Circular economy for plastics at risk
High energy prices drive plastic recycling out of business
As the energy crisis deepens on the Continent, the repercussion on electricity prices impacts operations of plastic recycling facilities putting at risk the transition towards circularity.
“Stopping the recycling activities will have an immediate, negative impact on the plastic waste management in Europe,” said Ton Emans, Plastics Recyclers Europe President. “If we want to drive a circular economy in Europe, plastic recycling must be considered a key industry sector to be targeted by Member States’ efforts to protect from the impact of high electricity prices” .
Plastic recycling facilities run 24 hours, 7 days a week which means that energy utilities are among the three major cost factors, after labour and maintenance, representing roughly 15-20% of the total operational costs. However, given the 400% increase in its prices, energy costs have now become the number one expenditure representing up to 70%[1] of the OPEX. This makes it nearly impossible for recycling companies to break even and means that without the European Commission as well as the Member States’ intervention, many companies will close.[2]
Navigating a pathway to a low-carbon EU economy by 2050, therefore, can only happen with the contribution of the recycling industry as plastic recycling has the lowest carbon footprint in comparison to other waste management options like incineration or landfill.
The recent EU policy and global developments have boosted massive investments in the plastic recycling capacities on the continent, while the fluctuations in energy prices will put these efforts to halt. Consequently, it will have disastrous implications for the European recycling industry.
[1] PRE internal survey.
[2] ASSORIMAP announced that 40% of recycling activities had to be suspended in Italy. More here.
