WRAP has called for an urgent overhaul of the pricing of recycled plastic to avert the crisis facing the sector, particularly Closed Loop Recycling (CLR), which has warned it may have to go into administration.
CLR has been caught by the sharp fall in oil prices, which has made recycled plastics including rHDPE much less competitive against virgin material. As MRW has reported earlier, supermarkets and dairies are being urged to contribute 0.1p for every two-pint milk bottle they buy to tide over the struggling recyclers such as CLR.
They have been accused of signing up to the voluntary Dairy Roadmap but failing to stick to it now that virgin polymers are currently more attractive.
CLR, along with Biffa Polymers, are the only companies producing rHDPE for milk bottles. CLR chief executive Chris Dow, left, has told the Guardian: “Without the support of the industry or the Government, it is inevitable we will go into administration.”
WRAP director Marcus Gover said the industry needed to agree quickly on a new way to price recycled plastic: “If we can agree something then maybe we can save this company.”
Virgin HDPE offered short-term savings but could leave the industry more vulnerable in future, he warned.
“Commodity prices go up and down. Recycled food-grade [plastic] will be a good buy again. But if we don’t stick with it now, there won’t be any to buy in the UK and that would be a real loss for us all,” he told the Guardian.
MRW understands that CLR has so far been unsuccessful in asking WRAP for a short-term commercial loan to tide it over.
Dow welcomed Gover’s comments but said “the reality is we have 24 hours to reach a solution for the whole industry” because Parliament is dissolving for the General Election.
We are the most vulnerable part of the supply chain, yet are shouldering all of the risk
He said there was a solution on the table that will stabilise the market, the long-term sustainability of rHDPE and the Dairy Roadmap.
“The [possible solution] will also ensure the future of our plant and provide a profitable business model for future investors.
“We are the most vulnerable part of the supply chain, yet are shouldering all of the risk. Surely a tenth of a penny is small price for the retailers and dairies to pay to show commitment to their own environmental policy and save thousands of green jobs and the future of the circular economy.
“We are confident that WRAP, the minister and the supply chain will provide a solution today that will ensure the future of the plant.”
Ray Georgeson, chief executive of the Resource Association, which has been battling to defend reprocessors and called for more than “warm words”, also said he was encouraged by Gover’s remarks.
“We are delighted to see that ministers and WRAP are actively pursuing a solution. They have a solution available to them that was proposed by CLR over a week ago that will provide market stability and ensure the survival of this critical UK infrastructure for plastic milk bottle recycling. which is so popular with the British public.
“We wish them well in their urgent endeavours, but stress again that the clock is ticking and action this day from the key influencers in this process – the retail and dairy signatories to the Dairy Roadmap – will still have the potential to salvage a critical situation.”
Chief executive of Dairy UK, which represents dairy companies, Dr Judith Bryans, told MRW that members were working hard to achieve the Roadmap target of 30% recycled material in HDPE milk bottles.
“We are keenly aware that the plastic recycling industry is facing difficult times and we have every intention to meet our targets,” she said. “The dairy industry is one of several industries in the UK that use recycled plastic, and we strongly urge all other sectors to make every effort to meet their own targets.
“In the long run, and to ensure a sustainable future for the plastic recycling sector, the Government may need to take a closer look at all the mechanisms in place to ease the pressure on plastic recycling companies and review the current regulatory system. It is crucial that all sides of the supply chain work together with the Government to achieve these results.”