Waste plastic is a tradable commodity that derives from the reuse of plastic materials and products. To qualify as waste plastic, materials need to be processed and assessed for quality, at which point they are assigned a grade. This enables certain grades of waste plastic to replace virgin plastic in the production of new goods, potentially reducing the use of natural resources.
Waste plastic is valuable
Many countries are adopting rules that mandate a minimum percentage of recycled material in consumer items like plastic bottles as part of their Net Zero commitments. This has created global demand for high quality waste plastic, leading to its so-called commoditisation as a secondary raw material. The EU, for example, is increasingly importing waste plastic to meet demand for recycled content. This move is proving controversial in the domestic recycling sector which fears lower profit margins due to price competition.
The global trade in recyclables
Although processing and transporting secondary raw materials such as waste plastic do cause carbon emissions, the United Nations sees the $315b international trade in recyclables as being on balance beneficial to reaching Net Zero goals. The trade in recyclables continues to grow faster than the global trade in commodities overall, registering 230% growth over the past 20 years according to a Chatham House report from 2022. Investment in modern recycling plants is also improving the overall quality and uniformity of waste plastic, encouraging its use by large brands and manufacturers.
Waste plastic vs. plastic waste
However, there is widespread confusion about the difference between ‘plastic waste’ which is discarded and ‘waste plastic’ the commodity that gives plastic waste a second life. Because the vast majority of plastic is still derived from hydrocarbons, and decades of poor waste management have led to contamination of both human and animal habitats, plastic waste is seen as a major environmental problem, with ample justification. Not all forms of plastic waste are easy or economic to recycle, so a high percentage of it continues to be disposed of via incineration and landfill, especially in low and middle income countries.
Plastic waste disposal is getting expensive
Many regulatory authorities have decided that the best way to incentivise plastic recycling, is to raise the cost of not recycling. Local governments for example impose taxes on landfill users to pay for waste collection services. This is in addition to the market costs of disposal. Landfill takes up valuable land resources and requires significant investment in compliance and monitoring. Incineration meanwhile requires expensive infrastructure and highly-trained staff.
Extended producer responsibility
National governments hungry for tax revenues and mindful of their Net Zero commitments are now targeting the producers of plastic, as well as those who dispose of it. The UK’s Packaging Recovery Note (PRN) regime, for example, follows the ‘polluter pays’ principle. This is where businesses that generate waste packaging have to make financial contributions to cover the cost of its disposal or recovery further down the line. The same principle is behind the UK’s extended producer responsibility scheme, scheduled to launch in 2025.
Benefits of waste plastic
Aside from government incentives and taxes, businesses are feeding more waste plastic into their manufacturing processes because it makes economic sense. Waste plastic supply chains are shorter and more resilient than those for virgin materials, and the recycled component of products tends to cost less. Many consumers also prefer to buy goods that have a recyclable component for sustainability reasons.
Research continues to focus on creating plastics that are biodegradable and can be produced without the use of hydrocarbons, which might eliminate the need for plastic recycling altogether one day. But until that happens, the world still needs plastics to preserve key consumables such as medicine and food, as well as many other applications. According to the United Nations, the trade in recycled materials plays a key role in limiting carbon emissions and growing the global circular economy.
