Energy consumption and carbon emissions are lower than those of virgin plastics, how to solve the dilemma of "price inversion" of recycled plastics?

China is a major producer and consumer of plastics, "In 2022, China's primary plastic production will exceed 110 million tons, accounting for about 1/4 of global plastic production. The "Proposal on Promoting the Development of the Recycled Plastics Industry" (hereinafter referred to as the "Proposal") drafted by the All-China Environmental Services Chamber of Commerce (hereinafter referred to as the "Environmental Chamber of Commerce") proposes that plastic recycling is of positive significance for promoting China's development of circular economy, achieving the "double carbon" goal and responding to global climate change.

However, "price inversion" is still one of the main reasons plaguing the development of China's recycled plastics industry, and the market price of virgin plastics is comparable to the price of recycled plastics, or even lower than the price of recycled plastics. How can this problem be resolved? The "Proposal" gives suggestions.

The use of recycled plastics has obvious carbon reduction effects, but the market is volatile

Recycled plastics are much smaller than virgin plastics in terms of energy consumption and CO2 emissions. Taking PET as an example, recycled PET can reduce carbon emissions by 58.8% compared to the production of virgin PET in general. With technological advancements, this figure can also be improved to a 79% reduction in carbon emissions.

China's recycled plastics industry has the most complete industrial chain, the most refined industry division of labor, the most abundant industry experience, the most perfect product application and the most diversified operation mode. According to the "Concept and Practice of China's Plastic Pollution Control", in the 10 years from 2010 to 2020, China completed the recycling of 170 million tons of waste plastics, which is equivalent to a cumulative reduction of 510 million tons of crude oil consumption and 61.2 million tons of carbon dioxide emissions. According to reports such as the "China Recycled Plastics Industry Development Report (2021-2022)", in 2021, China's waste plastic materials will be recycled about 19 million tons, and the recycling capacity will account for about 70% of the world's total.

However, the development of the recycled plastics industry still faces some difficulties. The first is that the "price inversion" has led to the instability of the scale of waste plastic recycling. Although the state encourages the use of recycled plastics, the production of recycled plastics is easily affected by the external market environment such as the willingness of downstream purchasers and fluctuations in the price of virgin plastics. Especially when the international crude oil price decreases, the price of virgin plastics will fall, and downstream buyers will reduce the use of recycled plastics.

Secondly, there is a lack of corresponding incentive mechanisms for the consumer side of recycled plastics, which mainly rely on the willingness of enterprises to purchase recycled plastics. "The plastic recycling industry chain is long and scattered, and upstream plastic recycling enterprises can enjoy some preferential tax policies, while downstream enterprises that use recycled plastics as alternative raw materials lack economic incentives. The Proposal states:

Thirdly, the progress of high-value utilization of plastic recycling is not as expected, and it is difficult to expand the scope of raw material substitution. For example, the domestic policy formulation on the utilization of food-grade recycled plastics is relatively lagging behind, and there is a lack of clear regulations and industry standards.

Therefore, "China needs to further accelerate the prevention and control of plastic pollution and resource conservation and substitution, and build a high-quality plastic recycling cycle." "Proposal.

The government, industry and the public promote the development of the recycled plastics industry

How to promote the large-scale development and high-value utilization of plastic recycling industry and improve the level of waste plastic recycling in China?

Huang Xiaojun, executive chairman of the Environmental Chamber of Commerce of the All-China Federation of Industry and Commerce and senior vice president of Veolia Group in China, believes that the recycled plastics industry is a new industry, and it is necessary to build a new industrial chain, including recycling systems, so the cost of the industry is relatively high, and emerging industries need to be supported by fiscal and taxation policies before rapid and healthy development.

The reporter learned that many governments around the world, represented by the European Union, Japan, Malaysia, etc., have formulated a plastic circular economy strategy, and have set a series of policies and regulations to clarify the target requirements for the use of recycled plastics. The European Union's Single-Use Plastics Regulation, adopted in 2019, clearly requires manufacturers to use 25% recycled raw materials in PET beverage bottles by 2025 and 30% recycled raw materials in all beverage bottles by 2030.

In recent years, China has comprehensively strengthened the control of plastic pollution and introduced a series of policies to promote the development of the recycled plastics industry. The National Development and Reform Commission and the Ministry of Ecology and Environment have successively issued the "Opinions on Further Strengthening the Control of Plastic Pollution" and the "14th Five-Year Plan for Plastic Pollution Control". In 2022, the Ministry of Ecology and Environment revised the Technical Specifications for Waste Plastic Pollution Control to meet the development needs of the waste plastic recycling industry and promote the standardized and orderly development of the industry.

The Proposal further proposes to develop a clear and binding strategy for the development of the recycled plastics industry. Led by the National Development and Reform Commission, drawing on the experience of foreign developed countries such as the EU "Single-Use Plastic Products Regulations", and on the basis of full investigation of the domestic plastics industry, the phased and quantitative classification and recycling requirements are put forward for primary plastic product production enterprises, and the proportion of recycled materials in packaging is clarified, so as to effectively stabilize the scale of plastic recycling in the whole society.

"Give corresponding tax incentives and financial support to enterprises that produce and use recycled plastics, and promote the scale and diversification of waste plastic utilization. Huang Xiaojun said that from the experience of the European Union, on the basis of policy support, we should also advocate the extended producer responsibility system, and upstream and downstream suppliers jointly promote the use of recycled plastics.

The reporter learned that China has established an extended producer responsibility system in the fields of electrical and electronics, automobiles, lead-acid batteries, and beverage paper-based composite packaging, and the practice of supporting policy management and market-oriented operation is relatively mature.

"If the responsibility of plastic recycling can be extended to the production of plastic packaging, it will establish a sustainable market-oriented operation mechanism for the closed-loop recycling of waste plastics. The "Proposal" suggests, following the principle of "mature one, launch one", led by the National Development and Reform Commission, referring to the extended producer responsibility system of beverage paper-based composite packaging, starting from the relatively mature PET polyester materials in the industry, and piloting the payment of funds by plastic packaging manufacturers to support the collection, sorting, recycling and reuse of PET packaging, so as to encourage manufacturers to reduce plastic packaging, carry out product ecological design, and promote the use of recycled materials.

Huang Xiaojun also said that the change in public consciousness is also very crucial. In this regard, the "Proposal" proposes to accelerate the promotion of carbon footprint accounting and carbon label certification of plastic products, guide green consumption, and encourage consumers to buy and use recycled plastic products with a low carbon footprint.