Demand for Recycled Resin to Outpace Supply

Corporate sustainability goals and new legislation are driving increased demand for recycled plastics. Notably, a new California law targets a 30% recycling rate for single use plastics by 2028, increasing to 65% by 2032. However, the ambitious targets set by companies and governments may be beyond the reach of current recycling infrastructure.

An article by Paula Leardini, senior analyst at ICIS, describes the gap between current capacity and expected demand. ICIS estimates that in 2021 there were 53 million tons of input capacity for rPET, rPE, and rPP and that global recycle output reached 12% of global virgin consumption. Recycled content targets adopted by corporations and mandated by governments are generally far higher.

To estimate expected global demand, an ICIS model assumed a recycled content target of 50% by 2025 for PET, 25% by 2025 for PE and PP, and 35% by 2030 for PE and PP.

The model predicts that an annual growth rate of over 45% would be needed to reach recycled content rate targets by 2025. Leardini writes that at least 1800 new recycling plants with an average output of 27,500 tons per year would be necessary for PET alone.  An annual growth rate of over 20% would be required to meet the targets for 2030, requiring 600 new recycling plants in each of the next nine years.

Constraints

The relatively small size (compared to virgin material production facilities) and geographic distribution of mechanical recycling plants limit their ability to scale up quantities. Collection rates are low in many regions and contamination is also a problem. Increasing the quality and quantity of collected materials will be necessary to supply sufficient material inputs.  Design for recyclability is expected to play a role in this area by increasing the amount of material that collection systems are able to accept.