In the case of plastics, COVID-19 is adding to the list of challenges already faced by plastic re-processors.
“Virgin plastic resins are at a record low as the price for oil-based feedstocks have fallen dramatically and there is a proliferation of gas-based feedstocks now available in the marketplace.”
— Eadaoin Quinn, Director, Business Development & Procurement, EFS-Plastics
Given this, Post Consumer Resins (PCR) were already struggling to compete against virgin derived alternatives. COVID-19 is amplifying the problem as manufacturing has slowed or in some cases stopped all together as consumers and industry focus on essential items (food, toilet paper, etc.) rather than consumer products. The reduced demand and the lack of price competitiveness of PCR compared to virgin resins has resulted in municipalities finding themselves receiving lower rates per tonne for some of their plastic commodities.
When COVID-19 subsides and manufacturing operations are able to reopen, the marketplace will remain challenging for recycled plastics. Virgin plastic resin pricing is expected to stay very low because new factories are being opened over the next couple of years to produce higher amounts of virgin polyethylene (PE) & polypropylene (PP) resin. This will likely result in municipalities continuing to receive lower prices for plastics they are collecting and processing.
Strategies to Enhance Strength & Resiliency of Plastic End Markets
In Canada the challenges faced by recycled plastic commodities are understood and strategies have been developed to respond to the issues. In June 2019, the Canadian Council of Ministers of the Environment (CCME) approved Phase 1 of the Canada-Wide Action Plan on Zero Plastic Waste. Contained in the strategy are calls for:
- targets and timelines for increasing recycled content as well as the updating of standards for measuring and reporting recycled content by December 2020, to help establish national performance requirements and standards, and
- guidelines and tools for government procurement practices to green operations and reduce plastic with tools to incorporate national recycled content targets and requirements by December 2021.
What can municipalities do today?
These systematic federal and provincial led efforts are a much needed and an important step forward, but they require long lead times to be implemented, and longer still before their benefits are realized. This is where municipal governments can take action now to shorten the runway and onboard these ideas sooner. Here are some examples of early leadership by your municipal colleagues.
City of Toronto
Toronto has introduced their Circular Economy Procurement Implementation Plan and Framework as a means of creating systemic change through public purchasing power. As new procurement opportunities are identified, staff are working to introduce circular economy principles. For example, a recent RFQ requires use of 20% recycled content (from post-industrial and, or post-consumer sources) in the bags used in mechanical litter removal.
“Procurement opportunities that allow the introduction of the post-consumer recycled content requirement through small incremental changes provide the chance to socialize or normalize these expectations while allowing time for the marketplace to evolve by developing supplies that increasingly meet specific recycled content requirements”.
— Annette Synowiec, Director of Policy, Planning & Outreach, Solid Waste Management Services
Read more about Toronto’s Circular Economy Procurement Implementation Plan and Framework in their case study which appears as a part of the Ellen MacArthur Foundation, Circular economy in cities.
Township of North Perth
The Council of the Municipality of North Perth passed a resolution to adjust the municipal procurement policy to require the use of 20% PCR content in all garbage bags used by the Corporation and review further opportunities to include PCR content in other municipal purchasing.
Municipal Opportunities Beyond the Bag
Until the decline in virgin resin pricing, corrugated HDPE pipes for municipal culverts and drainage pipes as well as agricultural use were made using up to 70% PCR content. This practice took the last 10 years to achieve. The recent drop in pricing for virgin resins is resulting in a shift away from the use of PCR, as there is nothing in place to prevent this backslide. A modest, minimum target of 25% required PCR content by municipalities for these applications would help to ensure a continued home for resins derived from municipally collected plastic recyclables.
Municipalities are large purchasers of good and services, and their participation in circular economy practices, such as mandating the incorporation of PCR content in the goods they purchase, can help stabilize, and potentially create new end markets for the materials they are regulated to recycle.