The EU Commission wasted no time on the subject of plastic. Only announced shortly before Christmas, the exports of plastic waste from the European Union were restricted at the turn of the year. Exports and imports to and from industrialized countries have been subject to stricter requirements since January 1st. Only clean plastic waste is allowed to be exported to developing countries for recycling.
In recent years, more and more countries have refused or at least restricted the import of plastic waste. Nevertheless, around 1.5 million tonnes of plastic waste have recently been transported annually across the borders of the European Union, preferably to Southeast Asia or Turkey. According to estimates by the Federal Association of German Waste Management, Water and Raw Materials Management, plastic waste exports in Germany were 986,000 tons last year, which corresponds to a decrease of ten percent compared to the previous year. Together with the USA and Japan, Germany is still one of the three countries with the highest plastic waste exports in the world.
Nevertheless, an ever larger part of the garbage heap remains in the European Union and has to be recycled. In Germany, almost two thirds of all plastic packaging waste from private households will have to be recycled from next year. By 2030, the EU wants to increase the recycling obligation to a quota of 70 percent. Tomra Systems is one of the beneficiaries of the stricter requirements. The Norwegians are among the world’s largest providers of sorting systems for recyclable residues and have been growing continuously for years. Between 2010 and 2020, revenues and profits each tripled. Not least because of the stricter EU requirements, further growth is likely to be mapped out in the coming years.
On the stock exchange, the share has been one of the favorites of investors in recent years. After quadrupling the share price since 2017, the valuation has now reached the limit. While the current recycling of plastics is primarily focused on mechanical processes in which the plastic waste is sorted by type of plastic, melted down and processed into recyclates as raw material for new products, innovative approaches are exploring the possibilities of chemical recycling. The Norwegian company Quantafuel has developed a chemical process with which plastic can be recycled into high-priced products – such as low-emission diesel that is traded at 1.5 times the price of normal diesel, heating oil and naphtha (raw gasoline), which is used to produce high-quality Recycled plastic is used. After the authorities gave the green light last summer, two of the four production lines at the Skive plant in Denmark were put into operation by the turn of the year.
Together with partner BASF, further plants are to be built in Europe in the coming years. The German chemical giant invested 20 million euros in the company and, as part of the deal, secured a right of first refusal to the entire amount of pyrolysis oil and purified hydrocarbons from Skive production. The huge market potential for chemical recycling of plastic waste, which industry experts estimate at 70 to 80 billion US dollars by 2030, also called the holding and investment company Kirkbi on the scene last autumn. The family office of Kjeld Kirk Kristiansen has invested 250 million Norwegian kroner (around 24 million euros). Between 1979 and 2004 Kristiansen led the toy manufacturer Lego to global success.
The French company Carbios is also pursuing the approach of chemical recycling and relies on an enzyme that can completely digest plastic within a few hours. Without prior sorting, plastic waste could be completely transformed into new plastics with the process. Partner companies such as Michelin, L’Oréal or Pepsico are interested; the proof-of-concept is now to be provided by a demonstration system. Carbios is a bet that the technology will be successfully commercialized in the years to come. Bank BNP Paribas believes the company will generate revenues of more than 280 million euros in 2030 with an Ebitda margin of 40 percent. For comparison: the company currently generates sales of less than two million euros per year. Agilyx is comparatively new on the course list. Together with partner Amsty, the newcomer to the stock exchange has developed a complete circular recycling system for polystyrene, a widespread and inexpensive plastic. Although the price has performed well since it went public last fall, the share is still flying under the radar of most market participants.
Alternative products in demand
Recycling, however, is only the second best way to cope with the ever faster growing plastic mountain. In the early 2000s, more plastic was created in a decade than in the previous 40 years. Today more than 400 million tons of plastic are produced worldwide every year, a third of it for packaging. The best solution to this problem would be to avoid plastic production and use sustainable alternatives. Among other things, Corbion produces the sugar-based plastic PLA as an alternative to petroleum-based plastics. The partners of the Dutch include international corporations such as Total, Nestlé and Pepsico. The share has been marking one record high after the other for months, but research houses such as Kepler Cheuvreux still see the potential not being exhausted.