Huang Chuqi: Global Plastic Recycling Industry Faces Continued Shortage of Raw Materials

According to the recent export figures for US wastepaper published by OPIS (Oil Price Information Service), the global plastic recycling industry will continue to face serious shortages of recycled materials.

US plastic exports decrease by 17.7%

According to the report, the number of US plastic exports from January to October this year was 19,503 shipments, approximately 450,076 tons, a decrease of 17.7% compared to the same period last year. The top countries for exports were Mexico, Canada, Germany, Turkey, and India, followed by Malaysia, Indonesia, Vietnam, Taiwan, Hong Kong, and Thailand. For thousands of recyclers in Southeast Asia, being able to purchase recyclable plastic waste from the US will only become more and more difficult.

At the same time, ExxonMobil announced that its 36,000-tonne plastic recycling plant in Baytown, Texas has started production. In order to comply with the requirements of a circular economy and environmental protection regulations, the group has begun preparations to increase its production capacity to 450,000 tons per year at this address and other locations. Other petrochemical plants have also joined the plastic recycling industry to improve their corporate social responsibility and environmental awareness. However, with the current shortage of supply, the situation is becoming increasingly serious.

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Bottleneck in plastic recycling market: front-end collection and sorting

During mid-November, at the Basel Convention Regulatory Enforcement Committee of the United Nations in Geneva, I shared with the committee members the current situation of plastic waste and explained why the global recycling rate for plastic is only 9%. The main reason is that developed countries do not have enough manpower to sort and classify; developing countries do not have the system, financial resources, and infrastructure to collect plastic waste for sorting, cleaning, processing, and directly creating pellets. The US and Hong Kong are good examples, where, even if citizens separate and recycle household waste, 70-80% of the waste cannot be processed into different types of pellets due to a lack of resources, and is eventually landfilled or incinerated.

I also emphasized that many recycling plants in Southeast Asia have been forced to shut down due to a lack of pre-sorted plastic waste to process into pellets. This situation will also occur in other developed countries, Europe, and the US. Many investors believe that the market needs many factories to produce pellets or fragments, but they do not realize that the bottleneck is in the front-end collection and sorting of the recycling chain. Desperately investing will only lead to an oversupply of recycling factories in the back-end, leading to a wave of closures outside of Southeast Asia due to vicious competition.

Chemical recycling brings new competition

Now, large-scale investment enterprises, including petrochemical plants and consortia, are referring to their production as "advanced recycling," also known as chemical recycling, where plastic waste is reduced to its original material and then refined into different plastics, gasoline or other petroleum products, and continuously reused. Is this technology a breakthrough? In fact, it has always existed. What is controversial is to meet environmental protection, economic benefits and production capacity. Despite how advanced it is in detail, this chemical recycling requires all materials to be sorted and sorted before they can be effectively used. The investment of the petrochemical group is in the billions of dollars. Regardless of the cost, it is necessary to make waste plastics into raw materials. Can the recycled pellets be prevented from competing with their own new materials? This needs to be discussed in depth in the future. But I am sure that the demand for waste plastics is increasing unabated, the supply and demand of the industry is out of balance, and the bottleneck of the supply chain has not been noticed. This will definitely cause major hidden worries for the development of the industry.

In the days to come, as the supply begins to decrease, the industry will be full of huge challenges. Everyone must be mentally prepared to deal with this series of problems!

(Author: Huang Chuqi, President of China Plastics Sustainable Development Association, Chairman of Bugao Tongmei Recycling Co., Ltd.)