New EU regulation: «Recyclates market on the brink of change»

The Packaging and Packaging Waste Regulation (PPWR) affects EU-based companies as well as companies that import packaging into the EU. The new regulation will reduce packaging waste in the EU and promote a circular economy. Among other things, the PPWR stipulates that packaging made from plastic must contain a minimum proportion of post-consumer recycled material (PCR) by 2030. We expect the regulation to be passed before the end of this year. In addition to these plans, specific EU regulations for disposable PET beverage bottles are already in place: Starting January 1, 2025, every bottle must contain at least 25 percent recycled plastic.

Elmar, how do you assess the planned EU regulations?

The new regulations pose challenges to our industry, but above all they provide the opportunity to focus on developing sustainable and innovative solutions. For Meraxis and me, it is clear that a functioning circular economy is a basic prerequisite for a viable future of the plastics industry. We are committed to this with or without legal regulations.

Specific re­quire­ments such as the minimum amount of 25 percent recycled PET per disposable bottle should not be underestimated. According to a study performed in 2022 on behalf of the NGO Zero Waste Europe, bottles used in the EU contain just 17% recycled PET on average. The current recycling rate for plastic bottles across Europe is around 50 percent. So, the EU targets are certainly ambitious – and they are binding.

In addition to the recyclates content in PET bottles or the planned new PPWR, some EU countries have already introduced their own plastic taxes or are planning to do so. This means that processors need to keep up with all relevant regulations, for one. For another, they need to start thinking early on about the use and procurement of recyclates so that they can be prepared.

What impact will the regulations have on the market?

The new regulations will undoubtedly lead to an enormous surge in demand for recyclates. However, the quantities available on the market are scarce, especially when it comes to high-quality recyclates. Because many products require material that looks new and has a «clean», aesthetically pleasing appearance. Of course, the material must also have certain technical properties. This limits the choice of recyclates. Only those companies who act quickly, know their way around the recyclate market, and have reliable suppliers can secure the required quantities. Especially for mid-sized companies, this is a challenge with which we can actively support them.

How has Meraxis prepared for the increasing demand for recycled material?

We have built up a very extensive supplier network, which we are continuously expanding. For example, in the fall of 2023, we signed RC Plast as a new partner. The Danish manufacturer has on offer high-quality recycled polypropylene (R-PP). Our latest strategic partner is the Finnish company Fortum Recycling & Waste. Their range includes PP, HDPE, and LDPE recyclates as well as customized re-compounds. Thanks to these two and other strong suppliers, we have secured large quantities of high-quality recycled materials for our customers. This is how we solve the central problem of procurement for them.

But we are also ideally positioned for all other challenges associated with increasing the use of recyclates or the conversion from virgin material to recyclates. Because Meraxis is a one-stop shop, i.e. a full-service provider, we also make our logistics, material, and product expertise available to our customers.

Especially polymer processors who have little experience with recyclates can really benefit from the services of our one-stop shop. What kind of consulting does Meraxis offer?

Our experts have extensive industry knowledge and can support processors in selecting and introducing the right recyclates. For years, we have worked extensively on answering questions such as: Which material is best suited for which application? How can the proportion of recyclates be increased in an application? What design adjustments are necessary? Unlike other polymer distributors, we also have our own in-house research and development department, where we can precisely measure and determine material properties such as density, fracture strength, temperature, and heat resistance.

In addition, digital solutions are another important key to greater sustainability. That’s why we are working on innovative tools that make the CO2 footprint visible, for example. We provide our customers with transparent information on the emissions caused by a product even before they make a purchase. This is indicated by the CO2 equivalent. The determined values are based on audited data from our suppliers and recognized emissions databases such as Ecoinvent. The values are calculated automatically according to current industry standards and are provided upfront for each quotation via our digital customer portal. That way, we help ensure that ecological aspects are considered in purchasing decisions.

At the beginning, you talked about the innovations that drive the PPWR. What packaging trends and other developments can we expect?

We will certainly see not only more reusable, but also compostable packaging solutions. The increased use of biopolymers is also likely. Even though the biopolymer market is growing, it will remain a niche for the time being – albeit an interesting one. Currently, the use of biopolymers is a question of availability and price. Because there are lower volumes of biopolymers on the market, they are generally still expensive. There are only around 2 million tons of biopolymers worldwide. By comparison, the total global market for polymers is around 400 million tons. Nevertheless, biopolymers are already of interest for certain products such as packaging, promotional items, and household items. At Meraxis, biopolymers are also in our portfolio.

Recycling processes will change, too. Material that is obtained through mechanical recycling often does not have food-grade qualities that comply with European regulations. In theory, chemical recycling can provide those qualities. This is because in chemical processes, polymers are converted back into monomers and then rebuilt. The result is a recyclate of high quality, comparable to virgin material. However, chemical recycling technology is still in its infancy. It will therefore take some time before it can provide recyclates on a larger scale. Nevertheless, we believe in the increasing importance of chemical recycling providers and are already working on building partnerships that will benefit our customers in the future.

Many thanks for these exciting insights, Elmar.

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