The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Thursday, November 14, 2019

Strategic CSR - Plastic (II)

The article in the url below charts a rise in the cost of recycled plastics:
 
"In recent months, the price of recycled plastic flakes, used to make goods from soft drink bottles to glitter, has become more expensive than virgin plastic for the first time. For years the cost of making plastic products from recycled flakes was cheaper than relying on virgin plastics made using fossil fuels, meaning the sustainable option was an economic option too. But according to experts it is now cheaper for major manufacturers to use new plastic. A report from S&P Global Platts, a commodity market specialist, revealed that recycled plastic now costs an extra $72 (£57) a tonne compared with newly made plastic."
 
This higher price is reportedly due to increased interest among manufacturers who want to include recycled materials in their packaging so that they can advertise that fact to consumers:
 
"Coca-Cola's European business plans to cut the amount of virgin plastic used in its soft drink bottles to 50% within the next two years, and will change the colour of its Sprite bottles from green to clear to make sure 100% of its bottles can be reused."
 
In addition:
 
"… new plastic is becoming cheaper to make due to a flood of petrochemicals production from the US driven by the shale gas boom. … this could cost sustainable manufacturers across Europe an extra $250m a year."
 
As a result, the article reports that the recycled industry is in trouble because it is now simply cheaper for manufacturers to use virgin plastic, at least for the moment:
 
"The UK is planning to tax companies which don't use at least 30% recycled plastic in their products, but until then it may be cheaper for companies to demand more new plastic to make their packaging."
 
This is confusing, to say the least. Ever since China stopped taking waste material from the West, I have been reading reports about how the recycling industry is in dire straits because the market value for recycled material is weak, leading to low prices, which mean it is not economically worthwhile for waste collectors to collect recycled materials and process them. Now, the article in the url below reports such materials are becoming too high in demand, leading to sky high prices, meaning that manufacturers will likely switch to virgin materials. In other words, when the price of recycled materials is too low, it is not viable to collect and process the waste; when the price is too high, industry will simply switch to virgin materials. So when, exactly, will it become economically viable to recycle plastic? It seems that when we have too few recycled materials it doesn't make sense, and when we have too much of the stuff it doesn't make sense, either.
 
Take care
David
David Chandler
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War on plastic waste faces setback as cost of recycled material soars
By Jillian Ambrose
October 13, 2019
The Guardian