Would the world be a better place without plastic packaging?
Think about this:
a. If a piece of steak is sealed in plastic, it will extend its shelf life by up to 26 days.
b. If cucumbers are wrapped in just 2 grams of stretched plastic, they will last up to 11 days longer.
c. The C02 emissions involved in making the piece of plastic to preserve the cucumber amount to less than 10% of the total CO2 emissions created to grow and deliver it to the supermarket in the first place.
Carbon footprints are broadly proportionate to the mass of a material and as plastic is a strong, light-weight material and can be stretched very thin, it has got about half the density of glass and approximately the same density as paper. As a result, the CO2 footprint of plastic is actually quite small and when comparing the CO2 emissions created in the production of plastic vs. glass or vs. paper, the emissions ratio of plastic is in fact more favourable. In fact, some scientists suggest that if we banned all plastic packaging and used only paper, glass and metal, the amount of materials and energy required to package our food would multiply and the amount of CO2 emissions generated would be about 3 x greater, also taking into account logistic related emissions.
Plastic has a lower CO2 footprint, plastic is cheap, it can be used as primary packaging, it can be easily moulded into shapes and it does not break or crack. In fact, plastic does the job of packaging very effectively. So what is the problem with plastic? The problem is that plastic does not reabsorb itself into the environment. Therefore, if there is no strong system to support plastic collection and reuse, it may end up being discarded by the consumer. 80% of plastic pollution is created by individuals littering our streets, countryside and oceans.
So how do we solve this?
Keeping plastic in the packaging system and reusing it is key, but not all countries have invested in systems that allow for this. At present, there are huge differences between countries when it comes to their recycling systems - even within the EU. A study by PRE (Plastic Recyclers EU) shows that in Germany 95% of PET bottles are collected and recycled, this compares to only 24% in Bulgaria.
In order to address the shortfall in collection rates in many countries, the EU has set ambitious targets. For example, the EU has set the target that by 2030, 30% of the materials used in PET bottles must be derived from recycled PET. Individual governments are also applying measures to increase recycling, for example in the UK, the government has determined that as of April 2022, a tax of £200 per tonne will apply whenever a minimum quota of 30% recyclate is not reached in any food related plastic packaging application.
Packaging companies will be pivotal in achieving these ambitious targets. They need to do this, whilst also managing to produce attractive, effective and economic packaging for demanding FMCG clients. Logoplaste is an example of a rigidplastic packaging company which, since its foundation in 1976, has been focused on leveraging the benefits of plastics for its clients whilst minimizing its environmental footprint. Logoplaste is the pioneer of wall to wall packaging - the W2W concept - locating Logoplaste's facilities inside the client's production sites; it is the innovator of the Ecover bottle and one of the first ever companies to manufacture a bottle made entirely out of recycled plastic. In addition to this, Logoplaste is proud to have set up a closed loop recycling stream to allow for the introduction of opaque PET plastic bottles into the Brazilian UHT milk market. Logoplaste is also a key member of the “Digital Watermarks Holy Grail 2.0” project which seeks to add watermarks to plastic packaging to facilitate the sorting and recycling of post-consumer plastic.
Our investment banking experts at Pöyry Capital were lucky enough to catch up with Logoplaste CEO Gerardo Chiaia to pose some questions relating to their approach and numerous successes in the field of sustainability.
What achievements in the area of environmental sustainability are you most proud of at Logoplaste?
We are very proud of our innovation capabilities at Logoplaste, particularly of the work we have done for the past 15 years in lightweight programmes. Some of them have become world standard in the industry; they are based on biomimicry concepts and led to developments such as the Ecover and Vitalis bottles.
And we are of course very proud pioneers of the wall to wall model where our secondary packaging manufacturing sites are connected to our clients by a hole in the wall. This allows for a just-in-time packaging supply, eliminates secondary packaging and allows us to optimise the weight of the packaging supplied. The removal of logistics associated with transport and delivery of empty bottles translates into a significant reduction in the carbon footprint associated with plastic bottle production. To quantify this: our annual worldwide CO2 emissions savings vs. the next best alternative is 15 529 tonnes of CO2/year, which is equivalent to 8 500 flights/year from London to New York, on a Boeing 747,or planting 721 000 trees/year to offset the same amount.
How do you balance the financial imperatives of being a profit driven company with the sustainability objectives of Logoplaste?
I am a strong believer that for a company to survive, it must have a social utility. This is the only way for sustainable growth and a fair economy. Environment and economy go hand in hand and cannot be separated.
Our financial imperatives and our sustainability objectives are linked. It has always been part of our DNA. Innovation plays a critical role in achieving the balance between sustainability and profit and we are, and always will be, an innovation-driven company.
What in your view is the biggest misconception about plastic packaging?
Plastic packaging has a bad image because it is not managed properly, it does not absorb itself back into the environment and therefore it needs to be effectively managed and recycled. Plastic packaging has a bad reputation because it is visible and is defined by the waste created when not managed properly. A big misconception is that alternative packaging substrates are a more environmentally friendly, although their production often consumes more energy, they are also difficult to recycle, have more mass and have a higher carbon footprint when compared to rigid plastic packaging. When plastic is collected, it can be recycled.
What are your views on bioplastics - do they present a viable alternative? Will they become common place?
Here we need to have a clear understanding of what is considered a bioplastic. Bioplastic, biodegradable plastic and compostable plastic are often used as synonyms and this is incorrect. Bioplastics are synthetic, non-biodegradable plastics derived from renewable sources (bio-based). The properties and performance are identical to their fossil versions and their recyclability is similar, meaning they can be incorporated in established recycling streams without causing any damage. Biodegradable/ compostable plastic requires a separate disposal infrastructure, if included in the existing collection system it becomes polluted. From Logoplaste’s perspective, it would make more sense to use recycled raw materials or to design bio-based plastics that are compatible with the existing collection and recycling streams, rather than building entirely new biodegradable/compostable plastic materials, products, and disposal infrastructures from scratch.
What particular challenges, if any, make it difficult for Logoplaste to achieve its sustainability goals? How is Logoplaste resolving them?
There is no global collection system to ensure we recycle at a rate of 100%, which means that there is insufficient recycled raw material available. Consumer education to encourage a change of habits is required so recycling becomes an ingrained practice globally. Logoplaste is leading many teaching activities and we have now launched a campaign in local schools in Portugal so that we engrave the need to recycle everything in kids' minds. Logoplaste’s ethos is “We work today for a better tomorrow”.
If you were to reflect forward say 5 or 10 years, what do you envisage to have changed regarding the packaging that Logoplaste and its competitors produce?
I would say 10 rather than 5 years; our vision is to have from 50% to 100% of plastic packaging made from recyclable material and our new manufacturing sites will be neutral or have positive CO2 emissions.
It is not only the manufacturing and operational side of Logoplaste which focuses on creating positive steps for the environment. This runs through the ethos of the entire organisation even up to the Finance Division, which in June successfully introduced an amendment to our loan, where it linked the interest rate payable to the CO2 savings the company achieves. It is the first of its kind in the leveraged loan market. Basically the cost of the loan goes up or down, based on the CO2 savings achieved. This is another ground breaking step.
Logoplaste is leading the way in the field of sustainable commerce and proving to us all that plastic packaging, when manufactured and managed effectively, does indeed play a valuable role in all of our lives.