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As one of the world's largest plastic producers and consumers, China has vigorously promoted green low-carbon and circular economy in recent years, and has successively issued a series of laws, regulations and incentive policies from top to bottom to promote and standardize the development of waste plastic recycling industry, and accelerate the transformation of the green and low-carbon development model of the whole industrial chain.

MantaRay will share and discuss with the industry changes and trends in the future development of the recycled plastics industry from the aspects of the development status of the recycled plastics industry, market size, policy orientation and technical processes.

Basic industry information

Recycled plastic refers to the waste plastic recycling, cleaning, sorting and other pretreatment, by melting granulation, modification and other physical or chemical methods to re-make plastic raw materials, applied to textile, food and beverage packaging, home building materials and other fields, is one of the sustainable development of plastics, in order to achieve the purpose of energy conservation and environmental protection.

First, recycled plastics industry chain

The recycled plastics industry chain is mainly divided into three links: front-end plastic recycling, mid-end plastic recycling and back-end recycled plastic utilization. Among them, the front end includes professional recyclers and community recycling points; Middle-end participants include operators, equipment vendors, etc. There are many participants in the back-end recycled plastics utilization process, including manufacturers of various types of plastic products.

Second, environment and demand

1. Policy environment

The resolution "Ending Plastic Pollution: Developing an International legally Binding Agreement" adopted by the Fifth United Nations Environment Assembly in 2022 has pressed the fast forward button for global plastic pollution control and waste plastic recycling.

Throughout the world's major and regional policies and regulations in the treatment and recycling of waste plastics, although each has its own focus, it has the following common characteristics:

Actively promote plastic pollution control by setting clear targets for waste plastic recycling and recycling;

By banning the use of single-use plastics to achieve source reduction, thereby reducing plastic waste disposal pressure;

Through the extension of producer responsibility, plastic tax to obtain special financial revenue, the use of financial means to encourage more waste plastic recycling;

Through clear requirements for the amount of recycled plastics added, the demand for recycled plastics at the plastic production end is stimulated, and the recycling of waste plastics is promoted.

China's "14th Five-Year Plan" plastic pollution control Action Plan issued on September 15, 2021, clearly defined the recycling target, that is, by 2025, the incineration capacity of urban solid waste in the country will reach about 800,000 tons/day, and the amount of plastic waste directly landfill will be significantly reduced; The recovery rate of agricultural film reached 85%.

2. Economic environment

There are tens of thousands of registered enterprises engaged in the plastic recycling industry in China, with an annual output of more than 30 million tons, but there are only five or six hundred standardized production enterprises, and the output of these standardized enterprises accounts for less than half, and the rest are produced by non-standard small enterprises.

According to the "China recycled plastics Industry Development Report 2021-2022", the amount of waste plastics recycled in China in 2021 is about 19 million tons, an increase of about 3 million tons from 2020, an increase of 19% year-on-year, and the output value of waste plastics recycling is about 105 billion yuan. However, the overall scale is relatively low, and there is still a large room for improvement compared with the domestic and global long-term demand for recycled plastics.

3. Social and ecological environment

At present, global plastic production has consumed 4%-8% of global oil consumption, and petroleum-based degradable plastics cannot be recycled after decomposition into carbon dioxide, methane and water, which is a waste of non-renewable resources such as oil. Plastics and some petroleum-based degradable plastics are the back-end products of petroleum, and after recycling, plastics can be reused in all aspects of production by physical or chemical means, and the consumed petroleum raw materials can be recycled.

Plastic recycling and recycling to save oil resources

Second, products and technology: product market segmentation and main technical processes

1. Segmented product market

According to the recycled Plastics branch of the China Materials Recycling Association, In 2021, China's waste PET recycling amount is 5.5 million tons, waste PE recycling amount is 4 million tons, waste PP recycling amount is 3.8 million tons, waste PVC recycling amount is 1.5 million tons, waste ABS recycling amount is 1 million tons, waste PS recycling amount is 900,000 tons, waste PA recycling amount is 550,000 tons, waste PC recycling amount is 500,000 tons, and other varieties are 1.25 million tons. In the proportion of waste plastic varieties recycling, waste PET accounted for 29%, waste PE accounted for 21%, and waste PP accounted for 20%, which is still the main component of waste plastic recycling.

In the waste PET recycling volume, the waste PET bottle recycling volume is larger, about 4 million tons, accounting for 21%, and other waste PET is 1.5 million tons, accounting for 8%.

2, the main technology

At present, the recycling and treatment methods of waste plastics at home and abroad mainly include landfill, energy recovery (incineration), physical recycling and chemical recycling. Only through physical recycling and chemical recycling can the whole life cycle of "plastic raw materials - plastic products - consumption - recycled plastics" be realized.

Among them, physical recycling technology is the core of the current plastic recycling industry. For the nine mature and emerging recycling technologies in the current industry, the applicability, product performance, efficiency and sustainability, integration, scope and scalability of the evaluation, extraction technology and catalytic cracking technology will be the main development direction of future recycling technology.

Third, market and competition: market competition pattern and leading enterprises

With the continuous maturity and improvement of recycling systems and technologies, recycled plastics, as an emerging billion-level market, has attracted the leading entrance layout of all links in the plastics industry.

From the perspective of market competition, overseas recycling companies mainly include FP Corporation of Japan, Indorama Ventures of Thailand and PetStar of Mexico, most of which are companies engaged in the recycling, recycling and utilization of PET plastics. Domestic recycling companies in addition to Yingke recycling, the main is Taiwan's Far East New Century Co., LTD.

From the perspective of subdivision industry scale and project type, rPET with higher added value is the main, the single scale is within 20,000 to 100,000 tons/year, the overall scale is relatively low, and there is still a large room for improvement compared with the global long-term 9.2 million tons/year grade rPET demand.

Yingke Recycling has 100,000 tons/day of recycled PS operating capacity, 150,000 tons of recycled PET construction capacity

We already have an FDA-approved production capacity of 50,000 tons/day of food-grade rPET slicing

Overseas companies such as Veolia and Indorama have realized the layout of recycled plastic production capacity

At present, the recycled plastics industry is still in a period of rapid expansion, and the industry competition pattern has not yet solidified.

Future development trend

First, policy orientation: global policy objectives

Eliminating the world's plastic pollution requires the joint efforts of countries around the world, according to the requirements of the United Nations Environment Assembly, countries in the world need to reduce plastic demand from the demand side and enhance the recycling of plastics, strengthen the recycling rate through policy means, and effectively control plastic leakage. At the same time, the advantages of energy saving and emission reduction of recycled plastics are obvious, and in the context of carbon neutrality, more recycled plastics support policies have been introduced to provide a good policy environment for the recycled plastics industry.

2. Market supply and demand

1. Supply side

On July 18, 2017, The General Office of the State Council issued the Implementation Plan for Prohibiting the entry of foreign Garbage to Promote the Reform of the Solid Import Management System, proposing to ban the import of waste plastics from domestic sources, and ban the import of waste plastics from industrial sources from 2019. According to the statistics of the Recycled Plastics Branch of the China Materials Recycling Association, in the past, China needs to import 5-8 million tons of waste plastics from abroad every year for recycling and manufacturing, and after the Ban on waste, it will digest 8-10 million tons of domestic waste plastics every year to complete resource reuse.

2. Demand side

In recent years, global plastic waste production has continued to increase, more than 300 million tons per year, and will reach about 12 billion tons in 2050.

Of the secondary plastics produced globally, only 9% are recycled, 12% are incinerated, and more than 70% are dumped directly into the soil, air, and oceans. The emergence of the replastics industry not only solves the problem of environmental pollution, but also saves energy consumption. According to the 2021 Annual report of the New Plastics Economy Global Pledge, more than 1,000 enterprises and government organizations have signed the pledge, such as Nestle, Pepsi, Coca-Cola, Ma, Unilever, etc., and the raw plastic consumption of brands and retailers who signed the global pledge has shown signs of peaking in 2021, and is expected to decline by nearly 20% by 2025.

Third, market size forecast

In 2021, the amount of waste plastic recycling in China is about 19 million tons, an increase of 19% compared with 2020, and the output value of waste plastic recycling in 2021 is about 105 billion yuan, an increase of 33% compared with 2020.

In 2025, China's waste plastic recycling is expected to reach 27.5 million tons, the recovery rate of more than 30%, according to 6000 yuan/ton estimates, recycling output value of about 165 billion yuan;

In 2025, the global production of recycled plastics is 80 million tons, according to the calculation of 6,000 yuan/ton, the overall recycling output value will reach 480 billion yuan;

In 2030, the global production of recycled plastics will reach 220 million metric tons, and the recycling rate will be 50%, and the annual market size of recycled plastics will reach $55 billion.

According to statistics and forecasts, in 2025, the proportion of global PS and PET plastic use will be maintained at 6.10% and 8.40% respectively in 2020, and the future recovery rate and recycling rate will be jointly improved. At the same time, in terms of the price of recycled plastics, referring to the average price of recycled PS plastics in 2022 of 8,500 yuan/ton, assuming that the consumption ratio of non-grade recycled PET and food-grade recycled PET is 8:2, it can be estimated that the overall market size of recycled PS and PET in 2025 will reach 120.3 billion yuan.

Industry advice

I. Industry risks and tips

The recycled plastics industry has a broad market space, and policy guidelines provide dual guarantees of demand and supply, which is expected to be further released;

The recycled PET and PS industry is the blue ocean market supported by countries all over the world, and the process technology is relatively mature and stable, so as to cut into it, it is more stable.

With the help of the original front-end recycling industry, the planned and step-by-step layout of the "recycling-reclaim-utilization" recycled plastics industry chain can accelerate the continuous horizontal and vertical expansion of the company's business sector and accelerate the fast track of development;

The current domestic waste plastic recycling system has not yet been completed, effective waste classification has not yet been fully realized, and the unstable quality of recycled raw materials may bring downstream regeneration and utilization risks;

The competitive landscape of the recycling industry has intensified, and it may face the risk of insufficient market promotion or insufficient demand.