Resin industry prioritizes treaty language that boosts investments, halts production caps

American Chemitry Council

ACC CEO Chris Jahn, center, at a 2023 news conference.

As the last planned negotiations for the plastics treaty prepare to open in South Korea, plastics materials makers from companies including Braskem, BASF and CP Chem are pushing for an agreement that sends investment signals to support their recycling plans but avoids caps or taxes on resin production.

In a media briefing in the runup to the talks, which open Nov. 25 in Busan, those firms and leaders from the International Council of Chemical Associations pointed to recycled-content mandates, extended producer responsibility laws and recycling rate targets as key provisions for a treaty.

"We hope that an agreement in Busan would accelerate a circular economy for plastics, where plastics are designed for reuse and recycling and then remade into new plastics," said Chris Jahn, council secretary at the ICCA and president and CEO of the American Chemistry Council.

"We believe this is the most economically sound way to end plastic pollution with the least unintended consequences," Jahn said in a Nov. 15 online briefing. "The global agreement can enable this by sending the right demand signals and providing the right frameworks to enable a circular economy across the globe."

But there are strong pushes from the opposite direction, for production caps and fees, coming from some countries as the Busan round opens.

They want the talks to end with, if not specific details, then a framework allowing for limits on production or fees on virgin plastics, arguing that supply-side limits are the best way to slow the rapid growth of plastics production and counteract the economic challenges that recycled materials face from cheap virgin resin.

More than 40 countries have signed on to the Bridge to Busan declaration calling for production limits. President Joe Biden's administration, as well, backed some form of production limits in August, but environmental groups said at their own briefing Nov. 15 they feared the administration was now walking back that support.

Proposals are circulating for resin production fees, including a new one from France, Kenya and Barbados, delivered as part of recent climate talks.

Those nations called for a plastics fee mirroring one offered earlier this year by the Minderoo Foundation, that would amount to a tax of roughly 5-7 percent of the value of virgin resins to finance recycling infrastructure and plastic pollution cleanup.

CP Chem

Prusak

The case against caps and fees

But the plastics executives pushed back on those fees and limits in their briefing.

The executives argued that resin taxes and virgin plastic production caps would increase the cost of consumer goods, create shortages that snarl manufacturing supply chains and force a shift to other materials with potentially higher greenhouse gas impacts.

"As individuals around the world are moving into the middle class, and as population grows, there's going to be continued demand for resources and materials," said Steve Prusak, president and CEO of Chevron Phillips Chemical Co. (CP Chem). "We think plastics are the right solution. The world's going to need more of these materials, not less."

Prusak said the agreement needs to address the third of the world's population without access to organized waste management.

He said EPR laws — which typically assess taxes on consumer goods companies' packaging to fund recycling and waste collection — are a tool the major resin makers support to do that.

"Extended producer responsibility could create funding that could then be put to use addressing the issue of plastic pollution, particularly for the 2.7 billion people in the world who lack basic waste management infrastructure," Prusak said.

While they supported EPR, the executives for the most part shot down the idea of direct fees on virgin plastics to help finance the treaty.

Jahn compared resin fees to production caps, arguing that both would raise prices and hurt lower-income consumers.

He said the treaty, instead, should have countries put measures like recycled content mandates into national action plans they're expected to develop.

"National action plans that require recycled content targets and/or recycled rate targets are a better way to go" than resin fees, Jahn said. "We support proper demand signals that incentive a circular economy. Those are national action plans."

Other plastics executives participating in the talks have said they could see resin fees being part of the treaty's framework, even if they opposed them.

Patrick Krieger, a Plastics Industry Association executive who attends the negotiations, said at a Plastics News event in September that it's possible the agreement could include resin fees.

Unlocking investment

The resin executives instead said they want the treaty to provide a framework for investments in recycled resins and other alternative feedstocks like biobased resins.

"Right now, there's so much uncertainty," said CP Chem's Prusak. "This is an evolving, emerging area, and to make the kind the large-scale investments needed to address this issue on a global basis, we need this treaty to provide what I'll call an investable foundation."

Martin Jung, president of performance materials at BASF, cited mass balance rules for chemical recycling as one area where more regulatory certainty would lead to more investment.

"If there are no clear rules, there is no investment because we can't calculate our business case," he said.

Allied plastics industry groups including the Global Partners for Plastics Circularity were also gearing up for the treaty, putting out a statement endorsing a "decision tree" matrix to identify plastic products mostly likely to leak into the environment, as well as highlighting a chemical additives database that ICCA is developing.

Jahn said the treaty needs to include resin producing countries to make sure that it can "unlock that investment that will drive progress."

"It's producing countries. It's countries with waste management challenges. It's national action plans with demand signals that unlock investments, recycled content targets, recycling rate targets, design for circularity guidance," Jahn said.

* Source : https://www.plasticsnews.com/news/resin-industry-prioritizes-treaty-language-boosting-investments-halts-production-caps