There is a lot of news about plastic waste/scrap prices rising this week. History suggests that we should not extrapolate this into any medium to longer-term conclusions about the longer-term fortunes of recycling. Every time base polymer prices rise above a certain point, companies using plastics with less rigorous product quality requirements start looking for anything they can get their hands on – especially if the supply of virgin resins is physically limited. This was the case when oil prices peaked in 2013/2014 and it was also the case in the early 1980s. The difference today is that a prolonged shortage may help to kick-start some recycling initiatives where consumers find that they can use the lower quality product effectively and choose not to switch back as virgin polymer availability rises because of the PR element of what they have switched to. That said, if virgin prices collapse later in the year, there would almost certainly be some switching back. We have been advocates for some time of a more holistic approach to recycling in the US (and globally) where buyers who want recycled content to accept that they must pay prices based on costs rather than a virgin polymer price marker. Without this, we will not drive the necessary investment to create sustainable and efficient models for recycling that can compete at lower prices.
We touched on this subject on Sunday and will cover it in more detail tomorrow, but we believe that the power issues in Texas last week will be a kick in the teeth for those that believe we can build a green hydrogen economy quickly. The volatility of wind and solar suggest that we need to build far more capacity while continuing the use of natural gas-based power just to create better grid stability – something increasingly important if weather anomalies might result in lower lows and higher highs going forward. We need hydrogen, created from periods of surplus power to back up the grid far more urgently than we need a hydrogen bus.
