Global recycling trade association BIR has called for governments around the world to support the industry.
It warned that restrictions on global trade and high energy costs were putting the sector under pressure.
In a statement, following its convention in Dubai last week, BIR said: “In the wake of its recent World Recycling Convention, the Bureau of International Recycling expresses concern regarding the effect of the current energy/cost-of-living crisis on the livelihood of its member companies in Europe and across the globe. During the event in Dubai, most of the over 650 attending companies, many of which are SMEs, reported on the huge burden that sky-rocketing energy costs put on their operations, threatening their survival on the medium to long term.
“During all commodity sessions covering ferrous and non-ferrous metals including stainless steel and alloys, paper, plastics, tyres/rubber and E-scrap, reports of unprecedented pressure on profit margins, financial losses and bankruptcy came to light.
“In addition, potential or forthcoming trade restrictions impacting exports of recycled materials will – if adopted – result in long-term market disruptions that will heavily impact circular value chains and therefore result in additional constraints for the recycling industry.
“BIR urges national governments and international legislators to enact immediate financial aid for the recycling industry to prevent significant long-term damage to a sector that plays a pivotal role in the global circular economy and the protection of the planet.”
BIR Paper Division president Francisco Donoso said that high energy prices had contributed to OCC prices falling by 80% to 90% in recent months, due to low demand and high stocks at mills.
He added: “The high cost of energy – and specifically gas – is one of the reasons for this as it has become by far the largest production cost for mills.
“They cannot pass on this cost in their sales prices because demand for their products is also low owing to the financial crisis, and neither can they reduce their energy costs. Therefore, the only cost they can manage is what they pay for their raw material.”
In the USA, Mr Donoso said, prices for mixed paper had reached zero dollars in some locations and thousands of tonnes were being landfilled. Prices had fallen fastest in Europe and he anticipated further downtime, suggesting “it is difficult to know where the bottom is”.
