Page 128 - CW E-Magazine (26-11-2024)

Point of View

As would be expected, chemical recycling is a lot more capital- and energy-intensive than mechanical recycling but can afford significant
value-addition as it enables the production of r-PET resin, with properties identical to virgin material.

Indian PET recycling industry
India’s PET recycling capacity (largely mechanical) currently stands at 2.2-mtpa, spread over about 40 medium-to-large production units
producing staple fibers primarily for the textile industry. But operating rates are low, due to supply chain constraints, operational inefficiencies
and lack of market. But at least the last is about to change.

The opportunities in the space are evident from the fact that the business has attracted several large companies, and several collaborations
with value chain participants. Reliance Industries, India’s largest virgin PET producer, has, for one, set up several plants across the country and
has a capacity to recycle 2-bn PET bottles annually, which it plans to scale up to 5-bn. The conglomerate’s retail business has a collaboration
with Coca-Cola India to collect and recycle 5-mn PET bottles annually in select cities. In 2023, the soft drinks maker launched its ‘Return and
Recycle’ initiative, together with Zepto, a grocery delivery business, to collect empty PET bottles of any brand directly from consumers, and
launched water and its eponymous soft drink in r-PET containers.
In September this year, Bangkok-based Indorama Ventures Public Co. Ltd., through Indian subsidiaries, IVL Dhunseri Petrochem Industries
Ltd. and Dhunseri Ventures Ltd., announced formation of a joint venture with Varun Beverages Ltd. – PepsiCo’s second-largest bottler globally
outside the US – to establish several greenfield r-PET facilities in India, with a cumulative capacity of 100-ktpa.

There is a shift towards high-end machines and recycling technology for new projects to improve the quality of r-PET. Ganesha Ecopet Pvt. Ltd.,
in Warangal (Telangana), a subsidiary of Ganesha Ecosphere Ltd., has recently installed mechanical recycling systems from Starlinger, a German
machinery manufacturer, raising its ability to produce bottle-grade r-PET to 42-ktpa.

In chemical recycling, revalyu Resources, part of a Germany headquartered group, has just commissioned its second plant, using glycolysis,
enabling it to recycle over 20-mn used PET bottles a day into 160-tpd (tonnes per day) of high-quality PET chips (see inside pages of this issue).

Drivers for r-PET
The increasing demand for food-safe r-PET in India is being driven by regulations. The Extended Producer Responsibility (EPR) of the Plastic
Waste Management (Amendment) Rules (PWMAR) 2022 require importers, brand owners and plastic waste processors to systematically
collect plastic waste in proportion to the quantity of plastics consumed. In addition, the rules stipulate brand owners and producers include a
30% share of post-consumer recycled content in PET bottles by 2025, with the share rising each year to reach 60% by 2029.
The recent clearance for food contact applications from the regulators – including for water and beverages – will serve as a big boost to
the r-PET industry and drive a modernisation of mechanical recycling as well as provide a boost to the nascent chemical recycling efforts. The
Food Safety and Standards Authority of India (FSSAI), which had prohibited use of recycled plastics in food contact applications, amended the
rules in January 2022 to allow r-PET in food packaging and in May 2022 laid out rules outlining the decontamination processes that need to be
followed. It also restricted the input material to be only food grade wastes. The Bureau of Indian Standards has since framed standards food
grade r-PET and these are expected to go in for wider circulation soon and subsequently notified. In short, the regulatory hurdles to adoption
of r-PET in food packaging have been cleared, just in time for the industry to begin using this material to meet compliance needs.

The recycling industry’s grievances are centred around peripheral issues, particularly taxation. There is an 18% GST currently payable on
the baled PET supplied by aggregators to the r-PET processors, but due the unorganized nature of many of the former there are compliance
issues with the taxes collected but not paid to the government. Some of these issues will be ironed out as the supply chain consolidates and
expands, but buyers will also need to do due diligence in procurement.
Recycling will have to step up
India now consumes about 1.8-mt of PET for all sorts of uses. The first stage of the mandate will require users to incorporate 30% recycled
content in their packaging. This implies an immediate demand for ~50-kt of r-PET – a volume which will expand by about 8% CAGR by virtue
of growth in demand for virgin resin, and by rising levels of recycled content (going up to 60% by 2029). The recycling industry will need to
step up to meet the emerging needs.

Life cycle studies of PET have consistently confirmed its environmental benefits as a packaging material, especially when its recycling is
considered. The industry will thus remain a standout when it comes to plastics use and recycling.
Ravi Raghavan

128 Chemical Weekly November 26, 2024

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