Podcast: Two Cents' Worth

Two Cents’ Worth: Recycling plastic won’t save the world

In this week's Two Cents' Worth podcast, Nikki Mandow delves into the economic mysteries behind the guilt-assuaging plastic packaging recycling bins, which mysteriously disappeared from supermarkets last year. 

It all started at the supermarket. Me and my plastic bag full of plastic bags. Saving the world by stuffing my squidgable packaging in the bin marked “soft plastics”.

And suddenly, there was the bin - gone. And I didn’t know why.

The answer involves economics 101 (supply and demand), China, the oil price, and health-damaging bonfires.

It also involves some tough truths about whether those recycling bins really are saving the world. Spoiler alert: they aren’t.

But to begin at the beginning.

The soft plastics recycling scheme began in 2015 in around 70 Auckland stores. It was run by the Packaging Forum, an industry-funded group which also runs projects involving glass recycling, compostable coffee cups and reducing the litter we drop.

People put their soft packaging in the bins and the Packaging Forum squashed it into bales. They then shipped it off to an Australian company called Red Service, which mixed it with other recyclable plastics and made products like park benches, bollards and decking.

Red Service didn’t pay anything for the plastic material, says marketing and communications projects manager Lyn Mayes. But levies from packaging companies paid for the scheme.

“Soft packaging never had an value. However, we were able to give it away.”

Then two things happened, which put the kibosh on the soft plastics recycling scheme. First, too many New Zealanders got on board.

“When we first started our collection service I remember celebrating when we got a tonne of material come through,” Mayes says. “It had probably taken two or three months to get a tonne. When we finished collecting we would be getting probably about 50 tonnes per month.”

At the same time, the Australians were also getting enthusiastic. Red Service, the company making the bollards and the park benches, started getting inundated.

“We’ve essentially been treating China as our global landfill. But they found they were getting a lot of stuff that ended up being landfilled in their country. So rightfully China closed its doors to a number of those products, including plastic bags.”

All might have been well if it hadn’t been for another, more dramatic development. From January 2018, China introduced its “National Sword” policy - a government initiative to ban the imports of a range of waste products, including a lot of plastics.

Before 2018, China was basically the dumping ground for the world’s waste. By 2016, the country was taking almost two thirds of the world’s discarded plastics, including plastic bags. Greenpeace oceans campaigner Emily Hunter says often the waste was sold to Chinese recycling companies as clean but actually contained contaminated and toxic material. China decided it had had enough.

“We’ve essentially been treating China as our global landfill. But they found they were getting a lot of stuff that ended up being landfilled in their country. So rightfully China closed its doors to a number of those products, including plastic bags.”

Suddenly developed countries all over the world found themselves with mountains of plastics that would previously been shipped to China, ostensibly for recycling.

A few other Asian countries, like Malaysia and Vietnam, started accepting more plastics. But often they couldn’t cope with the volumes either. Some companies ended up burning it illegally, causing environmental and health problems.

The Packaging Forum’s Lyn Mayes, with a roll of garden edging made partly from recycled soft plastics Photo: RNZ/Nikki Mandow

Global disruption

Mayes says the Packaging Forum was surprised when Red Service said it wouldn’t be taking any more Kiwi plastic packaging.

“We didn’t expect China to affect us. We weren’t shipping to China, we were shipping to Australia. But of course companies in Australia were shipping to China and when that market closed and the revenue from that market closed, they were looking closer to home.”

Hunter says National Sword was a wake-up call.

“It created a huge global disruption, a needed global disruption. It pushed the issue onto a much higher pendulum for policy makers, politicians and the public. Because suddenly we have to deal with our own waste back home, we can’t keep shipping it out.”

One solution in New Zealand has been the Government’s single use plastic bag ban.

From July 1, supermarkets and other retailers won’t be able to give you a plastic bag for your purchases.

Mayes says the bag ban will cut waste soft plastic in half. But you’ll still be able to put your carrots in a plastic bag in the supermarket, and buy plastic bin liners. And everything from sugar to frozen peas won’t be affected by the ban.

Mayes says until all plastics are banned, recycling is the next best thing.

“We are looking at resetting the programme in April, but it will be phased in gradually. We don’t want to raise too many expectations. We will make sure we only collect what we can process.”

Plastic stockpile at Thames Coromandel Photo: Grahame Christan / Smart Environmental

No one wants soft plastic

So far the Packaging Forum has found two New Zealand companies that can take soft plastics - a company in Levin called Second Life Plastics, which makes garden edging and cable covers from a mix of soft plastics and other recyclable plastic.

The other, Future Post, is due to start selling recycled plastic fencing posts later this month.

The forum is funding research into compostable plastics and overseas, companies are looking at other technologies for recycling plastics, including turning it into diesel.

Mayes hopes more Kiwi firms will look into recycling soft plastics to useable products - and that customers will start looking at buying goods made from recycled plastic.

Conservation Minister Eugenie Sage has a similar message. She is looking to bolster the Government’s waste minimisation fund by increasing the number of companies paying a landfill levy.

And that additional money will be available for companies looking at plastics recycling.

“Plastic bags fit nowhere and there is no place for them. There is no economic driver to recycle plastic bags. You would need a million to make a tonne."

But at the moment there aren’t nearly enough recycling options for soft plastics. The Packaging Forum reckons that even after the bag ban we’ll produce 3000 tonnes of soft plastics a year.

By contrast, even at its peak, the soft plastics programme collected only a tenth of that - about 300 tonnes. And New Zealand has the capacity to recycle just 20 tonnes. That’s an almost unmeasurable percentage.

No value

One of the problems with soft plastics is they are pretty much the lowest of the low when it comes to the recycling value chain. Companies will buy glass and aluminium cans to make more glass and aluminium; they will buy plastic coke and lemonade bottles to make t-shirts and fleeces. Even milk bottles have some value (though not the Anchor light-resistant ones).

But soft plastics aren’t worth anything - mostly you have to pay people to take them away.

Grahame Christian is the founder and managing director of Smart Environmental, New Zealand’s largest privately-owned waste management company.

The company has been going for 25 years and has contracts with 15 councils to pick up rubbish. It also has eight recycling facilities.

Christian is retiring later this year. So maybe that means he doesn’t need to mince his words. Or maybe it’s because one of his kids gave him another grandchild just a few weeks ago. Whatever the reason, there’s not much grey for Christian when it comes to plastic bags.

“Plastic bags fit nowhere and there is no place for them. There is no economic driver to recycle plastic bags. You would need a million to make a tonne.

“I’m a boatie, I see plastic bags floating all round New Zealand. My friends have helicopters, we do a lot of flying, there are plastics in our visual environment. We’ve got to do something about it. You’ve got plastic bags floating around the high country.”

Too many New Zealanders got on board with the soft packaging recycling regime. Photo: RNZ / Richard Tindiller

Christian argues we are never going to solve the soft plastics problem with recycling.

“You can’t collect it, there’s a cost to recovering it, there are varying grades, it’s contaminated. There are dozens of reasons why you can’t do it.”

He says one of the biggest problems with lightweight bags - including all the ones that aren’t captured by the government ban, like the ones you put your apples in at the supermarket - is they are just so damn light.

Recyclers pay for waste by the tonne and even if you squash soft plastics up, you are going to need a huge volume to make a tonne. Then you have to store them, transport them and process all this volume.

“That was the illusion of the bin, the illusion of recycling. We think recycling is this great, green circular process, that takes one product and turns it into the next."

Christian says plastic bags make up only 0.01 percent of the plastics waste stream and so recycling them is just not worth it financially for the recyclers or the collectors.

“There is no economic market for plastic bags, they go into landfill; they don’t break down. Landfills don’t breathe, so they go into landfill and they stay there.”

There are other reasons recyclers don’t like lightweight packaging. They get caught in the recycling machinery and gum it up. And often the bags collected in the soft plastics bins have bits of food in them.

Contamination is a big problem, says Lyn Mayes from the Packaging Forum. Some people wash out their plastic bags before they put them in the bins, but others don’t.

But it gets worse.

“You have people that wander past the bin and just throw something in. Coffee cups with milky coffee, or food.

“If the contaminated plastic is stored for any length of time it goes mouldy and starts smelling. Any level of contamination just stays there, it doesn’t go away.”

One apple core and effectively you have to throw the whole bale of plastic away.

Tens of thousands of plastic bags have been unearthed on a West Coast beach. Photo: Facebook/Tony Kokshoorn

More virgin plastic

Meanwhile, as recycling becomes more difficult, using virgin plastic just gets easier and easier. Plastic is made out of oil, so when the oil price is relatively low, as it is at present, new plastic is also relatively cheap.

Greenpeace’s Emily Hunter says the lower oil price encourages companies making things out of plastic to use new, rather than recycled plastic.

And the problem is way bigger than we realise, she says.

“Right now the amount of oil reserves being used for all plastics production globally is 5 percent - that’s the same size as the aviation sector.

“And they are estimating by 2050, 20 percent of all oil reserves will be used for plastic products.”

While Lyn Mayes from the Packaging Forum argues that it is better to recycle at least some of the mountain of soft plastics we produce each year, others say the recycling bins outside the supermarket send the wrong signals to consumers.

“It’s a sop to try and appease people, but it’s not a reality,” says Grahame Christian of Smart Environmental.

Image: Macrotrends.net

Emily Hunter agrees.

“Recycling is just a tokenistic ploy to get us to be distracted from the fact that they are producing more and more virgin plastic into our environment.”

Greenwash.

“That was the illusion of the bin, the illusion of recycling. We think recycling is this great, green circular process, that takes one product and turns it into the next. When it comes to plastics, it’s a more complicated picture.

“Unlike aluminum and glass that can be infinitely recycled, most plastics cannot. They can get recycled only so many times and they get downgraded and downgraded until eventually it’s all going into landfill.”

About Two Cents' Worth

Two Cents' Worth has been launched by Newsroom in a co-production with RNZ. It is the country's first weekly business podcast and will be broadcast just after the midday news on Sundays on RNZ National, will be available on both RNZ and Newsroom's websites and can also be found on iTunes and other podcast apps.

Each week we will examine one issue in depth and then convene a panel discussion. Here is this week's version on RNZ as well. 

Two Cents' Worth - the business week and the business outlook. Previous episodes are below.

Episode 1: Sunday November 4: The rise of double cab utes, the TAB's big profit and a threat to small electricity retailers.

Episode 2: Sunday November 11: Why your first job is crucial, why interest rates are so low and why wholesale power prices are so high

Episode 3: Sunday November 18: Inside a zombie town as its mill faces a closure decision, how a New Zealand company won big in Singles day and the future of Vector after the departure of chairman Michael Stiassny.

Episode 4: Sunday November 26: The rule of 8s and Trade Me’s big buyer

Episode 5: Sunday December 2: Why we don't buy cheap petrol

Episode 6: Sunday December 9:  Inside open banking

Episode 7: Sunday December 16: A ride sharing revolution

Episode 8: Friday January 25:  Salmon set to surpass dairy, save the planet

Episode 9: Friday, February 1: The wedding economy: a love story  

Episode 10: Friday, February 8: Our place in the space race

Episode 11: Friday, February 15: How NZ changed world economies  

Episode 12: Friday, February 23: The Park Mews effect 

Episode 13: Friday, March 1: Refashioning NZ's rag trade 

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