FMCG companies may need to re-think their packaging in light of the China recycling ban announced earlier this year.
Research company GlobalData says a reduction in plastic waste has become more necessary than ever.
“Given that the days of exporting the waste plastic problem to China may be over, the only way out may be to stop creating so much plastic waste in the first place, innovation insights director at GlobalData Tom Vierhile says.
“If so, FMCG companies may soon find themselves on the frontlines of the issue.”
China’s decision to stop importing recyclable plastic waste in January 2018 was part of an initiative by China to focus on its own domestically produced waste.
“This is a wake-up call to the global recycling industry and may force FMCG companies to change their approach towards waste, and make downstream packaging waste a key issue and a major point-of-difference,” Vierhile says.
Prior to the ban, China was taking in over seven million tons of scrap plastic each year from Europe, the US, and other parts of Asia, including Japan.
Recyclers in China used it to produce pellets as raw material for everything from office furniture to fiber-optic cables.
However, since the importation ban, waste plastic is stacking up globally as the supply far exceeds the demand.
Developing markets like Vietnam and Malaysia have picked up some of the slack from China post-ban but the industry consensus is that tighter regulations and increased taxes will prevent Southeast Asia from helping to maintain the status quo for plastic waste.
This reflects in GlobalData’s global consumer survey, in which 75 per cent of consumers globally see recyclable packaging as an important factor in environmentally friendly packaging.
“FMCG companies have the opportunity to emphasise the issue by using packaging that does not depend on third-party recycling activities that may or may not take place, depending on market conditions,” Vierhile says.
“Sooner or later, an enterprising FMCG company is going to make downstream packaging waste transparency a key issue and a major point-of-difference.”
