In a circular economy, a reliable stream of recycled inputs is required as part of an integrated supply chain. The COVID-19 pandemic has created disruption to this system, and affected the amount of recycled materials in supply chains including paper, aluminium and plastics. There are now interesting questions being raised as to whether processes could be automated or redesigned to prevent disruptions in the future.
Recycling collection systems have suffered disruption. In the UK’s lockdown, for instance, 46% of all local authority waste management services have stopped or been reduced, as worker safety is of of course paramount in these public service industries19. Consumers have therefore returned to a higher rate of disposing waste products in the traditional bins, rather than recycling. People have also been spending much more time at home, and so waste disposal has been concentrated in residential areas, rather than distributed as before during commutes or in office areas, adding to the challenges.
The disruptions to recycling collection and processing are threatening the supply of renewable products back into supply chains. 9% of plastics are, on average, recycled20 – much lower than for other materials such as aluminium (64% is the industry average21). Many companies have targets in place to increase the amount of recycled content in their packaging, and the fact that recycled inputs aren’t coming into the cycle to the same degree, could delay the achievement of these ambitions.
The constraints in existing waste management systems, being emphasised now, are adding to the pressure on governments to increase the capacity of recycling infrastructure and processing facilities22. So, a silver lining from this could be that we see real advancements in this area, with investments being made which would help towards building a more global circular economy.
Adding to the practical challenges in the supply of recycled plastic, the economics have also become more challenging. The crude oil price has fallen significantly, 40% since the beginning of the year23. This is due to a combination of national producer disputes, the economic slowdown, reduced demand and a surplus in supply. Given that virgin plastic (PET) is made from oil, the prices of the two commodities are intrinsically linked.
Therefore, there is increased pressure on the financial viability of using recycled materials; recycled PET (R-PET) was a more expensive option for companies previously, and so now, for some companies, using virgin PET remains even more attractive on a cost basis24. We do encourage companies to still be using RPET where possible.