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Research Centre

1/10th of a penny is shutting down global recycling – but at what cost?

By March 13, 2020August 27th, 2020No Comments

With new plastic costing less than recycled plastic, profitability threatens company commitments to using recycled plastic. Businesses will have to decide whether they will stick to their pledges or loosen them and risk not only their reputation but the natural environment. 

Sustainability remains at the forefront of public consciousness pressuring businesses to respond. In fact, one in four British consumers think that it’s the companies that produce packaged goods that should take the most responsibility for reducing it (Ipsos Mori ). Reducing plastic waste, especially single-use plastic in the Food and Packaging industry, is not only essential but an absolute imperative to mitigate the impact of plastic waste pollution.  

What’s ensued is vast amounts of money being ploughed into marketing budgets and a reassuring number of plastic reduction ambitions from manufacturers and retailers. However due to an increasingly uncertain market, these well-intentioned promises may be harder to keep than originally thought.   

For over a decade the most common recycled plastic, rPET (made from drinks bottles) was less expensive than new plastic, or virgin-plastic, which is made from oil and petrochemicals. In 2020, the cost of new plastic dropped below recycled plastic. From a purely business perspective, this means that recycled plastic has become less lucrative.  

At the time of writing, one shipping container of new plastic is approximately 800 euros cheaper compared to a shipping container of recycled plastic (rPET). This boils down to 1/10th of a penny perbottle. Here’s the math: 800 euro / 800,000 bottles = 1/10th of a penny of savings per bottle. 1/10th of a penny is 1/2000th of the price of a 2-euro product. 

For this tiny saving, many companies are risking their plastic reduction pledges and following the downward spiralling price of new plastic. But at what cost? 

For every shipping container of recycled plastic cast aside in favour of new plastic, another 800,000 bottles remain on land, in rivers and our oceans. Recycling factories shut down with huge impacts on coastal communities who depend on these industries to support their livelihoods.   

While governments and consumers are driving businesses to use more recycled plastic, market forces are pulling them in the opposite direction. In the next year businesses will have to decide whether to stick to their recycling pledges and pay more cash upfront or unravel them and risk their credibility and reputation. Time will tell which of these options carry a heftier price tag.   

For the natural environment and the developing coastal communities with whom we work, the answer is clear and simple.