Economic Study of the Canadian Plastic Industry, Markets and Waste
Environment and Climate Change Canada, 2019
The Economic Study of the Canadian Plastic Industry, Markets and Waste commissioned by Environment and Climate Change Canada in 2019 is the first of its kind in Canada. Using national statistics, interviews, and industry reports the study presents the entire value-chain of plastics in Canada from raw material production to end-of-life. Plastics are favourable throughout varying sectors of the market because they are cheap, lightweight, malleable and durable. The study focuses on the following topics: factors creating low recycling rates in Canada, the economic advantages of a zero plastic waste economy by 2030, and opportunities for positive change. This study shows that Canada has low landfill diversion and recycling rates (25% and 9% in 2016, respectively), and 87% of our plastic waste goes to landfills or the environment. Plastic pollution in Canada is a broad and systemic issue, and therefore difficult to address. While some sectors, such as textiles, automotive and construction have lower recycling rates than others, and each sector faces unique challenges, unifying recycling issues are economic problems of demand and supply.
Recyclers and other businesses in the end-of-life market, such as collectors, are in a vulnerable position in the Canadian market. The price of novel plastic material fluctuates often because it is linked to gas prices. Recycled plastic products compete in the market with virgin resins. For recyclers, the market is unstable and often not viable because the price of virgin resins is so cheap that the demand for recycled plastic material is low. This is a problem for Canada’s recycling rates because the types of plastics that are collected, accepted, and managed by recyclers are highly dependent on end-of-life markets. Across the eight sectors of plastic waste outlined in this study, packaging has the highest recycling rate at 15% in 2016. Recyclers focus on packaging because resins made from most of the plastics used in this sector, such as polyethylene terephthalatePET, are valued highly in the market. On the other hand, the automotive and white goods sectors essentially do not recycle (with recycling rates of 0% in 2016) because the market for the mixed shredded plastics these sectors produce is extremely limited. The viability of end-of-life markets is very important because it determines whether cost-adding actions like collecting and sorting plastic waste is worthwhile.
Fortunately, various levels of government can provide support to recyclers and help create a more stable and viable market for recycled plastics. First of all, policies such as a tax on virgin resins could make recycled resins more attractive in the market, or politicians could ensure a market for recycled resins entirely independent of the price of virgin resins by requiring that recycled plastics be used in certain products. These measures should be implemented at the same time as upstream actions in order to ensure that recyclers can access quantities and qualities of plastic required to meet increased demand. Further, municipalities can enter into long-term contracts with recyclers to provide them with raw materials and the stability to invest in technological developments. Municipalities can also decrease recycler’s operating costs by implementing good systems of collecting and separating plastic waste. Although concerted efforts involving all stakeholders in the plastic value-chain are necessary to increase recycling rates in Canada, governments have an important role to play. When governments clearly and proactively communicate policy changes such as non-voluntary recycling targets, product design regulations, and changes in the cost of disposing of waste into landfills, companies are encouraged to address the problems.
The report concludes that many barriers leading to low recycling rates in Canada are economic in nature. In sum, recyclers are vulnerable in the Canadian market due to the low demand for recycled plastic resins and costs related to the collection and contamination of plastics. Governments at various levels can help recyclers gain stability in the market and implement clear policies that encourage changes in various stages of the plastic value-chain such as raw material production, product manufacturing, and end-of-life processing.
Find the full report here.
1. Deloitte & ChemInfo Services Inc.. Economic study of the Canadian plastic industry, markets and waste. Environment and Climate Change Canada, 2019, Gatineau, Quebec. Available from http://publications.gc.ca/collections/collection_2019/eccc/En4-366-1-2019-eng.pdf