The coronavirus pandemic has sparked a rush for plastic, just as the world seemed to be waking up to its damaging environmental impacts.
Masks, hospital gowns, and all manner of medical equipment, are made from plastic.
As demand surged, so did the waste - as most of it can’t be recycled.
The economic slowdown is only adding to the problem, by intensifying the price war between recycled and new plastic.
It’s a war that recyclers worldwide admit they are losing.
[Rob Kaplan, Founder and CEO of Circulate Capital, saying:] "They're running out of runway. And I think that's happening globally. This is a massive disruption to all industries and recycling is not immune to it.”
The punctured global demand for oil has in turn led to a price cut for new plastic.
Known to the industry as “virgin,” it can now be half the price of recycled.
[Greg Janson, CEO of QRS Recycling, saying:] “I think the pandemic exacerbated this tsunami (...) We found ourselves in what would have been maybe a decade ago, the unimaginable position in that state of being the cheapest place in the world to make virgin plastic.”
It’s a tough one for plastic recyclers already struggling with lockdown losses.
[Rob Kaplan, Founder and CEO of Circulate Capital, saying:] “The combination of the impacts of COVID-19 and low oil prices is kind of a double whammy for the plastic recycling value chain across South and Southeast Asia.”
Since the coronavirus struck, recyclers worldwide told Reuters their businesses have shrunk by 20% in Europe, 50% in parts of Asia, and as much as 60% for some firms in the United States.
[Rob Kaplan, Founder and CEO of Circulate Capital, saying:] “40 to 60% of the plastic recycling value chain are at risk of permanent closure. Bankruptcy right now. And we're talking about the front lines of plastic pollution prevention, waste pickers, aggregators, junk shops, things like that."
Plastic makers are keen to stress that their products have saved lives.
[Keith Christman, Managing Director, Plastic Markets at American Chemistry Council, saying:] “Early on, it was determined that plastic was going to be needed for things like masks and gowns and the plastic sheeting we see on face masks that were used around the registers or other locations.”
It’s good news for the oil industry, which has long hoped new plastic would prop future demand for fossil fuels as the shift to electric vehicles begins to sap its biggest market.
Some in the industry even maintain plastic is vital for a shift to a low-carbon future.
[Keith Christman, Managing Director, Plastic Markets at American Chemistry Council, saying: “Plastic is essential for a range of applications. And, for example, automotive, where plastic use has been growing significantly to lightweight vehicles, make them more fuel efficient, reduce greenhouse gas emissions, plastic use in building construction where we have foam insulation to keep our houses cooler and more energy efficient, reduce greenhouse gas emissions also. But also in packaging, as you've asked about where plastics also play a very important role in reducing food waste.”
But plastic is an accepted and significant driver of climate change.
The manufacture of four plastic bottles alone releases the equivalent greenhouse gas emissions to driving one mile in a car, according to the World Economic Forum.
Then, there’s the devastating environmental damage plastic pollution can cause.
The companies say they share concerns about waste and are supporting efforts to reduce it.
But many declined to specify how much they are investing in recycling or how far they are reducing waste.
The future investments that could be quantified by Reuters amount to just $400 million a year.
That’s about 0.02% of total annual revenues at the companies involved.