June 23. 2024. 1:05

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Reusable parcels will cause e-shopping cost surge, McKinsey says

The introduction of reusable plastic packaging in e-commerce could inflate costs by 50- 200% compared to traditional cardboard boxes in a country like Germany, according to consulting firm McKinsey.

Those conclusions were highlighted in an article looking at scenarios where existing paper-based packaging is replaced with reusable alternatives made from polypropylene, a resin that makes plastics tough and heat-resistant.

“For e-commerce, the cost increase for reusable packaging is 50-200% versus single-use” boxes made from cardboard, says the article, published on Thursday (6 April).

The McKinsey article comes as the European Parliament and EU countries examine draft EU legislation, which introduces mandatory reuse targets for packaging such as drinks bottles and e-commerce delivery boxes for the first time.

For e-commerce, companies will have to deliver 10% of their products to consumers in reusable parcels by 2030 and 50% by 2040, said the European Commission, which tabled the proposal on 30 November.

However, the share of reusable packaging in e-commerce is negligible in Germany, where 2.3 billion online deliveries are made each year. “A few examples exist, but the penetration rate is close to zero,” the paper says.

To evaluate the impact of moving to reusable packaging, the McKinsey consultants modelled a shift from padded paper mailer bags and boxes to protective-plastic mailer bags or boxes using polypropylene, which is recyclable.

“The model shows a significant increase in the amount of transportation needed due to the need to return packaging to reusable packaging operators, third-party logistics centres, or distribution centres,” the article says.

On top of the additional costs this would incur, the shift to reusable plastic is expected to cause a simultaneous rise in CO2 emissions by 10-40%, it adds.

McKinsey drew similar conclusions in a second use-case scenario looking at takeaway food services in Belgium. Here, the cost of switching to reusable plastics is estimated to be roughly double compared to single-use paper cups and wrappers, with CO2 emissions expected to rise by 150%.

These added packaging costs “will potentially be passed on to consumers, making it more expensive to eat,” McKinsey warns, echoing the conclusions of an earlier study by McDonald’s.

McDonald’s warns EU packaging law will cause plastic surge

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Reuse ‘complementary’ to recycling

The article’s findings are echoed in a new in-depth study for paper-based industries, which draws on the McKinsey case study and previous research.

It concludes that reusable packaging would yield up to 40% more CO2 emissions for e-commerce and up to 160% more for food takeaway while generating higher costs overall.

According to the study, most additional CO2 emissions are linked to transport.

“Reusable packaging must be transported back to the producer after delivery or purchase. This is not the case for recycling, which takes place nearer to the consumer, not the original production place,” says the Confederation of European Paper Industries (CEPI), among the organisations funding the research.

CEPI slammed the European Commission’s attempt to impose “an EU-wide blanket decision” with mandatory reuse targets, saying packaging solutions must be assessed “case-by-case” based on technical feasibility, economic viability and environmental protection criteria.

“Sweeping reusable packaging targets simply do not comply with an approach based on proof of environmental benefit,” said Jori Ringman, director general of CEPI.

The McKinsey study did not discount reuse altogether, though.

One of the key questions, for instance, is the average distance that reusable packaging will have to be shipped around – a solution that could be envisaged within cities where travel distances are shorter.

Crucially, reuse systems will work best when use cycles – or rotations – can be guaranteed. In e-commerce, for instance, a minimum of 20 rotations is necessary for reusable packaging to provide an environmental benefit over single-use cardboard, McKinsey estimates, with further rotations required if extra cleaning operations need to be made.

For takeaway food, this could be “as high as 200 rotations”, though, McKinsey says, which could be challenging to achieve.

At the end of the day, whether reuse makes sense “will depend on complex research and decision making,” the McKinsey article says, a conclusion also shared by CEPI.

“Done right, reuse and recycling could be complementary solutions to achieving higher circularity,” Ringman said.

Environmental groups sceptical

Environmental groups, meanwhile, raised questions about the independence of the McKinsey research.

“We’re looking into the studies but cannot take a stance until the single-use paper packaging producers who commissioned the analysis publish the methodology and assumptions behind them,” said Jean-Pierre Schweitzer, who follows circular economy topics for the European Environmental Bureau (EEB), a green umbrella group.

“In well-designed reuse systems, there will usually be conditions when reuse will outperform single-use packaging,” he told EURACTIV in emailed comments. “Important impacts related to paper packaging, including land use, biodiversity loss and the inclusion of chemical coatings such as PFAS, are also not accounted for in this kind of analysis.”

Hannah Mowat, from the forest protection NGO Fern, says life-cycle studies often fail to include bigger picture impacts of single-use paper packaging, such as intensive forest harvesting or “the impact on nature or communities of replacing a natural forest landscape with a plantation”.

Not included either, she says, is the cost of recycling complex packaging such a beverage cartons, which are made with thin layers of polyethylene, paper and aluminium fused together.

In 2021, the Rethink Plastic Alliance published an analysis showing that increased reuse in the takeaway food, e-commerce and household care sectors could save 3.7 million tonnes of CO2-equivalent emissions, 10 billion cubic metres of water and nearly 28 million tonnes of materials.

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