Plastics and circular economy in EU: A hopeful ban-deavour

In the European Union's (EU's) Official Journal 12 June 2019, a single-use plastics directive was published, which states that single-use plastic products will all be banned Europe-wide from 3 July 2021.

The goal of the ban is to establish a circular economy that emphasizes the needs of reuse, repair, and recycling in the design and manufacturing of plastics and plastic products in order to tackle the uncontrolled increase of plastic waste and its pollution impacts on the environment, specifically the marine environment, as stated in "A European Strategy for Plastics in a Circular Economy". Other than the directive, there are also multiple initiatives inspired and participated by various sectors and organizations in the European markets.

In this reading, let us go over a brief introduction to the EU's single-use plastics directive, the strategies that have been carried out by the European markets to reinforce the ban and the circular economy for plastic products, as well as some current challenges that impede the executions.

What is the Single-Use Plastics Directive?

It is a legislation aims to prevent and tackle marine single-use plastics litter and to promote the transition to a circular economy by reducing consumption, adopting circular design and materials, establishing high market uptake, initiating extended producer responsibility scheme, implementing harmonized products standard and marking specification, and applying marketing and market placement restriction.

The EU's Single-Use Plastics Directive took effect on 3 July 2021 banning a range of throwaway single-use plastic items where affordable alternatives are available, notably plastic straws, cutleries (forks, knives, spoons, swizzle sticks, beverage stirrers, and chopsticks), plates, expanded polystyrene food and drink containers, and oxo-degradable plastics.

Where there are no or few alternatives to single-use plastic, the directive brings in other measures designed to encourage a switch from throwaway plastic products. For example, plastic cups will have mandatory labels about the negative environmental impact of littering and advise consumers on disposal.

Member states of EU also have to reduce consumption of single-use plastic cups and food containers from 2022, but it is up to them how they do that. Tethered caps and lids on bottles will be mandatory from 3 July 2026. From 2025 the directive requires polyethylene terephthalate (PET) bottles to contain at least 25% recycled materials, which rises to 30% in 2030. Member states will have to meet a 77% collection target for plastic bottles by 2025 and 90% by 2029.

The further directive aims to beef up application of the "polluter pays" principle from July 2021 by introducing fee-modulated extended producer responsibility (EPR). Manufacturers and retailers of packaging and the products inside will have to pay for waste collection, beach clean-up and measures to raise awareness about littering.

On a side note, plastic bottles are the most found single-use plastic product among marine litter items on beaches in the Union, followed by tobacco product filters. This is due to ineffective separate collection systems and low participation by the consumer in the collection system.

Initiatives to reinforce the ban and transition to plastic circular economy

The launching of European Commission's Circular Plastics Alliance

The alliance is a group of key industry stakeholders covering the complete plastics value chain. It has signed and adopted a declaration outlining key milestones for its vision of achieving the use of 10 million metric tons per year (MMt/y) of recycled plastics in products within the EU by 2025.

The alliance, made up of public and private stakeholders in plastics value chains, is part of the European Commission's efforts to reduce plastics waste. The alliance plans to increase the volume of plastic material that is recycled, and to stimulate market innovation. To date (September 2021), there are currently 293 organizations participating in this alliance.

Some of the commitments and efforts in planning that are to be carried out by the Commission to achieve the EU target include:

• Develop, revise, and regularly update the design-for-recycling guidelines for all plastic products to improve the recyclability of plastic products in order to deliver the volumes and quality of recycled plastics necessary to meet end-market needs.
• Increase the uptake of recycled plastics up to at least 10 MMt/y in all plastic products, while ensuring product quality and safety.
• Develop a research and development (R&D) agenda on circular plastics to address the technological barriers to meet the market and regulatory needs.
• Map the investments and funding needed in collection, sorting, recycling and converting of plastics, and list the technological, economic and regulatory challenges to make these investments.
• Set up a harmonized and transparent EU value chain voluntary system to monitor volumes of recycled plastics used in European products.

Circular Packaging Vision 2030 for beverage packaging

The Circular Packaging Vision 2030 was launched by the Union of European Soft Drinks Associations (UNESDA) with the goal to achieve full circularity for beverage packaging and recognize it as a source in the circular economy by producing bottles with 100% recycled or renewable polyethylene terephthalate (PET), or both by 2030. In order to ensure the 2030 goal is technically and economically feasible, the industry has committed to 100% recyclable packaging by 2025 and that its PET plastic bottles will use 50% recycled content as shorter-term goals. It also pledges that more than 90% of its packaging will be collected and that it will use more refillable packaging.

The commitments to achieve the 2030 goal focus on three equal pillars of circularity:

Collect: Establishment of closed-loop beverage packaging collection and recycling systems to catalyse achievement of the target of at least 90% collection of all its packaging by 2030.

Recycle: Using only packaging that is manufactured with circular design and improving uptake of recycled PET plastic in beverage packaging.

Reduce and reuse: Reducing the industry's beverage packaging footprint and increasing the use of refillable packaging model.

According to UNESDA, it is achievable to minimize the carbon footprint of beverage packaging production and deliver products in a safe and sustainable packaging by combining mechanically recycled PET, enhanced recycled PET, and renewable PET.

Issuance of guidelines on single-use throwaway plastic rules

In June 2021, the Commission has published guidelines for member states and industries on how to interpret the rules. The directive on the reduction of the impact of certain plastic products on the environment not only bans throwaway plastic items such as twizzle sticks, straws, cutlery and plates, but also lays down different requirements for other products.

The guidelines help show member states and the companies that have to comply with the rules which provisions apply to different single use items - whether they are covered by the ban - or for example for certain drink containers whether the lid needs to be permanently attached. The guidelines aim to ensure that the new rules are applied correctly and uniformly across the EU. The guidelines explain key definitions and terms, the Commission says, noting that they were developed through extensive consultations with member states and the sectors affected by the rules.

The guidelines make clear that paper products lined with plastics, such as bowls or cups, are single-use plastics. The paper part of the plastic-lined and -coated cups, food containers, and plates may dissolve relatively fast, but the plastic part may remain in the environment for many years, potentially further disintegrating into micro-plastics. If these products had not been included, it would have considerably weakened the directive's impact both in reducing marine litter and promoting a more circular economy.

The directive also requires certain plastic items, including beverage cups, that cannot be easily replaced with non-plastic products, to be labelled with a standard EU marking to ensure that consumers are told they contain plastic and how to dispose of them correctly. The Commission set out the standard markings to be used to signal to consumers the presence of plastic in disposable items in a December 2020 implementing regulation. The implementing regulation's Annex IV deals specifically with beverage cups and the EU designs to be used to flag up that there is "Plastic in Product" for mixed items, or "Made of Plastic" for wholly plastic products.

The regulation specifies the colors to be used and that the labels should be in upper case and Helvetica Bold font. The font size shall be a minimum of 5 points (pt) for the cups of less than 500 milliliters (ml) and of 6 pt for the cups of 500 ml or more.

It further requires that the marking shall be rectangular shaped with the ratio between the height and length 1:2. The minimum size of the marking is 1.4 cm by 2.8 cm (3.92 cm²) for cups with a volume of less than 500 ml and 1.6 cm by 3.2 cm (5.12 cm²) for larger cups.

Plastic bottle deposit and return scheme

A pan-European mega petition, European Citizens' Initiative (ECI), aimed at getting the EU to set up a single deposit and return scheme for plastic bottles covering all 27 member states, has started its year-long bid to gather at least a million signatures Europe-wide. The ECI calls on the Commission to come forward with a legislative proposal setting up EU-wide deposit-system to recycle plastic bottles, with a standard 15 euro cents deposit charged at point of sale and refunded when the customer returns the bottle via the reverse vending machines. The petition says the proposal should encourage all member states to ensure that supermarket chains selling plastic bottles install reverse vending machines to collect the bottles for recycling after being used by consumers.

As mentioned earlier, plastic bottles are most found single-use plastic products EU beaches. It is also the most commonly used plastic product in the world (it is estimated that 1 million bottles are bought every minute globally) and takes up to 500 years to decompose. However, they are not included in the single-use plastics ban, hence, this sparks the #ReturnthePlastics initiative. The most radical demand in the petition is for taxes on plastic bottle producers to fund the recycling and deposit system "under the principle that the polluter should pay".

Obstacles to the ban execution and plastic circular economy initiatives

Untimely transposition of directive

The EU's single use plastics directive took effect on 3 July 2021 banning many throwaway plastic items, but many member states have yet to implement the 2019 legislation. Unlike a regulation which is directly binding, directives have to be written into national law - or transposed - and many member states failed to meet the deadline for implementing the single-use plastic law, shows an implementation assessment report from umbrella group, Rethink Plastic.

Even where member states have transposed the directive, the 1 July 2021 report, "Moving on from single-use plastics: how is Europe doing?" shows that application is patchy across the EU. According to the report, many member countries are failing to implement the directive correctly or at all although it has been some time since the ban was implemented. Estonia, France, Greece, Ireland, and Sweden are the only countries to have adopted all the measures needed to implement the directive fully, whereas Bulgaria, the Czech Republic, Poland, Romania, and Slovakia have failed to transpose the directive at all. The other 17 member states plus non-EU Norway have only partially transposed the directive.

Resistance from food and agriculture businesses and sustainability dilemma

Food waste and plastic are some of the biggest circular challenges at the consumer-facing level and these two issues are often intertwined in a sustainability dilemma. Retailers and brands use plastic packaging to extend food products' shelf life and to protect them from contamination while on display in order to minimize food waste, but this is also one of the biggest sources of waste generated by consumers. Packaging is responsible for around 60% of post-consumer plastic waste in the EU, according to the Commission.

There is also a risk that circular economy practices can end up incentivizing linear production or promote business-as-usual consumption patterns - under the guise of sustainability - rather than focusing on optimizing the use of biomass or materials that would otherwise have no use, such as food waste and plastic packaging.

The directive also receives resistance from the food and agriculture industry due to the rising concern towards the impact it could have on their operations with some business figures fearing that it could eventually lead to a ban on some plastics without a sustainable substitute available.

Nevertheless, under Article 11 on coordination of measures, member states have to ensure that any measures they take to apply the directive, such as limiting single-use plastic, must also comply with EU food law and "ensure that food hygiene and food safety are not compromised," the directive says.

"Member States shall encourage the use of sustainable alternatives to single-use plastic where possible for materials intended to come into contact with food," it adds.

Honorable mentions

Unipetrol, the largest refining and petrochemicals company in the Czech Republic will invest more than $1.4 billion over the next decade in projects to decarbonize the company's operations and advance core developments in petrochemicals, plastics recycling, biofuels, and hydrogen.

Eckes-Granini, a German juice maker, is now packing its one-litre Hohes C juice in bottles made entirely from recycled PET plastics. By the end of 2022, Eckes-Granini Deutschland intends to only use PET bottles made entirely of recycled PET for all brands, saving approximately 9,000 tones new plastic per year.

The list of mentions is inexhaustible, many organizations and businesses in Europe are taking part in the effort of reducing the impacts of plastic products, specifically the single-use plastics.

Achieving the goal of the directive is a long journey, but as the participation from the public and private sectors continues to rise over time, it will be a hopeful ban-deavor.

Speaker: Sara Lewis Agribusiness, IHS Markit

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.