The Waste and Resources Action Plan (WRAP) has warned of the challenge the recycled plastics industry is facing as a result of falling oil prices. WRAPs first annual report since it registered as a charity in 2014 also highlights the greater potential of the UK circular economy.

A fall in oil prices and therefore a fall in the price of virgin plastics has put significant pressure onto the recycled plastics industry and ‘threatens to undermine viability’, the circular economy specialists have claimed.

WRAP’s account of the difficulty faced by the recycled plastic market comes after the news of several reprocessing companies, including ECO Plastics, a major supplier of recycled PET bottles, and Euro Closed Loop Recycling, faced closure due to businesses turning to virgin, rather than recycled plastics, for their packaging, despite it being just 0.01p cheaper.

Both companies had been recipients of WRAPs Mixed Plastic Loan Fund, worth £3.8 million and in December 2014 WRAP wrote-off a £1.65 million loan to ECO Plastics when it entered administration.

Despite these challenges, WRAP highlighted the potential boost that the UK could receive from investing in a more circular economy:

• improve the UK’s trade balance by up to £23 billion per year;
• improve business competitiveness by reducing costs by around £52 billion per year;
• increase recycling sector gross value added by £2 billion; and
• potential to create a minimum 205,000 new jobs by 2030.

WRAP also announced the annual turnover figures for the first time since it became registered as a charity. WRAP’s total income for 2014/15 was £40.7 million, compared to £66.3 million the previous year. Excluding Zero Waste Scotland (which now runs as a separate business), income was £36.8 million compared to £39.8 million in 2013/14. The charity stated that the fall in turnover was largely due to central government funding cuts. However, £35.5 million, of WRAP’s income from charitable activities in 2014/15 was in the form of grants from UK governments and the EU.

Unrestricted income from charitable activities amounted to £0.6 million. Income from other trading activities and investments was £0.6 million. WRAP’s trading subsidiaries contributed all the trading income and the majority of the investment income.

The charity also announced that a cost-benefit-analysis of its schemes in England showed that for every £1 of funding invested in priority programmes, £2 of external contributions was leveraged. Overall, WRAP claimed there was a five-fold return in benefits to society compared the initial investment.

As well as highlighting the different campaigns the body has run over the past year (such as the Love Food Hate Waste ‘10 cities’ initiative and rebrand of Recycle Now ), the accounts outline some of WRAP’s key plans for the future.

These include:

• working on the €9 million (£6.2 million) European Research project REFRESH, which will focus on helping European consumers reduce food and drink waste.
• developing a new partnership, Resource London, with the London Waste and Recycling Board (LWARB) to help London boroughs recycle more; and
• promoting its newly-relaunched Recycling Locator, an online tool designed to help make recycling information clearer and more straightforward for householders, so they can find out how and where items can be recycled locally.

‘Committed to achieving a more sustainable economic environment’

In the foreword to the report, WRAP Chief Executive Liz Goodman, wrote: ‘Delivering real change and action on the ground is what makes WRAP different and I have been keen to ensure we remain focused on delivery whilst developing our longer term strategy to diversify our funding base, grow our international reputation and make progress towards a world where resources are used sustainably.

‘By working with partners, WRAP delivered a 20-fold return on our funding in England between 2010 and 2015.

‘Although the 3Rs of reduce, [reuse] and recycle are widely understood and recycling habits have become ingrained across homes and businesses we now need a radical step change in performance on reducing environmental impact.

‘The 3Rs of the future require us to take a whole lifecycle approach: re-inventing at the design stage, re-thinking a product’s use phase and re-defining its end of life.

‘WRAP is committed to changing the ‘norm’ to achieve a more sustainable economic environment in the areas and countries in which we work.’

Read WRAP’s annual report.