EU parliament pushes through packaging law

Spanish Market: Petrochemicals
26/11/24

EU ministers are likely to approve the bloc's Packaging and Packaging Waste Regulation (PPWR) in December, allowing for its entry into force early in 2025. This follows the European Parliament today signalling the end to its so-called corrigendum procedure.

No substantive changes to the legal text were made to the PPWR during the procedure. Martin Engelmann, director-general of German plastic packaging association IK, along with 20 German industry associations, had urged European Commission president Ursula von der Leyen to remove the "failed" reusable packaging requirements for industrial and commercial packaging.

The PPWR will oblige packaging reductions of 5pc by 2030, 10pc by 2035 and 15pc by 2040. The rules state all packaging placed on the EU market shall be recyclable. The legal text defines 'recyclability' as packaging's compatibility with waste management and processing using separate collection and sorting, recycling at scale and use of recycled materials to replace primary raw materials. The regulation specifies that end-of-waste materials used as fuels or to generate energy shall not be counted as recycled.

The commission originally proposed the regulation in November 2022. EU elections in June 2024 held up formal adoption. EU ministers still have to formally approve the legal text, which should take place on 16 December. That would allow entry into force early in 2025.

By Dafydd ab Iago

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02/12/24

Countries diverge on plastic production in global talks

Singapore, 2 December (Argus) — Countries have failed to reach a consensus in negotiations for a global treaty to tackle plastic pollution, partly because of disagreements about whether its scope should include plastic production. The fifth session of the UN's Intergovernmental Negotiating Committee (INC) which took place over 25 November-1 December was supposed to result in an international, legally binding instrument to tackle plastic pollution. But negotiations ultimately ended without an agreement in South Korea on 1 December. The UN Environment Programme's (UNEP's) executive director Inger Andersen acknowledged on 1 December that the session did "not quite" achieve consensus, but added that it is "not for want of trying". Countries instead agreed on a draft text, which will "serve as the starting point for negotiations" next year, the UNEP said on 2 December. Plastic production A key point of disagreement was regarding the inclusion of a legally-binding pledge to cut plastic production, echoing the discussions during a preliminary meeting in September when plastic production limits also emerged as a major sticking point. Many countries want the treaty to tackle the entire plastic value chain, including production, but this met resistance from oil-producing countries. Panama on 28 November put forth a proposal, backed by over 100 countries, to adopt a global target to "reduce the production of primary plastic polymers to sustainable levels" under article 6 of the draft text. It also suggested that countries must report their production, imports and exports of primary plastic polymers and measures taken to achieve the global target. But Kuwait, on behalf of like-minded countries, reiterated on 1 December that "the objective of this treaty is to end plastic pollution — not plastic itself." Kuwait hopes that the treaty will address the "core issue" of plastic pollution through "improved waste management systems, recycling infrastructure, and innovations in material design", as opposed to plastic production cuts. "Attempting to phase out plastic as a material, rather than addressing the issue of plastic pollution, risks undermining global progress and exacerbating economic inequalities," Kuwait added, noting that there has been no solution offered on what can replace plastic across its applications. By Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

PPO producer Pryme raises capex forecast

29/11/24

PPO producer Pryme raises capex forecast

London, 29 November (Argus) — Dutch plastic-derived pyrolysis oil (PPO) producer Pryme said capital expenditure (capex) will be "significantly higher" than initially estimated for its second planned site in northern Europe, known as Pryme Two. Pryme Two will feature three-five reactor chains with an expected annual output of 50,000-80,000 t/yr of PPO when completed, the company said. Changes to expected reactor train capacities and other design elements as a result of learning from its first site, Pryme One, have led it to increase its capex forecast for the project, although it did not provide further details. Plans for further sites, Pryme Three and Four, remain on hold until funding has been secured for Pryme Two, the company said. The company also announced it had produced 100t of PPO in October and November, bringing the annual yield of PPO to 336t from its Pryme One site. The site will undergo maintenance in the remainder of 2024, and does not expect any more meaningful volumes until 2025. The company is seeking a capital increase of €8-10mn ($8.5mn-10.6mn) "as soon as practicable" in order to support operations, as Pryme One is not expected to reach breakeven cash flow until late 2025 or early 2026, according to the company. The company said it is in the process of renegotiating with its suppliers and customers as it needed to "achieve improved commercial terms" to avoid operating at a loss even when Pryme One achieves production rates in line with its nameplate capacity, which Pryme expects in late 2025. The company said the net loss for October 2024 was €1.9mn and a similar loss is expected in November. As of 28 November, Pryme had a cash balance of €7.4mn. In the third quarter earnings report in November, Pryme said it had revised down the stated production capacity of the plant to 16,700 t/yr from 30,000 t/yr. This is a result of a lower feedstock-to-oil yield expectation — 65pc, compared with a previous estimate of 75pc — and a reduction in the plant's expected input processing capacity to 26,000 t/yr from 40,000 t/yr, as the downtime needed for reactor feeding, and cleaning and maintenance of equipment has proved longer than expected. By George Barsted Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU recyclers need support: Sustainable Packaging Summit

29/11/24

EU recyclers need support: Sustainable Packaging Summit

Future regulations give certainty to the recycling industry for the long term, but prompt support is needed to ensure the industry continues to develop London, 29 November (Argus) — Recyclers warned the packaging industry that they needs support now to ensure enough supply will be available for future pledges and legislative targets at Packaging Europe's recent Sustainable Packaging Summit in Amsterdam. Mapping the sustainability challenge Delegates at the summit heard there is growing concern across the value chain around how to bridge the gap between now and 2030 to ensure the recycling industry can survive and continue necessary growth. In the interim years there are significant challenges in the market for recyclers which risk the secure availability of supply that brands and packaging companies need to reach desired recycled content goals in the future. Recyclers stated the industry in Europe is currently in decline, with a swathe of closures recently announced across the region and a lack of investment. Higher fixed costs in Europe, such as the price of electricity, hamper recyclers' ability to remain competitive on world scale, along with subdued demand for recyclates, exacerbated by low cost virgin material and rising imports. Brands noted less focus on sustainability from consumers and companies impacted by reduced consumer confidence and spending. Combined with the availability of lower cost virgin alternatives, this is said to be weighing on the urgency to increase recycled content as companies focus on the bottom line to manage the wider economic challenges the industry is facing. The industry must maintain sustainability momentum, and that sustainability must remain an advantage for companies for the recycling industry to continue to develop, delegates said. Navigating regulatory landscape Uncertainty in the market is hitting investment hard, and regulation is a fundamental step to providing clarity and stability for the European industry, but comes with its own challenges. The Packaging and Packaging Waste Regulation (PPWR) — which passed through the corrigendum procedure at this week's EU plenary and is now expected to be adopted by ministers on 16 December — is the first time that the waste hierarchy will be regulated consistently across EU member states. This is expected to ease uncertainties in the industry and add confidence in investments and further business planning as and when confirmed. The regulation is the most wide-reaching and ‘most challenging', due to the divergence of industries and interests across the value chain, Wolfgang Trunk, policy officer for the European Commission, said. "It is not perfect" he said, but considering the complexities "we can be content with what is now in the text. There are a lot of issues there, but we are convinced we can remedy and mitigate any concerns. We had to suffer a lot of national derogations at cost of harmonisation, or the scaling up of internal market benefits". Once the text is published the industry will try to adapt to the new framework. Trunk said it is only then the commission will observe the developments and as a backup and as last resort make amendments for specific streams or products which have encountered difficulties as a result of the regulation to come up with a solution. Positive sentiment regarding PPWR was shared by delegates, with may affirming that the industry is ready to move forward to meet the new requirements and quick action is needed to develop and implement the secondary legalisation that is anticipated. But the secretary-general of packaging organisation Europen Francesca Siciliano Stevens reaffirmed that the regulation does not go far enough in securing the single EU market and safeguarding European competitiveness on the global level. The drawbacks of a fragmented market, with varying national regulation and extended producers responsibility (EPR) schemes, were also highlighted, with delegates calling for a singular circular market. Some participants feel that harmonisation remains the weakest part of the regulation, and that political agendas have remained a barrier to overcome these difficulties. It is hoped that swift adoption of secondary legalisation, harmonised standards and the issue of necessary guidance will smooth the adoption of the PPWR. A proposed EU Circular Economy Act, presented in Ursula von der Leyen's policy guidelines upon her re-election as the president of the European Commission in July, was mentioned as a possible measure to reduce the exposure of the recycling industry to cheap virgin polymer prices. But, given the complexities and length of these legislative processes, recyclers may be entitled to reservations on how effectively this will support them in the short term. Reporting headache Packaging companies represented at the summit asked regulators to consider the need to reduce the reporting burden to help circular economy development. Frequent references were made to a ‘tsunami' of regulation, and the burden of reporting challenges around accurate and credibility in data were highlighted across the value chain. Non-harmonised EPR is a concern for the industry, with each member state implementing their own regulations. For global brands there could be upwards of 25 different policies with varying implications to adhere to in Europe alone. Participants called for clear standards and guidelines, as well as and harmonisation in data collection and reporting methodologies across the region in order to navigate the forthcoming headwinds. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan’s Oct naphtha imports fall on weak petchem demand

28/11/24

Japan’s Oct naphtha imports fall on weak petchem demand

Tokyo, 28 November (Argus) — Japan's naphtha imports totalled 1.18mn t in October, down by 10pc on the year but up by 5pc on the month, according to the country's finance ministry. Naphtha imports were lower on the year, given the continuous weakness in domestic petrochemical demand. This lowered cracker operating rates, which have been weakening since July, by 5.2 percentage points from a year earlier to 77.4pc in October, according to Japan Petrochemical Industry Association (JPCA). Cracker operating rates below 90pc indicate weakness in petrochemical consumption and the Japanese economy, JPCA said. The rates have been below 90pc since August 2022. Against a backdrop of weaker petrochemical consumption, ethylene production by domestic crackers in October fell by 7.4pc on the year to 414,500t. On a year-on-year basis, polypropylene and polyvinyl chloride output dropped by 5pc and by 12pc to 174,000t to 121,100t, respectively. Acrylonitrile output fell by 32pc to 21,300t, while styrene-butadiene rubber production stood at 15,600t, down by 25pc on the year. Aromatics xylene and benzene output fell by 2.6pc to 328,200t and by 1.5pc to 232,500t, respectively. By Nanami Oki Japan naphtha imports (t) Oct-24 Oct-23 Sep-24 y-o-y % ± m-o-m % ± Saudi Arabia 40,663 82,359 137,722 -70 -51 UAE 414,109 306,886 564,083 -27 35 Kuwait 205,941 284,441 109,249 89 -28 Qatar 148,927 147,786 195,703 -24 1 Bahrain 0 55,054 24,632 -100 -100 South Korea 179,544 92,986 89,023 102 93 Malaysia 0 0 0 - - India 38,742 0 8,516 355 - China 0 0 0 - - Indonesia 0 0 0 - - Singapore 0 0 0 - - Thailand 0 28,421 27,165 -100 -100 Russia 0 0 0 - - Australia 0 0 66,854 -100 - US 70,425 54,440 26,448 166 29 Others 79,178 69,289 60,090 32 14 Total 1,177,530 1,121,663 1,309,486 -10 5 Source: Finance ministry Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Chancay Port takes center stage at APLA

25/11/24

Chancay Port takes center stage at APLA

Sao Paulo, 25 November (Argus) — The new $3bn Chancay Port in Peru could disrupt polymers trade throughout Latin America, according to conversations at the 44th Latin American Petrochemical Association (APLA) conference last week in Cartagena, Colombia. Located 80km north of Lima, the Chinese-built port promises to reduce shipping times for Chinese products to the region by up to 20 days, thanks to its direct route across the Pacific Ocean. Chinese President Xi Jinping inaugurated the port in Peru on 14 November. The port was a focal point of discussions among producers and traders in Latin America, but especially for those in the west coast of South America (WCSA), the first region to be possibly affected by Chancay's operations. A polypropylene (PP) producer in Colombia told Argus that the news is not good for them as it would be easy and fast to ship Chinese PP from Chancay to Buenaventura, Colombia's most important seaport on the Pacific Ocean. The company said it is trying to figure out how to deal with the expected increase in resin imports from China. Several other regional resin producers and traders are closely monitoring the situation, trying to strategise their next moves. In the US, the largest polyethylene (PE) exporter to South America, Chancay has already been causing concerns for local producers and traders selling into the region, one source told Argus . The combination of more Chinese PE arriving on South American shores and local governments placing anti-dumping duties on US-produced, as is foreseen in Brazil in the short-term, should lower US sales for the whole region, the source added. Asian resin is already gaining market share in Peru. Currently, the country is the second largest PP importer in South America by volume, and its imports had a significant increase this year even before Chancay's inauguration. PP imports climbed 32pc from January to October, with 90pc more purchases from Asia-Pacific, whose market share expanded from 41pc to 58pc year on year. South American purchases fell 7pc to 57,800t in the same period. Concerns were also raised about the Chancay port being used to distribute Chinese resins to other regional markets, including Brazil and Argentina, via smaller containerships being sent through the Panama Canal. Chancay set to change routes The first phase of the Chancay Port project, which began in 2021, features four berths and a maximum depth of 17.8 meters, allowing it to accommodate ultra-large container ships with capacities of up to 18,000 twenty-foot containers (TEUs). With a projected throughput capacity of 1mn TEUs annually in the short term and 1.5mn TEUs in the long term, Chancay Port is set to significantly impact maritime routes from Asia to Latin America. Over 80pc of the project is already completed, including the main quay structures finished earlier this year. Once fully operational with its 15 docks, Chancay will be South America's first port capable of handling ships too large for the Panama Canal. Additionally, China plans to build a railway linking Chancay with Brazil, its largest Latin American trade partner, later in the decade. The ownership of Peru's Chancay Port is split between two major entities. Cosco Shipping Ports, a Chinese state-owned company, holds a 60pc stake in the port. The remaining 40pc is owned by Volcan Mining Company, a Peruvian firm. This collaboration is part of China's expansive Belt and Road Initiative. By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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