargoes to pass into the country
mislabelling of waste to disguise it
These can be described briefly as follows.
Import through SEZs and EPZs
180
AIPMA 58th Annual Report (2004) Proposals for Union Budget 2004-2005
181
New Indian Express, 12 February 2002 “Denmark minister apologises for illegal plastic waste imports”
A wide variety of plastic wastes, that would otherwise be forbidden, are allowed to be imported into Special Economic
Zones and Export Processing Zones, with the proviso that 100% of the reprocessed product is exported. The relevant
regulatory instrument allowing this is Notification No. 37 (Re-98)/97-02, dated 23rd December, 1998. As a result, a large
number of importers and recycling units are located within these zones, and reprocess waste plastic for export.
However, according to industry sources, the plastic waste can be taken out of the zone and legitimately imported into
India proper. This is achieved through a loophole in the law under which imports into India are restricted as described
above, but transfer of product from an EPZ or SEZ is allowed as long as duty is paid. According to one company,
“thousands of tonnes” of plastic waste is imported into India in this way each year. This tallies with the reports of at
least two other companies interviewed, who explained that they did not import waste themselves but bought it instead
from companies located in an SEZ.
According to one interviewee, this practice is well-known in the industry and also to the authorities, but a blind eye is
turned to it. The officials we spoke to in Delhi acknowledged that this might have been a problem in the past, but
claimed this had been resolved.
Illegal imports
In addition to legitimate transfers of waste via SEZ / EPZ routes our interviews suggest that a certain amount of illegal
importing takes place. One interviewee involved in recycling noted that his company sourced domestic waste only, as it
was cheaper than imported waste. According to this source, domestic waste could be obtained for 15 – 16 Rupees per
kilo (£0.18/kg). Similar grade waste could also be imported for the same price. However, 4 Rupees per kilo (£0.05/kg)
had to be paid in bribes to Customs officials and a 1 Rupee per kilo (£0.01/kg) payment made to Pollution Control Board
officials. The implication that there is a fixed price per kilo for facilitating import suggests however that the practice is
likely to be well established and that it may be significant in terms of volume.
Mislabelling of plastic waste
According to research by environmental campaigners, substantial amounts of electronic, or “e-waste”, (defined to
include used computers, TVs, mobile phones, refrigerators, etc.) is illegally imported into India every year from
developed countries182 . This is recycled predominantly in the so-called un-organised sector of small enterprises, and is
often focused on reclaiming recyclable metals (e.g. copper, gold, etc.) and some of the plastic from the original product.
Much of this scrap is imported under the category of “Mixed Metal Scrap” or “Mixed Cable Scrap”, hiding the fact that it
may also contain substantial amounts of plastic waste. In addition, those consignments of waste that are barred by
Customs are often auctioned off to the highest bidder, (rather than being returned to the country of export), thereby
creating an alternative method for plastic waste to enter.
12.3.3 Assessment of future trends in waste imports
From the discussion above it can be seen that the pattern of future imports of plastic waste will be influenced by growth
patterns in both legitimate and illegal imports.
In this concluding section, a broad assessment of the potential trends in plastic volumes is made. As will be seen from
the following discussion this remains a highly conjectural exercise and is for the purposes of scenario planning, rather
than a rigorous forecast.
Legitimate waste imports
As noted above 99.4kt of plastic scrap and waste was imported in 2004 according to official data. This represents a
7.6% compound annual growth rate compared to the volume of imports in 1999. In assessing what future growth rates
might look like the following broad factors need to be taken into account:

A key driver of plastics consumption in general in India is economic growth, which drives not only increases in
consumer packaging waste but also investment items such as plastic construction materials or pipes for agricultural
use. GDP growth in India is estimated by the World Bank to be in the range of 6% – 7% over the next five years.
182
Toxics Link (2004) E-Waste in Chennai: time is running out New Delhi
The plastics industry has typically grown faster than GDP in recent years, giving credence to forecasts of
consumption tripling to more than 12,000kt in the next five years.

Although it is likely that a large part of this demand will continue to be met by domestic production, falling customs
duties and possible lack of capacity in the industry mean that imports are likely to continue in some categories for
some time. Although virgin and waste plastic are not exact substitutes due to quality issues, these factors would
suggest continuing demand for imported waste. It is also worth noting again that lack of capacity is already cited by
the industry (e.g. in the AIPMA submission cited above) as a reason for relaxing waste import regulations in order to
meet demand.

However, discussions with government officials suggest that the regulatory framework on import of plastic waste will
remain in force and more or less retain their current shape, with only limited exceptions allowed. This would suggest
that the trend rate of growth for legitimate waste imports can perhaps be expected to increase slightly.
Illegal waste imports
Unfortunately, while it is clear that a certain volume of illegal plastic waste continues to enter India, due to its (semi-)
clandestine nature it is very difficult to assess either the scale of the trade, or its potential rate of future growth.
In terms of volume, the only indications provided by the interviews carried out for this survey were from sources who
were not directly involved in the trade, but knew other companies and individuals that were.
According to these “thousands of tonnes” of illegal plastic are currently being imported. However, given the scale of
interest in illegal waste among environmental groups, and the existence of a free and inquisitive press in India, (the
current journey of the contaminated French aircraft carrier Clemenceau has attracted front page headlines for instance)
it seems likely that if the illegal trade were greater than the current level of licensed imports, it would have attracted
exposure and censure. Taken together, this would suggest that the level of illegal plastic waste imports is perhaps in the
range 1% - 100% of legitimate imports.
12.4

Summary
India is not a significant player in the recovered plastics trade. This could change if current import restrictions are
eased. India’s plastics industry is five decades old and historically has grown significantly faster than GDP. Demand
for polymers grew from less than 100kt in 1970 to an estimated 4,500kt in 2005, with large capacity additions by
major producers taking place particularly in the second half of the 1990s. In the last decade, India moved from being
a net importer of polymers to having a substantial export surplus, and this trend is set to continue. The industry grew
by nearly 20% in 2004, and various industry sources have predicted trend annual growth rates of around 12% - 15%
in coming years.

India continues to import plastics despite its growing capacity. This includes some virgin plastic raw material,
speciality polymers not produced by Indian manufacturers, and a certain amount of plastic waste. Tariff barriers have
been systematically reduced in recent years, with the present customs duty being 15 % for most polymers.
According to industry sources, it is expected that tariffs may come down to about 5-6% within the next few years.
This may lead to an increase in imports (which constituted just 11% of plastics consumption in 2004), although our
industry interviews suggest that large plastics producers operate cartel-like mechanisms to try and keep imported
products out of the market.

Imports have grown rapidly in the last six years, with a compound annual growth rate of 7.6% during this period.
Official trade statistics show that 99.4kt of recycled plastic were imported in 2004, worth just under £17 million. The
USA, Holland and Germany were the largest exporters, accounting for 54% of all recovered plastic imports to India.
Unfortunately, while it is clear that a certain volume of illegal plastic recyclates continues to enter India, it is very
difficult to assess either the scale of the trade due to its (semi-) clandestine nature, or its potential rate of future
growth.

There is also a smaller, growing trade in export of recovered plastic from India. 15kt of recovered plastic were
exported from India in 2004, an increase of 14.9kt since 1999. The main export destination for recovered plastic is
China and Hong Kong, accounting for just over 25% of exports.

The Indian government are now considering easing scrap import restrictions, but only on a case by case basis. Scrap
(e.g. industrial trimmings), not post-consumer waste, might be allowed in particular instances and officials are
currently studying this to see how it might be allowed. The current thinking is that any exceptions to the rule should
be carefully specified, e.g. with scrap imports specifically allowed for recycling for a particular product.

Overall, consultations suggested that the overall policy presumption against importing recovered plastics will stay in
place. However, the existing exemption for PET recycling, previously obtained after industry lobbying, and the
discussion of making exceptions in some cases suggest that a moderate additional amount of scrap imports will be
allowed in the future.
13.0 Future export demand
13.1
Introduction
This chapter considers the future outlook for the recovered plastic export market, with a focus on markets
outside the EU. The analysis is built on the exporter and importer profiles provided in the previous chapters
which cover the EU, USA, Japan, Hong Kong, China and India.
The quantity of recovered plastic exported is influenced by, among others:

The volume and type of UK supply
Whether the export or domestic markets are prepared to pay a higher price for plastic of a given type and
specification, net of shipping and other transaction costs

Non-price factors such as risk and security
Whether public policy at national and local level is neutral, positive or negative towards export
Supply
UK supply side issues have been discussed in chapters 2 to 4. The preceding analysis shows that the quantity of
packaging waste recycled and reported under the Producer Responsibility Obligations (Packaging Waste)
Regulations is expected to increase from 414kt in 2005, to over 685kt in 2015. The 86kt of recovered plastics
exported in 2004 that were additional to the declared PERN volume are thought to include: post-production
scrap, re-exports of material from Ireland and other countries, shredded plastic from ELV/WEEE processing, ‘off
spec’ virgin material and international sales of semi-processed flake. The destination and volume of recovered
plastic exports are understood better than the origin or type of material being shipped. There are fewer data on
ELV and WEEE derived waste plastic arisings but the quantities of these materials placed on the market are
expected to increase. At present the bulk of the separated plastic from WEEE & ELV sources is relatively low and
is thought to be finding outlets in the export market, rather than the UK.
Price
Recovered plastic is a commodity good. As with other traded commodities (coal, steel, paper pulp, scrap metal,
etc.) materials find a market that matches specification, availability and price. There is nothing in the nature of
the product that differentiates UK recovered plastic of a given specification from that exported by Holland,
Germany, Japan, the USA or any other country183.
The UK has a small share of the overall global market and does not have sufficient market share to significantly
influence the market price offered: it is a price-taker, not a price-setter. The UK has, for example, around 5% of
the Chinese market for recovered plastic imports. Prices in the domestic market are heavily influenced by the
export market. As recent experience has shown, the presence of a price premium in the export market can draw
collected material overseas in large quantities.
Non-price factors
The size of the export trade is also determined by the willingness of UK vendors to sell the material they have at
the price offered by the global market. This choice is influenced by non-price factors such as perceived risk (both
financial and relating to reputation), market knowledge, terms of contract and payment, local authority policy and
the quantities involved. While there is a market for individual ‘spot’ trades, consultations show that much of the
business is built on long-term relationships and contracts that cover multiple deliveries.
Public policy
Public policy matters to the export market. For example:

Local governments (waste disposal authorities) can specify that their recyclables should not be exported
National government policy can set rules or incentives that affect access to, and the cost of, export (e.g. the
terms of issue for PERNs/PRNs in the UK, or policies in countries such as France that have favoured domestic
recycling, and standards on export and import of materials in source and destination markets)
183
It is noted that some common types of available waste plastic may vary between international markets: e.g. different levels
of PET barrier bottles, use of heavier returnable PET bottles, different colour mixes etc. However material value should be
comparable where the specification is equivalent.
Table 13.1
UK supply side outlook – a summary (kt)
Sector
Packaging
ELV
WEEE available for recycling
Total
Projections
2005
2008
2010
2015
Plastics waste
arisings (kt/a)
2,0402,200
2,2022,675
2,323 2,934
2,565 3,814
Collected for
recycling (kt/a)
414
503-548
580-692
686-1,028
% recycled (minmax)
19-20%
19-25%
20-30%
19-40%
Plastics waste
arisings (kt/a)
60
60
60
60
Collected for
recycling (kt/a)
<3
10
15
29
% recycled
<5%
17%
25%
48%
Plastics waste
arisings (kt/a)
196
204
234
252
Collected for
recycling (kt/a)
Low
23-68
47-117
101-177
% recycled
Low
11-33%
20-50%
40-70%
Plastics waste
arisings185 (kt/a)
219
242
258
281
Collected for
recycling (kt/a)
Low
68
89
104
% recycled
Low
28%
34%
37%
Plastics waste
arisings (kt/a)
2,5152,675
2,7083,110
2,8753,405
3,1584,300
Collected for
recycling (kt/a)
c.425
604-695
731-913
920-1338
% recycled
16-17%
19-27%
21-32%
21-42%
Source: various references, see Chapter 2

Public policy can mandate use of recovered plastic in products sold in the domestic market, creating an
enhanced local demand for recovered material beyond that which would exist in ‘normal’ market conditions
(as is the case in some parts of the USA)
Outputs & Focus
In producing export projections accurate information on trends up to and including the chosen base year and an
understanding of how the market will evolve in the future are required. In the case of recovered plastic these
conditions are only partially met as, as shown in Chapters 2 and 5.

The origin of c.25% of existing (2005) UK exports is undetermined and there are gaps in the data covering
the remaining c.75%

UK trade data do not provide a reliable guide to the type of materials being exported186
184
Agricultural packaging arisings and recycling rates are included in packaging data in this table, but are identified separately
in chapter 2.
185
assumes 22% of WEEE is plastics (ICER 2000)
186
See discussion in Chapter 5.
market demand, future trends and associated risks.
181

While at a general level the drivers of export demand are clear, there are significant gaps in the data on endmarket applications
The terms of reference for this study require projections for 2008, 2010, 2015. As of 2006, the extensive global
trade in recovered plastic is no more than ten years old, and in its current shape and form dates back only five
years. Like many secondary markets it is volatile and so difficult to predict. Furthermore, a direct mapping from
source to application for the UK, even in the base year, is not possible with present data.
In looking forward there has therefore been an effort to ‘focus on what matters’:

To determine the strategic direction of export market development:
Will demand continue?
Where will it be?
What is the outlook for individual materials?
To explore the outcomes from alternative scenarios
To identify and understand risks and key influencing factors
To provide as much detail as possible, but not to extrapolate further than the underlying data will support
13.2
Outlook
13.2.1 General pattern of trade
Current situation
As Chapter 5 describes, the global recovered plastic market is characterised by:

Extensive trading within the EU and NAFTA bloc
Net exports from both these regions, and from Japan, Australia and other wealthier nations to developing
countries
Trade between the EU, NAFTA and Japan is much smaller that their exports to the developing world. This is fairly
typical of secondary products markets.
There is also increasing evidence that demand from China is drawing material out of other emerging economies
in Asia and South America. As plastic consumption (and hence waste arisings) in these countries is increasing,
they are also being recruited as sources of recovered plastic for Chinese industry.
Future developments
This general pattern of trade is expected to continue into the long term. Plastic industries in lower income
countries tend to have a higher utilisation rate (e.g. 20%) for recovered plastics compared to those in wealthier
economies (e.g. 6%), in part because they are used in applications that have a different set of price/quality
trade-offs. In an increasingly efficient global marketplace where the barriers to trade are falling, the demand for
lower cost inputs can be met by imported secondary material.
The only circumstances under which a reversal of present trends is expected is if new regulations:

Placed hard barriers to exports of recovered material from the EU
Forced domestic markets to use locally recovered material, e.g. through mandating a percentage of (EU)
recycled content
Neither of these is a prospect at present, but could not be ruled out in the period to 2015.
182
13.2.2 Location of demand
Current situation
It is estimated that more than 70% of all imports of internationally traded waste plastic end up in China (Figure
6.1), which accounts for most of the exports from OECD markets to the developing world. China also imports
material from emerging and recently industrialised economies such as Malaysia, Korea and Taiwan. By
comparison other importers are small.
Figure 13.1
India
1%
Estimated share of demand for internationally traded recovered plastic
EU
14%
Others
3%
NAFTA
11%
China
71%
Source: GHK from international trade data for 2004. Country of import is here assumed to reflect location of
final demand. Chart assumes China imports 4,700kt/a rather than 4,000kt/a declared, i.e. adjusted to fit Hong
Kong data (see text). Hong Kong not shown: it is a transhipment port only and provides no final demand.
Future developments
Over the next ten years, the OECD markets’ share of world plastic consumption is expected to fall. Growth rates
in other markets – the major Asian economies but also South America, the Middle East, South-East Asia – are
higher than those expected for the EU, North America and Japan. Consultees for this study noted the emergence
of markets for recovered plastic in Eastern Europe and Russia and the Middle East over recent years. The
increase in plastic consumption in non-OECD markets also creates new sources of supply of recovered plastic
material.
With current plastic consumption of 4-5kg/capita/yr in India and 10-15kg/capita/yr in China (compared to an EU
average of 98kg/capita/yr), a population of around two and a half billion people in these two countries alone and
a tendency for plastic consumption to grow faster than GDP, the demand for plastics, both new and recovered,
will clearly be substantial. The issue is whether, for each material, the imports of recovered plastic will retain
their current share of the larger market.
China is the more open than India to recovered plastic imports – due to its more liberal Green List schedule and
the low freight rates from Europe and North America. Our research suggests that China will continue to be the
focus of the recovered plastic trade for at least the next five years, and probably longer. Growth in Chinese waste
plastic imports should be expected to fluctuate in line with domestic demand, manufacturing output, prime prices,
domestic recycling trends, etc .
Only punitive regulatory change in China (Green List changes and import controls) would cause it to lose the
central role it has in the market. The path and timing of regulatory change in China cannot be predicted but the
past ten years has seen a focus on eliminating imports of contaminated and low-grade material that carries a
threat of pollution. This is being achieved directly, through standards, and indirectly, by accreditation of suppliers,
rather than any fundamental restriction of imports. China’s accession to the WTO has also reduced recovered
plastic import tariffs and liberalised other aspects of the trade.
India has a more restricted Green List schedule than China and a very small share of global imports of recovered
plastic. If more types of plastic were legally importable to India, its overall market share would increase.
However, container freight costs from the UK to India are much higher than those to China (around £2200 per
183
forty foot container compared to £500 or so to Hong Kong/China) so the prices offered would need to be higher
to divert large quantities of material from the UK-China trade. Only if India was able to create the same
manufactured trade surplus as China, and hence the imbalance in inward/outward freight rates, would the
Chinese advantage be eroded. For the present at least, this seems unlikely.
Role of Hong Kong
Hong Kong has a strategic function in the international trade with China. It is a well-connected transhipment hub
that lies outside China’s customs and environmental controls. The movement of material into China via Hong
Kong appears to carry a lower risk of customs intervention than direct shipment, and is favoured by some
importers for that reason.
Although the size of trade has increased, Hong Kong’s share of China’s external trade has been in decline for
some years as new and efficient ports have been built in the Mainland. Factors reducing Hong Kong’s
significance as a hub for the recovered plastic trade include:

The internationalisation of the Mainland reprocessing sector, i.e. more Chinese buyers being equipped to buy
direct from sources markets (in terms of language, familiarity, finance facilities, etc.)

Mainland ports’ increasing share of China-EU and China-US container freight movements
The ‘normalisation’ of customs and import procedures in China, support by exporter accreditation and customs
clearance, so that direct shipment poses limited additional risk for exporters
Only 25% of UK exports were shipped direct to China in 2004, in comparison to 50% of both German and US
exports,– 75% went first to Hong Kong. It is not clear whether this reflects a greater proportion of lower grade
material in the UK exports, or simply the strength of historical business ties between the UK and Hong Kong.
German and US exports in 2004 had a higher value per tonne than those from the UK, but it may not be sensible
to put too much weight on the declared value statistics in this trade.
13.2.3 Demand drivers
The overall demand for recovered plastic imports is made up of the demand from a series of separate plastic
material markets. These individual markets have some common features and drivers (e.g. economic and
investment climate, feedstock prices) but many differences. For instance, demand for PET bottles in China is
driven by the markets for, and economics of, polyester fibre for toys, furniture, etc. This has very little to do with
demand for recovered ABS used in electronic and electrical manufacturing.
As with the supply side, the analysis is therefore best done on a ‘bottom up’ basis, looking at individual plastics,
and researching:

How demand is expected to change for the specific products where recovered material is used (e.g. future
demand for stuffing for soft toys)

What influences the use of recovered as opposed to prime plastic (qualify, price, supply availability) and how
those factors are likely to change in the future

How domestic recovered material competes with imported and whether relative shares are likely to change
This is a data-intensive process that is achievable to a degree in UK markets, but more challenging in China
where the firms are more numerous and supply chains more opaque.
13.3
Scenarios and Projections
13.3.1 Projections
For the next 5 years, unless there is liberalisation of Green List controls by India, China’s demand for recovered
plastic is going to determine the size of the international trade in recovered plastics beyond the EU and NAFTA.
Other markets are emerging, but they are likely to remain dwarfed by the Chinese market for the time being.
184
Summarising the analysis of market and regulatory conditions provided in Section 10, it is concluded that Chinese
demand for recovered plastic is set to be sustained and to grow, at least to 2010 and probably well beyond.
China’s consumption of synthetic resin has increased at double-digit annual rates over the last 10 years (see
Figure 6.2). Steady growth is expected to continue (Table 6.1). Large investments are being made by
international firms and domestic companies to expand capacity, but import of many millions of tonnes of prime
resin continues to be required to sustain the growth in output of domestic and export manufacturing businesses.
In circumstances of strong competitive pressure and varied markets, recovered plastic has acquired a share of
this growing market for material.
However, the demand for recovered plastic is not determined simply by deficits in domestic supply of prime resin
and so need not decline if and when domestic production capacity does catch up with demand. Nor is it solely a
matter of high prime prices, though these did contribute to the surge in demand seen in 2004. This is illustrated
by the continuing high demand for PET bottles despite excess virgin PET production capacity in China.
Demand is driven by manufacturers seeking plastic inputs at a price lower than that of the prime resin in order to
gain competitive advantage. Quality requirements for a wide and growing range of plastic applications can be
met by recycled plastics at a discount to virgin. Even if prime prices fall significantly, the baseline demand for
recovered plastics, particularly for less quality-sensitive applications is expected to remain.
On top of this baseload demand, the comparatively high prime prices of the past couple of years have help to
drive an additional move from prime resin to recovered plastic by other manufacturers that have the scope to do
so. Intense competition and fixed contract terms mean that manufacturers have had only limited scope to pass
higher input costs to buyers, and so have had to look hard at production costs. The percentage of recovered
plastic used in individual applications varies from 5% to 100% depending on quality and performance standard.
A wide spectrum of recovered plastics is being imported into China – from mixed post-consumer plastics to
production scrap. The scope to substitute recovered plastic for prime resin is higher with production scrap, and
the latter trades at only a 10% discount to the prime as a consequence. As a general case, the applications are
either:

For the ‘low-end’ domestic Chinese market
For the general export and domestic market in applications where the appearance and performance
parameters are compatible with use of recovered plastics
At a material level, this translates into demand for:

PET, for use in staple fibre applications (e.g. stuffing for soft toys, furniture, textiles)
ABS, for use in the manufacture of toys, electronic and electrical equipment, etc.
PE, for applications including household products, packaging, construction and agricultural plastics
PP, for applications including packaging
PVC, for applications including construction plastics
The plastic products market in China is evolving rapidly and it can be expected that the recovered plastic market
will change in line with it, and probably exhibit further instances of the volatility seen in 2004. Beyond 2010 the
outlook is, as a result, increasingly uncertain. It is expected that sustained high prime resin prices will further
encourage innovation in the use of recovered plastic by manufacturers in China. This will expand the potential
range of applications for recycled plastics.
Waste plastic collected from domestic sources in China is unlikely to displace imported material in the next five
years and quite possibly longer (see Section 10). Data on domestic collection of plastic wastes appear scarce. It
seems plausible, however, that a reliable and large-scale supply of recovered plastics depends on the
establishment of formal waste management systems that include separation of recyclables. This is a general
case, specific markets and requirements may be impacted more significantly.
On the basis of a simple linear extrapolation of the trend in declared imports from 1999 to 2003, official
recovered plastic imports were on track to hit 5,000kt/a by 2008 and 5,500kt/a by 2010. However, the added
impetus of the higher prime prices from 2004 onwards has pushed the linear trendline towards 5,500kt/a by 2008
185
and 6,500kt/a by 2010 (Figure 13.2). With 2005 declared imports standing at 5,000kt, there is a very good fit
polynomial trendline that would put 2010 imports nearer 12,000kt (Figure 13.3).
There is no basis for knowing whether the near-1,000kt increase shown in China’s 2005 import data reflects
better measurement of the trade, or a true increase in underlying demand. As discussed above, past figures
have probably under-stated actual imports by 20%-25% so that the true demand in the market has been
correspondingly higher than shown in the charts 13.2 and 13.3 below.
Given reasonable assumptions about utilisation of recovered plastic compared to prime resin, the increases seen
from 1999 to 2004 are compatible with annual increases in consumption of many plastics in China over the past
few years and with those projected for the coming 5 years or more, particularly if high prime prices are
sustained.
China’s consumption of the five major resins in 2004 has been estimated at a little over 30,000kt. Declared
recovered plastic imports, excluding the ‘other’ category (which is thought to include a large share of PET and
other plastics as well as ABS), in 2004 were 2,300kt, (2,500kt if ABS is included). This is about 7.5% of prime
demand for the same plastics. If these imported recovered materials did no more than maintain their existing
market share, official imports (excluding PET) in 2008 would be 3,000kt and 3,800kt in 2010.
These ‘rough and ready’ approaches suggest potential additional demand of 500kt/a-1,000kt/a each year, spread
across all recovered plastics. However, as Figure 13.4 illustrates, the headline import figure hides significant
movement from year-to-year in the apparent imports of individual polymers. Even if trade data are discounted as
unreliable, anecdotal evidence suggests that sub-markets have their own dynamics (as is the case in the UK). The
dynamics are shaped by, for example, trends in electronics, intensity of construction investment, etc. US and EU
limits on China’s growth in exports of products (e.g. textiles) feed back into reduced demand for the associated
plastics. It would be preferable, in time, to build up material specific projections mapped more closely on to the
demand drivers for individual plastics.
Most of all, the cumulative analysis conducted in this study suggests that much more needs to be known about
the capacity and growth rates of recovered plastic applications in China for more reliable forecasts of demand to
be feasible. This could be put together with macro-economic parameters in order to build more solid projections
than are possible at the present.
Figure 13.2
Linear extrapolation of imports 1999-2005, to 2010
8000
6000
5000
4000
3000
2000
1000
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
1999
Annual imports (kt)
7000
186
Figure 13.3
Polynominal trendline on imports 1999-2005, to 2010
Annual imports (kt)
14000
12000
10000
8000
6000
4000
2000
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
0
Source: GHK
Looking at the overall market, a ‘Base’ case export demand scenario would be associated with the following
general market conditions:

Continued growth in the Chinese domestic economy on the recent trend line (i.e. annual growth in GDP of
7%-9%)

Sustained export demand for Asian consumer goods from European and North American markets
Feedstock prices in the range observed in 2004-2006
No changes to the regulations governing trade in recovered plastic, either in Europe or China, such that
material of an adequate standard can reach end-markets
A ‘Low’ export demand scenario would be associated with:

A sustained fall-off in US/EU demand for Chinese exports and a slow-down in the Chinese domestic economy
A significant fall in international prime plastic prices
Systematic over-supply of resins in the Chinese market leading to heavily depressed domestic prices
New regulations and enforcement that imposed significant restrictions on the type of recovered plastic legally
importable to China (either in terms of type of polymer or the nature of previous use)
A ‘High’ export demand scenario would be associated with:

Feedstock prices moving higher than recent levels
Strong global economic growth translating into strong consumer demand for Asian exports in key sectors such
as textiles, toys, electronics and plastic products

Strong growth in Chinese domestic economy and, in particular, above-trend income increases among the rural
population and sustained growth in the construction sector

Chinese import controls largely unchanged and the gradual opening up of new markets (e.g. liberalisation of
Indian import regime for recovered plastic)

Any measures that substantively reduced Japanese or US supply into the export market (e.g. additional export
controls from Japan or extension of the mandated recycled content measures in the US that were sufficiently
demanding to cause domestic buyers to be able to out-compete export markets on price)
187
China’s imports of recovered plastic in 2005 stood at 5,000kt and at a value of £1.1 billion. On the evidence
collected, the recovered plastics trade has not really been on the radar screen of the plastics industry, but as it
grows, that seems likely to change, particularly as recovered plastics replace prime polymer in a larger set of
applications.
Figure 13.4
China’s declared imports of recovered plastic (kt)
6000
5000
4000
kt
3000
2000
1000
0
1999
2000
2001
PE
2002
PS
PVC
2003
2004
2005
Other
Source: China Customs Information Centre
13.3.2 Implications for the supply side
If demand is increasing at 500-1,000kt per annum is the global market capable of supplying it? So far the
evidence is that it will. Larger demand and higher prices appear to be stimulating new and additional supply on a
global basis, with material being sourced from Asia and South America as well as OECD markets. Export demand
is drawing out material that might otherwise be processed in their domestic economies. It is also playing a large
part in absorbing the additional supply coming from policies such as the Packaging Directive. PlasticsEurope data
from recent years, for instance, suggest increases in collection for mechanical recycling in Europe in the order of
300kt per year. A large fraction of this additional material is being exported.
The continued existence of a buoyant international market does not, in itself, dictate the volume of UK exports.
As described in chapters above, domestic factors have a large role, such as the presence/absence of a
manufacturing industry, with potential demand for the material (electronics/ABS being an example) and the
financing of recovery.
As present, the UK accounts for a 4% to 5% share of overall supply into the recovered plastics market as a whole
and this seems unlikely to change dramatically. The quantum of supply into the market from Europe and
elsewhere is expected to increase, but given that demand is also projected to rise, problems of over-supply
generally seem unlikely. However, the supply/demand balance for specific polymers and applications will be
dynamic; specific over-supply challenges may require addressing (e.g. PET for fibre, ASR plastics). The general
conclusion is rather that export demand will put continued pressure on recyclers in OECD markets to find niches
where they can be competitive.
The proportion of supply to the international market seems set to shift gradually towards post-consumer material
as:

The EU Packaging Directive and equivalent Japanese legislation increase recovery from the municipal waste
stream;

Improvements in manufacturing efficiency are expected to reduce waste arisings per tonne of output from
industry.
188
If the export policies of other EU member states became more restrictive (e.g. due to popular back-lash against
exports), supply would tighten and, at the margin, favour increases in UK market share.
13.4

Summary
Demand for material from the export market will continue to exert competitive pressure on recyclers in the UK
and elsewhere. The lower labour cost of emerging economies in Asia and elsewhere provides a competitive
advantage to reprocessors and manufacturers in an environment of increasingly globalised investment,
sourcing and supply.

As with the prime resin, the prices and dynamics of individual secondary plastic markets vary and valid
generalisations are difficult. However, all indications are that China is set to remain the focus of global export
demand for recovered plastic for the next five years.

It is expected that future demand for recovered material will be influenced by prime plastic prices and by
income growth and the strength of consumer spending in the Chinese domestic economy – anecdotal
evidence suggests that recovered plastic is used more in products sold into the domestic market than in
exports. Evidence to date is that the global market is capable of delivering this supply, albeit at the expense
of exposing domestic reprocessors to competitive pressures that they may not have faced previously.

Looking beyond China and into the longer term, additional demand is expected from India and other regions
where plastic consumption is increasing.

The global consumption of plastics is over 200,000kt a year. Based on the experience of several European
countries with strong domestic recycling activity, it appears that from a technical perspective well over 20% of
this global consumption could reasonably be met by recycled plastics.

Long term demand for recycled plastics appears to be structurally strong for most materials considered –
whether it be from recyclers in the UK, Mainland Europe, China or emerging economies. The actual flows of
material will therefore be determined by both price and the extent to which sellers wish to incorporate nonprice factors into their selling decisions. For example, suppliers of waste plastics in the UK can, if they choose,
guarantee material is recycled in the UK but may in some cases have to accept a lower purchase price in
return for this facility.

The differences in prices paid for equivalent waste plastics by domestic and overseas buyers are not only
determined by shipment and labour costs. In part, indirect factors such as business costs of environmental
controls, environmental taxation (e.g. Climate Change Levy), health and safety and other social costs are
components of the final pricing. In this regard, the UK plastics recycling industry is generally competing based
on working to higher operating standards (with associated costs) than some international buyers outside the
EU. Higher minimum international standards for recycling could ‘level the playing field’ in relation to these
indirect cost factors. This could in turn impact on where recycling occurs.

The prevailing regulatory framework can influence supply/demand balance very strongly. This is particularly
obvious in the ELV waste stream where verification protocols on the amount of other materials accepted as
recycled, and the revision of the long term targets can have fundamental impacts on the investment of
businesses in the extraction of plastics for recycling, and the supplies of materials arising.
189
14.0 Risks & Risk Mitigation
14.1
Introduction
The preceding chapters show how the demand and supply of recovered plastic in the UK and internationally are
matched in profit driven markets that are shaped by regulations that govern the supply, trade and processing of
the material. These chapters suggest that the most probable position is that markets for UK waste plastics in the
period to at least 2010 and probably beyond will generally be limited by available supplies, not by limits on
demand. This chapter explores how market and non-market (regulatory) factors could impact on the domestic
and international recovered plastic sector. It provides an assessment of the risks associated with key end
markets, such as changes in indigenous processing capacity, prices and the balance between supply and demand.
It also describes possible risk mitigation measures that could be taken.
The study has considered risks that would limit the growth in recycling of UK plastics waste to target levels shown
in this report. Recommended actions are considered primarily from the perspective of policy makers and delivery
agencies seeking to achieve the identified national growth levels in plastics recycling.
It should be emphasised that the management of many of the risks described here should be considered as
processes, not ‘one off’ events. The analysis in this report highlights that the global market is dynamic and that
there are also many factors that will influence supply. It will be important for the UK to introduce and/or improve
ongoing monitoring and feedback systems to manage risks and deliver continuous improvement.
The issues relating to risk are described in more detail in this following section and a summary of the main risks is
provided at the end of the section. A full tabular summary of the key risks, their relative impacts and the
associated recommended mitigating actions is provided in table 16.1, in the Recommendations section.
14.2
1Domestic market
14.2.1 Supply side
The risks to the supply of UK collected plastics for domestic recycling fall into four broad categories:

Changes to regulatory frameworks & economic instruments
Deterioration of market economics of recycling
Changes in society’s priorities and changes in householder behaviour
Innovations in products, materials and waste processing technology
Collapse of export demand187
Regulatory framework & economic instruments
Most of the economic instruments used to minimise waste and influence supplies of recyclable materials are
common to many waste streams and not specific to plastics.
Regulatory interventions and the associated use of market instruments to achieve desired outcomes have had a
transformatory impact on plastics recycling. The presence of recycling targets has underpinned the ability of the
market to offer solutions, by encouraging investment in systems to fulfil the future need of greater recycling.
The risks to supplies of plastics for recycling from changes to the regulatory framework, appear generally low.
The EU’s long term vision as set out in the Thematic Strategy on the prevention and recycling of waste188 is
187
Although not directly a supply risk, the UK’s heavy reliance on export markets means that – although unlikely – even a shortterm market collapse would undoubtedly damage investment confidence in future collection infrastructure. It would also
probably result in materials not readily handled in the UK (particularly mixed plastics) being diverted to recovery or landfill,
rather than being recycled.
188
Commission of the European Communities, 2005
190
stated, in part, as a continuing move to a “recycling society”. European policy also aims to encourage activity on
the basis of beneficial environmental impact using more life-cycle consideration. On both these points plastics
recycling can make a contribution: end of life plastic products represent a large waste stream from which a
substantial proportion of the waste could potentially be recycled. Studies consistently show savings in CO2
emissions as a result of plastics recycling.
It is very difficult to envisage regulatory backtracking on current targets for plastics recycling in most areas – with
ELV plastics perhaps being the exception. It is also difficult to envisage weakening of mechanisms such as the
UK’s landfill tax, given the ongoing commitment to increase this tax.
The risk that regulations would deliberately be conceived to act as the brake on the growth of plastics recycling is
considered highly unlikely. There are, though, some areas where regulatory decisions may indirectly result in the
market conditions for supply changing (e.g. increasing the statutory priority of other waste streams, such as
biodegradables).
Deterioration of market economics of recycling
Significant negative shifts in supply-side economics would put supplies at risk. It can be argued that the supplies
of plastics for recycling are relatively price inelastic in the short term – for example, it is unlikely that large retail
film collections or domestic collections would stop if prices slumped within historic trends. Equally, once plastics
separation equipment is in place (for example at a shredder site) is it unlikely that this significant capital
investment would not be employed unless sales prices descended to historically abnormal levels.
Most of the technology and regulatory drivers point to improving the overall economics of generating plastics in a
form suitable for recycling. There are some indirect risks though – for example if the price of paper collapsed
then this would have a much more significant impact on available waste management budgets as there is no
financial support from producers for non-packaging paper. A price collapse in paper which, as a heavy and
biodegradable material is more ‘target friendly’, might disrupt the collection of municipal plastics for recycling in
the short to medium term.
Producer responsibility mechanisms provide, at a strategic level, a method of limiting this market risk. The PRN
system, for example, should compensate for adverse market economics by increasing subsidies to achieve a
sustainable flow of material to target levels. It is important that the supply and the targets are growing together.
If supplies significantly exceed underpinning targets then there is a greater risk of instability in the supply trends.
Reduction in current municipal budgets for waste management, or ‘back-tracking’ on current Producer
Responsibility policy framework would have negative impacts on supply. Neither of these is likely in the short
term.
Changes in society’s priorities and behaviour
Although a risk, it is considered unlikely that society will elect to return to waste management with high levels of
landfill. The drivers point to a much greater level of landfill reduction, with increases in recycling and recovery.
A more pertinent risk for recyclers of plastics is a greater social acceptance of energy recovery techniques as
being of equivalent value. This could lead, for example, to material potentially available for recycling being
recovered for energy instead. Recovery of energy from plastics is undoubtedly preferable to landfill as a waste
management solution but in many cases it generates lower environmental gains than material recycling. Better
policy integration, for example of CO2 tradeable permits and the impacts of waste management, would help to
highlight the added value of mechanical recycling in many instances. This would be necessary to better align
environmental economic instruments to achieve the desired environmental outcomes.
There is a hypothetical risk that householders become ‘disenchanted’ with recycling– for example through
sustained and seriously adverse publicity about recycling, e.g. ‘dumping of recyclables’ stories - and therefore
participate less in schemes. Again, there appears to be a very low likelihood of occurrence of this kind of negative
behaviour change.
Innovations in products, materials and waste processing technology
During the next 10 years there is the potential for new plastics materials and products to be developed that are
currently not being considered. Change in packaging technology could also occur, that could potentially create
large shifts. Ten years ago there was no mass market for 500ml PET bottles but the market has grown massively.
191
An example for the future, could be a much larger than anticipated growth in the use of biodegradable polymers,
or the widespread growth in ‘intelligent packaging’ with more complex material combinations (e.g. RFID labels).
These kinds of changes have the potential to change the nature of arisings from collection schemes. There are
risks that in some cases new packaging and materials could contaminate existing recycling streams. The risk here
is considered relatively low as there is some regulatory protection against this in Annex II of Directive 94/62/EC –
commonly referred to as setting out the ‘Essential Requirements’ of packaging. However, it is acknowledged that
the impact of biopolymers and complex packs on recycling is currently uncertain and the extent of enforcement of
this aspect of the Directive in the UK is currently low. The mitigating activity here is to undertake periodic ‘horizon
scanning’ projects to ensure that long term planning of infrastructure will not be rendered inappropriate, due to
unanticipated shifts in the nature of arisings being targeted.
Large scale changes in waste processing infrastructure not currently foreseen could result in changes in the
format of plastics materials available for recycling, and in the balance between recycling and broader recovery
technologies employed. However, provided that the policy framework and definitions of recycling are maintained
this should not present a major risk to the supply projections provided.
Summary of supply risks
The growth in supplies of plastics for recycling has been accelerated by national and international government
policy. The most significant risks to the supply of plastics for recycling are believed to be associated with national
waste and other environmental policies, their economic instruments and their associated interaction.
Deterioration of market economics is not generally considered a major risk, as this should be counteracted by
increased financing from Producer Responsibility programmes for all the main waste streams considered in this
report. For example, if market prices decline, PRN values should increase to compensate operators and to
maintain economically viable supply chains to the target levels. However, particular polymer types or applications
may exhibit weak market capacity and/or price periodically. In such cases there is currently no specific support
mechanism.
Changes in waste processing infrastructure represent both an opportunity and a risk. For example, introduction of
increased pre-sorting of waste, could generate larger supplies of plastics suitable for recycling. However, some
technologies will not generate a recyclable stream and instead will generate outputs of plastics more suitable for
energy recovery. It is important to ensure that support for development work encourages the extraction of
recyclable streams prior to generating lower grade plastics streams suitable for other recovery processes.
A summary of the main risks to supply and their relative potential impacts is illustrated in figure 14.1.
192
Figure 14.1 Summary of risks to expected UK supply of waste plastics
14.2.2 UK domestic demand risks
The UK has the potential to utilise higher quantities of recycled plastics in products. The domestic demand risks
need to be considered at three levels – domestic demand by reprocessors for unprocessed waste plastics,
domestic demand for recyclate for domestic remanufacture and domestic demand for products made using
recycled material but not manufactured in the UK. In the first two cases the key risk is likely to be a result of
competition from lower cost enterprises in locations such as Asia and Eastern Europe.
UK consumption of plastics products is growing in a range of sectors where there is development of recyclate use
in new applications. This suggests that there will be a growing market in the UK for products with increasing
levels of recycled content.
There is uncertainty about the degree to which domestic enterprises will fulfil this product demand. Domestic
remanufacture risks are closely related to the health of the UK plastics processing industry generally. There is a
shift of plastic product manufacturing from the UK to businesses in Asia and Eastern Europe with a lower cost
base. Despite this, the UK plastics conversion industry is growing (although at more modest rates than in other
parts of the world). It is expected that the economics of UK remanufacture and reprocessing will be the biggest
determinant of UK demand for recyclate. It is anticipated that products that are less readily imported – for either
bulkiness or ‘speed to market’ reasons – will be the most promising long-term opportunities for domestic
remanufacture of recyclate.
Whilst there remains such a large difference between the cost base of UK and Asian reprocessors and
remanufacturers of plastics products, there will be significant economic challenges for UK operators. Activities
that could reduce the risk of loss of domestic reprocessing and remanufacturing capacity include work to develop
increasingly competitive processing technologies, development of recycling processes that feed particularly
sustainable local market needs (e.g. remanufacture of bottles) and better integration of supply chains (e.g. waste
collectors, recyclers and end product manufacturers). The use of lower cost recycled material should be
encouraged as part of the competitiveness strategy of UK firms.
193
Government policy impacts could and should be considered in a more integrated manner to recognise the
different external costs and benefits of UK recycling and, for example, recycling in China. As an illustration of this
point, UK recyclers of plastics pay Climate Change Levy (CCL) costs on energy; this disadvantages them against
Asian recyclers who do not pay such taxes. The CCL is designed to encourage more energy-efficient practices,
with the aim of reducing greenhouse gas emissions. Plastics recycling makes a significant positive contribution to
reducing greenhouse gas emissions, and yet recyclers are penalised without receiving any balancing credit for the
CO2 savings generated by recycling and use of recycled materials. Instead the CCL measure disadvantages the
UK recycler and creates an economic position which makes it more likely that plastics will be shipped to China
where, in many cases, the sources of energy used in the recycling process will be less sustainable and lead to
greater greenhouse gas emissions than those used in the UK189. The 2006 Budget Statement suggests the
Chancellor will require some convincing of this argument. Equally, certain businesses that are working to reduce
their carbon footprint could do so by using recycled plastics, but the current tradable CO2 certificates system does
not recognise such benefits financially. These are examples of misalignment of UK environmental economic
instruments and outcomes – detailed consideration is beyond the scope of this report but clearly these issues
warrant more work to ensure that decisions on implementing environmental improvement objectives are made
based on best practicable environmental option (BPEO) rather than simply the least expensive approach.
Currently the UK tends towards the latter position with respect to plastics recycling.
A further potential risk to the recycling activity in the UK (and Europe) is the implementation of the Registration,
Evaluation, Authorisation and restriction of CHemicals (REACH) regulation. This is intended to bring about better
control of the chemicals that are used to make products. Subject to certain exemptions, chemical substances will
have to be registered with a new European Chemicals Agency. This will require submission of information on the
risk to health and the environment for the entire life-cycle of the substance. This information will be used to
create a safety data sheet (SDS) identifying relevant information needed by the user of the substance. Although
both polymers and waste are either exempted or outside the scope of REACH, the generation of recycled raw
materials (e.g. recycled plastic pellet) from waste leads to problems within the currently conceived REACH
regulation, that appear unique to the plastics recycling industry. The plastic recycler supplying pellet must be able
to provide a safety data sheet to customers. The problem for the recycler is how to do this: without SDS
information about the material input to the recycling process (which, as waste is outside the scope of REACH) the
recycler would be required to test the output recycled material, probably on a batch basis and at molecular level,
in order to compile the necessary chemical safety assessment to provide SDS.
The cost of the exercise for recyclers working on different batches of material and at relatively low tonnages
would be excessive. Using the Commission’s own assessment, the cost of doing this would be much higher than
the value of the recycled material itself. As a result, this could significantly commercially undermine plastics
businesses selling pellet. Oddly, due to the way REACH is conceived, the problem of high costs of product testing
do not apply to those businesses that convert waste into a finished end product (rather than intermediate
pellets).
Although the REACH regulation is unlikely in the long term to undermine the demand for recycled plastics, the
unintended consequences could make it significantly less attractive to recycle plastics in Europe. The regulation, if
applied as currently being conceived, would significantly disrupt many current recyclers’ businesses and would
undermine current and future investment in European recycling infrastructure. That an initiative designed to
improve our environment and health (REACH) could badly - and inadvertently - undermine the ability of
enterprises in Europe to deliver another measure to improve the environment (plastics recycling) is an example of
the risks of poorly integrated policies and regulations.
Several consultees identified concerns that any significant reduction in the sales value of virgin polymer, would
result in a further increased competitive disadvantage for UK and European recyclers, compared to Asian
recyclers. A lower sales price for recycled flakes or pellets would probably reduce absolute profits; European
businesses with greater overhead costs for site and equipment would become relatively less competitive than
Asian buyers who, it is suggested, will be able to better adapt to a price decrease. There would be some
counterbalancing factors that would result from a lower level of demand from Asia, for example, less intense
procurement efforts from traders. Nonetheless a decrease in virgin prices does present a risk to the sustainability
of competitiveness of UK recyclers.
189
It is acknowledged that there is a counter-argument that the recycled material from the UK displaces virgin production in
China and this has greater environmental benefits than equivalent displacements of virgin plastics produced in Europe. Such
uncertainty highlights the complexities that exist and the need for better understanding of BPEO in this context.
194
14.3
International market risks
This sub-section reviews risks in the international market for recovered plastics, considering market and nonmarket factors separately.
14.3.1 Market factors
Technological change
If major downstream consumers switch over to technologies (typically integrated, continuous systems) in which
recovered plastics would not be risked, aggregate demand in the market for recovered plastics would decline.
Given the number of plastics involved in the trade, the variety of destination markets and the fact that the
material flows are not always well documented, there are hazards in making generalised statements about the
impact of technological change on the recovered plastic export market. However, the consistent view of
consultees in the trading, reprocessing and manufacturing sectors in Hong Kong and south China was that they
did not see this as a threat to the market at the present time. Indeed, it was a new theory for most of them. It
could be argued that traders and reprocessors are too far removed, and that the lack of specific information
about end-users in various areas means that there is undetected change underway, but this is the situation as
reported.
This is not to say that there are not specific markets where investments will reduce the scope for individual
factories to use recovered plastic (integrated plastic bag production, cutting and printing lines was an example
mentioned in one meeting). However, with the wide spread of factory standards, products being manufactured
and markets being serviced in the Pearl River and Yangtze River Deltas, there is little evidence that technological
change poses a short to medium term threat to demand. In the specific case of PET, some analysts have
reported fibre applications that use recycled PET are reaching a ceiling in China, and some factories will convert
to new technologies using monomer and in-situ polymerisation rather than PET flake to produce polyester190.
Follow-up calls on this issue have been made to several factories in Zhejiang which convert PET bottles to
polyester fibre, and none said that technology changes were expected to reduce their markets.
If a dialogue with Chinese authorities is established (see below) this issue would warrant further research as part
of a more general investigation on the applications to which individual plastic waste streams are being put, and
how these are changing. This would require more extensive research on-the-ground in China than was possible
in this study, and probably the support of the Chinese official research centres.
Prime prices
The outlook for the prime resin prices is relevant to projections for the recovered plastic market. A significant
decline in the prime prices would be expected to soften demand for recovered material, reducing the incentive on
consumers to look to alternatives.
Post production scrap plastics, which can be used on a near ‘like-for-like’ basis, track the prime rates more closely
than do lower value, post-consumer loads. However, as prime prices rise, manufacturers are more likely to look
at use of recovered plastic. Not all can do so: consultees in Hong Kong suggested that a 10% uplift in prime
resin prices will in time lead to a 5% upward movement in recovered plastic prices.
The prices of individual resins are driven by supply and demand dynamics that are often specific to individual
plastics. Specialist market research companies provide world and regional plastic-specific analysis and forecasts
which describe these markets in more detail than is possible or appropriate here191.
‘External’ effects can also intervene in the smooth operation of regional markets, an example being the loss of
production in the US after Hurricanes Katrina and Rita, which pushed up prime prices and prompted strong
demand for recycled material192.
190
Personal communications with European sector specialists
191
See for instance www.cmai.com ; www.bccresearch.com
192
Plastic Technology, 2005.
195
Figure 14.2
Global oil consumption
88
Million barrels/day
86
84
82
80
78
76
74
72
1Q
2Q
3Q
4Q
1Q
2003
2Q
3Q
4Q
1Q
2Q
2004
3Q
4Q
2005
Source: IEA, 2005
A common underlying market driver is the world oil price. Driven by growth in demand from non-OECD countries
(see Figure 14.2 and Table 14.1), tight supply and political uncertainty, oil prices doubled from their 2002/03
levels.
Table 14.1
Global Oil Demand by Region, 2004-6, million barrels/day
Demand
2005
Annual Charge
2004
2005
0.81
0.11
North America
25.45
0.22
-0.04
Europe
16.29
-0.16
0.10
OECD Pacific
8.63
0.86
0.16
China
6.60
0.51
0.18
Other Asia
8.73
1.20
0.44
Subtotal Asia
23.96
0.17
0.05
FSU
3.81
0.34
0.29
Middle East
5.91
0.09
0.09
Africa
2.90
0.19
0.12
Latin America
4.98
3.02
1.06
World
83.30
Source: International Energy Agency, Oil Market Report
Annual Change (%)
2006
2004
2005
2006
0.44
0.05
0.08
0.38
0.20
0.67
0.13
0.30
0.08
0.11
1.78
3.3
1.3
-1.9
15.4
6.3
5.4
4.7
6.5
3.2
4.1
3.8
0.5
-0.2
1.2
2.5
2.1
1.9
1.3
5.1
3.2
2.5
1.3
1.7
0.3
1.0
5.8
2.3
2.8
3.3
5.0
2.9
2.3
2.1
Oil futures markets and a scan of long term energy forecasts show that oil prices are not expected to decline, but
rather to gradually increase over time. Figure 14.3 shows the long term forecast from the latest energy outlook
report produced by the US Government’s Energy Information. This illustrates an expected sustained increase in
oil prices over the next 25 years. Current pricing is already higher than shown in the graph, but this analysis
serves to show that official projections do not expect prices to fall. Although it is acknowledged that increasing
quantities of plastics are being derived from gas and, to a lesser extent, renewable sources such as crops, oil
pricing will undoubtedly be a factor in future energy/fuel pricing generally. It is therefore concluded, that the risk
of a down-turn in the recovered plastic market, due to a fall in oil prices, is low.
Although this implies that international prime resin prices for oil-derived plastics are unlikely to collapse, it need
not necessarily imply that prices in the main end market for recovered plastics, China, will follow suit. One of the
characteristics of the Chinese manufacturing sector in the last ten years has been a tendency towards over-
196
investment, leading to surplus capacity and then heavy competition on price, sometimes resulting in firms selling
at below cost-price for sustained periods.
Other markets, including energy and resources, were a central part of the planned economy. These remain
dominated by state-owned companies and do not operate entirely on market principles, characterised by
subsidies, soft loans and controls on prices. It is unsurprising to find that the upstream part of China’s
petrochemical sector is either state-owned, or involves partnerships between state-owned and foreign firms.
China’s forecast need for imports of major resins on an ongoing basis (as reported in Chapter 10), the foreign
participation in new production, and increasing openness to the global market (e.g. through lower tariffs and
WTO obligations) suggest that the risk of serious over-supply of prime resin, and hence artificially depressed
prices, is low. It seems more likely that China’s demand for imported recovered plastics will be affected by
competition from domestic recovered material or regulatory change, than by over-supply in the prime market.
Figure 14.3
World oil price long term projection (2004 dollar/barrel)
Source: Annual Energy Outlook 2006193
Freight rates
Substantial upward movement in in-bound freight rates would have an impact on the economics of recovered
plastic trade, especially on lower-margin products. Freight charges are generally paid by the exporter.
One reason why it is cost-effective for China to meet demand for recovered plastic from sources overseas is the
comparatively low cost of inward transportation. Prices for container shipments to China are much cheaper than
for the outward journey from China to Europe and North America. This reflects the imbalance in physical trade
between Asia (and especially China) and the major developed markets. Shipping lines sell China-bound container
space on these routes at a discount, defraying the costs of repositioning containers back to China, that would in
any event take place. The differential between the inward and outward traffic is illustrated by the data in Figure
14.4, which shows averaged freight rate changes over the last few years. Return-leg rates have not changed
even as outward-leg prices have risen.
193
Report #:DOE/EIA-0383(2006), http://www.eia.doe.gov/oiaf/aeo/index.html
197
Figure 14.4
2003-2005
Freight rates (market averages) on Trans-Pacific and Europe-Asia liner routes,
2500
Rate, US$/TEU
2000
1500
1000
500
0
03/Q1
03/Q2
Asia - US
03/Q3
US - Asia
03/Q4
04/Q1
04/Q2
Europe-Asia
04/Q3
04/Q4
Asia-Europe
Notes: Information from six of the trades’ major liner companies. All rates are all-in, including the inland
intermodal portion, if relevant. All rates are average rates of all commodities carried out by major carriers. Rates
to and from the United States refer to the average for all three coasts. Rates to and from Europe refer to the
average for northern and Mediterranean Europe. Rates to and from Asia refer to the whole of South-East Asia,
East Asia and Japan/Republic of Korea
TEU: Twenty foot-equivalent units
Source: Adapted from UNCTAD, Review of Maritime Transport 2005
Typical freight rates for a 40 foot container (2 TEU) in and out of Hong Kong (one of the cheaper routings) are
shown in Table 14.2. Consultations in the UK suggest that a 40 foot loaded container can be shipped to Hong
Kong for around US$800, including the UK inland trucking move. This is cheap by comparison with other
worldwide destinations, or even point-to-point cargo moves within the UK.
Table 14.2
Exemplar freight rates, 40’ container
UK
USA
Japan
Source: Industry sources.
From Hong Kong
US$1800
US$2100
US$550
To Hong Kong
US$800
US$950
US$350
There has been upward pressure on freight rates over the period 2003-2005 driven by, in particular, large
increases in the price of bunker oil (Figure 14.5)194. The effects of energy costs were compounded by heavy
outward traffic from Asia, with ship operators adding vessels, diversified routes and improved load planning to
increase cargo delivery to US ports195. However, despite these factors, industry analysts expect freight rates to
fall in 2006 and the outlook for 2007 is similar. The reason is the large increase in supply of container vessels
coming into service.
194
IFO380 is currently trading at US$290-$320/t depending on location. Source: www.bunkerworld.com . Fuel costs can
account for 15% of vessel operating costs.
195
Neptune Orient Lines Ltd. spokesperson on www.floridashipper.com
198
The large number of orders placed when the market was tightening a few years ago are now entering service,
and more are scheduled for 2007. In terms of container capacity (TEU), the global container fleet is expected to
increase 16.6% in 2006, after a 12.8% increase in 2005. A 14.7% increase is expected in 2007196. Some
industry experts are predicting significant falls in prices.
Figure 14.5
Year on year freight rate changes, 2000-2006
20
17
Annual percent change
15
10
5
7.5
3.6
2.6
0
2000
2001
2002
2003
2004
2005
2006
-5
-6.1
-10
-9
-10.7
-15
Source: Drewry Market Forecast, Oct 2005. East-West trade route composite rate.
The imbalance in container trade on European and North American routes seems set to continue. China’s
containerised trade has been on a sustained upward path (Figure 14.6). Imports used to manufacture the
finished goods sent to the EU and North America tend to come from other Asian countries.
Figure 14.6
Growth of containerised trade at Hong Kong and China ports and China’s share
of world container movements
20
120
18
million TEU
14
80
12
10
60
8
40
China as % Of World
16
100
6
4
20
2
0
0
1995
1996
1997
1998
Total China
1999
Total HK
2000
2001
2002
2003
2004
Total China as % of World
Source: GHK, from published sources.
Overall, it is concluded that there is a low probability of freight rate increases choking off the recovered plastic
export trade, at least in the coming few years.
196
All estimates BRS-Alphaliner Cellular Fleet Forecast. www.alphaliner.com
199
Substitution (by domestic supply)
The increase in China’s consumption of plastics also implies an increase in the quantity of recoverable plastic
material that could be fed back into the manufacturing sector. If the proportion of plastic recovered increases,
and the price and regulatory environment is favourable, it is possible to see domestic material displacing imported
waste plastics. There is therefore a risk that the Chinese demand for imported plastics (which currently
dominates world demand) will reduce, because the material need is being met by domestic supply.
This risk is the hardest to evaluate, simply because very few recent data have been located about plastic recovery
in China. The following is known:

Consultations show that domestic supply exists and is being used, but is insufficient to meet current demand.
Domestic supply is subject to reliability and quality issues.

The most recent studies that have been located on this market (from 1999197) reported that
o
The collection rate had fallen from 20% in 1980 to 9% in 1994 (although this probably is a
reflection of consumption increasing faster than collection). A further 20-30% of waste plastic
was landfilled or incinerated and the remainder assumed to have been dumped or left
uncollected
o
Formal collection systems servicing industries were more effective (and handled larger
volumes) than the informal sector, which mainly collected post-consumer wastes.
o

Domestic recycling has suffered from lack of supply of waste plastics.
Very different consumption and income patterns exist within the country – crudely summarised as an 800
million rural population on very low incomes and an expanding urban population (of the order of 400 million
people), mainly in the coastal provinces, where incomes are rising and (in the wealthiest areas) where
consumption patterns are rapidly evolving towards those seen in OECD markets. There are plastics product
producers within China serving both these markets, which have different price/quality attributes.

Driven primarily by the urban population and export demand, plastic consumption as a whole is growing
rapidly, and corresponding increases in collection from the domestic commercial and household waste streams
will be needed for the domestic market to maintain its ‘market share’.

China will need to invest large sums of money in modern waste management infrastructure and services if it
is to cope with the projected waste arisings and make progress towards the ‘circular economy’ objectives set
out in government policy (e.g. separation of recyclables, controlled landfills, incinerators). Extension of formal
waste management systems should increase the supply of recovered plastics from urban areas.

China is a very large country in which distances can be very large and internal transport costs significant,
especially on road transport (inter-provincial trucking services are not yet fully liberalised, often necessitating
a change of firm/vehicle). Today’s demand for imported recovered plastic is concentrated in a few coastal
provinces well connected to international shipping routes and overseas markets.
Collection of higher value post-consumer plastics (e.g. PET bottles) is known to be well established. The extent
to which this might displace imported bottles depends on the relative growth rates of PET bottle consumption in
the domestic market and consumption of recovered PET, principally for polyester fibre. China’s national
consumption of PET for packaging has been estimated at 1,000kt for 2004 and is increasing, but 88% of prime
PET goes to fibre applications. The recovery rate on the packaging not exported is unknown. Imports of
recovered PET bottles (pre and post consumer) have been estimated by industry sources at 1,600kt. If output of
textiles, toys, carpets, etc. continue to grow at recent rates, and recovered fibre is to retain its share of overall
fibre consumption, growth from both the domestic and imported PET markets will be required to meet demand.
It can be argued that in the case of UK PET supplies, the Packaging Producer Responsibility programmes will also
have a role in ensuring this material finds a market. PET collection is important to meet future statutory recycling
targets and the financial underpinning that the PRN system provides should support this. It is possible that PET
baled prices could be discounted to prices that would enable them to be attractive to the Chinese market in spite
of large levels of national collection of PET. Put simply, if the market did contract the UK could still supply baled
197
Van Beukering, 1997, 1999a, 1999b.
200
PET to China at prices tending to £0 (with the corresponding loss in revenue compensated for by increased PRN
prices) to meet the UK recycling target. This material will be purchased preferentially to supplies from purely
“market” economies such as China and North America where, at low market prices, collection will not be
commercially justifiable and supplies would contract. In reality, this is believed to represent a relatively extreme
and unlikely scenario.
In conclusion, there is insufficient evidence that domestic collection will displace imported material in the short to
medium term. There are, however, few contemporary data on the domestic plastic recycling market in China and
how it is changing and this is an area that warrants further research so that the dimension of the risk can be
better quantified.
14.3.2 Non-market factors
Regulatory change
The primary ‘non-market’ risk to the export market is regulatory change (figure 14.7) which affects the cost of, or
scope for:

Export of material from the UK/EU (e.g. export standards, Green List status at destination)
Import of material at the destination country (e.g. import duties, importer/exporter accreditation, import
standards, customs procedures, Green List status)

Access to imported material, and operation of re-processing facilities in the destination country
Figure 14.7
Source
Regulations
governing
collection
&
processing
Regulatory influences on traded plastic waste
Road
Ocean freight
Export
regulations
(e.g. TFS)
Road
Import
Regulations
(e.g. AQSIQ)
End-User
Regulations
on import
licensing,
reprocessing
& re-use
At the UK or EU border regulatory factors include whether:

The plastics are on the Green List for export to the destination in question. Not all the countries that could be
potential markets for recovered plastic have made Green List submissions to the European Commission. Of
those that have, the type of plastics that can be imported varies – India’s list is more restrictive than China’s
for example.

The shipment is deemed to meet the EU standards for export (i.e. export of mixed waste is prohibited, export
of plastics is allowed). In practice, mixed plastics are shipped which may not meet all the green list
requirements and should be more appropriately classed as ‘amber’ waste.

The shipments are to recycling operations deemed to meet the “broadly equivalent standards” requirements
necessary to count towards EU recycling targets. The practical implementation of this requirement is currently
unclear. Defra is expected to issue further guidance.

The shipment is destined for recovery or disposal (export for disposal is prohibited) and how/whether proof of
the recovery is required. By example, on the application for accreditation as a packaging exporter, firms are
201
asked to give details of where exported material is going to be sent and for what purpose, but this is not
necessarily subsequently verified.
Export demand is also affected by border and internal regulations in the destination market. Changes can
sometimes come rapidly, as with China’s temporary ban on direct import of plastics waste from Japan in 2004
and introduce unfamiliar procedures, as with China’s introduction of an accreditation system for scrap exporters.
A scan of the regulatory risks facing the plastic export trade has been carried out. It is concluded that the risks
to the trade production scrap and pre-consumer waste are limited – this is the least contentious of the material
traded. By contrast, it can be expected that export markets for lower quality, unprocessed post-consumer waste
will be more heavily regulated over time and may become unavailable. By example, the current Chinese
environmental protection standard in effect prohibits import of unprocessed material. As of early 2006, some
importers are bringing whole, unprocessed PET and HDPE bottles into China in violation of the standard. Some
fraction of these bottles is being sourced in the UK. The UK original exporters, providing they are compliant with
UK regulations, are breaking no law because the shipments are sold to third parties in Hong Kong where that
standard does not apply, and then resold. If or when that standard is systematically enforced at the border
then sorting, washing and shredding operations for this type of waste will be pushed back along the supply chain.
This seems likely to have more impact on those countries (such as the UK and USA) that have less sorting-atsource than ‘green dot’ countries. However, while the direction of change seems clear, the timing and degree of
change is uncertain.
While international convention has established rules that allow countries to notify potential exporters of the types
of material they are prepared to see imported, the detailed quality standards governing these shipments have
been developed independently around the world. The literature notes the consequences, an example being
shipment of material that is legal for export from Japan which is then rejected on arrival for not meeting the
(different) standard of the importing country.
More active dialogue between regulators in exporters (such as the EU and Japan) and the major destination
countries (such as China, Hong Kong and India) is recommended. This could include the issue of mutual
recognition of accreditations for exporters/importers and harmonisation of standards198. More communication
among regulators will improve regulatory management of the trade and reduce regulatory risk.
Environmental risks
This study has explicitly not addressed the comparative environmental impacts of recycling overseas and in the
UK and associated risks. Independent research on this topic is necessary to properly inform the debate about the
wider environmental (and social) implications of the trade, a debate that has tended to be shaped more by
conjecture than hard analysis. Without this information the development of environmentally-directed national
policies on plastics recycling may result in environmentally negative outcomes.
14.3.3 Summary of international market risks
Figure 14.8 illustrates the international market demand risks and relative impacts described in this section.
198
The continuing development and adoption of common international standards for specifying plastics for recycling will assist
international trade. This requires both the ability to accurately describe material, for example, through the Publicly Available
Specification (PAS) 103 and also a common agreement as to minimum standards for acceptance of shipments in relation to the
composition of material.
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Figure 14.8
Summary of risks to expected market demand for UK waste plastics
Notes: The dimensions of each oval reflects the degree of uncertainty of impact or probability of occurrence.
Source: GHK in association with Recoup.
14.4
Summary of key risks
The study has considered risks that would limit the growth in recycling of UK plastics waste to target levels shown
in this report.

Many of the risks identified relate to regulatory objectives and controls. The growth in supplies of plastics for
recycling has been accelerated by national and international government policy. The most significant risks to
supply of plastics for recycling are believed to be associated with availability of sorting technology for mixed
plastics from domestic sources and shredder residues, national recycling targets, other related environmental
policies and their economic instruments.

A significant drop in recycled polymer pricing is not considered a major risk to supplies of identified plastics
streams, as this should be counteracted by increased financing from producer responsibility programmes for
all the main waste streams considered in this report. For example, if market prices for recycled material
decline (e.g. as a result of declining virgin pricing), PRN values should increase to compensate operators and
to maintain economically viable supply chains to the target levels. Assuming current material pricing remains
broadly at current levels or higher, the long-term trend is likely to be a decline in the value of PRNs to a level
that covers administrative costs (this issue is discussed in detail on page 48)

Changes in waste processing infrastructure represent both an opportunity and a risk. For example,
introduction of increased pre-sorting of waste could generate larger supplies of plastics suitable for recycling.
However, some technologies will not generate a recyclable stream and instead will generate outputs of
plastics more suitable for energy recovery. It is important to ensure that support for development work
203
encourages the extraction of recyclable streams prior to generating lower grade plastics streams suitable for
other recovery processes.

There are no general ‘high probability, high impact’ risks identified for the export trade.
Of the recovered plastic markets, the unprocessed and mixed post-consumer plastics trade is the most
vulnerable to additional regulatory intervention. These shipments are a small subset of the overall trade but
attract most of the regulators’, NGO and press attention. China’s most recent import standard effectively bars
import of such material, but enforcement is still variable. More far-reaching regulatory change in China that
would cut off demand for all recovered plastic imports is arguably increasingly less likely as China’s industry
becomes more dependent on recovered plastics as a source material.

This study has explicitly not addressed the comparative environmental impacts of recycling overseas and in
the UK and associated risks. Independent research on this topic is necessary to properly inform the debate
about the wider environmental (and social) implications of the trade. Without this information the
development of environmentally-directed national policies on plastics recycling may result in environmentally
negative outcomes.

The management of many of the risks described here should be considered as processes, not ‘one off’ events.
The analysis in this report highlights that the global market is dynamic and that there are also many factors
that will influence supply. It will be important for the UK to introduce and/or improve ongoing monitoring and
feedback systems to manage risks and deliver continuous improvement.
204
15.0 Conclusions
This report provides the results of a study into the UK’s current and future supply and demand for recovered
plastics, and the present operation and future prospects for the export market in this material. Although the UK
recovered plastics market, particularly the packaging component, is comparatively well documented, this is the
first time that the domestic and export markets have been considered in tandem. In addition, there is little in the
way of independent research in the public domain on the Asian export market.
The report contains a large amount of data. The objective of this chapter is to draw out the key points from this
mass of information and help to provide a focus on ‘what matters’.
As well as answering old questions, the findings of the study raises new questions and helps to quantify known
data problems. Such issues include questions about activity in the UK market that is, in theory, the better
understood part of the sector. Examples include the gap between the plastic packaging flows used by Defra and
those identified in this report, the gap c.100kt between the PRNs and PERNS reported as issued and the arisings
of plastics that generate these, and the nature and source of the material exported that is not PERNed packaging
waste. Information gaps on newer plastic waste streams, such as those arising from WEEE and ELV, can be
expected to be addressed over time. Collectively these have an impact on the extent to which a complete
picture of arisings and applications (domestic or export) can be projected, and hence the balance between
domestic supply and demand. For strategic and decision-making purposes this does not necessarily matter,
since the market fundamentals by which recovered material ‘finds’ a secondary use are relatively well understood.
15.1
Domestic supply
The quantities of plastics arising in UK waste and available for recycling will undoubtedly increase during the
period to 2015. The recycling of material will increase as a result of improvements in waste management
practices. These include better kerbside collection, commercial waste management systems, greater extraction of
plastics from mixed waste, implementation of new technologies to sort plastics from shredder residues, increases
in disposal costs and the underpinning of targets set by producer responsibility regulations.
Packaging
Plastic packaging as reported under producer responsibility regulations is projected to grow at between 2% and
5% per annum, with a figure closer to the lower end of this range believed to be most likely over the long term.
This would imply c. 3,000kt of plastics will be used in UK packaging applications by 2015. On this basis packaging
will be easily the largest single source of post-use plastics for recycling (potentially generating supplies of c.
675kt-1,015kt for recycling by 2015).
The analysis highlights that it is important to ensure that the targets set by Producer Responsibility programmes
remain challenging, achievable and affordable. For packaging it appears possible that the supplies of packaging
for recycling will begin to significantly exceed targets. Given the broad aim of moving to a more resource efficient
“recycling society”, it appears important that future targets are set at a level which keeps the targets in line with
growth – particularly when the costs to business of doing this are low. Defra, the ACP and other interested
stakeholders should closely monitor the trends highlighted in this study when considering new target levels.
The alternative to revising targets in line with anticipated growth is that a growing proportion of packaging
recycled falls outside the PRN system. This would probably be an undesirable outcome for several reasons: for
example, reduced influence over standards of trade, restricted access to accurate performance information to
inform national strategy and limited underwriting of sustainable growth in recycling levels by producer
responsibility.
The most significant ‘unknown’ factor in future supplies of packaging for recycling is the extent to which
extraction of plastics in a form suitable for recycling from mixed waste processing plants, will occur. It is clear
that more investment in such plants will occur in the UK to enable compliance with Landfill Directive
requirements. It is less clear which technologies will be favoured and to what extent plastics will be separated in
a form suitable for recycling (rather than in a form suitable only for energy recovery). For example, large-scale
technologies for extracting plastic bottles from mixed waste are already in use internationally. The analysis
highlights that it is critically important for the issues of new waste technologies (e.g. Mechanical Biological
Treatment) in relation to plastics waste management, to be considered with much more focus.
205
Currently the thrust of government interest in new waste technologies primarily relates to the biodegradable
fraction. It is important that the wider opportunities of these new technologies as they relate to recycling and
recovery of non-biodegradable materials, such as most plastics, are factored into assessment of BPEO.
As the analysis shows, it is likely that the development and use of plastic extraction technologies for recycling
from mixed waste processes will be essential if growth rates of packaging tend towards the higher end of the
projections. The extraction technology will also be important if the targets ultimately set for packaging recycling
post 2008 are higher than those assumed in this study.
The analysis highlights several other areas where there are opportunities for focussed activity to increase supplies
of packaging. ‘Away from home’ collections of bottles and other packaging are currently under-developed.
Targeted collection of larger streams of material – for example industrial packaging such as drums199 – could
generate worthwhile quantities of material.
‘The packaging gap’
The study highlights two data issues that are not ‘new’ and still remain unresolved, although are now better
documented:
The review of quantities of plastic packaging collected for recycling again highlights a gap between the amounts
of PRNs and PERNs issued and the quantities of material believed to have been collected. Although not an
objective of this study, it appears an unacceptable position that it has not proved possible to reconcile almost a
quarter of the reported plastic packaging recycling tonnage. Arguably this large ‘unknown’ represents one of the
highest risks to non-compliance with EU recycling targets if at a later point some part of this is found not to be
from ‘Packaging’ as defined by the regulations.
It is recommended that additional summary information should be provided on the source of PRNs/PERNs (e.g.
bottles, retail film, redundant stock, etc or by polymer type). This would assist reconciliation of this data and
would support the inspection agencies’ audit activities. It is believed that such information could be integrated
relatively easily into the current new electronic data system being developed.
Concerns were again raised by recyclers surveyed that this data gap was the result of production scrap and other
plastics, not defined as packaging, having PRNs/PERNs incorrectly issued on them. Further investigation of the
treatment of production scrap should prove of value, both in reconciling the current data gaps and in helping
inform the work of regulatory agencies.
Second, the study reinforces the question of whether the total market for plastic packaging is being understated
in consideration of recycling targets. Although the difference between the assessment in this report and the
information used by Defra is not large, it is worth consideration. The growth in imported packaged goods is a
potentially significant factor that should be watched closely as this sector appears to have a higher proportion of
tonnage that falls outside the obligation. Obligated tonnage has grown at over 6.5% per annum in the last 3
years. If this growth rate continues, and there is a large capture of the new obligation from leased packaging,
there is a risk that the reported obligation tonnage exceeds the tonnage on which the businesses targets were
set, which would be undesirable.
One suggestion made during the study is that businesses obligated under the Packaging Regulations should
provide a polymer breakdown as part of their returns. This would provide information on packaging market
trends and highlight shifts that may be relevant for recycling. Some businesses already have information in a
polymer-specific format, however others may not be able to provide this information without major changes to
their data capture systems. The cost/benefit of providing this kind of reporting as within business returns merits
further consideration.
It is clear that supplies of plastics from agricultural sources will grow, driven by changes to waste management
regulations. The confidence of significant growth of recycling in this sector has been given increased impetus by
199
It is noted that one of the anomalies of the current producer responsibility system is that ‘third party reconditioning’
arrangements for industrial packaging do not count as ‘reuse’ for the purposes of calculation of producer obligations and
therefore some of the associated financial incentives are misaligned.
206
the Government announcement that producer responsibility will be introduced for non-packaging elements of this
sector (primarily plastics used in crop cover, silage wrap, etc). Although the regulatory mechanics are not yet
certain, the experience of operators of established farm plastics recycling programmes in the UK and
internationally highlights the potential for strong growth in supplies for recyclers rising to some 50kt of plastics
over the period to 2015. The rate of growth of collections may vary from that shown in this report depending on
the details of the recently announced move to a producer responsibility system for non-packaging agricultural
waste.
End of Life Vehicles
The quantity and quality of plastics arising from ELV streams are closely linked both to details of the
implementation of the ELV Directive and to the - partly related - introduction of Automotive Shredder Residue
plastics separation technology in the UK. There is sufficient international evidence from different implementations
of post-shredder plastics separation technology to demonstrate that the limiting factor to generating relatively
large supplies of separated PO (polyolefins) rich plastics (i.e. >100kt pa) from these sources is an economic and
developmental one, rather than a fundamental technological barrier.
It appears that the economic conditions are not yet sufficiently attractive for shredder operators to take major
investment risks by investing in new separation technologies. The current debate about recovery targets for 2015
is not likely to give confidence to those considering investments in ELV plastics recycling based on fulfilling a
producer responsibility ‘need’. Improved clarity on the quantities of plastic necessary to comply with the ELV
Directive, both now and in 2015, is one requirement needed to stimulate increased supplies of discrete ELV
plastic streams. Support in mitigating or underwriting technology investment risks could also accelerate progress
in generating supplies.
In the long term it would appear likely that a combination of improved separation technologies and increased
costs of landfill disposal would tend to favour extraction of plastics for recovery. The uncertainty, given the above
issues, is to what extent recovery will be achieved specifically by materials recycling.
WEEE
The quantities of plastics for recycling from WEEE sources will increase during the period studied – potentially to
around 100kt per annum. This assessment has proved the most difficult to quantify due to both uncertainties
surrounding the pending implementation of the WEEE regulations and the impact of export and reuse of this
equipment. Within the scope and resources available for this study it has proved difficult to access reliable data to
make assessments. The report sets out a framework that could be used more accurately to assess flows of
plastics, as more robust data becomes available. It is also noted that a number of new WEEE processing plants
are being established both in the UK and internationally which integrate various separation technologies. The
success of these in capturing plastic streams should be monitored. It would be worthwhile to revisit the supply
assessments made here as such information become available.
WEEE plastic streams have some parallels with ELV plastics streams in both the likely quantities and in the
method of recovery. It appears that although some plastics will arise for recycling through manual dismantling
activities, the bulk of plastics will probably be available as a result of separation of plastics from the shredder
residue of large appliances.
Export declaration Forms
Research for this study suggests that UK trade statistics do not provide a reliable guide to the material content of
exported recovered plastics. The high proportion of PE in the UK recovered plastic trade statistics appears to be
an anomaly of the completion and coding process for export declarations. Shipping companies are responsible
for completion of the forms for which an 8 digit HS code describing the shipment is required. Consultation
suggests that suppliers rarely provide a description of the shipment that is more detailed than “scrap plastic”. In
the absence of further information, this is being coded in the system into the HS code 39151000 which is
supposed to only apply to ‘polymers of ethylene’.
Engagement with the industry and Customs & Excise on this issue to address such coding issues and produce
more reliable data is recommended. This would also contribute to an understanding of the nature of the material
exported that is not covered by PERNs. It is also recognised that some shipments to buyers in Europe (e.g.
Rotterdam) are then routed to non-EU markets, so EU recycling is probably overstated by the available trade
data.
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Consistency of data capture
All the above plastics waste streams will be covered by producer responsibility obligations. This will necessitate
certification mechanisms to prove materials such as plastics have been recycled/recovered. Such mechanisms
already exist for packaging in the form of PRNs and PERNs.
One of the current considerations at an EU level is whether ultimately to move to material-specific recycling
targets (i.e. for ‘plastics’). It appears highly desirable that the process of certification of recycling for these
different waste streams is as consistent as possible – particularly if at a later point there is the possibility that
they will be of equivalent value in achieving future targets. A common approach would also simplify regulation
and inspection/audit controls.
The quality of market data is vital for the market and the producer responsibility schemes to function effectively,
efficiently and with credibility. The main stakeholders should agree systems of data management. The effective
validation of the data by regulators to the satisfaction of stakeholders is and will remain a key requirement.
15.2
Domestic demand
The UK has sufficient consumption of plastics products to offer potential markets for large quantities of recycled
plastics. Whether material collected in the UK will be reprocessed in the UK, remanufactured in the UK, or be
used in products purchased by UK consumers will depend on a range of factors.
Reprocessing capacity
The analysis of information provided by UK recyclers suggests that in general the capacity to recycle plastics is
significantly ahead of the available supply. This is reinforced by anecdotal comments from UK recyclers generally
who comment on the difficulty of sourcing sufficient inputs of raw materials. Comments from recyclers also
suggest that investment in new UK capacity to handle incoming plastics remains ongoing, although to what
extent this is being offset by removal of old capacity through ‘mothballing’, sale or closure is not clear.
The analysis suggests that the strategic consideration for the UK is not whether there is a need for ‘more
capacity’ – arguably there is not - but what represents ‘the right kind of capacity’ for sustainable businesses.
The nature of the competitive challenge from Asia is such that UK recyclers need to be clear what long-term
added value they provide that will ensure they can remain competitive in the global market. This could be a
combination of business integration with either material supply and/or product manufacture; use of innovative
technology; providing niche solutions for traditionally ‘hard to recycle’ materials or working at a scale that brings
sufficient economies to ensure competitiveness. Without some kind of competitive advantage in one of more of
these areas, it is difficult to see how a business will compete effectively.
Capacity to handle current qualities of plastics from mixed domestic, ELV and WEEE streams appear relatively
limited in the UK (especially for post shredder material). Uncertainties regarding the likely levels and quality of
future arisings are market obstacles to enterprises developing solutions. It can be argued that work to develop
solutions for both mixed plastics separation and recycling should be a given higher priority and incentive.
The kind of interventions that will be important to maintain competitiveness of reprocessors relate to addressing
the above issues. For example, supporting technological innovations that will minimise the impact of the large
labour cost differentials between the UK and Asia; working to integrate supply chains to make opportunistic
buying from traders less attractive and/or providing a scale of supply that can justify investments that provide
economies of scale; and in some cases better regulatory underpinning to provide certainty of supplies.
The above potential interventions relate to business models. The study highlights a case for considering wider
regulatory or fiscal interventions: for example, some of the competitive imbalance between UK businesses and
those in Asia relates to energy tax (Climate Change Levy). It seems at best counter-productive that a measure
designed to reduce greenhouse gas emissions is helping to drive material to more distant markets where energy
sources used in the recycling process are likely to have higher environmental impacts: it may be better for the
environment to recycle the plastics in Europe with perhaps lower environmental impacts and trade reprocessed
materials. However, a BPEO analysis is not available to draw conclusions on this point. The flows of recyclables
are primarily driven by economics and weight-based targets, rather than by environmental economics. Better
integration of environmental policy threads could better align the economic and environmental outcomes. This
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report has already noted that there is need to assess BPEO with regard to whether recycling plastics in
developing Asian economies is environmentally better, worse, or the same as recycling in the UK. Another
example relates to CO2 allowance trading: renewable obligation certificates (ROCs) currently trade at £32.40 per
MW/h200.
Assessments of PET bottle recycling show savings of over 50MJ/kg201 mechanically recycled when used in place of
virgin polymer at 1:1 substitution. On this basis, recycling a tonne of PET bottles would conserve energy
equivalent to 1.4MW/h – worth £45 in ROCs value - substantially more than currently traded PRN values. Would
large businesses be more likely to use recycled plastics if this allowed them to highlight reduction in greenhouse
gas emissions or energy use, rather than simply comply with “landfill diversion” targets – particularly if the fiscal
instruments were better aligned to the environmental outcomes sought?
The REACH regulation casts a potentially unwelcome shadow over recyclers in Europe who produce recycled raw
materials (flake or pellet). If implemented as currently drafted it will introduce highly costly testing requirements
that are not required by businesses that recycle “in house” into a final product. This is an example of a potentially
serious and presumably unintended impact of a much wider regulatory intervention. It is important that the
REACH regulation as currently conceived is amended so that it does not adversely impact the plastics recycling
industry in the manner outlined.
End product capacity
The UK could potentially remanufacture using a large quantity of the plastics collected for recycling. In most
cases the fundamental barriers to domestic self-sufficiency relate to pricing (both raw material and transitional
investment costs), rather than technical limitations. This view is reinforced by the fact that there is demand for a
range of plastics from ELV, WEEE and mixed sources from Asia – again suggesting that a main barrier to use in
the UK is cost of upgrading the material. Another example comes from Japan, where the pattern of recycled PET
use is very different from the UK: almost 60% of PET bottles collected in Japan are used to remanufacture PET
bottles for the Japanese domestic market, a further 20% is used in packaging sheet applications202. It should be
noted that the high landfill costs in Japan provide an economic incentive for higher recycling rates.
Finding applications for plastics from mixed plastics, WEEE and ELV streams are undoubtedly more challenging
than for most of the currently sourced packaging material. This is due to quality issues and in some cases the use
of additives in the original plastic products. However, there is a growing body of evidence of successful market
trials and commercially successful initiatives in the WEEE and ELV sectors. The development of markets that use
mixed plastics (or the development of effective separation systems) represents an important development area
and one that will be critical to achieving higher levels of justifiable mechanical recycling (and other “high value”
recovery processes) from domestic waste.
Shifts in UK manufacturing industry continue to occur – with a net flow of manufacturing activity to Eastern
Europe and to Asia. This could have implications for some markets if high collection levels are achieved, but the
UK manufacturing capacity for the material is relatively low (e.g. electronics).
The construction industry, although not considered in detail in this report as a source of supply, certainly
represents an important potential market opportunity for large quantities of recycled plastic material. For
example, products such as drainage pipes, land stabilisation systems, and damp-proof membranes can all be
manufactured with high levels of recycled content. The growth of plastic consumption in the UK is also currently
higher in the construction sector.
The most important opportunities to encourage domestic use of recycled materials arguably lie in two directions.
One is to make environmental issues a greater feature of public procurement. The other is in programmes that
mitigate transitional investment cost risks in product lines with long term, high volume prospects.
200
http://www.smartestenergy.com
201
Wastewatch & Recoup (2003)
202
Japan Containers & Packaging Recycling Association
209
15.3
The export market
Many types of recovered plastic are bought and sold in the UK for domestic consumption and, increasingly, for
export. While this export ‘trade in waste’ may be synonymous in the media with exports of mixed plastics or
unsorted bottles from domestic sources, in reality such material accounts for only a small fraction of the overall
market. The bulk of the business involves shipments of production scrap and other less-contentious material, a
large fraction of which falls outside the scope of the Packaging Regulations. In 2004 exports of this ‘unseen’
material, and re-exports of recovered plastic from elsewhere, were at a similar volume to the packaging waste
covered by Packaging Export Recovery Notes.
This study explains why plastic is being exported. It ought to put to rest the claims that recovered plastic is
exported only to be dumped. As a general principle, export demand, by increasing overall demand for recovered
plastics, helps to support prices and reduces the overall cost to the UK of recovering plastics. In the absence of
an export market, domestic prices for recovered plastic would be lower but PRN prices would be higher (in the
obligated sector) and recovery less economically attractive (in the unregulated scrap sectors).
The export market is providing outlets for some recovered plastics, such as ABS from waste electronic and
electrical equipment, for which demand in the UK is likely to remain modest - simply because few products that
use it are manufactured in the UK. China produces large quantities of electronics and electrical goods and
machinery, manufactures most of the world’s toys, and is the world’s largest consumer of ABS. It is unsurprising
to find that there is an export demand for recovered ABS.
The recovered plastics market is a composite of a series of individual trades shaped by the supply and demand,
as well as regulations governing, individual types of plastic. Generalisations are, as a consequence, difficult.
Nonetheless, there tends to be an inverse correlation between market value and regulatory risk of waste plastic
exports. For plastic users, clean production scrap can be close to prime resin in performance and trades at a
modest discount to it. For environmental regulators, it is a commodity that presents few issues of risk, although
licensing and other conditions still apply. Unsorted, post-consumer plastics are low in value and the focus of
regulators’ attention, both here and in destination markets. It is this lower-value material that is most vulnerable
to regulatory intervention.
The real debate, at both ends of the trade, is therefore about standards and how they are applied to postconsumer material. Sorting and processing of mixed, post-consumer plastics will tend to take place in the lowest
cost location allowed by the prevailing regulations, subject to transport costs and location of demand. In the case
of bottles this operation produces 15%-20% waste203 and has the potential to create water pollution if adequate
treatment facilities are not in place.
There is an order of magnitude difference in the sorting cost per tonne between the UK and China. Firms in China
(for example) have found margins in treating unprocessed, or partially processed, material from overseas. The
latest Chinese standard on imports is sufficiently strict in its terms that for post-consumer wastes it would, if
followed to the letter, preclude direct imports of anything but sorted, washed and shredded material204. If
consistent enforcement was applied at the Chinese border, export demand for unsorted material would suffer,
but processing activities would in time move to the next most favourable location as dictated by labour, capital
and shipping costs and regulatory climate. If Europe wished to allow only processed material to be exported then
the additional costs of sorting domestically would follow. Regulatory risks in export markets would be lower, but
at the expense of higher cost recycling at home.
At the present time China dominates the UK export market for recovered plastic. For every one tonne that was
exported to another EU country in 2004, 5 tonnes were exported to China, either direct or via Hong Kong.
China’s 75% market share in UK direct trade probably understates its total contribution to demand, as some
fraction of the UK’s exports to continental Europe also ultimately end up in China, mainly via consolidators in
Belgium and Holland.
Although China drives UK recovered plastic exports, the UK is of much less significance to China. The UK’s share
of China’s recovered plastic imports in 2004 was no more than 5%. The UK exported less than Germany,
203
from waste labels, residual contents of the packs, some closures and miscellaneous contamination
204
Hong Kong is excluded from this standard
210
Holland, the US or Japan. Chinese imports of recovered plastic from all regions have increased rapidly since 2000,
as consumption of plastic for the domestic economy, and for exports, has grown. Other export markets are
modest by comparison, but have the potential to grow in the future.
15.4
Export outlook
Much of the effort of this study went into documenting and researching the export trade. We expect continued
export demand for recovered plastic across most sectors. However, this is a dynamic trade and it would be
entirely possible for the international recovered plastics market to change as much in the next five years as it has
in the past five.
In the short to medium term the case for demand for recovered plastic from China looks robust, even if
aggregate demand will not necessarily increase at the rate experienced between 2001 and 2004. In the longer
term other markets can be expected to expand. India’s consumption of plastics lags behind China but is
increasing. On one Indian estimate, 70% of plastic production in the country uses recovered plastic. Imports of
recovered material are constrained by regulation, but there is some pressure from within the country for
regulations to be relaxed. Other markets, such as the Middle East, are also emerging. The distribution of global
plastic consumption in 2015 will be different from today and in the lower income markets, in particular, demand
for recovered material can be expected.
Manufacturers in China are using recovered plastic at a price lower than prime resin to gain competitive
advantage. Some of the plastic applications are ‘natural’ recovered plastic markets where quality parameters do
not require prime resin to be used. A consistent message on the drivers of demand for this material was received
from many different sources and it stands up to scrutiny. However, the exact identity of these manufacturers
and the precise applications into which the plastic is put remain, in the case of several markets, obscure. While
consultations provide comfort that demand is unlikely to decline in the next few years (and is more likely to
increase), the extent to which manufacturers’ sourcing strategies are likely to change, as end market
requirements evolve, domestic collection increase and prime resin supplies is increased, is still uncertain. In this
study the trail was followed as far as the material reprocessors. A more intensive research effort in China,
probably in collaboration with Chinese ministry research centres, would be required to shed light on these
dynamics.
Overlaid upon these uncertainties, are external market factors such the oil price and trends in liner shipping
which will do much to influence the recovered plastic market. By common consensus, a substantial fall in oil
prices (and hence many prime resin prices) would prompt a softening in the recovered plastic market. The same
consensus regards such a fall as unlikely over the short to medium term. Despite energy prices, freight rates
seem set to fall as the increases in container slot capacity of the world’s shipping fleet, out-strip growth in
containerised trade over the next few years.
Changing prices may influence demand, but regulatory changes have the power to open or close markets,
sometimes at very short notice. Changes in the way in which imports to China are regulated and enforced could
have important effects on the shape of the international recovered plastic trade. The Chinese Government is
accrediting scrap exporters in the UK (and elsewhere) on the basis of an evaluation similar to that applied by our
own Environment Agency for packaging waste exporters. China has standards for imported scrap plastic material
which – if enforced - are stricter than European export standards. Similar issues will apply in time to other export
markets as they emerge. Research suggests that plastic wastes from the municipal waste stream in the UK and
other countries are commonly imported to China in a form that does not meet China’s own environmental
protection standard for this material. Other exporters (such as Japan), have already faced trade issues relating to
mismatch in national standards. Sustained strict enforcement of this standard would deliver a short term shock to
the market sectors involved, and prompt a shift in sorting/processing operations, probably to other intermediate
locations. This would probably manifest itself in some short-term disruption to shipments and price corrections as
a result of re-routing to other outlets, rather than any structural loss of demand for the raw materials.
There would be benefits in an international dialogue on how standards are applied and enforced at each end of
the trade. This would reduce the regulatory risk to businesses, and help deal with the environmental risks
stemming from aspects of trade where there are concerns. There is a common interest in making the legitimate
trade work smoothly and acting in concert against the small fraction of the shipments that risk bringing the trade
as a whole into disrepute
211
Regulatory change in the EU, that required more detailed verification of the reprocessing location, or standard for
exported waste, would also have a negative impact on exports, at least in the short term. Material can change
ownership several times in the destination country before being processed, and en route in transhipment
locations such as Hong Kong.
The final dimension is competition. The UK has a small percentage share of the global export market for
recovered plastics. If the export market becomes more competitive (i.e. buyers become more selective because
supply and demand are better balanced than was the case in 2004) better quality material is more likely to find
an outlet (or command the target price). For the large markets in post production scrap, and for suppliers able to
guarantee a reliable flow of material of consistent quality, this is less likely to be a problem than for those touting
lower quality loads closer to the margins of acceptability.
15.5
Balance between supply and demand
Most recovered plastic of a given type and quality will find a market within the global economy on the basis of
price.
The analysis indicates that for most collected packaging applications, and many agricultural plastics, supply is the
practical limiting factor. Underlying market demand remains strong. From a UK perspective, the UK market has
both capacity and is a consumer of many end products that could potentially accept the medium term growth in
collection. The reason the UK market is currently under-utilised is due to pricing factors rather than fundamental
technical limitations to the market. Providing UK recyclers can remain competitive, it is anticipated that further
recycling capacity will grow in the UK – although perhaps not at the same pace as export activity.
From a global perspective there is a consumption of over 200m tonnes of plastics a year; based on the
experience of several European countries with strong domestic recycling activity, it appears that from a technical
perspective well over 20% of this global consumption could reasonably be met by recycled plastics. Given that
long term demand appears to be structurally strong for most materials considered – whether it be from recyclers
in the UK, Mainland Europe, China or emerging economies – the actual flows of material will be determined by
both price and the extent to which sellers wish to incorporate non-price factors into their selling decisions. For
example, suppliers of waste plastics in the UK can – if they choose - guarantee material is recycled in the UK, but
may in some cases have to accept a lower purchase price in return for this facility.
In countries such as China, some external costs (such as the pricing of environmental impacts and health and
safety standards comparable to the UK) are not fully reflected in the cost of recycling. This gives recyclers in
these countries a competitive advantage, and has an effect on waste plastic prices. If these costs are included
into the price mechanism as a result of further regulation, then this could impact on the actual location where
recycling occurs.
The area with the greatest risk of disruption relates to markets for unsorted or more contaminated plastics
material. Changes in regulatory controls for recipient countries could result in rapid reduction of routes to markets
and/or in changing acceptance specifications.
It is recognised that the prevailing regulatory framework will influence supply-demand balance very strongly. This
is particularly obvious in the ELV waste stream where verification protocols on the amount of other materials
accepted as recycled, and the revision of the long term targets, can have fundamental impacts on the investment
of businesses in the extraction of plastics for recycling and the supplies of materials arising.
This study has shown that the recovered plastic market is not static and is subject to the currents of the global
economy (consumption in the US, output in China, oil prices, etc.) as much as any other commodity market.
Medium and long term projections are subject to significant uncertainty. It is recommended that the export
market should be periodically reviewed, either via published reports or commissioned research, within the context
of likely waste plastics availability and quality.
212
16.0 Recommendations
The most important recommendations from the study are summarised below. The full listing of
recommendations, along with associated risks and explanatory commentary is provided in table 16.1.
The most important recommendations to address the major risks to a sustainable increase in plastics recycling in
the UK, are:

Ensure current and proposed statutory recycling targets remain in place (e.g. for ELV).
Encourage development of technology for effective separation of plastics for recycling from WEEE, ELV and
mixed waste streams.

Develop/ensure availability of UK handling capacity capable of upgrading plastics materials to European
market standards, to mitigate risks of tighter import controls in China and other markets.

Lobby for implementation of REACH regulation in a manner that does not undermine competitiveness of
European plastics recyclers.

Review export market profile at least biannually to ensure ongoing awareness and management of risks in a
rapidly changing global market.
In addition, the following recommendations are also considered important to ensure that good quality information
is available to accurately track performance and inform policy:

Improve PRN reporting to include more information on the sources of plastics recycled to aid data
reconciliation and auditing.

Review data capture methods used by different agencies (e.g. Customs and Environment Agency/SEPA) with
the aim of achieving improved data coherency.

Clarify how the requirement for ‘broadly equivalent standards’ of recycling will be implemented to comply with
EC recycling targets.

Review whether UK plastics recyclers compete on a level international playing field and revise policies
accordingly (e.g. does Climate Change Levy on plastics recyclers achieve the desired environmental
outcome?)

Review the wider environmental, social and economic merits of recycling in the UK compared to recycling in
Asia to inform BPEO. (This review would be useful to inform the interpretation of the ‘broadly equivalent
standards’ requirement of the revised Packaging Waste Directive.)
213
Table 16.1
Summary of risks & recommendations to mitigate risk
Risks
Chinese waste imports
substituted by domestic
supplies of plastics waste
Probability
Impact
Net risk
(a)
(b)
(a x b)
(1 –5)
(1-5)
(1-25)
2
4.5
9
Comments
Increasing collection of plastics waste generated in China and other Asian
countries could displace imports from Europe and North America.
There is evidence of substantial collections of waste plastics in Asia
undertaken on a commercial basis.
The probability of these collections significantly displacing supplies from the
UK is considered relatively low for two reasons: the projected growth of
plastics demand in Asia remains large; the producer responsibility systems
in the UK and mainland Europe would be able to finance discounting of the
price of relevant plastics waste until it became competitively priced to the
available market (i.e. UK material could be priced below local material, or
below material from less regulated countries such as the USA).
Recommendations to mitigate risk

Monitor the trends in supply/demand balance in
China and India on a biannual basis to review
risks to market availability.
Plan alternative market options as required.
Changes to current ELV
targets reduce recycling
requirements
3
3
9
The 2015 EC targets of ELV recycling and recovery are under review.
Producers are arguing for lower recycling rates or the removal of the
recycling target and a focus on ‘recovery’ only. A change in the current
targets would undermine investment in separation technology for the
recycling of plastics from ASR streams.

Argue for retention of current targets.
Ensure producer responsibility implementation
provides financial underpinning required for
investment in ASR separation technology.
Adverse implementation
of REACH
3
3
9
The currently proposed implementation of the REACH regulation would
introduce expensive, commercially unsustainable testing regimes for
recyclers producing flake and pellets (but not those making finished
products).
The impact would be to further reduce competitiveness of European
plastics recyclers and potentially limit EU capacity for collected materials.
Ironically the implementation proposed would drive more plastics outside
the EU for recycling, where the REACH requirements are not present.

Lobby for REACH implementation for recycled
plastics based on generic data requirements,
rather than batch testing.
Encourage vertical integration of product
manufacture and recycling to avoid the
requirement for intermediate testing.
Enforcement of stricter
controls on imports of
waste plastics materials to
China
4
2
8
Consultation suggests that most of the waste plastics trade is
uncontroversial. However, the Chinese Authorities have been concerned
about low quality materials (for example mixed plastics or plastics
contaminated with organic matter) and these require pre-treatment before

Develop links between the UK regulators (EA,
etc) and SEPA to ensure good communication
on current and intended import controls and
identify emerging risks to trade.
214
New manufacturing
technologies for PET fibre
in Asia result in
substitution of recycled
material with virgin
polymer
2
for separation of plastics
from mixed waste
2
for plastics separation
from shredder residues
Incorrect PRN and trade
statistics provide
incorrect/unreliable data
2
3
3
3
3
2
6
6
6
6
entering mainland China.
Tightening standards could disrupt the markets for lower quality waste
plastics sales to China.

Ensure availability of alternative markets.
Develop UK based sorting capacity capable of
upgrade all materials to anticipated
international import standards.
PET fibre accounts for over 75% of all markets for PET collected.
Contradictory views were expressed on the potential for ‘in line’ PET fibre
production in Asia to shift to greater virgin use and displace demand for
recycled PET.

Review PET fibre market trends in Asia with
major producers to identify extent of risk.
Stimulate the growth of recycled PET use in
other market sectors such as bottles and sheet
packaging.
Achievement of the high projections for supplies of plastics from the
domestic waste stream will rely on effective separation of plastics from
mixed waste, for example as part of an MBT process.
Some of the ‘new technologies’ for mixed waste treatment appear capable
of extracting plastics for recycling. Others are less effective or aim to use
the plastics in energy recovery (e.g. RDF production).
It is not yet clear which mixed waste treatment technologies will be
implemented or how rapidly they will be introduced.
Achievement of the targets for ELV and WEEE recycling will rely on
effective separation of plastics from shredder residues. Suitable
technologies are developing but not yet commercialised. Some uncertainty
surrounding the implementation of the associated regulations is likely to be
slowing investment.
It has not been possible to reconcile the sources of 100kt of plastic
packaging PRNs from 2005 data.
The trade statistics for UK plastics waste exports are not consistent with the
associated PERN data.
Reported exports of plastics from the UK to Hong Kong are significantly
different from the same imports received from the UK by Hong Kong.
UK trade data are thought to significantly over-state polyethylene’s share of
waste plastic exports. This is because of the way that export declarations
are being completed, and the fact that polyethylene happens to be the first
on the available list of commodity codes. Some shipments to buyers in
Europe (e.g. Rotterdam) are then routed to non-EU markets, so EU
recycling is probably overstated by the available trade data.
Tracking arrangements for recycling of agricultural, ELV and WEEE plastics
under producer responsibility requirements are not clear.
These points highlight that the reliability of baseline recycling data remains
a concern.

Encourage development of technology for
plastics separation for recycling within new
waste technologies (e.g. through WIP New
Technologies programme).
Evaluate and promote effective technologies to
local government and contractors.
Review biannually the UK’s ability to achieve
long-term packaging recycling targets based on
anticipated developments of this technology.
Encourage investment and commercialisation of
required technologies.
Evaluate and promote effective separation
technologies.
Finalise long term statutory objectives,
associated regulations and financial
arrangements for WEEE and ELV.
Improve PRN reporting to include further
information on the sources of plastics. This will
aid reconciliation of data.
Review relevant data capture methods used by
different agencies (e.g. customs and EA) with
the aim of achieving improved coherency of
data.
Procedures for completing plastics export
paperwork should be examined for consistency
with other trade data.
Examine opportunities for consistent approach
to measuring plastics recycled through various
producer responsibility systems to maximise
efficiency and minimise likelihood of
misreporting.
Consider cost/benefit of reporting polymer type
as part of obligated business’ packaging
215
obligation returns.
Plastics collection
schemes develop at a
slower rate than
anticipated
2
Declining competitiveness
of UK plastics recycling
industry limits local
markets
3
Negative environmental
and/or social impacts
2
Prime price collapse
Tighter enforcement of
Transfrontier Shipment of
Waste Regulations
2
2
3
2
2.5
2.5
2
6
6
5
5
4
The main reasons for failure to achieve collection levels predicted would be
market collapses or other financing collapses (e.g. removal of funds for
recycling). These are considered unlikely.
There are some specific risks to achieving supplies of mixed plastics and
post-shredder plastics and these are described separately.
This study shows confidence in capacity being available for plastics
collected. There is also evidence, however, of UK recyclers struggling to
compete in the international market – particularly against the low labour
costs and regulatory controls of the Asian market.
Sustained damage to the UK plastics recycling industry in combination with
tighter controls on exports would present challenges in finding markets –
particularly for lower quality and/or mixed plastics waste.
Currently export trade is driven almost exclusively by economic
considerations within agreed regulatory frameworks.
The relative environmental and social merits of recycling in Europe
compared to in Asia play little part in current decision making.
The EC requirements that recycling should count towards targets only if it is
undertaken under ‘broadly equivalent standards’ to Europe may lead to
restrictions in access to some export markets. How this requirement will be
implemented/enforced remains unclear.
Some suppliers of plastics – particularly from the public sector – may
determine end markets with greater emphasis on non-price issues.
Greater consideration of non-price issues when selling plastics for recycling
(either as a result of national or organisational policies) would influence
flows of materials to export and into domestic markets.
Although viewed as unlikely, large falls in virgin plastic pricing would
depress pricing for recycled plastic materials. This could make collection
less economically viable.
Producer responsibility obligations and improving recovery technology
provide an underpinning mechanism to mitigate the effects of such price
changes.
Tighter enforcement of TFS export controls could limit UK shipments of
mixed plastics or contaminated single streams of plastics to export markets.

Recovery technologies
1
3
3
The adoption of waste to energy technologies at a larger scale than

Maintain current/planned recycling targets and
levels of investment in recycling infrastructure
and communications.
Maintain landfill tax escalator.
Ensure availability of local sorting capacity to
upgrade low quality, mixed materials.
Review competitiveness of UK recyclers in the
global market, consider whether the ‘playing
field is level’ and take further action as
required.
Review the relative environmental, social and
economic merits of recycling in UK and Asia to
identify BPEO.
Clarify how the ‘broadly equivalent standards’
requirement will be implemented in Europe.
Review requirements to manage risk based on
the outcomes of above two actions.
Ensure producer responsibility targets are
matched to collection levels to ensure growth in
collections can be maintained.
Invest in development of lower cost recovery
technologies.
Maintain links with UK regulators to assess risks
and ensure clarity of acceptable quality
standards for export.
Quantify materials potentially effected by
tighter controls.
Develop plan based on availability of local
sorting capacity to handle any material
identified as ‘at risk’.
Continue development of LCAs and associated
216
displace recycling
activities
Exchange rate movements
Chinese freight rate hikes
anticipated could displace material suitable for recycling.
Changes to environmental regulations that place more emphasis on
‘recovery’ and lower emphasis on ‘recycling’ would impact on the relative
economics of recycling (e.g. if the ELV Regulations were amended to
reduce or remove recycling targets).
Increasing availability of LCA evidence of the superior environmental
benefits of many recycling technologies mean this risk is considered low. It
is considered more likely that energy recovery technologies will displace
landfill.
2
1
1
1
2
1
Significant changes in the $/£/€/Yuan exchange rates will affect the relative
value of UK scrap plastics on the global market.
For example, a reduction in the value of the Chinese Yuan against the
pound might reduce the £-equivalent price paid by Chinese buyers for scrap
plastics, however it would also make Chinese finished products more
competitive and this would drive demand.
Increased shipment costs to China would make this market relatively less
attractive to European sellers.
China’s imbalance of physical trade is expected to continue and the balance
of expert opinion is that freight rates will decline in the period to 2008.

economic assessments to accurately identify
the BPEOs for waste plastics.
Lobby for appropriate national and international
environmental management policies (e.g.
recycling and recovery targets) based on BPEO.
Monitor trends in currency exchange rates as
required to manage risks.
Enterprises concerned with this risk could buy
options on future currency prices as required.
No action proposed.
217
Annex A Packaging
Consumption of polymer for packaging applications
Details of consumption of polymers 2005-2015, used to form an analysis of the quantity of packaging in the UK
market are shown in tables A.1 and A.2.
The baseline (2005) assessments in these tables have been derived in the following manner:
An assessment of packaging arisings and future trends has been developed with reference to a wide range of
industry sources. This assessment has been derived from information sourced from six trade associations, four
market research organisations specialising in the plastics and packaging markets, and directly from a range of
large businesses specialising in particular market areas. In addition, a review of trade media was undertaken to
identify specific market data and trends. In the main, information has been sourced showing specifically UK
consumption. In a limited number of instances only European consumption figures have been available and have
therefore been assessed ‘pro rata’ for the UK, primarily based on population. It has been possible in most cases
to cross-reference various sources of information on both applications and polymer types to within 5-10% of each
other.
In some cases the market data from particular sources provided information on UK production – rather than
domestic consumption of finished products – in other cases information on import/export data was available. In
order to reconcile available data on total net imports of packaging with other data sources to provide a
consolidated assessment of the plastics applications used and arising as waste in the UK, some adjustments have
been made to reference data (notably to assess the net imports/exports of films based on PIFA statistics
published in 2003 and 2004). This allows as full an allocation of the net imports of packaging to be identified and
broken down to applications and polymers as the available data will allow. The ‘balancing’ assumptions made in
this report relating to the available PIFA statistics are shown.
Assessments have been made for the annual growth/decline of the individual packaging applications and
polymers listed in the tables A.1 and A.2. Where assessments of specific likely future growth levels were available
from sources, these have been used. Where this has been unavailable, historic trends have been extrapolated
where it is considered that there is good reason for trends being maintained (e.g. displacement by imports).
Where this information was unavailable cross-referencing between different data sources was used to assess and
consolidate the remaining data based on the authors knowledge of the industry to produce what is judged to be a
reasonable overall assessment. As a result of the combined trends in different polymers and applications, the
resulting overall growth rates of total plastic packaging are approximately 2% and 5% per annum – which are
levels consistent with industry estimates and available obligated packaging data trends.
Table A.1
Consumption of polymer 2005-2015 by major packaging applications (kt) c. 2%
overall packaging growth pa.205
Description
kt 2005 kt 2008 kt 2010 kt 2015
PET bottles
300
309
315
331
HDPE bottles - natural/food
HDPE bottles - non food, retail
130
70
136
72
140
74
151
77
HDPE bottles - oil & car care, retail
PVC bottles
PP bottles
10
13
10
10
13
12
11
13
13
11
14
16
PS bottles
PS thermoformed & XPS packaging
PP thermoformed packaging
PET thermoformed packaging206
5
85
112
60
5
93
124
66
5
98
133
70
6
114
158
81
PP injection moulded packaging
PP Injection moulded pots
PP Bulk bags
70
15
3
80
16
3
87
17
3
109
20
3
PO other closures
PS expanded packaging- - transit
50
28
52
29
54
30
58
32
55
37
10
20
122
(54)
25
96
5
10
52
59
27
132
24
29
16
12
8
148
(40)
35
25
159
87
19
(19)
12
58
39
11
22
126
(54)
28
99
5
10
54
58
24
140
26
29
18
12
8
152
(40)
33
25
167
91
20
(19)
11
59
40
12
23
128
(54)
30
101
5
11
56
56
22
146
28
29
19
12
8
155
(40)
32
25
172
94
20
(19)
11
64
43
13
27
135
(54)
37
106
6
12
60
54
18
161
32
29
23
12
8
163
(40)
29
25
185
101
22
(19)
9
PO other drums & IBCs207
PP pails
PET strapping
PP strapping
OPP film
OPP Deduction: assumed imports in PIFA OPP data
PET sheet
PVC film/sheet (sandwich packs, etc)
PVC other technical/performance film/sheet
PVC cling film
HDPE Other HDPE packaging
PE Collation shrink
PE Pallet shrink
PE Pallet stretch
PE Frozen Food FFS
PE Lamination film
PE Bubble Film
PE Dry cleaning/laundry
PE Cereal Co-ex
PE Other PE reels for packaging
PE Deduction: assumed imports in PIFA PE film data
PE Heavy duty sacks
PE industrial liners
PE Carrier bags
PE Retail bags
HDPE Bags
PE Adjustment to PIFA data for HDPE films
PE Bread bags
205
‘c. 2%’ refers to the aggregate annual increase in all plastic packaging. Individual applications and polymers may exhibit
different estimated rates of growth/decline.
206
There is evidence of recent rapid growth in PET thermoforming applications. It is possible that this may be counterbalanced
by some slowing growth rates in the use of other polymers in thermoforming. However, it was not possible to verify this
hypothesis within the study. As a result the thermoformed market may be overstated in total; this would be compounded in the
long term projections.
207
Intermediate Bulk Containers (IBCs)
219
Description
kt 2005 kt 2008 kt 2010 kt 2015
PE Freezer bags
PE Other bags
PE Deduction: assumed imports of bags in PIFA data
Biopolymers Various applications
PET net imports various applications
PO other net imports various applications
PVC net imports various applications
OPP net imports various applications
PS net imports various applications
HDPE net imports various applications
PP net imports various applications
PE net imports various applications
Sub total - polymer use
Of which supply chain process losses
Of which other filling and stock losses
6
197
(120)
3
15
5
10
54
10
40
20
160
2,474
118
47
6
209
(120)
5
16
5
11
57
11
42
21
170
2,608
118
47
6
217
(120)
7
17
6
11
60
11
44
22
177
2,704
118
47
6
240
(120)
19
18
6
12
66
12
49
24
195
2,971
118
47
Of which net imports
Net weight of polymer supply to final UK user/customer
314
2,310
333
2,444
347
2,540
383
2,807
Plastic packaging forming basis for targets (kt)
2,356
2,490
2,586
2,853
Source: Recoup, from industry consultations & published market research – AMA (2003), AMI (2005), APME
(2003, 2004), BPF (2004), DEFRA (2005), ACP, Envirowise (2003), EPRO (2005), PIRA (2003, 2005), PRW, PIE,
REXAM (2005), RPC (2005), PIFA (2004, 2005), The Packaging Federation (2005), Valpak (2005), WRAP (2003b,
2004d), Wastewatch & Recoup (2004)
220
Table A.2
Consumption of polymer 2005-2015 by major applications (kt) – c. 5% growth
pa.208
Description
kt 2005
kt 2008
kt 2010
kt 2015
PET bottles
300
323
339
384
HDPE bottles - natural/food
130
140
147
166
HDPE bottles - non food, retail
70
75
79
90
HDPE bottles - oil & car care, retail
10
11
11
13
PVC bottles
13
14
15
17
PP bottles
10
12
13
16
PS bottles
5
5
6
6
85
98
108
138
PP thermoformed packaging
112
130
143
182
PET thermoformed packaging
60
71
80
107
PS thermoformed & XPS packaging
PP injection moulded packaging
70
81
89
114
PP Injection moulded pots
15
17
18
22
PP Bulk bags
PO unspecified closures
3
3
3
3
50
53
55
61
PS expanded packaging- - transit
28
30
31
34
PO unspecified drums & IBCs
55
58
61
67
PP pails
37
39
41
45
PET strapping
10
12
13
16
PP strapping
20
23
26
33
OPP film
122
129
135
149
OPP Deduction: assumed imports in PIFA OPP data
-54
-54
-54
-54
PET sheet
25
28
30
37
PVC film/sheet (sandwich packs, etc)
96
102
106
117
PVC other technical/performance film/sheet
5
5
6
6
PVC cling film
10
11
11
12
HDPE Other HDPE packaging
52
55
57
63
PE Collation shrink
59
58
56
54
PE Pallet shrink
27
24
22
18
PE Pallet stretch
132
140
146
161
PE Frozen Food FFS
24
26
28
32
PE Lamination film
29
29
29
29
PE Bubble Film
16
18
19
23
PE Dry cleaning/laundry
12
14
14
17
PE Cereal Co-ex
8
9
9
10
PE Other PE reels for packaging
148
157
163
180
PE Deduction: assumed imports in PIFA PE film data
-40
-40
-40
-40
35
33
32
29
PE Heavy duty sacks
PE industrial liners
PE Carrier bags
25
25
25
25
159
169
176
194
208
‘c. 5%’ refers to the aggregate annual increase in all plastic packaging. Individual applications and polymers may exhibit
different estimated rates of growth/decline.
221
Description
kt 2005
kt 2008
kt 2010
kt 2015
PE Retail bags
87
93
97
107
HDPE Bags
19
20
21
23
-19
-19
-19
-19
12
11
11
9
PE Adjustment to PIFA data for HDPE films
PE Bread bags
PE Freezer bags
6
6
6
6
197
209
217
240
-120
-120
-120
-120
3
7
11
41
15
22
28
51
5
7
9
17
PVC net imports various applications
10
14
18
34
OPP net imports various applications
54
78
99
183
PE Other bags
PE Deduction: assumed imports of bags in PIFA data
Biopolymers Various applications
PET net imports various applications
PO other net imports various applications
PS net imports various applications
10
14
18
34
HDPE net imports various applications
40
58
74
136
PP net imports various applications
20
29
37
68
PE net imports various applications
160
231
295
543
2,474
2,793
3,051
3,932
Of which supply chain process losses
118
118
118
118
Of which other filling and stock losses
47
47
47
47
Sub total - polymer use
Of which net imports
Net weight of polymer supply to final UK
user/customer
Tonnage forming basis for targets
314
453
579
1,066
2,310
2,629
2,887
3,768
2,356
2,675
2,934
3,814
Source: Recoup, from industry consultations & published market research, (from table A.1)
The projections shown in table A1 are summarised by polymer type and application for the years 2008, 2010 and
2015 in the three figures A.3 – A.5.
222
Table A.3
Polymer demand by application in production of packaging for consumption in
the UK (2008) (2% growth)
Format
Bottles
PE
HDPE
-
218
OPP
-
PP
PO
other
12
-
PET
309
PS
PVC
5
13
BioGrand
polymers Total
2008
(kt)
-
557
Closures
-
-
-
-
52
-
-
-
-
52
-
-
-
-
-
-
29
-
-
29
Fibre
-
-
-
3
-
-
-
-
-
3
Film
428
-
72
-
-
-
-
10
-
510
Film – bags
404
20
-
-
-
-
-
-
-
424
Injection moulded
rigids
-
-
-
16
-
-
-
-
-
16
Injection moulded
RTPs, crates, etc
-
-
-
80
-
-
-
-
-
80
Other HDPE
-
54
-
-
-
-
-
-
-
54
Pails, drums &
industrial
-
-
-
39
58
-
-
-
-
96
Semi-rigid sheet
-
-
-
-
-
28
-
104
-
132
Strapping
-
-
-
22
-
11
-
-
-
33
Thermoformed packs
-
-
-
124
-
66
93
-
-
283
-
-
-
-
-
-
-
-
5
5
Net imports
Grand Total
170
42
57
21
5
16
11
11
-
333
1,001
335
129
316
115
430
138
138
5
2,608
Source: Recoup, from industry consultations & published market research (from table A.1)
223
Table A.4
Format
Bottles
PE
HDPE
-
224
OPP
-
PP
PO
other
13
-
PET
315
PS
PVC
5
13
Biopolymers
-
Grand
Total
2010
(kt)
571
Closures
-
-
-
-
54
-
-
-
-
54
-
-
-
-
-
-
30
-
-
30
Fibre
-
-
-
3
-
-
-
-
-
3
Film
437
-
74
-
-
-
-
11
-
521
Film – bags
418
20
-
-
-
-
-
-
-
438
Injection moulded
rigids
-
-
-
17
-
-
-
-
-
17
Injection moulded
RTPs, crates, etc
-
-
-
87
-
-
-
-
-
87
Other HDPE
-
56
-
-
-
-
-
-
-
56
Pails, drums &
industrial
-
-
-
40
59
-
-
-
-
99
Semi-rigid sheet
-
-
-
-
-
30
-
106
-
137
Strapping
-
-
-
23
-
12
-
-
-
35
Thermoformed packs
-
-
-
133
-
70
98
-
-
301
-
-
-
-
-
-
-
-
7
7
177
44
60
22
6
17
11
11
-
347
1,031
345
134
338
119
444
145
141
7
2,704
Net imports
Grand Total
224
Table A.5
Format
Bottles
PE
HDPE
-
239
OPP
-
PP
PO
other
16
-
PET
331
PS
PVC
6
14
Biopolymers
-
Grand
Total
2015
(kt)
606
Closures
-
-
-
-
58
-
-
-
-
58
-
-
-
-
-
-
32
-
-
32
Fibre
-
-
-
3
-
-
-
-
-
3
Film
461
-
81
-
-
-
-
12
-
554
Film - bags
457
22
-
-
-
-
-
-
-
479
Injection moulded
rigids
-
-
-
20
-
-
-
-
-
20
Injection moulded
RTPs, crates, etc
-
-
-
109
-
-
-
-
-
109
Other HDPE
-
60
-
-
-
-
-
-
-
60
Pails, drums &
industrial
-
-
-
43
64
-
-
-
-
107
Semi-rigid sheet
-
-
-
-
-
37
-
112
-
149
Strapping
-
-
-
27
-
13
-
-
-
40
Thermoformed packs
-
-
-
158
-
81
114
-
-
353
-
-
-
-
-
-
-
-
19
19
195
49
66
24
6
18
12
12
-
383
1,113
370
147
400
128
481
164
149
19
2,971
Net imports
Grand Total
225
Plastic packaging recycling by application
Table A.6 provides a breakdown of estimated plastic packaging recycling by material/application identified for
2002, and also shows UK plastic packaging activity in the same year reported by Defra based on PERN and PRN
returns.
Table A.6
Sources of UK plastic packaging recycled in 2002
Application
2002 (kt)
PE crates
4.8
PP crates
19
HDPE film
0.5
PP film
4
EPS
9.5
PS cups
0.5
PET bottles
2.5
LLDPE
0
LDPE films
101
HDPE bottles & drums
7.4
Other packaging (positively identified)
15
UK recycled packaging not captured in survey (reconciliation based on PRNs issued)
60.8
Sub-total UK packaging recycled
(based on PRNS issued)
225
Export - Straight on trays (PVC/PET/PS)
6.5
Export - Bottles
5.6
Export – Other, assumed to be mainly LLDPE/LDPE films; (reconciled quantity based on
PERNs issued)
122.9
Sub-total export
135
Total packaging recycling
360
Source: Defra & WRAP (2003c)
226
Table A.7 provides an updated assessment of UK probable breakdown of plastics packaging recycling
activity in 2005. This has been developed from table A.6 by Recoup in conjunction with input from 10
UK recyclers or exporters and using 2005 Defra data on PRNs and PERNS issued.
Table A.7
Estimated UK plastic packaging recycling in 2005 by application, (kt)
Application
kt 2005
Films - packing rejects
15
Packaging/filling rejects - bottles
6
Other filling/packing/redundant stock rejects
Films - post-use
Office & commercial collections - additional
Carrier bags - FOS
Bottles & other household
EPS
Cups
Trays (e.g. "Straight on")
Plastic crates & pallets
10
165
<1
2
67
6
<1
7
25
Drums & large containers
5
PP pails (e.g. catering)
3
PP bulk bags
<1
Agricultural & horticultural packaging
<1
Construction site packaging
<1
Other packaging - unidentified
100
TOTAL (kt)
414
Source: Recoup, from industry consultations, WRAP (2003c), WRAP (2004d), Defra (2006b)
227
Projected collections of plastics packaging for recycling
Table A.8
Projection to show separated domestic plastics streams available for recycling by
scenario & polymer type
Scenario
Year
Total bottles
Scenario 1
Scenario 2
Scenario 3
2008
2010
2015
2008
2010
2015
2008
2010
2015
kt/a
kt/a
kt/a
kt/a
kt/a
kt/a
kt/a
kt/a
kt/a
108
130
167
128
168
246
150
220
357
Total mixed plastics
6
8
13
8
15
36
9
30
164
Total plastics
114
138
180
136
183
282
159
250
522
PET bottles
49
60
79
58
77
116
68
101
168
HDPE bottles
54
62
77
64
81
113
75
105
164
Other bottles
5
8
12
6
10
17
8
13
25
Mixed plastics (PO, PET, PVC,
PS)
6
8
13
8
15
36
9
30
164
% of bottles sold polymer
sorted
25%
30%
40%
25%
35%
50%
30%
40%
60%
% of bottles sold unsorted
75%
70%
60%
75%
65%
50%
70%
60%
40%
baled mixed polymer bottles
81
91
100
96
109
123
105
132
143
baled PET bottles (clear &
blue)
9
13
24
11
20
43
15
30
76
baled PET bottles (coloured)
3
4
8
4
7
14
5
10
25
baled HDPE bottles
15
21
35
18
32
65
25
47
114
Of which
Source: Recoup based on industry consultations, WRAP (2005j), WRAP (2006), WIP
228
Annex B Agricultural Plastics
Table B.1 shows detailed arisings of agricultural plastics waste (1998) by polymer type and application.
Table B.1
Plastic waste from agricultural holdings by polymer type and use
Application
Polymer type
Amount
(ktonnes)
PACKAGING
Agrochemical packaging
HDPE
2.4
Fertiliser bags
PP/LDPE
Seed bags
PP
1.0
Animal feed bags
PE
11.4
Animal health packaging
12.2
0.7
Oil containers
PP
0.7
Miscellaneous packaging
EPS,PP
3.8
Total plastic packaging
32.2
NON-PACKAGING PLASTICS
Films
LDPE
Silage plastics
LDPE
Silage plastic + contamination
25.0
50.0
Greenhouse and tunnel film
LDPE
0.5
Mulch film and crop cover
LDPE
4.5
Mulch film and crop cover + contamination
22.5
Total films
30.0
Total films + contamination
73.0
OTHER NON-PACKAGING PLASTICS
Silage wrap cones
1.5
Other horticultural plastics
LDPE
Bale twine and net wrap
PP
6.0
11.1
Tree guards
11.9
Total non-packaging plastics
60.5
Total non-packaging plastics with
contamination
Total all plastics - non contaminated
103.5
92.7
Source: Environment Agency (2001, 2005)
229
B.2
Summary of agricultural waste management options.
On the introduction of the ‘2005 Regulations’ farm waste will be classed as ‘industrial waste’ leaving five basic
waste management options available to farmers209– of which a combination may be used.

Option 1
Store waste, pending collection, on the site where it is produced for up to 12 months in suitable containers where
necessary to that it cannot escape control – e.g. become windblown. Storing waste properly can reduce costs,
and avoid contamination also allowing for waste to be easily separated.

Option 2
Take the waste for recovery or disposal off-farm at an appropriately licensed site detailed in the Waste Recycling
Directory210. A gate fee may be charged and paperwork such as a Duty of Care transfer note may be requested.

Option 3
Transfer waste to someone else for recovery or disposal off-farm at an appropriately licensed site. Duty of Care
documents will be requested.

Option 4
Register a licence exemption with the Environment Agency to recover or dispose of waste on-farm free of charge.

Option 5
Apply to the Environment Agency for a Waste Management Licence (WML) or a landfill Pollution Prevention and
Control (PPC) Permit to recover or dispose of waste on-farm. Ideal for diversification of farm to transfer station,
waste recycling business, waste treatment facility. Obtaining licences and permits is subject to charges and
meeting statutory requirements.
Within these available options, there is no specified or separate provision for the recovery and recycling of large
quantities of valuable waste plastics.
209
DEFRA, 2005a
210
http://www.wasterecycling.org.uk
230
Annex C End of Life Vehicles (ELV)
Table C.1
Composition and projected changes in vehicle material composition as a % of
vehicle by weight– EU 1990 to 2020
Material
1990
2000
2010
2020
Galv steel sheet
17.94
17.73
17.65
17.55
Cold rolled coil
15.09
14.94
14.85
14.79
Hot rolled coil
10.70
10.67
10.55
10.54
Plate steel
0.23
0.22
0.22
0.28
Alloy steel
17.01
16.85
16.79
16.70
Wire rod
0.69
0.66
0.72
0.71
Cast iron
1.85
1.84
1.79
1.84
Cast Aluminum
7.93
7.95
7.96
8.00
Wrought aluminum
2.77
2.80
2.80
2.83
Cu
0.54
0.59
0.65
0.71
PE
0.46
0.52
0.50
0.50
PP
2.93
3.02
3.08
3.11
PVC
1.23
1.25
1.29
1.34
Other TP
3.23
3.38
3.44
3.47
Thermosets
1.39
1.47
1.51
1.49
Synthetic rubber
4.77
4.86
4.88
4.81
Glass
3.39
3.31
3.30
3.26
Other materials
7.85
7.95
8.03
8.07
Total plastics
9.24
9.64
9.83
9.91
Source: Assurre, http://www.assurre.org/downloads/archive/afeaf9c1-86cb-4232-a4cb49fb477a05e5.xls
231
Figure C.1
Post shredder technologies for treating shredder residue (Assurre, 2005)
232
Examples of ASR plastics separation technologies
Engineering Separation and Recycling - Dense medium separation (wet)
Materials that either float or sink are separated using different densities of water. The water density is changed
by means of suspending fine particles that will separate out polymers. In the past there have been problems of
heavier materials (‘sinks’) burying lighter materials (‘floats’), that cannot find their way to the surface of the
density medium drum.
Material is injected with the medium over a 3-D plane into a shallow bath inside the drum. The length of the
drum is called the separation zone. The bi-directional motion of the drum combined with scrolls underneath the
drum moves the sinks in one direction (where they drop outside the separation zone and are ‘screwed’ up out of
the drum) and the floats in the opposite direction.
Different suspension densities, created using materials such as sand, ultra-fine metals and glass in different
drums can separate out different polymer types (organics from inorganics, PVC from ABS and nylon).
MBA Polymers - Dense medium separation - hydrocyclone
At MBA Polymers, polymers are removed in stages. Lighter materials, such as foam, film, and paper are removed
by air jets, and hydrocyclones separate plastics further using water as a medium to separate sinks or floats.
Argonne Laboratories, Recovery Plastics - Froth/Skin flotation
Once bulk separation has taken place, polymers are separated by froth flotation. The process (shown in Figure
C.2) modifies the effective density of polymers. In solution, gas bubbles attach to the material surface enabling
the material to float above denser plastics to the surface.
Figure C.2
Separation of mixed plastics concentrates
Source: Argonne Laboratories
233
VW Si-con
This process of shredder residue separation produces a PVC fraction for PVC production, and shredder granulate
to be used as reducing agent in blast furnaces.
Figure C.3 shows the process in more detail.
Figure C.3
Source: VW
ELV treatment chain
Figure C.4
Main process steps of VW Si-Con recycling technique
Source: VW
234
Annex D Waste Electric and Electronic
Equipment (WEEE)
Tables D.1 – D.4 used for the basis of the projections are colour coded:
Green cells
= data based on recent ICER statistics, or credible other references
Grey cells
= data where the reference highlights a relatively large uncertainty, or assumptions based on
informed estimates based on disparate data sources
Blue cells
= an estimate to ‘drive’ the model, with little corroborative evidence to support
The projection model is based on the following assumptions:

Plastics content of WEEE remains broadly around 20%
Growth in arisings per year is 3-4%
Improvements in availability of collection infrastructure will result in growth in collections during the period
Efficiency of plastics extraction from shredder residue will improve to 60-75% of input plastics
The focus of small appliance plastics recycling will be around styrenic polymers
Growth in collections of smaller household appliances will be most evident in the period 2010-2015
Note there will be other commercial and industrial WEEE that may not be currently accounted for in the data.
235
Table D.1
Estimated supplies of plastics from WEEE recycling, 2003
Household WEEE
2003
Refrigeration equipment (kt)
143
Of which collected for
reuse/recycling/recovery (%)
77%
ktonnes WEEE collected
Of which exported for reuse (%)
ktonnes net exports for reuse
Of which available for recycling (kt)
Of which plastics (%)
Of which extracted for recycling (%)
22%
69%
15.5
70%
PA
PC
Other
10.6
5%
0%
4.9
-
-
-
-
-
335
3%
9
325
30%
56%
Tonnes of plastics available (kt)
80%
70%
54.7
Equipment containing CRTs (kt)
96
25%
54.7
5%
0%
5%
-
10%
0%
-
-
-
-
-
95%
5%
95%
50%
5%
0%
24
45%
11
13
21%
48%
1.3
All other WEEE (kt)
220
5%
36%
60%
PMMA
8
102
478
59%
80%
PP
110
Other large household appliances
(kt)
PU
Foam
7%
Styrenic
1.3
-
-
-
-
-
-
17%
40%
7%
40%
3%
40%
4%
40%
4%
40%
11
10%
1
10
20%
47%
65%
50%
0.9
0.6
-
0.1
0.1
0.0
0.0
236
0.0
Table D.2
Projected supplies of plastics from WEEE recycling 2008
Household WEEE
2008
162
80%
22%
72%
19.0
554
75%
PC
Other
13.3
5%
0%
5.7
-
-
-
-
-
416
11
404
20%
56%
80%
70%
45.3
117
35%
45.3
5%
0%
5%
-
10%
0%
-
-
-
-
-
95%
5%
95%
50%
5%
0%
41
45%
18
22
21%
48%
2.2
All other WEEE (kt)
268
7%
PA
3%
36%
60%
PMMA
9
120
59%
85%
PP
129
Other large household appliances (kt)
PU
Foam
7%
Styrenic
2.2
-
-
-
-
-
-
19
10%
2
17
20%
65%
17%
7%
3%
4%
4%
33%
40%
20%
20%
20%
20%
20%
1.1
0.9
-
0.1
0.0
0.0
Source: Recoup from ICER (2004, 2005), APME (2003), AMI (2005), industry consultations
237
0.0
0.0
Table D.3
Household WEEE
2010
Styrenic
PU
Foam
PP
PMMA
PA
PC
Other
170
90%
153
7%
142
22%
75%
23.4
59%
90%
16.6
36%
60%
6.8
5%
0%
-
-
-
-
-
10%
0%
-
588
85%
126
50%
500
3%
486
20%
60%
58.3
80%
75%
58.3
5%
0%
5%
-
-
-
-
95%
5%
95%
60%
4.5
5%
0%
40%
21%
57%
4.5
-
-
-
-
-
All other WEEE (kt)
290
20%
20%
20%
33%
3.1
65%
40%
2.4
-
17
20
0.3
7%
20%
0.1
3%
20%
0.1
4%
20%
0.1
238
4%
20%
0.1
Table D.4
Household WEEE
2015
181
95%
Styrenic
PU
Foam
PP
PMMA
PA
PC
Other
172
15%
26
146
22%
59%
36%
5%
75%
90%
60%
0%
24.1
643
95%
17.1
7.0
-
-
-
611
92
519
20%
80%
5%
60%
75%
0%
62.3
137
75%
62.3
5%
10%
0%
-
-
-
-
-
-
95%
5%
95%
5%
103
40%
41
62
21%
76%
80%
9.8
All other WEEE (kt)
314
40%
-
15%
-
9.8
0%
-
-
-
-
-
-
125
20%
25
100
20%
65%
17%
7%
3%
4%
4%
38%
40%
40%
30%
30%
30%
30%
7.7
5.2
-
1.4
0.4
0.2
239
0.2
0.2
Annex E UK Market Demand
Table E.1 An indication of existing market sizes by application, an estimate of the potential for
market growth and the extent to which that growth that could occur. (reproduced from Enviros,
2003)
Note this is not an ‘exclusive’ listing and other potential applications (e.g. bottles) are also available.
240
241
Annex F Summary of global market in waste plastics by
country/region
Market
Features of current market for waste plastics
Assessment of future market outlook
EU
•
•
Supplies of plastics for recycling will continue to increase throughout Europe, as all
member states must achieve higher recycling targets.
•
European plastics recyclers report that it is increasingly challenging to remain
competitive with Asian recyclers. The market data suggests that total available
capacity in Europe is significantly under-utilised and this trend is likely to continue,
with margins being squeezed.
•
As more product manufacturing transfers to Asia, so local end markets for recycled
flake and pellet products also become less available.
•
NAFTA
211
Many EU countries (e.g. Germany, Italy, Netherlands and France) have wellestablished plastics recycling industries. Some have developed plastics recycling
infrastructure with support from ‘green dot’ packaging fees through access to
waste plastics packaging supplied at below global market rates and secure, longterm supply contracts given in return for guarantees of market availability and
traceability of materials.
The European plastics recycling industry is estimated to comprise over 700
businesses and 2,500ktpa recycling capacity211.
•
2,200kt-3,100kt of plastics were collected in Europe for recycling in 2004. Of this
at least 1,800kt of plastics packaging was collected for recycling, with
approximately 80% recycled within the EU.
•
‘Green dot’ packaging recycling schemes are using competition in the market to drive
down costs. EU plastics recyclers are receiving less favourable arrangements than in
the past and are being forced to compete fully in the international market.
•
There is significant intra-EU trade of recovered plastics with major imports from
other EU countries to the Netherlands, Belgium, Italy and Germany. These
countries are also the major exporters outside the EU.
•
Recycling capacity in Eastern Europe and the new EU states is growing. This will
compete with capacity in Western Europe for material and has the advantages of
lower labour costs and, in some cases, better access to new markets in Russia.
•
In 2004 EU export of plastics waste to Hong Kong and China were 1,245kt almost two thirds of total EU exports by volume. Exports to this region have more
than tripled since 1999 (see Figs. 6.2 and 6.3).
•
Changes to the EU food contact regulations will improve opportunities for ‘closed loop’
packaging recycling for PET that will favour local markets.
•
There is extensive trading of recovered plastics within the NAFTA region (the
USA, Canada and Mexico), and also a net outflow of this material to East Asia.
•
Supplies of plastics for recycling will increase with increasing regulatory interventions,
although at a slower rate than Europe.
•
The US is one of the world’s largest importers and exporters of waste plastics. It
imported 396kt and exported 745kt in 2004.
•
North American plastics recyclers are concerned about ability to compete with Asian
recyclers. Their concerns mirror those expressed by Western European plastics
recyclers.
•
Exports of, for example, PET bottle waste have increased by over 400% since
1998 whilst domestic recyclers’ consumption has declined slightly during the
period.
•
Six of the ten largest recovered plastic export markets for the US are in Asia,
accounting for more than two-thirds of US recovered plastic exports (see Fig 8.4).
The US’s close neighbours, Canada and Mexico, receive most of the remainder.
http://www.eupr.org/
242
JAPAN
•
The US exports more plastics waste direct to China than to Hong Kong.
•
Japan has a range of laws covering recycling of different waste streams, including
packaging and appliances. This requires high levels of plastics recycling (e.g. c.
850ktpa of plastic packaging recycling in 2005)
Japan is the country with the largest recovered plastics exports to the China
market. It exported 850kt of recovered plastic in 2004 (Fig 9.3).
Japan has a strong reputation in China and Hong Kong for reliable supply of high
quality plastic, both industrial scrap and post-consumer plastic waste. Many of
the firms in Hong Kong focus exclusively on Japan-sourced material.
After the introduction of a ban on direct import of plastics waste to China in May
2004 the proportion of Japan’s plastics that was routed through Hong Kong
increased. The ban was lifted in September 2005, and a recovery of direct trade
is now expected.
•
Japan is a wealthy economy and, like Europe, is likely to continue to act as a net
supplier of waste plastics to lower cost economies for recycling.
•
China is the driving force behind the huge worldwide growth in the trade of waste
plastics and the ultimate destination of most of the waste plastics that are
exported from the European Union and NAFTA regions.
•
•
C. 40,000ktpa of plastics are used in manufacturing in China and this demand is
increasing at over 10% per annum. Demand for plastics in China has doubled in
the last five years. Total imports of waste plastics to China were ‘only’ 12.5% of
production - 5,000kt in 2005.
The demand for waste plastics from China looks strong for many years ahead.
Consumption of plastic is expected to increase by at least 7% per annum over the
next ten years as domestic consumption rises in line with income. There is robust
growth in export manufacture of plastics products, which also drives growth in plastic
packaging use.
•
Even allowing for expected growth in virgin plastics manufacturing in China, imports
of plastics are expected to form an important part of overall supply. At least
10,000ktpa of plastics imports (virgin & waste) will be required.
•
Commercial drivers to source lower cost raw materials will continue to drive demand
for scrap plastics. The development of domestic virgin plastics capacity is generally
not expected to displace recycled material, unless virgin prices were to fall massively.
•
Projections suggest that demand for waste plastics will rise to 6,500ktpa by 2010.
•
Local collections of plastics waste are not expected to significantly reduce imported
plastics demand within the period to 2010.
•
Hong Kong’s demand is a function of demand in China, which is expected to grow
(see above).
The role of Hong Kong as a trader and broker of deals with Chinese recycling
•
•
•
CHINA
HONG
KONG
•
The UK waste plastics sales to China (including plastics routing via Hong Kong)
are not significant when compared to China’s overall consumption – they
represent less than 1% of total plastics demand and only 5% of waste plastics
imports.
•
The waste plastics are used in a wide variety of applications, from textiles to toys
to kitchen utensils.
•
The end-user manufacturers are seeking to reduce production costs by finding
cheaper sources of plastic inputs, particularly when virgin prices are historically
high.
•
Demand for waste plastics remains strong. The combination of low cost labour,
relatively low entry costs to establish recycling plants, more limited regulatory
controls and low freight costs makes China highly competitive when compared to
European and North American plastics recyclers.
•
Hong Kong acts as a point of transhipment and temporary storage for plastics
waste destined ultimately for China. It is a free port with separate customs zones
that are not subject to China’s import duties and customs law.
•
243
•
•
INDIA
•
•
•
OTHER
•
•
2,730kt tonnes of plastics waste imported in 2004. Almost all these imports
(2,500kt tonnes) were subsequently routed to mainland China.
Due to import controls on mixed plastics and whole bottles, there are a growing
number of enterprises in Hong Kong that sort, rinse and shred post-consumer
bottles to comply with entry requirements of mainland China.
•
India has a sizeable domestic plastics recycling industry consisting of an
estimated 20,000 companies. It is estimated that 30-40% of all plastics in India is
recycled.
Import restrictions on waste plastics have limited India’s influence on the global
waste plastics market. It imported 100kt of waste plastics in 2005, against a total
demand for all polymers of 4,500kt.
Import licenses for plastics waste are hard to obtain and in effect only waste
equivalent to virgin plastics can be imported. The single exception to this rule is
PET bottle waste, which can be freely imported.
•
This study highlighted growth of recycling capacity in other parts of South-East
Asia, North Africa and South America.
These regions are all characterised by a combination of low labour costs
(compared to the UK) and increasing demand for plastics products, with relatively
low market entry barriers for those wishing to establish plastics recycling
operations.
•
•
•
businesses is likely to erode over time as increasing numbers of buyers gain the
international business skills and connections to source material directly. Any decline in
demand from Hong Kong will therefore be counterbalanced by increases in demand
for direct shipments to mainland China.
Hong Kong is likely to continue to act as a site for sorting and upgrading material
prior to entry to China, although it will probably face growing competition in this role
from other nearby countries such as Vietnam and Malaysia.
India is a “sleeping giant” with the potential to be a buyer of much larger quantities of
waste plastics.
Average per capita consumption is low (3.6 kg/person cf. a global average of 21.5kg)
Total plastics demand is predicted to rise at 12-15% per annum in coming years,
increasing demand for plastics to 12,300kt by 2010.
The commercial importance of securing plastics for this growing economy is expected
to lead to relaxing of the restrictions to import of waste plastics. There is evidence
that the Indian Government is considering some easing of import restrictions on a
case by case basis for industrial scrap. It is unlikely this would extend to postconsumer material in the near future.
Growth in plastics recycling capacity is expected to continue in developing countries,
particularly those that are able to access international markets. This capacity will be
used to supply raw material for growing domestic end-product consumption at lower
cost than virgin plastics and to supply plastic products for the international market.
244
Annex G Chinese regulation of trade in waste
Inventory of changes in the regulations on imported waste, from Yoshida (2005), Chapter 3, in Kojima et al (2005).
Table Changes in the Regulations on Imported Wastes (1989—2004)
March 1989
Basel Convention established
March 1991
Notice of tough restrictions on transboundary movements of foreign hazardous
wastes bound for China”: State Environmental Protection Administration, General
Administration of Customs
Sept.
Standing Committee of the National People’s Congress ratifies the Basel Convention
Nov. 1994
Interim regulations concerning the strict control of waste imports from the European
Community (EC)” State Environmental Protection
Administration (total ban on
imports of yellow and red wastes)
Oct. 1995
Law of the People’s Republic of China on the Prevention and Control of
Environmental Pollution by Solid Waste” established (enacted on April 1, 1996)
Nov.
Urgent Circular on the Strict Control on Transference of Foreign Waste to China (the
General Office of the State Council)
Mar. 1996
Interim Provision on the Administration of Environmental Protection in the
Importation of Waste Materials” (State Environmental Protection Administration,
General Administration of Customs, Ministry of Foreign Trade and Economic
Cooperation, State Ministry of Commerce, General Administration of Import and
Export Commodity Inspection)
July
Supplementary Interim Provision on the Administration of Environmental Protection
in the Importation of Waste Materials” (as above)
July
Supreme People’s Court explanation regarding minor problems in applying the law
to criminal hearings on illegal imports of wastes
Sept.
Management rules for pre-shipment inspections of imported wastes” (General
Administration of Import and Export Commodity Inspection) established
Oct.
Category 5 and Category 10 (waste plastics) added in a Supplementary notice
relating to those wastes used in raw materials and restricted in import” (State
Environmental Protection Administration, Ministry of Foreign Trade and Economic
Cooperation, General Administration of Customs, State Ministry of Commerce,
General Administration of Import and Export Commodity Inspection)
Feb. 1997
Urgent notification by the State Council of a tough ban on imports of waste metals
and plastics that have been radioactively contaminated” (State Council)
Nov. 1999
Methods of Managing Pre-shipment Inspection Agency Licenses for the Importation
of Wastes” (General Administration for Quality Supervision, Inspection and
Quarantine)
Feb. 2000
Notice of even tougher controls on the importation of waste” (State Environmental
Protection Administration)
Jan. 2000
Notice of problems relating to the importation of Category 7 wastes” (Ministry of
Foreign Trade and Economic Cooperation, General Administration of Customs, State
Environmental Protection Administration) bans imports of used household
appliances, etc. from February 1, 2000 onwards
Jan. 2001
Notice of adjustment of problems relating to the importation of waste and
environmental protection administration” (State Environmental Protection
Administration, General Administration of Customs, State Administration for Quality
Supervision, Inspection and Quarantine, Release [20002] No. 7) automatic import
licenses
May
2001
Notice of problems relating to the management of “mixed metal waste” imports”
(Ministry of Foreign Trade and Economic Cooperation)
Nov.
2001
Notice of adjustments to the screening and accreditation procedures for authorized
Category 7 waste treatment companies” (State Environmental Protection
Administration, Release [2001] No. 186)
Dec.
2001
Mar.
2002
July
2002
Dec.
2002
Apr.
2003
July
July
July
July
Aug.
Aug.
Dec.
May
2004
Oct.
Nov.
~
China
Measures on the Administration of Automatic Import Licenses for Goods” (Ministry
of Foreign Trade and Economic Cooperation, 2001, No.20) enforceable from January
1, 2002
Notice relating to the importation of wastes and environmental protection issues”
(SEPA [2002] No. 7) Imports of 11 types of waste, including waste plastics, scrap
vehicles, scrap ships, etc., covered by import quotas are, in principle, permitted.
Imports of used paper, iron and steel scrap, copper scrap, aluminum scrap
(excluding used mixed metal electrical equipment, electric wires I cables, motors)
permitted via the administration of an automatic registration system.
Ban on imports of components (State Environmental Protection Administration,
Ministry of Foreign Trade and Economic Cooperation, General Administration of
Customs) enforceable from August 15, 2002 onwards
Bill of amendments to Criminal Law passed by the National People’s Council
Stipulating that contraband traffic in imported wastes (solid, liquid, gaseous) is a
punishable offence Regulations on the administration of quality inspections,
supervision and quarantine for importation of secondhand electrical equipment
(State Administration for Quality Supervision, Inspection and Quarantine Ordinance
No. 37) enforceable from May 1, 2003. Strengthening of inspections of secondhand
electrical equipment; mandating of pre-shipment inspections for certain products.
Notice of Administration of Environmental Management of Waste Materials
Restricted in Importation (SEPA [2003] No. 69)
Notice of Problems in the Administration of Licenses for Waste Materials Restricted
in Importation (SEPA [2003] No.61)
Notice of Standards for the Rigid Enforcement of Environmental Protection from
Imported Waste Plastics (SEPA
[2003] No. 66)
Notice relating to the further strengthening of quarantine controls on imported
waste materials (AQSIQ [2003] No. 217)
Notice relating to the further strengthening of quarantine controls on imported
waste materials (AQSIQ [2003] No. 217)
Notice relating to the strengthening of the environmental management of used
electronic and electrical equipment (SEPA [2003] No. 143)
Regulations relating to quality supervision, inspection and quarantine procedures for
imported secondhand electrical equipment (State Administration for Quality
Supervision, Inspection and Quarantine Ordinance No. 53), enforceable from
October 10, 2003 onwards
Notice relating to the temporary registration of foreign suppliers of waste materials
(State Administration of Quality Supervision, Inspection and Quarantine [2003]
Ordinance No. 115), enforceable from January 1, 2004 onwards Announcement
concerning problems relating to the importation of secondhand electrical products
(2003, No. 124)
(State Administration of Quality Supervision, Inspection and Quarantine Notice No.
47) Temporary ban on Japanese exports of waste plastics to China Detailed
regulations on the registration of overseas suppliers of imported waste (State
Administration of Quality Supervision, Inspection and Quarantine Notice No. 48
[2004]) enforced
Notice concerning problems relating to the licensing of companies designated to
undertake the treatment of mixed metals, used electrical wires / cables and motors
imported in 2005 (SEPA [2004] No. 344)List of processing trade bans I products
(Ministry of Commerce, General Administration of Customs, State Environmental
Protection Administration Announcement [2004] No. 55) enforceable from
November 1, 2004 onwards
Notice concerning problems relating to the administrative strengthening of checks
on import-restricted wastes (SEPA [2004] No. 100)
refers to recyclable wastes as “importable wastes” and “waste materials.”
Compiled from the State Environmental Protection Administration web site and various materials.
Source: Yoshida, 2005.
Annex H Chinese Environmental Protection
Standard for Imported Scrap Plastics
This is an unofficial translation of the new Chinese environmental protection control standard for imports of scrap
plastic212. Published in draft in 2005, it came into force in February 2006. This text relates to the draft version. The
Chinese original of the final version (which is substantially unchanged) follows.
Environmental Protection and Control Standards for Imported Materials – Scrap Plastic
1
Scope
These standards hereby set forth the control requirements for items brought in by imported scrap plastic and radioactive
pollution that impacts the environment. These standards shall be applicable to the import of the following scrap plastic.
Customs commodity number
Name of waste material
3915.0000
Waste and scrap ethylene polymers and remnants
3915.2000
Waste and scrap vinyl benzene polymers and remnants
3915.3000
Waste and scrap cholroethylene polymers and remnants
3915.9000
Other waste and scrap plastic and remnants
2
Standards cited
GB 5085.3 – 1996 Standards for Identification of Hazardous Waste Materials – Identification of Poisons
SN 0570 – 1996 Best Inspection Practices for Radioactive Pollution By Imported Scrap Metals (Proposed)
GB / T 15555.1 ~ 15555.12 – 1995 Methods for Measuring Poisons Extracted from Solid Wastes
SN 0625.1 ~ 0625.2 – 1997 Best Inspection Practices for Imported Scrap Plastic Usable As A Raw Material
3
Definitions
These standards shall use the following definitions:
3.1 Scrap plastic
This shall refer to the remnant bits, leftover bits, defective and substandard products and single wanfen [sic;
unintelligible] thermoplastics that has been processed and washed (in chips, blocks, or particulate or powdery).
3.2 Waste materials brought in
This shall refer to waste substances mixed in imported scrap plastic during the collection, packing and transportation
processes (exclusive of the packing materials for the imported scrap plastic).
4
Standards and requirements for control
4.1
The import of thermoplastic products and used scrap plastic products that have not been processed and
washed shall be prohibited.
4.2
It is prohibited to mix imported scrap plastic with clinical wastes, medical wastes and explosive waste materials.
4.3
Imported scrap plastic with waste materials brought in that are mixed with harmful substances in their extract
liquid with a level that exceeds the standard value for identification in GB 5085.3 – 1996 shall be prohibited.
4.4
Waste materials brought in that are mixed with imported scrap plastic and that have a pH value in its extract
liquid equalling or exceeding 12.5 or less than 2 shall be prohibited.
4.5
Imported scrap plastic shall be prohibited from bringing in radioactive wastes.
4.6
The external penetrating radiation of imported scrap plastic shall not exceed the local natural and background
radiation by three times, the value of the αsurface pollution level inspection shall not exceed 0.04 Bq / cm2, and the
value of the βsurface pollution level inspection shall not exceed 0.4 Bq / cm2.
4.7
The total weight of the following waste materials brought in by imported scrap plastic shall not exceed 0.01%
of the weight of imported scrap plastic:
Waste insecticides, other waste chemicals and their contents
212
The assistance of BIR in providing this translation is gratefully acknowledged.
Various liquid wastes
Kitchen waste and bathroom waste
Sealed containers and used complete plastic containers, etc.
4.8
In addition to the waste materials listed above, other waste materials (such as scrap wood, scrap metals, scrap
textiles, scrap glass, thermoplastics, composite plastic, scrap rubber, soil and sand, etc.) shall not exceed 0.1% of the
total weight of the imported scrap plastic.
5
Inspections
5.1
Inspections under Article 4.3 and Article 4.3 of these standards shall be performed in accordance with the
provisions of GB / T 15555.1 ~ 15555.12 – 1995:
5.2
Inspections under Article 4.5 and Article 4.6 of these standards shall be performed in accordance with the
provisions of SN 0570 – 1996.
5.3
Inspections under Article 4.1, Article 4.2, Article 4.7 and Article 4.8 of these standards shall be performed in
accordance with the provisions of SN 0625.1 ~ 0625.2 – 1997.
Annex I AQSIQ Registration Needed for
Overseas Suppliers of Waste Material
Imports
Implementation Details of the Registration Scheme Concerning Overseas Suppliers of Waste Material Imports,
promulgated and implemented by the General Administration of Quality Supervision, Inspection and Quarantine
(AQSIQ), make it mandatory for foreign enterprises, including those in Hong Kong, Macau and Taiwan, which export
waste material to the Mainland to apply for registration with AQSIQ. Those which fail to obtain registration will not be
allowed to export waste material to China, nor will their requests for inspection and quarantine be accepted by the
departments concerned. This new rule is believed to ensure that imported wastes will comply with the environmental
protection standards as well as other mandatory requirements and technical regulations of the state.
The following are the prerequisites for overseas companies wishing to apply for registration according to the
implementation details:

The company is in legal operation in the country or region where it is located;
The company has a permanent office or processing workplace and its business is of a considerable scale;
The company should be familiar with the laws and regulations concerning environmental protection technology in
China, and the associated environmental protection standards; it must also be equipped with the necessary facilities
and inspection capabilities;

The company should implement quality assurance or environmental quality administration systems, such as
ISO14000 certification, or provide corresponding accreditation certification;

The company must have a relatively stable supply source over which it exercises environmental protection quality
control measures;
No major safety, hygienic and environmental protection quality problems have been found in the company in the past
three years.
Within 30 days from the receipt of the registration application documents, AQSIQ will decide whether or not to accept
the application. After examination and investigation, applicants found to comply with the requirements will receive a
notification signed by AQSIQ informing them that their applications are being processed. AQSIQ will then form a jury to
assess the applicants.
Overseas suppliers need to submit the following paper documents besides application forms:

Organization structure, department and employee task responsibility.
Promise to obey the technical regulations on environmental protection, associated environmental protection and
control standards and relative regulations in China.

Document about the supplier's permanent office and manufacturing site, like floor plans.
Relative proof about category, quantity and environmental quality of the materials supplied.
Quality control management system and relative technology employees, including hazardous wastes,
carried/contaminated wastes control and disposition of discarded wastes.

Raw materials inspection and acceptance system
Measurement and equipment calibration system
Rules of rejects control
Employee training plans
Promise for the cargos' environmental quality control, including the promise of the environmental quality control on
supplying source and supplier.

Promise to pay any associated costs for the treatment of unqualified cargos in environmental protection.
All documents must be in Chinese or in English/Chinese bilingual version. We provide professional translations, contact
us for further details.
If any one of following situations happened, the registration application will be denied:
1). The submitted materials do not comply with aforementioned requirements;
2). The submitted materials are false or falsified;
3). The waste materials imported into China within recent three years by the supplier did not conform to the
environmental protection control standards, and the supplier is responsible after investigation;
4). The imported waste materials are falsified to include with hazardous or forbidden cargos, or are found out as fraud
and the supplier is responsible after investigation;
5). The imported waste materials are required to be returned due to disqualify the environmental inspection, and the
supplier causes severe impacts because of indolent return;
6). The supplier causes severe impacts because of abandoning unqualified cargos;
7). The supplier changes the harbor to import again those returned unqualified cargos;
8). The inspection certificate prior to shipment is faked;
9). The import scale is too small to guarantee the quality of cargos;
10). Other situations do not conform with requirements announced by AQSIQ.
Registration Evaluation and Approval:
Within 30 days after receiving the registration application materials in paper format, AQSIQ will make the decision
whether or not to accept the application:
1). If qualifies all requirements after investigation, AQSIQ will issue and send out the "Receipt Notice of Oversea
Suppliers of Waste Materials Import Registration Application";
2). If disqualifies after investigation, the applicant will be noticed to revise within 30 days. If no revision made after due
day, the application will be cancelled;
3). If disqualifies the No. 115 Announcement from AQSIQ and the requirements of evaluation, the application will be
denied and the applicant will be noticed.
After AQSIQ issues the "Receipt Notice of Overseas Suppliers of Waste Materials Import Registration Application",
auditors will be organized to evaluate the oversea supplier. The evaluation will consist of two parts: document evaluation
and on-site evaluation, to certify the integrity and authenticity of the application materials. The validity of the supplier's
inner management and quality control measurements will be investigated and verified; the capability of guaranteeing the
imported materials conforming to Chinese environmental protection control standards and regulations will be measured
and evaluated as well.
Follow-up Administration:
1. The registration certificate will be valid for three years. The applicant could apply to AQSIQ for renewal at least three
months before its expiration date.
If the oversea supplier has any change in its registration information, like owner or address change, the supplier must
notify AQSIQ within three months.
2. If any one of following situations happened to the registered oversea supplier, AQSIQ may suspend the supplier's
import declaration, or even cancel the supplier's registration. If the supplier's registration is cancelled by AQSIQ, AQSIQ
will not accept its application within three years:
1). Any violation of Chinese laws, rules and regulations associated to waste materials import;
2). Any violation of the aforementioned 10 regulations about registration application denial;
3). One disqualification happened during the safety, hygienic or environment inspection conducted by the custom
inspection and quarantine authorities, and causes severe consequence, and the oversea supplier is responsible after
investigation;
4). Any document has been altered or fabricated; or any other frauds;
5). Supplier didn't report to AQSIQ in time if any important change on supplier's registration information;
6). Registration certificate or registration number was transferred to other companies for use;
7). Any violation of other regulations.
3. AQSIQ or its authorized organizations should take care of the regular supervision management after the oversea
suppliers receive the registration certificate. The authorized organizations should report the supervision management
situations to AQSIQ.
The content of regular supervision management includes:
1). Scheduled or non-scheduled random inspection to the imported cargos by the registered suppliers;
2). Inspection to the registered suppliers to check if any violations of the regulations;
3). Send the inspection feedback on the imported cargos by the custom inspection and quarantine authorities to the
registered suppliers in time;
4). If registered supplier violates the aforementioned regulations after investigation, should put forward the opinion to
suspend or cancel the supplier's registration to AQSIQ;
5). Supervise the registered suppliers to return the unqualified cargos.
Annex J UK-based firms on the AQSIQ list of
accredited companies
A826042760
PREMIER TRADING
WINDMILL BUSINESS CENTRE,302-310 COMMONSIDE
EAST,MITCHAM, SURREY, U.K
A826042761
ASIA GLOBAL TRADE LTD.
SUITE 37,6 PORCHESTER TERRACE, LONDON, UK
A826042762
HARMON INTERNATIONAL LTD
4TH FLOOR,TUBS HILL HOUSE,SEVENOAKS,KENT,UK
A826042763
CHOICE TRADING INTERNATIONAL
LTD.
10 PARK PARADE GUNNERSBURY AVE LONDON
A826042764
FLEXDART LTD TRADING AS BEAVER
METALS
MARSH LANE, WATER ORTON, BIRMINGHAM, UK
A826042765
PAPER TRADE LIMITED
25 PRETORIA ROAD NORTH EDMONTON, LONDON
A826042766
ANGLO OVERSEAS COMMERCE
LIMITED
WOOD HOUSE,WARWICK BRIDGE CARLISLE
CUMBRIA,CA4 8RJ UK
A826042767
INTERNATIONAL FOREST
PRODUCTS UK LTD
WINCHCOMBE HOUSE, 123-126 BARTHOLOMEW
STREET, NEWBURY BERKS
A826042768
METALS COMMODITY TRADING LTD
UNIT1 B,HOOD LANE FARN NUREATA,ENGLAND
A826042769
VOSS INTERNATIONAL LTD.
SOVERIGN HOUSE,GRAHAM
ROAD,WEALDSTONE,HARROW,MIDDLESEX HA3 5RF
A826042770
DOWGATE TRADING (UK) LTD
BRIDGE HOUSE,CHURCH
LANE,RAVENFIELD,ROTHERHAM
A826042771
E.KLEIN&CO.
122-126 WEST FERRY ROAD LONDON E14 3SG
A826042772
BLAKEPORT MARKETING LIMITED
106 DORCHESTER WAY, KENTON, MIDDLESEX, HA39RB
U. K.
A826042773
TANGENT TRADING LTD
1 DOLLIS MEWS, LONDON UK
A826042774
OMG INTERNATIONAL LTD OMG
SUITE F10 SHAKESPEARE BUSINESS CENTER 245A
COLDHARBOUR LANE LONDON
A826042775
RJH TRADING LTD.
10/11 DACRE STREET LONDON,UK
A826042776
AZUSA LIMITED
C214 89 BICKERSTETH RD. LONDON, UK
A826042777
MINMETALS (U.K) LTD.
5A PRAED STREET,LONDON WZ 1NJ, U.K
A826042778
ALAN M WYE&CO.,
23 PRIORY CRES.CHEAM.SURREY
A826042779
MH PLASTICS LTD.
SANDY WAY AMINGTON IND.ESTATE
TAMWORTH,STAFFS
A826042780
PAPER DRAGON LIMITED
78-82 CHURCH STREET,ECCLES,MANCHESTER,UK
A826042781
C SOAR AND SONS
TANK ROW, GRANGE LANE STAIRFOOT, BARNSLEY
A826042782
A.K.HIRANI LTD
98CHELMER CRESCENT,BARKING,ESSEX IG11
0QA,ENGLAND
A826042783
BERNHARD RECYCLING LIMITED
ATHENE HOUSE THE BROADWAY MILL HILL, LONDON
A826042784
ROBINSON INTERNATIONAL
TRADING LTD
SUITE 7, DERWENT MANOR ALLENSFOM,
NORTHUMBERLAND
A826042785
THE REMET COMPANY LIMITED
9A CODY BUSINESS CENTRE, CODY ROAD LONDON E16
4SR UK
A826042786
METAL INTERESTS LTD
CAWLEY PRIORY, SOUTH PALLANT,CHICHESTER, WEST
SUSSEX ,U.K.
A826042787
STEMCOR UK LIMITED
LEVEL 27 CITYPOINT,ROPEMAKER STREET LONDON
A826042788
WESTPORT VENTURES LIMITED
SUITE 202, 24-28 ST.LEONARD'S ROAD WINDSOR
BERKSHIRE
A826042789
METRO POLYMERS LTD.
19-21 BULL PLAIN HERTFORD HERTFORDSHIRE,U.K.
A826042790
BBY CONSULTING LTD.
126 BROOM LANE, ROTHERHAM, SOUTH YORKSHIRE, UK
A826042791
HARMONY CONSULTING LTD.
STUDIO, ST NICHOLAS CLOSE, ELSTREE HERTS.UK
A826042792
UNIMETALS COMPANY LIMITED
UNIT 11,SHAFTESBURY CENTRE,85 BARLBY
ROAD,LONDON
A826042793
SUNRY IMPORT AND EXPORT CO.,
LTD
76,ST.HELENS GARDENS LONDON, UK
A826042794
CENTURY GENESIS LIMITED
56 WOLFA STREET DERBY, UK
A826041659
PLASTICS RECOVERY LTD
UNIT 121 CLYDESDALE PLACE, MOSS SIDE, 1
INDUSTRIAL ESNA LEYLAND PRESTON, LANCASHIRE,
ENGLAND
A826041660
SONOCO RECYCLING EUROPE
STAINLAND BOARD-MI LLS, HOLYWELL GREEN HALIFAX
WEST YORKSHIRE
A826041661
C.F.BOOTH LIMITED
ARMER STREET ROTHERHAM S60 1AF SOUTH
YORKSHIRE, UK
A826041662
PLASTIC RECYCLED UK LIMITED
33 GOODWOOD KILL INGWORTH NEWCASTLE UPON
TYNE
A826041663
LONDON METALS LIMITED
59 COMPTON ROAD,LONDON NI 2YT ENG LAND , U K
A826041664
VALIENT RECYCLING LTD
STRATFORD BUSINESS PARK,BANBURY ROAD,
STRATFORD-UPON-AVON, UNITED KINGDOM
A826041665
COMMUNITY WASTE LTD
7 EARL’S COURT SOUARE,LONDON
A826041666
APG ATLANTIC PAPER LTD
8 EARL’S COURT SQUARE,LONDON
A826041667
ALTERNATIVE WASTE SOLUTIONS
LTD.
34 ST GEORGES CRESCENT,WHITLEY BAY TYNE&WEAR
UNITED KINGDOM
A826041668
SINOWAY INTERNATIONAL LTD.
136 CHAMBERLAIN STREET,ST.HELENS
A826041669
EUROPEAN METAL RECYCLING LTD
(AND SUBSIDIARY)
SIRIUS HOUSE DELTA CRESCENT,WESTBROOK
WARRINGTON,WAS 7NS
A826041670
J & A YOUNG(LEICESTER)LTD.
BROOK HOUSE, HAMBLETON
ROAD,EGLETON,NR.OAKHAM,RUTLAND,UNITED
KINGDOM
A826041671
INTERNATIONAL RECYCLING
LIMITED
GREYFRIARS FLOUSE,18-2O PRINCE OF WALES RD,
NORWICH UK
A826041672
R.M.EASDALE & CO.LTD
ALBERT WORKS 65-7 WASHINGTON ST. GLASGOW G3
8BB SCOTLAND
A826041673
MOUNTSTAR METAL CORPORATION
LTD
RAILWAY SIDINGS BIGGLESWADE BEDFORDSHIRE
826041674
A826041674
WALLIS AND PARTNERS LTD.
126 ALDERSGATE STREET, LONDON UNITED KINGDOM
A826041675
ELG HANIEL METALS LTD
TEMPLEBOROUGH WORKS SHEFFIELD ROAD SHEFFIELD
SOUTH YORKSHIRE UNITED KINGDOM
A826041676
IK – ECO LTD
NORTH EAST ENGLAND, ABBOTSFORD ROAD, FELLING,
GATESHEAD, TYNEWEAR, NE10 OHJ
A26041678
DUNN BROS (1995) LTD.
RABONE LANE SMETHWICK R66 2LF U.K.
A826041679
J&H SALES INTERNATIONAL LTD.
11A CAMBRIDGE PARK, WANSTEAD, LONDON
A826041680
SCA RECYCLINQ UK LTD
543 NEW HYTHE LANE AYLESFORD,KENT,UK
A826041681
FIBRE BROKERS INTERNATIONAL
27 BURNSIDE TROON,AYRSHIRE,SCOTLAND
A826041682
GORDELL PLASTIC RECYCLING LTD.
UNITL,TANFIELDLEA INDUSTRIAL PARK,TANFIELD
IEA,STANLEY COUNTY
DURHAM
A826041683
M & B HAULAGE & WASTE PAPER
CO.LTD.
LOWMILLS, RAVENSTHORPE, DEWSBURY,UK
A826041684
MONOWORLD LIMITED
WOMERSLEY MIII,DONCASTER ROAD
WHITLEY,NR,GOOLE
A826041685
HAWKESWOOD METAL RECYCLING
RIVERSIDE WORKS TREVOR STREET NECHELLS
BIRMINGHAM B7 SRG
A826041684
MONOWORLD LIMITED
WOMERSLEY MIII,DONCASTER ROAD
WHITLEY,NR,GOOLE
A826041685
HAWKESWOOD METAL RECYCLING
RIVERSIDE WORKS TREVOR STREET NECHELLS
BIRMINGHAM B7 SRG
A826041686
DELLEVE PLASTICS LIMITED
BAY 5,BOLD INDUSTRIAL PARK,NEILS ROAD,ST HELENS
MERSEYSIDE U.K.
A826041687
SUNBERG LIMITED
CHURCHILL HOUSE,137 BRENT ST.LONDON UK
A826041688
EURTOPE INTERNATIONAL
HOLDONGS GROUP LIMITED
SACHSENWEG 37-C
A826041689
GROSVENOR WASTE MANAGEMENT
LTD.
CENTURY WHARF,CRAYFORD CREAK CRAYFORD,KENT
DA1 40G
A826041690
UNITED MOLASSES
THAMES REFINERY FACTORY ROAD LONDON UK
A826041691
IRISH POLYMERS
UNIT ELL ,ENKALON IND ESTATE, RANDALSTOWN ROAD
CO ANTRIM
A826041 692
UNIBOND TRADING LYD.
29A SWAKELEYS ROAD, ICKENHAM,MIDDLESEX,UK
A826041693
POLYMERS TRADING INT’ L INC.
29 A SOUTH STREET ELGIN MORAY IV3O
1JZ, SCOTLAND UK
A826041694
PEARSONGS (THETFORD) LTD.
HOWLETTWAY,THETFORD NORFOLK
A826041695
PRESTON RECYCLING LTD.
D2 RED,SCAR INDUSTRIAL ESTATE, LONGRI DGE ROAD,
RIBBLETON, PRESTON,LANCASHIRE, ENGLAND
A826041696
F.J.CHURCH & SONS LTD
CENTENARY WORKS,MANOR WAY,NEW ROAD,
RAINHAM,ESSEX,RM13 8RH
A826041697
GROVE ENVIRONMENTAL LTD
WHITLEA GROVE INDUS ESTATE MEXBOROUGH SOUTH
YORESHIRE,U.K.
A826041698
B.D.METALS
14 ELM CRESCENT HIXON,STAFFORDSHIRE UNITED
KINGDOM
A826041699
MAXTON TRADING LTD
37 STATION RD MARCH CAMBS
A826041700
ROSEFIELD SALVAGE LTD
IRON GRAY ROAD, LOCUSIDE INDEST,DUMFRIES DG2
OHS
A826041701
MATERIALS RECOVERY LTD
BICESTER ROAD KINGSWOOD AYLESBURY BUCKS HP18
ORA
A826041702
AMPTHILL,METAL COMPANY
LIMITED
STATION RD. IND.EST.AMPTHILL BEDFORDSHIRE,U.K.
A826041703
CLEARWAY DISPOSALS LTD.
EAST TWIN RD, BELFAST HARBOUR BELFAST N.LRELAND
UK
A826041704
XPAP RECYCLING LIMITED
BLDG,3.CHISWICK PARK 566 CHISWICK HIGH
ROAD,LONDON UK
A826041705
CONCORD IMPEX LTD.
16 ABERY STREETLONDON SE181DD U.K.
A826041706
THORNDALE ENVIRONMENTAL
RECYCLING LIMITED
77 CLOONEY RD, CAMPDALE, LONDONDERRY BT47 3PA
Annex K OECD Member Countries
Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
Japan
Korea
Luxembourg
Mexico
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
Annex L Consultees
Europe
Interviewee
Cormac Quigley
Bill Duncan
Ian Barnes
Philip Law, Mercia Gick
Andrew Green
Tony Weatherhead
Paul Smith
Jessica Baker, Stephen Chase
Raj Iqbal, Mark Mellor
Michael Murray
Peter Cottrell
Melissa Shinn
Graham Carus
Peter Sundt
Damian Packer
Karolina Fras
Bernard Mercx
Julian Carrol
Roger Mottram
Jason Leadbitter
Harald Kaeb
Claire Snow
Graham Rice
Mick Young
Les Fergusson
Tracy Wallbank
Steve Jenkins
Andrew Noone
Frank Koelwijn
David Tyson
P Charlesworth
Paul Farquson
James McKechnie
Organisation
Agricultural Waste Stakeholders Forum
ASSURRE
Boots
BPF
BPI
Bruce Metals
BTR (UK)
CARE
CCE
Chase Plastics
Choice Trading
CKS Recycled Technology
Compass IT
Cynar
DTI
EEB
EMR
Environmental Storage Solutions Ltd
EPRO
EPS Group
EU DG Environment
EUPR
EUROPEN
EVC
Hydro Polymers
IBAW
ICER
Ineos
Integrated Polymers
Klassic Computer Services
Linpac
LME
M Baker Recycling Ltd
MDB Market Research Company
NEWS
PCI
Petcore
PIFA
Rade (UK) Ltd
RAPRA
Recovered Plastics
Sainsburys plc
UK
CCIC London
BPF Recycling Council
Exporters
Raj Iqbal, Peter Marsh – Choice Waste Management
Mark Sharples – CK Polymers
Mike Scollick - Materials Recovery Ltd
MIT Plastics Ltd
Mr Ruparelia - Monoworld Ltd
Mr Modha - Premier Trading
Simon Jones - YSB Recycling
Peter Bennett – MA Logistics (shipping company)
HM Revenue and Customs, tariff classification service
EU
PlasticsEurope
Bernard Mercx - European Plastics Recyclers (EuPR)
Peter Sundt – European Association of Plastics Recycling and Recovery Associations (EPRO)
Peter Daardler - Bureau of International Recycling (BIR)
Jim Armstrong – Wellman
Germany
Matthias Kuegelgen – Gruene Punkt DSD
Belgium
An Vossen - FostPlus
Mr Huysman – Valipac
Netherlands
Mr Schutjes – Vereniging Milieubeheer Kunstofverpakkingen (VMK)
Luxembourg
Mr Boever - Valorlux
Asia
China
Huang Xiao Wei
Guangdong Plastics Industry Association
Tan Rong Ying
Zhaoqing Xinchuang Plastics Co. Ltd
Huang Tongyu
Eco-material (Hong Kong Corporation)
Yang Bo
ZhuHai BBD Plastic Raw Material Co. Ltd
Daniel Ho Kar Wong
United Overseas Industries Co. Ltd
Tan Xin Feng
Zhaoqing Xinchuang Plastics Co. Ltd
Xun Yue Jian
Yixing People Government Stop
Wen Li Hua
Shenzhen Plastics & Rubber Association
Tan Rong Ying
Guang Dong Hong Ling Group Co. Ltd
Jiang Shou Bing
Dadu Co. Ltd
China Plastics Processing Industry Association
Office of the China Chemical Industry Yearbook
Shenzhen Risu Plastic Products Co. Ltd
Hong Kong
Chuk Kwong Yi
Wai Yee Lam
China Inspection Co. Ltd
Wing Shun Chemical Limited
Billy Leung
Barry Lee
Toland Lam
Enphy Cheung
Chu Fuk Cheung
Dr William Chan
Cheung Chi Ming
Fook Woo Group
Benchmarking China Development Ltd
T & T Hong Kong Ltd
The Hong Kong Packaging Institute
HongKong Enviro Plastics & Metal Recycling Co. Ltd
Federation of Hong Kong Industries
Global Plastic Recycle Processing Centre (HK) Ltd
Hong Kong Environmental Protection Department
Hong Kong Plastic Manufacturers Association
Hong Kong Plastics Recycling Association
Virginia Glory
India
Interviewee
Dr. Indrani
Chandrasekar
Dr. Pratima Dixit
Dr. Naoji
Mr. R. C. Palhan
Mr. G. Jindal
Mr. N. Anand
Nitin Mehta
Ritesh V Vakil
Vinod Poadar
Ravi Agarwal
Mr. T.K.
Bandopadhyay
Organisation
Hazardous Waste Management Division,
Ministry of Environment & Forests, Delhi
Directorate General of Foreign Trade, Ministry
of Commerce & Industry, Delhi
Avishek International, Delhi
Elastometric Molding Lines, Delhi
Prime Sales, Delhi
Amber Waste Recycling Company, Delhi
Kunal Exports, Mumbai
Pet Plastics Limited & T.S.V. Corporation,
Mumbai
Shakti Plastic Industries, Mumbai
Toxics Link, Delhi
Indian Centre for Plastics in the Environment,
Mumbai
Further documentary information was also obtained from Association of Plastics Manufacturers of India and the Plastic
India Foundation.
NAFTA
Institutions / Associations / Journalists
Alberta Plastics Recycling Association
Pete Dinger
American Plastics Council
Association of Post Consumer Plastics Recyclers
Atlantic Dairy Council, Nova Skotia
Jason Marshall
Californian State Government, Integrated Waste Management Board and Department of Conservation
Atul Sharma
CIPA, Canada
Donna Dempsy
Film and Bag Federation
NAPCOR
Robert Sinclair
Natural Resources, Canada
James Hickman North Carolina State Government, Division Of Pollution Prevention and Environmental Assistance
Steve Toloken
Plastics News
Companies
Dari Jongsma
Marc Fleischmanm
Tamsin Ettefagh
Agri-Plastics, Oregon
B. Schoenberg & Co. Inc. New York
Envision Plastics, North Carolina
Dave ___
Mike Biddle
Bruce Buchan
Tribu Persaud
Jean Bina
Steve ___
Gerry Fishbeck
Go Polymers, Global
MBA Polymers, Global
Midpoint International, Canada
Norwich Plastics, Ontario
Phoenix Technologies L.P. Ohio also known as Plastic Technologies International, Global
Recycle America Alliance, USA
United Resource Recovery Corporation, South Carolina
Annex M Bibliography
M.1
Supply Side Analysis
AMA Research (2003) The UK Plastics Recycling Industry
Applied Market Information Ltd. (AMI) (2005) European Plastics Industry Report
Assocation of Plastics Manufactures in Europe (APME) (2000) UK Packaging Data
Associates in Industrial Ecology (2002) Delivering the Landfill Objective: The role of new and emerging
technologies
Association of Plastics Manufactures in Europe (APME) (2001) Plastics – Insight into consumption and recovery in
Western Europe 2000
Association of Plastics Manufactures in Europe (APME) (2003) Plastics in End of Life Vehicles : Galloo Shredder
Residues Treatment Line
Association of Plastics Manufactures in Europe (APME) (2003) Annual Report – Statistics
Association of Plastics Manufactures in Europe (APME) (2004) An analysis of plastics consumption and recovery
in Europe
Association of Plastics Manufactures in Europe (APME) (2005) 5th Identiplast 2005, the Biennial Conference of
the Recycling and Recovery of Plastics - Identifying the Opportunities for Plastics Recovery Conference
Proceedings
Biffaward (2004) UK Food and Drink Processing Mass Balance
British Plastics Federation (2004) Annual Review
Camanoe Associates (2003) World Business Council for Sustainable Development (WBCSD) Materials Projection
Analysis
Defra (2005a) The Waste Management (England and Wales) Regulations
Defra (2006) A Review of England's Waste Strategy - A Consultation Document
Defra (2003) e-Digest of Environmental Statistics, Categorisation of Commercial and Industrial waste
Defra (2005) Municipal Waste Management Survey: Mean weight of municipal waste arisings in 1996/97 to
2003/04 by region and authority type
Defra (2005b) Packaging recycling data 1998-2004
Defra (2004) e-Digest of Environmental Statistics, Recycling of plastics 1984-2001
Defra (2006b) Packaging & Packaging Waste Data relating to 2005 (as at 10 April 2006)
Environment Agency (2001) Towards Sustainable Agricultural Waste Management
Environment Agency (2005) Changing Attitudes to Waste - Recycling Agricultural Plastics Waste
Environment Agency (2003) Agricultural Waste Survey
Environment Agency (2004) Review of Agricultural Waste Research and Development Projects
Environment Agency (2002) Improving Data on Agricultural Waste and Resources
Environment Agency (undated) Transfrontier Shipment of Waste - A guide to the international shipment of waste
Envirowise (1999) Reducing Waste for Profit in the Dairy Industry
Envirowise (2000) Packing Line Savings in the Food and Drink Industry
Envirowise (2001) Finding and Reducing Waste in Plastics Processing
Envirowise (2003) Are you focused on waste?
Envirowise (2000) How to improve packing line efficiency in the food and drink industry
Envirowise (2003) Benchmarking report on waste in plastics processing
European Association of Plastics Recycling and Recovery (EPRO) (2005) Best Practice Working Group, Plastic
Packaging Statistics 2005
European Commission (2005a) Taking sustainable use of resources forward: A Thematic Strategy on the
prevention and recycling of waste
European Commission (2005b) Science for Environmental Policy, DG Environment News Alert Service Ecological
Advantages of WEEE Recycling
European Environmental Bureau (2005) Strategies on Resources, Energy and Waste: the EEB Perspective.
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GHK/EPEC (2004) Support in the Drafting of an ExIA on the Thematic Strategy on the Prevention and Recycling
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Totals - Annual - Imports & Exports 1996-2004, Imports and Exports of Top 30 Products. Imports and Exports of
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Industry Council for Electronic Equipment Recycling (ICER) (2005) Status Report on WEEE - Interim report
Industry Council for Electronic Equipment Recycling (ICER) (2004) WEEE- Green List Waste Study
Industry Council for Packaging and the Environment INCPEN (undated) Environmental Impact of Packaging in the
UK Food Supply System
Institute of Civil Engineers (2006) The case for a resource management strategy
Perchards (2005) Transposition of the WEEE and RoHS Directives in Other EU Member States
PIRA (2001) Packaging in the 3rd Millennium
PIRA (2005) Developments in the Plastics Packaging Sector' presentation given at 'Plastics The Industry of
Tomorrow' BPF Conference, December 05
PIRA (2001) Mass Flow Analysis of Packaging in the UK, Phase 1 Report: Data Review and Methodology
Development
Plastics and Rubber World (2005-2006) Various articles
266
Plastics Information Europe (PIE) (2003-2006) Various articles
Realise Network (2003) IT Recyclers Research Report A survey of views on the impact of the WEEE Directive
among UK IT recyclers - Full report
Recycling and Waste World (2006) Article: small scale gasification within an IWMS
RECycling Of Used Plastic (RECOUP) (2005) Online Reprocessor Database
Reinhardt, W.A., (2005) Drive Towards Compliance IN Waste Management World, Nov/Dec 2005
REXAM (2005) future innovation today - Consumer Packaging Report
Society of Motor Manufactures and Traders (SMMT) (2002) UK Motor Industry Facts
Strategy Unit (2005) ‘Waste not, Want not’ Strategy Unit Report Recommendations Final Update
The Association for the Sustainable Use and Recovery of Resources in Europe (ASSURRE) (2005) Stakeholder
consultation on the review of the 2015 targets on reuse, recovery and recycling of end of life vehicles produced
for the European Commission
The Chartered Institute of Waste Management (CIWM) (2005) Delivering Key Waste Management Infrastructure:
Lessons learned from Europe
The Packaging and Industrial Films Association (PIFA) (2004 & 2005) Annual Review
The Packaging Federation (2005) Packaging - a very productive resource
The Recycling Coalition (2005) The need for a recycling definition in the Waste framework Directive Recycling
Coalition’s reaction to the Commission draft proposed package for the Thematic Strategy on the prevention and
recycling of Waste
The Stationery Office (2005) The Producer Responsibility Obligations (Packaging Waste) Regulation 2005
TRL Ltd (2002) Data required to monitor complance with the EU Directive. Part 2 Report – Demonstrating
Compliance Project Report PRSE/518/02
Valpak (2005) PackFlow 2008 'UK compliance with the 2008 targets of the European Packaging and Packaging
Waste Directive' Summary Report and Recommendations
Waste and Energy Research Group (WERG) (undated) Polymer Processing B: Towards Processing Polymers from
ASR
Waste Management and Technology (WAMTECH) (2004) Green List Waste Exports
Wastewatch & Recoup (2004) Plastics in the UK Economy
Welsh Assembly Government (2005) Annual Report Expert Panel on Resources Management (EPRM)
Welsh Assembly Government (2002) Wise About Waste: The National Waste Strategy for Wales Part One
WRAP (2002a) Investigation of Technical and Economic Viability of Recycling 25 Litre Plastic Drums to Process
Chemistry to Metal Finishing Industries
WRAP (2003b) A study into Waste Polythene Film Recovery
WRAP (2003c) Survey of Applications, Markets and Growth Opportunities for Recycled Plastics in the UK
WRAP (2004d) Development of Options for Enhancing Commercial and Industrial Film Collection
267
WRAP (2004e) Establish Tonnages and Cost Effectiveness of Collection of Construction Site Packaging Waste
WRAP (2004f) Materials and Products from UK sourced PVC rich waste
WRAP (2005-6l) Develop a process to separate BFR from WEEE polymers - Interim reports 1,2 & 3
WRAP (2005g) Development of a Food Grade PET Recycling Process. Literature Review and Feasibility Study
WRAP (2005h) Develop a food grade HDPE recycling process
WRAP (2005i) Stockport Household Plastic Collection and Sorting Trials Summary Report
WRAP (2005j) UK Plastic bottle recycling survey 2005
WRAP (2005k) Plastics Forum Presentations Chelsea Village, London
WRAP (2006) UK Plastic bottle recycling survey 2006
Zolotor, A., (undated) Composition, Properties & Economic Study of Recycled Refrigerators
268
M.2
Demand Side Analysis
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American Plastics Council 2004, National Post-Consumer Plastics Recycling Report,
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M.3
Websites
UK
http://www.wasteonline.org.uk/
http://www.letsrecycle.com/
China related
http://www.export.gov/china/exporting_to_china/scrap.asp
NAFTA related
Alberta Recycling Management Authority, http://www.trma.com/
American Metals Market, http://www.amm.com/recman/
American Plastics Council, http://www.plasticsresource.com/ and http://www.americanplasticscouncil.org/
Association of Post-Consumer Plastics Recyclers, http://www.plasticsrecycling.org/members-index.asp
Bottle Bill Resource Guide, http://www.bottlebill.org/about_bb/bottlebill-whatis4.htm
Californian Government Home, http://www.ciwmb.ca.gov/
Canadian Plastics Industry Association, http://www.cpia.ca/
Canadian Plastics Industry Association, http://www.plastics.ca/
Canadian Plastics Sector Council, http://www.cpsc-ccsp.ca/index.php?lang=e&view=search
Canadian Polystyrene Recycling Association, http://www.cpra-canada.com/
Capital Press, http://www.capitalpress.com/specpages/agriplus.htm
Coca-Cola, http://www.cokefacts.org/news/news_aw_articles_recycling.pdf and http://www2.coca-
cola.com/presscenter/nr_20050713_americas_pet_recycling.html
DMOZ Open Directory Project,
http://dmoz.org/Business/Energy_and_Environment/Waste_Management/Recycling/Polymers/
270
Environment and Industry Plastics Industry Council, http://www.plastics.ca/epic/
Environmental Packaging International, http://www.enviro-pac.com/home.htm
Federal Environmental Executive, http://www.ofee.gov/eo/13101.htm
Global Recycling Network, http://www.grn.com/
HDPE Recycling Exchange, http://www.recycle.net/Plastic/hdpe/xf100200.html
Hong Kong Trade Development Council, http://forum.tdctrade.com/forum/Forum8/HTML/000068-2.html
Industry Canada, http://strategis.ic.gc.ca/
Midpoint International Recycling Links, http://www.midpoint-int.com/links.mv?m=
NAPCOR, www.napcor.com
National Recycling Coalition, http://www.nrc-recycle.org/default.htm
National Recycling Coalition, www.nrc-recycle.org
Natural Resources Canada, http://www.recycle.nrcan.gc.ca/
North East Recycling Council, http://www.nerc.org/
Pacific Recycling Marketplace, http://pacific.recycle.net
Planet Ark, http://www.planetark.com/dailynewsstory.cfm/newsid/31660/story.htm
Plastics News, http://www.plasticsnews.com/
Plastics News, http://www.plasticsnews.com/
Platts Petrochemical Information,
http://www.platts.com/Petrochemicals/News/8293083.xml?p=Petrochemicals/News&S=n
Portland Business Journal, Denton Plastics,
Recycle Exchange, http://www.recyclexchange.com/a/1000.html
Recycled Plastics Market, http://www.caplasticsmarkets.com/index.php
Recycling Council of British Columbia, http://www.rcbc.bc.ca/
Recycling Today, http://www.recyclingtoday.com/
San Francisco Chronical 17th February 2004 http://www.sfgate.com/cgibin/article.cgi?f=/c/a/2004/02/17/BUGRI51VNU1.DTL
USA Environmental Protection Agency, http://www.epa.gov/
Waste Recycling Directory, http://www.wasterecycling.org.uk/stem.net/(2aq3ux55lpuiyibz2of5yybm)/index.aspx
www.ccc-us.com/wastesupplier.htm AQSIQ Registration of Overseas Supplier of Imported Scrap
www.sepa.gov.cn/english State Environmental Protection Administration of China
http://importer.alibaba.com/buyeroffers/Waste_Plastic.html
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Annex N Currency Conversion Factors
Costs and prices in foreign currency have been converted at the following schedule of rates to the pound sterling:
USA
Euro zone
Canada
Japan
India
China
Pakistan
US$1.73
€1.48
C$2.01
¥209.76
80.11 INR
14.01 RMB
103.79PAR
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Annex O Glossary of terms
ABS – Acrylonitrile Butadiene Styrene
AQSIQ – General Administration of Quality Supervision, Inspection and Quarantine of China
BFR – Bromine Flame Retardants
BPEO – Best Practicable Environmental Option
BPPs – Biodegradeable Polymers
BREW – Business Resource Efficiency Waste Programme
CCIC – China Certification and Inspection Group
CIF – Cost Insurance & Freight (Sellers must pay costs and freight to bring goods to the named port of
destination and procure insurance against buyer’s risk of loss or damage of the goods).
CRT – Cathode Ray Tube
EEE – Electrical and Electronic Equipment
ELV - End of Life Vehicle
FOB – Free on Board (Buyer has to bear costs and risks of loss or damage to goods from the named port of
shipment. Seller must clear goods for export).
HDPE – High Density Polyethylene
HIPS – High Impact Polystyrene
IBS – Intermediate Bulk Storage
ICER – Industry Council for Electronic Equipment Recycling
JCPRA – Japan Containers and Packaging Recycling Association
LDPE – Low Density Polyethylene
MBT – Mechanical Biological Treatment
NAFTA – North American Free Trade Agreement
NAPCOR – National Association for PET Container Resources
OPP – Oriented Polypropylene
PE – Polyethylene
PERNs – Packaging Export Recovery Notes
PIFA – Packaging & Industrial Films Association (UK)
PO – Polyolefins
PP - Polypropylene
PRNs - Packaging Recovery Notes
PS - Polystyrene
PVC -Polyvinylchloride
RDF – Refuse Derived Fuel
REACH – Registration Evaluation & Authorisation of Chemicals
RoHS – Restriction of Use of Certain Hazardous Substances in Electrical and Electronic Equipment Regulations
SAN – Styrene Acrylonitrile
SEPA – State Environmental Protection Administration (China)
SEPA – Scottish Environmental Protection Agency (UK)
TEU – Twenty Foot Equivalent Units
WEEE – Waste Electrical and Electronic Equipment
WIP – Waste Implementation Programme
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Written by: GHK in association with Recoup
Published by
Waste & Resources
Action Programme
The Old Academy
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Banbury, Oxon
OX16 0AH
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