Digitalization in the procurement of plastic recyclates
The final session of Greiner Packaging’s virtual Innovation Days saw Christian Schiller, co-founder of Cirplus, explaining the interplay between the procurement platform and standardization, and discussing the contribution this can make overall to closing the plastics cycle.
Digitization in the procurement of plastic recyclates – closing the loop with standards and technology
“All of us in the plastics world are aware that the quantity of plastic waste entering the ocean is increasing and has now passed more than 15 million tons, which is more than the entire amount of plastic converted in Germany in any given year,” said Christian Schiller.
“Cirplus is a startup, based in Hamburg, Germany, and we've been around for two and a half years. We know that the plastic economy is inefficient and wasteful. When we talk about the topic of recycled plastic, and why it hasn't really been used, there are several reasons. First, is the lack of an economic incentive. When virgin material is, on average, cheaper than high quality recyclates, why use recyclates? This then leads to a lack of quality materials when in the past there has been limited demand.”
I founded Cirplus because the digital readiness of the industry is, in general, not yet very advanced. However, this is changing fast, as consumer pressure and regulations are forcing the use of more recycled plastic across the board, and not just in packaging.
Christian Schiller then outlined some examples of the regulatory landscape and voluntary company pledges which are leading to very ambitious recycled plastic targets.
“The procurement of recycled plastic is not always easy. In fact, it's quite hard when you're dealing with fragmented markets. That’s the opposite to what we are used to in the virgin plastic world. It is also very hard to secure consistent quality and quantity, plus the market actors are digital dinosaurs still using phones, fax machines, and trade fairs as the traditional way of doing business. All that makes it difficult when you're dealing with the complex market of plastic waste feedstock and recycles worldwide. That is why Cirplus was founded in December 2018 – just one month ahead of the German packaging act entering into force – as a procurement platform for recyclates.”
“We basically connect markets with a few clicks, so you can go on Cirplus today and check out quantities and qualities. We vet suppliers on the platform, and we’re driving specifications. We are also demonstrating contract tenders and spot market quantities.”
“We’re driving standardization of recycled plastics, certification and consulting, because we understand that a digital platform and the trading of plastic waste and recyclates will not work if you cannot achieve better commodification across country borders, so that it becomes easier and more reliable for converters and brand owners alike to procure the quantities and qualities they need in larger amounts.
“Cirplus was founded as a platform for plastic waste and recycled plastics, so the most obvious use for our software is that you can buy and sell waste feedstock and recyclates,” said Christian Schiller, before explaining how customers – waste owners, recyclers, and plastic converters use the Cirplus digital software. He then gave a few product demonstrations.
“We are aware that there is a lot of demand now entering the market that does not yet find a seller, or where the supply still needs to be developed as it is not yet there. So, we allow for the placement of specific procurement needs, so you can place your procurement need on the platform – up to 1 million tons a year – and specify the details of what you need.”
“We have also added more advanced functionality such as securing material at the best market conditions. Right now, with the high prices of virgin and rising prices of recyclates, this functionality cannot be overstated. You can basically survey what's going on in the market, and eventually the software helps you to make more informed and better procurement decisions – when to sell and/or when to buy, when you are a buyer.”
“The platform also provides a market overview of quantities, qualities, prices and geographical availability.
The role of standardization
“In May, we published DIN Spec 91446 – classification of recycled plastics based on data quality levels for use in digital trade – for public review. We got together with the German Institute of Norms and 16 players from every step the value chain – including Greiner Packaging. We had participants from the converter side, sorting technology, waste managers, post-industrial and post-consumer recyclers, testing labs, academia, and industry associations.”
“Our goal was to close the lack of available and reliable standards in the industry for recycled plastic to make it really easy and cost efficient for procurement departments to procure the recycled needs of the future. We looked at four specific segments: definitions; quality grades. based on data depth; labeling; and the types of recyclates and recycled content share. We also looked at the process of handling plastic waste including collection testing and processing. Work is now under way to transfer this DIN Spec in German, European and International norms.”
“The DIN Spec 91446 fits neatly into what we're trying to do with Cirplus, because combining digitization with a standard for procurement for higher quality of recycled plastics, allows the market to adjust. We're bringing capacities of qualities and quantities to the market, while making the life of converters and brand owners easier when they're really serious about meeting targets for recycled plastics.”
The core reason to establish Cirplus was to unlock the market for recycled plastics, unlocking the true sustainability effects that come with an increased use of recycled plastic. We are saving CO2 emissions by up to 80% by replacing a ton of virgin with a ton of recycled plastics, and of course we are stopping plastic pollution by unlocking the market for recycled plastics.