When Recycling Stops Being the Expensive Option - Seite 2

• ~60% feedstock (oil/gas)

• ~15% energy & utilities

• ~15% processing

• ~10% margin

Recycled plastic has a fundamentally different operational profile:

• ~30-40% collection & logistics

• ~20-30% sorting & cleaning

• ~20-30% processing

• ~10-15% compliance & certification

This difference creates a major pricing divergence when energy markets spike.

The Repricing Dynamic Taking Shape

Using current benchmark pricing:

• Virgin plastic: ~$950-$1,100 per ton

• Recycled plastic: ~$1,200-$1,400 per ton

Today, recycled plastics still carry an approximate 30% premium.

But three realistic market pressures materially alter that balance.

1. Oil and Gas Cost Escalation

If feedstock prices double, the impact on virgin plastic production is immediate because roughly 60% of production costs are directly tied to fossil fuel inputs.

2. Limited Exposure Within Recycling

Recycling operations experience only moderate cost increases under the same scenario. Transport and energy inputs rise, but recycled production does not depend on fossil feedstock in the same way virgin production does.

3. Regulatory Cost Expansion

Carbon pricing, plastic taxes, and compliance obligations continue adding incremental costs to virgin resin manufacturing.

The Inflection Point

Under those combined conditions:

• Virgin plastic: ~$1,840 per ton

• Recycled plastic: ~$1,430 per ton

At that stage, recycled material becomes approximately 20-25% less expensive than virgin resin - a significant turning point for the industry.

Regulation Is Accelerating the Transition

Energy pricing alone does not explain the shift underway. Regulation is increasingly becoming a second major structural cost driver, particularly for virgin plastics.

Environmental externalities associated with plastic production and waste are gradually being priced into the system through policy mechanisms.

Governments across Europe and Asia are implementing:

• Carbon pricing programs

• Extended Producer Responsibility (EPR) frameworks

• Mandatory recycled-content requirements

The trajectory is increasingly clear: the structural cost burden on virgin plastics is rising.

This creates both direct cost pressure and market access risk. Companies unable to validate recycled content or lifecycle compliance may face barriers to customers, procurement systems, or regulated markets.

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