driving carton recycling value chain - green initiativesdriving carton recycling value chain april,...

Driving carton recycling value chain

April, 2018 @Green Drinks Shanghai

Jiayu WAN

We commit to making food safe and available, everywhere

* All numbers refer to 2015

Number of Tetra Pak packages sold 184 billion

Number of packaging machines in operation 8,850

Number of processing units in operation 74,450

Countries where Tetra Pak packages are available >170

Number of employees 23,600

Offer solutions to guarantee safe foodUHT + Aseptic package

Temp °C

150

100

50

Pasteurisation

Indirect UHTDirectUHT

Time

Core Presentation/2016-0120 / 3

PAPER

75%

Offer solutions to guarantee safe foodUHT + Aseptic package

71% of Population

72% of Milk Sources

Source: 2010 provincial raw milk outputCDIA Documents

Best milk belt in northern hemisphere: 45°north latitude

Our commitment to sustainability is deep-rooted

Reducing food waste

Increasing food availability

Improving resource efficiency

Our founder, Ruben Rausing, was a firm believer that a package should save more

than it costs.

When food is packaged, it canbe transported and madeavailable to consumerseverywhere in a safe, efficient

and affordable way

PROTECTS

WHAT’S GOOD

Environmental Excellence forms part of

our Sustainability approach

We are driven by our vision to make food safe and available, everywhere.

Our innovative and market-leading processing and packaging solutions are

making that vision a reality worldwide.

We make social responsibility a priority when it comes to people. We

seek to support communities wherever we operate and provide opportunities for our employees around the world.

We strive to play an active role in shaping a better future, supporting the

long-term success of our customers’ businesses and driving environmental

excellence across our whole value chain.

We work with industry organizations, non-governmental

and international organizations and several initiatives

Good governance is our fundamental framework for achieving all our sustainability targets

Drive environment excellence of the value chain

Transportation

Product design

Packaging manufacturing

Filling

RecyclingSourcing

We continue to drive environmental excellence

OBJECTIVES GOALS

Reduce environmental

footprint across the value chain

2020 climate goal:

Cap climate impact across value chain at 2010 levels

Develop sustainable

products

Renewable packaging goals:

100% FSCTM-certified paperboard, A 100% renewable package

Increase recycling 2020 recycling goal:

40% global recycling rate

Used cartons are not waste.

They are a valuable raw

material for new products.

We have a strong starting point

Average renewable content in carton packaging material today

accounts for 75%

Value chain impact in 2010*

Tetra PakProduction sites, offices & business travel

6%

Scope 1, 2, 3 of the GHG Protocol

SuppliersPurchased materials for packaging & transportation

38%

Scope 3 of the GHG Protocol

End-of-lifePost-consumer cartons not recycled or recovered for energy

6%


CustomersUse of sold products –life-time impactProcessing equipmentPackaging equipment

50%


*2010 baseline data verified by a third party in 2015Accounting based on GHG Protocol standards and guidelines for corporate and value chain climate accounting.

Effective separation and recycling of all layers

Turning used cartons into an asset

Pulp Products

RepulpingCollected

cartons

ProductspolyAl

We have mapped used beverage carton recyclers

globally

Active recycling in 43 countries (trans-border shipments take place in several markets)

Active polyAlrecycling in 24 countries

Key success factors to increase recycling

Increase consumerawareness Support collection

& sorting infrastructure

Boost business opportunities for

recycling entrepreneurs

Expand market opportunities for

recycled materials

Increase consumer awareness

• Drive consumer campaigns• Drive school programmes• Partner with local organisations

We teach school children in Turkey about recycling

Since the start of 2005, the recycling awareness programme “Little Things Renew Nature” has been seen by over a million children in Istanbul, Bursa and Izmir.






recycled materials

Support collection and sorting infrastructure

Tetra Pak India forms waste dealers club

Tetra Pak India brought together NGOs, recyclers, scrap dealers and street waste pickers in Delhi, India. As a result, the city now has a waste dealers club (Paryavaran Mitra) and the process for collecting used beverage cartons has been significantly improved.






recycled materials

• Connect collectors and recyclers• Cooperate with key stakeholders

Boost business opportunities for recycling

entrepreneurs

Increased recycling in China

With development support from Tetra Pak, the Chinese recycling company, Hangzhou FulunEcology Technology increased its recycling capacity from 20k tonnes of paper to 35k tonnes (75% increase) in just under 10 years. They now also recycle the plastic and aluminium (PolyAl) from used beverage cartons, and sell it to plastic recyclers and fireworks manufacturers.






recycled materials

• Recommend recycling solutions • Support technological developments

Expand market opportunities for recycled materials

• Match recycled materials and market needs• Promote recycled end-products

Roofing tiles in Brazil

Since 2000, we have supported the market for roofing tiles made out of plastic and aluminium from recycled beverage cartons. Manufacturers and local universities cooperated to enable material analyses, which led to important product improvements. Now, over 15 roofing tile manufacturers are operating in Brazil, producing a million tiles each year.






recycled materials

Kraft paper

Toilet paper

Copy paper

Balance paper

Sole pad

Cardboard paper

Plastic wood

Post-consumer waste

Filling waste

Imported/domestic

factory waste

Others

Raw material type Semi-end product End products

Others

Chipboard

• Most recyclers also recycle factory waste and other similar feedstock while recycling

UBC, and their production is mainly for the Kraft paper.

UBC recycling

UBC Recycling Analysis

Recycling value chain overview

RecyclingValueChainOverview

Collection Recycling Application

UBCRecycler(Papermill)

Fibre recycling

UBCRecycler(Fullcartonrecycling)

PolyAL recycling

Papermill

PE

Aluminum

Plasticwood

Chipboard

Paper

PaperSocialcollectionsystem UBC

Collector

Wastepaperpackingstation

TotalInvoicedTonnageofPackagingMaterialin2016is644kt

Incinerator&Landfill

MixedintoOCC

• In 2016, the total invoiced tonnage of packaging material in China market is 644kt, a total of 153kt UBC are recycled, of which Post-consumer waste and Filling waste volume 142kt, UBC mixed into OCC volume 11kt.

Compared with cardboard paper and PET

UBC Collection Analysis

• This diagram sketches up the primary value chain. However disorder among levels and miscellaneous prices make it much more complex.

• The price gap of salvage station:UBC 200RMB, cardboard paper 850RMB, PET 500RMB. Price gap of single category professional collectors, UBC300RMB, cardboard paper 450RMB, PET 700RMB.

ComparisonamongUBC/Cardboardpaper/PET bottlecollectionCollecting

Junkhouse/transit station

Wastecontractors/sortingcenters

cleaner/Junkman

Paper/othersalvagestation


Landfill plant

Recycling

Resident

UBC collector

Plasticpacking/crushing station

UBC recycler

Papermill

PETfactory

UBC/PET/Cardboardpaper:

0RMB/t orlittle




UBC�600-800RMB/t

Cardboardpaper�1600-1800RMB/t

PET�2500RMB/t

UBC�800-1000RMB/t

Cardboardpaper�2500-2600RMB/t

PET�3000RMB/t

UBC�1200RMB/t

Cardboardpaper�3000RMB/t

PET�3400-4000RMB/t

Note 1. UBC pricebetweenlevelIandIIisestimated.2. Allprices aremarketmainstreampriceduring Sep-Octperiod.3. Cardboard paperisAlevel

MargincomparisonamongUBC/Cardboardpaper/PET bottlecollection

1,275

3,000

3,700

800

2,5003,000

0

1,000

2,000

3,000

4,000

5,000

Price Feedstockcost Packingfee Logistic cost Landrent&environmental protection Shippingcosts Margin

UBC Cardboard paper PET bottle

Margin�14RMB/tMargin rate�1%



Compared with cardboard paper and PET

UBC Collection Analysis

• Profits of UBC collector are very low because UBC collecting locations are a long way from plants and shipping costs are high.

Waste paper and plastic

Market Overview

Recovered paper (OCC) price Recycled plastic price

• The demand of recoverd paper is expected to increase the coming years due to growthing economies, and UBC price is very competitive compared with OCC under current market environment.

China ban on waste imports

Butterfly Effect

• Not prepared for the change• Need to find a new home for the

waste

• Investing recycling infrastructure, and rebuild the waste management

strategy

&

• Decreased import volume and strict customs inspection

• Shortage of raw material and

looking for alternatives• Overseas investment

• Phase out SME

&

• Potential destination for waste• Not enough capacity to consume the

excessive material

• Expansion and transformation underway

• Reshaping the global supply chain• Additional cost to improve the quality• Volatile market price

• Raise public awareness and trigger further action to tackle waste problems

China ban on waste imports

Impact on UBC recycling

Challenges Opportunities

• Impact on the current collection models, especially for UBC collect with mixed paper

• Lower waste price in some markets positions UBC as a less attractive source of raw material

• Pressure to remove UBC to improve quality

• Recognized as valuable material if it can be collected at a reasonable price

• Investing recycling infrastructure to recycle UBC locally

• Higher waste price encourages UBC

collection and recycling(China)

• Newcomer step into the market due to raw material shortage