WRAP boosts recycling of yoghurt pots and food trays with launch of new mixed plastics loan fund
At a time when prices for recovered PET plastics are at an all-time high and 90% of mixed plastics in the waste stream presently going to landfill, the Mixed Plastics Loan Fund (MPLF) will deliver a shot in the arm to the market by providing capital support to potential investors in mixed plastics reprocessing capacity in the UK.
The Fund will also contribute to the Green Economy by stimulating this area of the micro-economy and creating jobs.
WRAP created the MPLF to supply a source of funding which had been more difficult to secure through traditional financing sources due to the emerging nature of the industry.
“A reduction in available capital brought on by the current economic climate together with recent market price volatility in recovered materials has meant that the risk-reward balance is still a barrier to private sector investment in mixed plastics recycling in the UK,” said Marcus Gover, WRAP’s Director of Market Development.
“By establishing a loan fund, as opposed to offering a capital grant, investors can pay back the money after they start making a profit and WRAP can re-invest those funds into more support for the mixed plastics market,” he said.
Last summer, research undertaken by WRAP proved that it was technically possible, commercially viable and environmentally best to recycle mixed plastics on a large scale. WRAP followed this up with a capital grant awarded to recycling firm Greenstar WES which is now commissioning infrastructure for the UK’s first mixed plastics reprocessing plant. It aims to deliver 20,000 tonnes of mixed plastics reprocessing capacity and be processing this material by March 2011.
WRAP’s long-term goal is to see mixed plastics recycling capacity established and maintained purely by the private sector. In offering a loan rather than a grant we are taking an important step in achieving this. WRAP’s 2008-11 business plan contains a target to deliver 40,000 tonnes of mixed plastics recycling capacity in the UK by 2011.
Householders in the UK dispose of 1.7 million tonnes of mixed plastics each year, the majority of which currently goes to landfill. It’s estimated that only around 20,000 tonnes of this is diverted from landfill each year.
Paul Davidson, WRAP’s Plastics Sector Specialist commented that as high quality recycled plastics can sell at anywhere between 50% and 100% of virgin polymer prices (at about £900-£1,000 per tonne), there is a potential market worth £250-£500 million pounds a year that the UK could benefit from.
“We know that that general public wants to recycle items such as plastic yoghurt pots, margarine tubs and rigid plastics like food trays, but at present there is only a 5% recycling rate on these items,” said Dr Davidson.
“At the moment the UK exports all of its recovered non bottle plastics, mostly to China,” she said, “If we closed the loop through increased collections and reprocessing of mixed plastics here in the in the UK, the economic benefits could be startling,” he said.
Applications to the Mixed Plastics Loan Fund (MPLF) will be sought until 31st December 2010 to ensure commissioning deadlines are met. For selection criteria and full details of how to apply for the loan.
