Chemical Week - November 4/11
CEOs call for plastics treaty with binding targets
Alex Fiedosiuk, Daniel Pelosi and Finlay O’Riordan, S&P Global Commodity Insights 2024-11-08 08:27:30
The Business Coalition for a Global Plastics Treaty, a group of CEOs from multinational companies, has published a letter calling on governments to agree to “binding global rules” when they meet later this month for the fifth and final session of the UN Environment Programme’s (UNEP’s) Intergovernmental Negotiating Committee (INC-5) on plastics pollution. Signers include the CEOs of Borealis AG, Unilever PLC, IKEA, Berry Global Group Inc., ALPLA Group, Nestlé SA, PepsiCo, SC Johnson, Mars Inc., Danone SA and 12 other companies.
Binding rules would “harmonize the policy landscape, strengthen national legislation and help businesses scale proven solutions for priority sectors such as packaging,” said the letter. However, a treaty based on voluntary measures would “create further fragmentation in the regulatory landscape for business, leading to increased cost and complexity,” it said.
The letter also advocates global criteria for the phasing out of “chemicals of concern,” approaches for the circular product design of plastic products, common principles for the implementation of Extended Producer Responsibility (EPR) schemes and a mandate to strengthen the agreement over time.
“We are working to transform our business models to catalyze a circular economy in which plastic never becomes waste or pollution, and the value of products and materials is retained in the economy,” the letter said. “There is already significant alignment on these topics through voluntary industry initiatives [...] however, it is clear that voluntary efforts alone are not enough to address plastic pollution at scale.”
The fourth round of talks, INC-4, took place in April 2024 in Ottawa. Disagreements over production caps on virgin polymers were a major sticking point. Following INC-4, participants in the discussion, such as the Ellen MacArthur Foundation, Unilever, Opsomer and the Plastics Europe trade association, called for collaboration and urged delegates to refocus efforts on relevant discussions during intersessional work ahead of INC-5. INC-5 will be held at Busan, South Korea, from Nov. 25 to Dec. 1.
Regulation has been cited by a number of players across global circularity markets as critical to broader commoditization of sustainable plastic markets, solidifying demand for recycled polymers and facilitating a transition to a circular economy. Demand for recycled plastics has been clipped across the last 18 months by high cost premiums and broader macroeconomic pressures. Mandated inclusion targets and regulatory intervention are commonly cited as solutions that would create more consistent procurement from a wider consumer base.
Cost premium weighs on demand
“All recycled products are seeing efforts to bolster the market, but demand remains weak,” a distributor told S&P Global Commodity Insights. “Prime is very available, quite cheap, and many recycled grades are more expensive [...] without the legislation, people don’t use the material.”
European recycled high-density polyethylene pellets have averaged a €578 per metric ton premium to virgin material across the fourth quarter of 2024, up 4% on the quarter but down 9% on the year.
Similar calls for increased government intervention in the sector have been made this year. The European recycled polymers industry organization, Plastics Recyclers Europe (PRE), called on EU institutions to take action toward establishing a circular market for plastic waste, citing ongoing downward pricing trends and weak fundamentals across European markets. PRE warned in a press release on Oct. 24 that Europe’s recycled plastic markets could face plant shutdowns and potential industry collapse if pressures from weak demand, dwindling investments and competitive imports are not addressed.
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