The volatile situation in the global market for recycled materials is also evident in Finland

There is now a clear oversupply of packaging waste on the market. As the world market prices of materials fall and waste has to be stored, recycling becomes more expensive. In the case of plastic packaging, recycling fees are also affected by the fact that the amount of recycled plastic packaging has multiplied in a short period of time.

Demand for recycled metal has rapidly declined

The coronavirus epidemic has rapidly weakened demand for recyclable metal. The steel industry is at least temporarily reducing its production across the world, according to Mepak-Kierrätys Oy’s Managing Director Satu Estakari.

– The steel industry no longer buys as much recycled material as before, and this is clearly reflected in the reduced sales of recycled material, Estakari says.

The automotive industry is a major user of recycled metal, especially recyclable aluminium. Production in the automotive industry had already fallen last year, but the coronavirus epidemic has further reduced it.

Estakari estimates that the collapse in the stock market in March will also be passed on to world market prices for recycled materials.

– When there is no demand for recycled metal, the price it achieves is even lower than the world market prices.

Estakari says that the changes that have taken place in the market for recycled metal mean that recycling fees for metal packaging may increase next year.

The volyme of recycled fibres in Europe continue to exceed demand

There is currently an oversupply of recycled fibres in Europe. Recycled paper and used fibre packaging have previously been exported from Europe and the United States to China. In 2017, China began to limit the amount of recycled fibres it received, and the country has announced that it will stop buying it altogether in the next few years.

Millions of tonnes of recycled fibres are currently stored in Europe, and stocks have also been accumulated in Finland. The price of recycled material is determined by the world market, so oversupply means a fall in prices and also reductions in the compensation payments received by packaging producers.

Millions of tonnes of recycled fibres are currently stored in Europe, and stocks have also been accumulated in Finland.

– Early 2020 was cautiously promising, but the strikes in the forest industry increased stocks. The coronavirus situation has introduced a variety of uncertainties. Will the logistics and production chains work, will waste management and collection operations have to be prioritised? Will import and export activities be hindered and will consumption do down? asks Juha-Pekka Salmi, Managing Director of Suomen Kuitukierrätys Oy.

Inventories of recovered carton and cardboard increased at companies such as Lassila & Tikanoja and Encore Ympäristöpalvelut.

– Recycled cardboard can be stored for long periods of time. Longer-term storage of recycled board is challenging, as the various food residues and spills in fibre packaging easily cause harm in the form of pests, says Customer Manager Jaana Jäppinen from Encore Ympäristöpalvelut.

Approximately 300,000 tonnes of fibre packaging waste are collected and recycled in Finland every year, and corrugated cardboard is the largest category. Finnish cardboard plants use the bulk of this volume. The machines are running in factories, but stocks are not decreasing yet.

Jäppinen thinks that if the exceptional situation continues and, for example, illnesses cause a shortage of drivers, fibre stocks can compensate for the reduced volumes of imports.

– Even in this exceptional situation, it is important that the Finnish industry has a good supply of recycled fibre, says Jäppinen.

The oversupply of recycled fibres, as well as increasing collection volumes and storage costs, mean that the recycling fees paid by packaging producers may go up next year.

Plenty of plastic waste across Europe

At the moment, more plastic packaging is collected than can be recycled in Finland. For the time being, all plastic packaging waste collected from Rinki eco take-back points can be processed at Fortum’s Plastic Refinery in Riihimäki. However, some of the plastic packaging collected from residential properties is currently awaiting an export permit.

– Plastic packaging collected here is exported to the European Union for recycling, with the likeliest destinations being Sweden and Germany. Exports are scheduled to begin in May, although there is a risk that the coronavirus situation will affect the logistics chain, says Vesa Soini, Managing Director of Suomen Uusiomuovi.

The recycling rate of plastic packaging has multiplied in recent years, and it will increase as the EU’s recycling obligations become stricter. That is why there are large stocks of plastic packaging in relation to the processing capacity in every country in Europe.

The recycling rate of plastic packaging has multiplied in recent years.

Lassila & Tikanoja’s Business Director Ville Vainio believes that the demand for plastic packaging waste will increase in the long run as the European countries build more processing capacity.

– I hope that the current global situation will not stop the planned investments, says Vainio.

Fortum’s Product Line Manager Mikko Koivuniemi estimates that the capacity of plastic refineries will also increase in Finland when the new waste act, which is currently being reviewed, enters into force.

– It is great news that more plastic packaging has been collected than was forecast. The new EU recycling targets are challenging, and that is why it is good that plastic is eagerly collected, says Koivuniemi.

The increase in the recycling of plastic packaging means that there will be an abundance of recycled raw materials in Europe in the coming years.

– In order for there to be uses for the raw material, manufacturers of plastic products have to make changes in their production, says Soini.

The recycling fees for plastic packaging producers rose sharply this year, and the fees are likely to rise next year as well. According to Soini, the increase is mainly due to a significant increase in costs following the increasing volumes of recycled packaging.

There are plenty of takers for recycled glass

The supply of waste glass will increase as the EU’s recycling targets for glass packaging go up. The recycling rate for plastic packaging will be 75 percent by 2030. However, the packaging industry’s raw material can contain 70–80 percent recycled glass, so there will be uses for the glass that is collected, at least in theory, according to Operations Director Pertti Tammivuori from Finnish Packaging Recycling RINKI Ltd.

–  The market situation may, however, fluctuate unexpectedly due to the coronavirus pandemic, says Tammivuori.

Glass is widely used in packaging for jams and preserves, for example. The demand for these products has increased in the exceptional situation, while the restrictions brought on by the coronavirus have meant that sales of beer, soft drinks and wine in restaurants and bars have declined.

Based on the current situation, Tammivuori does not believe that there will be any significant changes to the recycling fees for glass packaging next year. Glass collected in Finland is exported to Great Britain and the Netherlands for processing, then recycled glass is sold to packaging manufacturers.

Wooden packaging is reused or repaired for reuse

There are plenty of uses for used wooden packaging for the time being. Most wooden packaging, such as pallets, can be reused as they are.

– Wooden pallets, especially standard pallets, that can be reused have value either as they are or after they have been repaired, explains Jukka Ala-Viikari, Managing Director of Puupakkausten Kierrätys PPK Oy, the organisation responsible for the recycling of wooden packaging in Finland.

At best, standard pallets can be used for up to ten years. Cheaper recycling fees are driving producers to favour durable and easily reusable packaging.

When wooden packaging reaches the end of its life cycle, it is chipped for energy production or to be used in composting processes. Since 2018, wooden packaging that has been taken out of use has also been used as raw material in the chipboard industry.

In order to reach the recycling target, it is important that packaging producers report their packaging volumes carefully and correctly.

According to 2018 statistics, about 24 percent of wooden packaging is recycled. According to EU targets, 30 percent of wooden packaging has to be recycled from 2030 onwards.

– In order to reach the recycling target, it is important that packaging producers report their packaging volumes carefully and correctly. Some repaired packaging, for example, is not reported as new packaging,” says Ala-Viikari.