Why Papier-Mettler pulled out of planned infrastructure investment

The trials and tribulations of trying to get infrastructure up and running in Australia can be extremely challenging. As well as navigating red tape, NIMBYism, legislation (federal, state, and local), and competitors, you also have to find the expertise to build and run plants.

These issues are not just the purview of the resource recovery industry, Australia is littered with projects that failed to see the light of day due to a variety of reasons and therefore being put into the ‘too hard’ basket. As a consequence, Australia virtually has zero capacity to recycle certain waste streams locally. Paradoxically, it has implemented one of the strictest waste export bans globally.

In the case of the waste industry, environmentalists will argue – rightly in some cases – that a robust legislative and regulatory process makes sure that rogue operators, or those that sail over the legal requirements to make a quick buck, are pulled back into line. It makes sense to have guidelines and comprehensive, as well as consistent, regulations for sectors like the waste industry. 

However, those regulations need to be considered in the bigger picture and maybe politicians need to take certain issues into account when deciding to set targets, such as those for packaging and recycling. Because, as it stands, you can’t meet targets if there is no infrastructure in place. This issue is exacerbated by waste export bans that are not thoroughly thought out. Adding to that, investors are not prepared to put in 10s, or sometimes even 100s, of millions of dollars into a project that will not realise a return on investment for decades, or has a plethora of caveats hanging over its head in terms of legislation and compliance before it even gets off the ground.

Which brings us to Papier-Mettler. The family-run German company was founded in 1957 by Hans Georg Mettler as a paper wholesaler business and has expanded to specialise in flexible packaging made of paper and plastic. It recognised early on that waste was a resource that could be recovered and reused to substitute products made from virgin material. Papier-Mettler now has one of Europe’s largest recycling capacities for LDPE-film waste, a soft plastic that is considered hard to recycle. This means it can create economically and ecologically viable closed-loop material cycles with its customers. It also takes product stewardship seriously, which is why the company focusses on developing products that are recyclable through the same recycling stream as the initial product.

Papier-Mettler has expanded to various locations throughout the world including Australia in 2014. While it has diversified its offerings over the years, and already being key player in the European soft plastics recycling infrastructure, its vision was to play a similar role in the Australian soft plastic recycling sector. Recognising the lack of relevant infrastructure in the market, and an opportunity to contribute to the nation’s recycling infrastructure to process LDPE film waste, Papier-Mettler came in with a proposal to establish a facility that would recycle soft plastic LDPE film into high-quality resin, which could again be recycled into film again at end of life – i.e., following the cradle-to-cradle concept.

In the past, Australia has, if at all, focussed on downcycling schemes rather than circular schemes for soft plastics – meaning that even barely contaminated film waste is turned into lower quality products such as plant pots, which cannot be turned back into soft plastics.

“We made the decision to pursue a significant investment in a state-of-the-art mechanical recycling facility in Victoria in which we build up local cradle-to-cradle recycling capacity for LDPE waste,” a company spokesperson who wishes to remain anonymous told Inside Waste.

“This could be a game changer for the industry.”

As he pointed out, the country’s capacity for recycling LDPE film waste consisted almost entirely of processing schemes, which turned soft plastics waste into rigid, bulky products such as park benches and bollards. 

In comparison, Papier Mettler produces every-day film products, such as post-consumer recycled content reusable bags, from what is considered problematic soft plastics LDPE waste, within a circular scheme. This means that not only the overall recycling capacity in Australia increases for that material, but that the produced bags can be recycled into new bags again. 

Papier Mettler was willing to put its money where its mouth was by investing more than $20 million in such a plant and was planning to invest in more, only to have the rug pulled out from under it. How and why? 

Several state governments decided to, or were looking to, explicitly ban LDPE plastic carrier bags. It essentially banned the recycled content output for LDPE recycling without having another solution put in place that could offer a closed-loop solution for soft plastics waste. The decisions were made under a seemingly green agenda that was fuelled by other drivers that had nothing to do with protecting the environment, according to the spokesperson.

“The reasoning was that these shopping bags were harmful to the environment despite scientific evidence proving the exact opposite,” he said. “Plastic shopping bags made of post-consumer recycled plastics are – according to numerous LCAs – actually the most sustainable option in comparison to other materials such as paper or cotton.

“Following national purchasing and standardisation strategies, most of our customers needed to opt for alternatives to consolidate their shopping bag range. 

“Hence, even though only one state explicitly banned LDPE carrier bags at the beginning of 2022 (WA), the end market for the products which we manufactured out of film waste, virtually died overnight.”

This meant that all the work going into establishing the plant had to be stopped due to the lack of product and end market. 

“The sustainability and the success of recycling schemes depends on these end markets,” said the spokesperson. “Without them, recycling just isn’t viable long-term – economically and ecologically.

This correlation proved to be true once again just recently in Australia, in the form of the collapse of aRedCycle. The lack of a sustainable end market caused the scheme to be unable to process the amounts of collected material. Further, the competitiveness of the end product in the free market was not a given.

“Currently, there’s no industry-scale collection program and recycling capacity for LDPE soft plastics,” he said. “There remains a very small amount of recycling capacity for LDPE film waste (around 15,000 metric tonnes, where more than 300,000 tonnes are actually required,) with most of the LDPE material sent off-shore through waste export ban exemptions.

“Globally, we are striving for circularity. We want to be part of the solution. Organisations like Papier-Mettler need the support of policy makers and government in ensuring end markets not only exist but are actively created and sustained for long-term viability of investments and a truly circular economy for plastics. Without an economically and ecologically viable solution to process soft plastic waste onshore into competitive products, the dream of a true circular economy for plastics just cannot come true.” 

Send this to a friend