Viridor to exit UK mechanical recycling operations at Avonmouth
Viridor today announces that, following a detailed strategic review of its UK mechanical recycling site at Avonmouth, it has taken the difficult decision to propose the closure of the site. A separate review of the site at Rochester is ongoing.
Viridor’s UK mechanical recycling operations have been negatively impacted by persistently and increasingly challenging market conditions, and the absence of planned legislation to increase rates of plastic recycling in the UK.
Despite sustained investment from Viridor over the last four years to develop its mechanical recycling capability, including building and commissioning the Avonmouth polymers recycling facility and expanding production, recycling rates are below where they were projected to be in 2020. Policies announced and planned under the previous Government to increase UK recycling, as set out in the 2018 Resources and Waste Strategy, have been repeatedly delayed and have not, to date, been implemented.
The significant delay in implementing these policies, combined with reduced demand for recycled plastic and packaging products from the consumer goods sector, have had a material impact on the financial viability of Viridor’s UK mechanical recycling operations. This has been exacerbated by broader market conditions[1]; the global virgin polymer market is suffering from overcapacity due to significant growth in production in lower-cost markets outside Europe, leading to significantly reduced demand and prices for recycled plastics. At the same time, imported recycled plastics from low-cost countries has increasingly flowed into Europe displacing domestic supply. The combination of these pressures has resulted in today's decision.
Today is a particularly difficult day for our colleagues at Avonmouth who have worked incredibly hard under challenging market conditions to make our mechanical plastic recycling operations commercially viable. The proposed closure of Avonmouth will be subject to the normal consultation process, and Viridor is currently exploring redeployment opportunities within the wider Viridor business for those colleagues impacted by this decision.
Viridor remains committed to, and a supporter of, delivering a circular economy, preventing waste from going to landfill and driving the UK’s Net Zero and decarbonisation objectives. The business is continuing to make major investments in the UK’s waste and decarbonisation infrastructure, including through its carbon capture and storage ambitions, with its Runcorn site integral to the HyNet industrial decarbonisation cluster, which was selected to progress by the Government earlier this year.
Viridor is continuing to invest in polymer recycling through its Quantafuel subsidiary which came through a ~£100m acquisition in 2023. The focus now is on creating an efficient business that can play a key role in developing viable chemical recycling infrastructure and through Quantafuel’s joint-venture Resource Denmark.
[1] https://www.plasticsrecyclers.eu/news/recession-hits-the-eus-plastics-recycling-industry-8ja84r/