Mapping financial requirements to facilitate the transition away from virgin fossil-based plastics

Objectives

The Swedish Environmental Protection Agency (EPA) aimed to map out companies’ need for investment to support the transition from virgin fossil-based plastics to sustainable materials and to propose a possible design of instruments to help companies overcome the economic obstacles involved.

The goal was to assess the feasibility among companies, and the role different instruments can play in realising and accelerating the transition in the Swedish market.

Project

In order to achieve Sweden’s 2045 climate goals, virgin fossil-based plastics must be replaced with materials with a lower climate impact and material recycling must increase, both of which require increasing the demand for recycled and bio-based raw materials. Greenhouse gas emissions from waste incineration mainly originate from plastic, which is produced almost solely by fossil oil and natural gas.

Results from market research with industry stakeholders showed that financial support from the EPA can be successful to support investments in both small and large facilities mainly for recycling of PP(polyproylene), HDPE(High-density polyethylene) and PET(Polyethylene terephthalate). In addition, calculations from the report show that recycled granules (even after sensitivity analyses) always have less climate impact than the production of virgin fossil-based plastic.

Services

• Mapping of obstacles in the Swedish market
• Assessment of climate effects
• Estimation of cost of investment
• Analysis of whether the needs are met by existing support
• Proposals for the design of policy instruments

Impacts

The changes proposed are:

• Increased information on the possibility to apply for aid to companies in the plastics and recycling industry
• Consider changes to the current Regulation to make it clear that the circular economy and efficient use of materials are given priority with equal climate benefits
• Review the interpretation of Article 47 of the Climate Change Act, which we believe does not exclude support for investments that lead to environmentally better or more efficient recycling compared to the best conventional recycling process that could be built without support
• If possible, strengthen the budget within the Climate Change Facility.

Results from market research with industry stakeholders showed that financial support from the EPA can be successful to support investments in both small and large facilities mainly for recycling of PP(polyproylene), HDPE(High-density polyethylene) and PET(Polyethylene terephthalate).