The news comes a week after the minister hosted initial crunch talks with retailers and the plastics industry around increased pressure on recyclers over falling oil prices (see letsrecycle.com story).
Recyclers claim that the falling oil price could be leading users of recycled plastic to switch back to virgin polymers as the value of the material falls alongside the cost of oil, and that existing voluntary agreements from retailers – such as the Dairy Road Map –are not effective enough to safeguard the future of the recycling industry.
The situation is particularly critical for Dagenham-based plastic bottle recycler Closed Loop Recycling, the largest supplier of rHDPE for plastic milk bottles in the UK.
An article in the Guardian newspaper today (March 27) suggests that the company could be on the brink of administration if retailers continue to turn their back on rHDPE in favour of virgin material, the price of which is now more competitive with recycled polymers.
Speaking this morning, Closed Loop’s chief executive Chris Dow said that the company was running out of time for a political solution, with Parliament set to dissolve on Monday. However, Mr Dow remained confident that an agreement could be reached.
Discussions
He said: “We understand that there are high level discussions between the minister, WRAP, Defra and top level representatives of the supply chain, and we know that there is a solution on the table that will stabilise the market and long term sustainability of recycled HDPE and the Dairy Road Map.
“This will also ensure the future of our plant and provide a profitable business model for future investors. We also know the British consumer is committed to using recycled plastic as a YouGov survey earlier this week showed that 68% of British adults supported a price increase of a tenth of a penny on a two pint plastic milk bottle to secure the future of the industry.
“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.”
Dairy Road Map
Signatories to the Dairy Road Map include retailers ASDA, TESCO, Morrisons, Marks & Spencer, Waitrose and the Co-operative. The voluntary commitment includes a pledge to increase the use of recycled content in milk bottles.
As yet, only the Co-operative has publicly renewed its commitment to sourcing recycled polymers for its milk bottles in the wake of last week’s meeting.
A spokesperson for the company said: “We have no plans to move away from using recycled content in our milk bottles and we will continue to help in the progress towards the Dairy Road Map targets for recycled content. Part of the long term solution for the recycling sector will need to be a fairer alignment of PRN and PERN prices that will support a sustainable UK recycling system.”
Resource Association
Resource Association chief executive Ray Georgeson has urged retailers to back the recycling industry in light of the falling oil price and welcomed the news that the minister is seeking to resolve the situation, but added that time is running out for an agreement.
He said: “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 Closed Loop Recycling 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.”
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