Abstract: “As the European regulation on plastics waste fosters the use of recycled polymers instead of virgin ones, the relationship between primary and secondary plastics markets is of high interest. Because of competition and substitution effects, these two markets are closely interrelated. Their links are highly influenced by their grades which determine their technical substitutability. When the recyclate has similar properties to its virgin counterpart, their demands are more likely interconnected, as well as their prices. To estimate the influence of these technical characteristics on substitution effects, cross-price elasticities between a large range of plastics are calculated with non stationary panel methods. Long and short run parameters are estimated using FMOLS, DOLS and PMG estimators for 23 sorts of recyclates between 2002 and 2019. The results confirm the substitutability hypothesis and show that virgin plastics has a higher influence on the price of recycled plastics than naphtha or plastics waste. A distinction between common and technical plastics also appears.”

 Zoom webinar >>> 

Practical information