Draft EC document supports fuel-exempt mass balance

A leaked draft of the European Commission's implementing decision for calculating recycled plastic content in single-use plastic beverage bottles — towards mandatory content requirements — outlines support for the plastic and chemical recycling industry's preferred "fuel-use-exempt" model for mass balance accounting.

The draft document sets out the rules for calculating recycled content in plastic beverage bottles for the Single Use Plastics Directive (SUPD), which mandates 25pc recycled content in PET bottles from next year and 30pc recycled content in all plastic beverage bottles by 2030.

The draft states that recycled content from chemical recycling will be allowed to count towards the recycled content requirements. And where mass balance accounting is used to track the output of chemical recycling through the plastic production chain — such as when pyrolysis oil is blended with fossil-based materials as a steam cracker feedstock — a fuel-use-exempt approach will be permitted.

Under a fuel-use-exempt model, processors of pyrolysis oil or another feedstock from chemical recycling would be free to allocate recycled content to their highest value output, equal to the volume of recycled feedstock input minus a certain proportion to account for fuels and residue outputs of the cracking process.

A more restrictive "polymer-only" approach, which was also under consideration, would reduce the amount of recycled content "credits" that producers could allocate to their most valuable outputs, by excluding from reallocation the proportion of recycled feedstock used to make chemicals that do not go into polymer production, in addition to fuels and residues. Supporters of chemical recycling have said that this approach would significantly worsen pyrolysis plant economics and stifle development in the industry.

According to the draft, mass balance accounting could be applied only at site level, with transfers of recycled content credits between different companies or sites within the same company not permitted. There would also be a need for "chemical traceability", to avoid "overcompensation" and the attribution of recycled content to outputs that can be chemically linked to stemming from post-consumer plastic waste.

The implementing decision, if and when adopted, would apply directly in EU countries. The decision should have been adopted by the European Commission before 1 January 2022. An official noted political difficulties holding up work on the law, and another source pointed to a change of position among member states, notably Germany, leading to the commission's latest attempt at a proposal.

A meeting of the relevant technical advisory committee, comprised of EU member state experts, could take place later this month allowing for public consultation in March and formal adoption in April. According to the overarching SUPD, approval of the commission's implementing decision would then require a qualified majority in favour of 55pc of EU states, representing 65pc of the bloc's population.

Support for a fuel-exempt model will be well received by the plastic and chemical industries. Associations representing the sectors wrote an open letter to the European Commission in March last year calling for this methodology to be implemented. "In our view, a fuel-use exempt model would provide for a robust system, viable with chemical recycling routes, and allow producers and users of recycled content to reach the levels expected by the market and required by EU legislation in a timely manner," the leter said.

The letter also called for a decision relating to the SUPD to set a precedent for calculating chemically-recycled content in other regulations that would extend recycled content requirements beyond beverage bottles, such as the Packaging and Packaging Waste Regulation (PPWR) and the End of Life Vehicle (ELV) regulation, which are currently under discussion.

But the commission's position has not met with universal approval. Non-governmental organization Zero Waste Europe (ZWE) said by proposing the inclusion of a fuel-use exempt model for mass balance, the commission had "blatantly" dismissed concerns of greenwashed recycled content claims at product level and disruption of a level playing field.

"Should this flawed allocation rule persist, urgent action must be taken to impose a cap on pyrolysis and gasification technologies to prevent their undue advantage over mechanical recycling, perpetuated by the proposed allocation rule," said Lauriane Veillard, ZWE's policy officer for chemicals recycling and plastic-to-fuels.

The commission's draft still states that it considers mechanical recycling technologies generally preferable to chemical recycling "provided they can produce recyclates of the required quality, and waste that can be recycled mechanically should generally not enter into chemical recycling".

The commission will review the methodologies established in the draft implementation document by 1 January 2030, to take into account technological advances such as the roll-out of chemical recycling to commercial scale.

By Dafydd ab Iago and Will Collins