Pandemic sharpens sustainability focus in plastics and aluminium

MELBOURNE: The aluminium and plastics sectors have poved resilient during the coronavirus crisis but need to do more in the push towards so-called circular economies, two industry executives said at at a pre-recorded panel for the Reuters Next conference.

Markets such as the United States have seen average aluminium recycling rates actually fall, said Steve Fisher CEO of Novelis Inc, a unit of Hindalco Industries and the world's largest producer of recycled aluminium and flat rolled products, including for drinks cans.

Collecting the 45 billion cans per year that are not being recycled would save 5 million metric tonnes of green house gas emissions a year, or the equivalent of 1 million vehicles off the road, Fisher said.

In the automotive sector, production of the next generation of aluminium-intensive Ford F-150 trucks, to be launched this year, is driving a change in the supply chain with improved ability to separate out aluminium alloys and reduce waste.

"It's going to take the industries as a whole to come together and ... design products for circular economies, and not just for linear economies that we have today. So there is a lot of work we have to do," Fisher said.

In plastics, tougher regulation since China shut its doors to Western waste in 2018 is driving improved collection and higher rates of recycled material per product, said Yash Loria, chief sustainability officer at Indorama Ventures.

The two companies have proved resilient during the COVID-19 pandemic, with demand bouncing back towards pre-pandemic levels for Novelis while Indorama's share price has climbed to an 18-month high, both helped by demand for drinks containers.

"In beverage cans, which make up 55% of our business roughly, we have seen steady ... if not an actual increase in consumption, because of the trends of individuals consuming more beverages at home," Fisher said.

The trend was the same for PET plastic producer Indorama.

"There was a big bump in PET sales when COVID-19 first hit Europe and the reason for that was everyone was stocking up at home with large bottles of water," he said.

"In the summer months that continues and we have seen PET sales continue to be strong."

More broadly, demand from all customer segments including auto has recovered from prepandemic levels, Fisher said, the only exception being aerospace.

COVID-19 has also presented opportunities to rethink business priorities, including flexible workplaces that Loria said have improved productivity at Indorama while also providing the opportunity to cut down on air travel.