Hello, and welcome to the TOMRA Talks Press Conference with Tova Anderson, who became President and CEO of TOMRA on August 16, 2021. Tova is the first woman in the history of TOMRA to hold this position. Prior to joining the company, She worked for a leading global fertilizer company, IATA International, which is also headquartered in TORMRA. Tova spent 24 years with Yara in a variety of senior roles, ultimately becoming Executive Vice President for Europe. Tova holds a Master of Science degree from the Norwegian Institute of Technology and a Master of Business Administration degree from the Norwegian School of Management.
In the next 15 minutes or so, Tova will share her perspectives of the circular economy, including upcoming legislative efforts in Europe and taking a holistic approach in the transition towards a circular economy, the challenges and opportunities of getting there and the outlook on how to transform in the most effective and efficient way possible. Just a quick housekeeping note before we start. We will have a question and answer session after Tova's presentation, where you can enter your questions into the chat section on the right side of your monitor. Welcome, To Over.
Good morning, good afternoon and good evening, everyone, depending upon where from you are joining us. And thank you very much for attending this press conference in connection with the Tundra Talks event. This is the 4th conference of this And I'm truly excited that we have 288 guests joining from 23 countries. The theme of this year's conference is closing the loop on plastic. And in order to do so, we need to work together along the value chain.
And that's the true value of this conference, that we bring together players across the value stream to learn, discuss and network in the true spirit of collaboration. And why does this matter? Because we need to reduce litter, we need to reduce plastic in the ocean, and we need to reduce the global CO2 emissions. We could actually decrease 2,800,000,000 tonnes of CO2 annually if we use best practices within Waste Management globally. That's a staggering figure, and that is why this topic matters.
There is a significant increasing interest globally regarding reuse, recycling and circular economy, And EU is in the forefront of this development. So let me quickly recap some of the most Relevant instruments and initiatives that EU is implementing. The Single Use Plastics Directive It's a wide reaching piece of legislation that seeks to reduce marine- and land based plastic pollution. It requires the EU member states to ensure manufacturers, producers, retailers, importers and sellers are all in compliance with such measures. The ratio has many elements, but I would like to highlight the collection target rates for plastic beverage containers, where all the member states need to collect minimum 77% by 2025 and 90% by 2029.
And based on our experience, this can only be achieved through implementing a deposit return system. Then you have the plastic waste amendments. Until 2020, unsorted and contaminated scrap plastic was traded without any specific controls. Starting in 2021, most types of plastic waste are subject to the basal processes for import, export and transit. And from the 1st January this year, only plastic waste that is sorted, Clean, uncontaminated and effectively designed for recycling can be traded freely.
In addition, EU introduced a ban on export of unsorted plastic waste to non OECD countries. As a result of this, we expect an increased need for sorting plants and resizing capabilities in Europe. Europlastic tax is another piece, important piece of legislation. The tax entered into force January this year for all 27 member states, which now need to pay a tax on non recycled plastic Packaging equal to €800 per ton. It's been debated and questioned if the countries will pass on the tax to the relevant industries or not.
But if they do so, it can be an important element to drive the preference of recycled plastic ahead of the virgin as it will become more financially beneficial to use recycled material. And we see some countries are moving in that direction. For example, Italy and Spain have announced the intention to implement a plastic tax on virgin material of €4.50 per ton from next year. And also in U. K, we'll have a plastic tax of GBP 200 per ton as of beginning of 2022.
And then we have the next generation EU, a SEK 750,000,000,000 temporary recovery instrument. The aim is to mitigate the economic and social impact of the coronavirus pandemic and make European Economies and societies more sustainable, Resilient and better prepared for the challenges and opportunities of the green and digital transitions. And in the end, we have the revision of the packaging and packaging based directive. We should reinforce essential requirements to promote reuse And Recycling increased the recycled content in addition to reduce excessive packaging. The planned adaptation by the EU Commission is Q4 this year.
And underpinning all of these regulations and initiatives is, of course, a green deal, where one of the main blocks is the Circular Economy Action Plan with 35 complete actions to foster transition to a circular economy. And the rest of the world is following. We do see strong global movements also Almost everywhere now. Let me give you a couple of example. For example, Australia will be the 1st continent with a deposit return system implemented throughout Next year, no, 2023.
And extended producer responsibility is being discussed, proposed or already legislated in many countries, including India, South Africa, Singapore and several states in the U. S. To mention some. So this is becoming a global movement. It creates the right foundation to drive the required transformation, and there is no need to wait for further legislation.
The UN called cold red for humanity this early autumn. We need to act now, And we can act now. There is such a significant potential by rolling out current best practices and technologies, as I mentioned in my introduction. And it is really relatively straightforward what we need to do. We need to maximize the collection of recycled material, And we need to increase the recycling of that material in a closed loop.
That means that the material is being used for the same purpose over and over again. In how we obtain, use and reuse the planet's precious resources. And we have set some high ambitions, not only for us as a company, but even more important for recycling globally. By 2,030, Our aim is that 40% of all post consumer plastic packaging is collected for recycling. Today, it's only at 14%.
And we target by 2,030 that 30 Percent of all post consumer plastic packaging should be recycled because it doesn't help to only collect it. It needs to be recycled as well. So we want 30% of it to be recycled in a closed loop. That compares to only 2% to 3% to date. But we cannot do this alone.
We will only achieve these ambitions by collaborating across the value chain. A good example of the required collaboration is the Landstein plant, which some of you who are joining us physically were able to visit today. It illustrates the value chain cooperation required, in this case, between us, Borealis and Simmel to create new closed loops, which in this case is creating high quality plastic from mixed waste sorting. But also a lot can be done with existing competence and technology. One example is the potential in household waste.
There should be a requirement to sort mixed waste before incineration or landfill. The benefits of this are threefold: more plastic is collected to be recycled Less plastic is burnt and by that, less CO2 emissions. And finally, less new incinerations Incinerators need to be built. According to McKinsey data, there are globally around 67,000,000 tons of packaging going into incineration and landfill annually. In Europe, the volume is estimated to be around 10,000,000 tonnes.
And studies have shown that you can more than double the amount of plastic packaging for recycling if you implement mixed waste sorting. And the impact on the reduction in greenhouse gases by doing that, by doing mixed waste sorting As part of the waste management before incineration is a reduction annually of 680,000,000 tonnes. As illustrated here on this slide, to create a circular economy where resources are in closed loops, We'll have to address the full life cycle of the product. Products needs to be designed with durability and longevity in mind. Products released and sold to consumers in all outlets needs to provide transparency so the consumer can make informed and green decisions.
Once consumed, products should be reused or repurposed and be easily disassembled for recycling. Used product material needs to be collected via deposit return schemes, separate source collections or as a mixed waste. After that, collected materials must be identified and sorted into clean fractions before the sorted materials are purified and upgraded into new products. Then we have circularity. In TOMRA, we have 50 years of experience in circular waste management.
And based on that experience, we have in partnership with Anumia Creating what we believe is the best system to maximize the collection and sorting of this material for closed loop recycling. We call this the holistic resource system, and it is based on a combination of established Practices, which include deposit return system, separate collections and mixed waste sorting. Again, this is something we can act on and implement today for immediate benefits for our planet. I want to end this short presentation with a call for action to all stakeholders. For brands and brand We are now working with our customers and we are willing to pay a premium to get The market started.
For recyclers and material producers, invest into high quality recycling processes. Don't compromise on quality. For investors, invest into building up advanced mechanical recycling infrastructure And not only chemical recycling and only fund waste to energy if it includes presorting. Our legislators continue to push the boundaries and make recycling financially more attractive, but also remove administrative hurdles. And for all us as consumers, Embrace products which are designed for recycling and which have a high recycle content.
We and TOMRA are ready to play our part. And in collaboration, we can transform how we obtain, Use and reuse of plantless resources to address the global challenges of litter and climate change. You are on mute, Mitra.
Thank you very much. I think this is the most common statement since the last 2 years, right? Yes. Thank you very much, Tova, for those words and for being so inspiring. We do have the first Can you describe the contribution TOMRA Mechanical Sorting and Recycling make for climate change?
Yes. So I touched a bit upon it as part of my presentation. Of course, recycling plays Different roles in reduction of climate change. But I guess the 2 big ones, especially when you talk about plastic, It is then to reduce energy because it is less energy consuming to reuse existing plastic. And of course, it's to reduce the burning of plastic because it then reduces CO2 emissions.
And as I said, we have done estimates or There has been studies done on what is really the potential impact here. And as I said, it is significant. And by only implementing existing waste practices globally, The reduction could be almost 3,000,000,000 tons annually globally. And then of course, by innovations and creating new closed loops, that is even further. So this is a significant contributor for the world to meet the climate ambitions and to become net 0.
Thank you. But the question from me perhaps that hasn't been asked. You listed several initiatives whether it's legislation, whether it's brand owners, is there a ranking that you would say needs to come one after another?
I think the most efficient is if we are able to make it financially preferential to recycle. That is the strongest driver. If you make this that it is more profitable to recycle than not to recycle. So if you can achieve that, I think that will be the main driver. And as I mentioned, I mentioned plastic tax as one of those drivers that could do that.
But also, I think consumer demand and pressure can also be a very significant contributor. And I do think we as consumers as well should take Responsibility on that, we do challenge and we look at what we are buying. So that I think now you see a mix of drivers here. There is a legislation part that is Driving this, but it's also really a consumer driven element into driving the increase in recycling and growing the whole market.
Okay. I think many brand owners would agree with you. The second question that we've had come in, where are the Profitable business areas for TOMRA, are they in Europe, in America, in Asia or perhaps elsewhere?
I think, first of all, I think we are a very fortunate company that we are profitable in all areas that we are operating and we are operating globally. In TOMRA, we have 3 divisions. So we have 1 division linked to collection, 1 through recycling and mining and 1 on food, all of those being very profitable. They have a different geographical footprint, but we are operating in more or less all areas of the world In a profitable way. But then the question is more about where will the growth be coming and where will the profitable growth come short term?
I think short term, As I talked about, EU is the front runner here, and we see more things happening in the EU short term. But longer term or medium term, I would say, both North America and Asia is also going to be significant contributors in the growth to come.
Okay. Thank you. You talked about the expertise of TOMRA in collection and sorting. Perhaps you can tell us what other innovation that TOMRA is involved in, maybe something in the pipeline, new trends and technologies that you see for TOMRA?
Yes. So Tamara was funded on innovation. I think innovation has been core in everything we do ever since we were founded 50 years ago. And we innovate in different areas. I mean, we innovate on the product side, really looking at how can we Optimize and increase the performance of, for example, our sorting machines that could be new types of Sorting, but it will also be utilizing artificial intelligence and deep learning into our machines.
We innovate on more the Business model side and how we cooperate with the value chain. And then I think the example I mentioned with Lansdowne, The Landstein plant is a good example of that, where we are working together with the whole value chain to innovate a way that we create New closed loop and then we combine the knowledge that we have in all our divisions to set up a system where we really can take And turn waste into really high quality material. So a lot of the innovations now is about what we and that's why we have Call this conference closing the loop. How do you make sure that when you recycle, you don't downgrade the material, but you actually are able to get the high quality material? And then you need to work with the whole value chain.
You need to work on the actual sorting technology, but also with the whole value chain from collection to design of products and so forth. So there is a lot of different initiatives happening within circular economy, and we want to take A role in then building these bridges between the different players, and that's one of the reasons also why we have Conference here today and tomorrow that we believe that if you're going to solve these global challenges, you need to work across the value chain. We want to utilize the components that we have, which goes well beyond just sorting to support and creating then these collaborations to really create new closed loops. So it's everything then from technical innovations, digital innovations to really more business model innovations.
It sounds like there's a lot to be done.
It is. It is, which is, of course, it's very exciting. I think we're in a very fortunate situation to be In a business like this, Fishbolt is meaningful, but also is growing significantly.
Okay. We've had a question come in that's actually Stepping away a bit from business, a personal question. What made you excited about TOMRA's journey and inspired you to join the TORMRA family? Thank you.
Yes. It's a good question. I said that I was not looking for a new opportunity, but when I was called if I was interested to be part of a process to join TOMRA, I immediately said yes because I knew I'm Norwegian. TOMRA is originally a Norwegian company. It's a company I've known since I was a small kid.
I'm also very technology interested. That's why I started physics when at university. So I always I was fascinated by the technology element. I find the machines extremely fascinating to see them in action. So it was a combination about the technology.
It's a combination of technology that it is a global company and that is a purpose driven company. It's really those three elements that speak to me. I like the global environment. I think that kind of brings a completely different dimension to your work experience. But also it's very important for me to be Part of something that I feel is very meaningful where I can make a difference, and TOMRA can really make a difference.
Okay. That sounds like a TOMRA passion, definitely. Now going back to a bit more business. Europe has set the goal that 30% of PET, Mrs. Bottles has to be recycled by 2025.
Do you think it is feasible? And which or what could be the challenge we face?
I know it is feasible because if the wheel is there, the technology is there. So it is feasible. But of course, it's important to get the alignment of how to get this implemented. I think it's important to drive this legislation is to get transparency on reporting. So that is something that still is not completely in place everywhere because it's going to be important And then it's about implementing, as I say, existing best practices.
But also you now see, for example, one thing is 30%. But if you look at now some of the beverage companies in Europe, they come now with target at 100% of All their bottles should be recycled. So I think also there will be a significant drive to get hold on more recycled material that hopefully will then drive the price Even more on that and make it then profitable to invest in recycling and that, I think, can speed up and accelerate the implementation of this.
Okay. The next question is a regional question. Let's put it this way. Do you what do you expect from the new government in Germany? Are they pushing forward?
Probably a tricky question, but it's a different situation at the moment, but let's try.
I think it's a bit too early to say. I think some of these elements, of course, Germany has been in the forefront. They introduced their deposit The return system, I think, in 2,005, I think, they have some of the highest collection rates today, the same with sorting mixed waste. And I do think it's important that Germany continue playing this role of kind of leading EU forward and being in the forefront there. That's what I hope the next phase from the new government.
People look at Germany. So I think it's important what Germany does.
Okay. I don't think we have any more questions. Perhaps we just want to wait another 5, 10 seconds and see if anything comes in. Any closing words, Tove, while we are waiting?
No, I think as I said, I think I'm very excited to be part of this Tumorator conference today and tomorrow. I think it's very important that we work across the value chain and that we have these meeting places where we come together to really explore how to take this forward Because it is essential in order to meet the climate change ambitions, it is essential to reduce plastic in the ocean. So I really look forward to engaging them with the whole value chain. And we at Sumra, as I said, we are very committed to play our role In facilitating and support the change that needs to take place.
Okay. I spoke too soon. I guess I just have to threaten. We do have another question that's In the meanwhile, Emmanuel Katrakis, Secretary General of the EU RIC opened recycler Talks today by highlighting the importance of EU wide end of waste criteria to achieve a well market for RWA materials from recycling. What do you think of this?
Then I think it's a bit too deep for me to have you on that. I need So I see also what he has said specifically. So I think it's a bit difficult for me to comment on. No.
And you've been quite busy, I know, today with conference as well. So perhaps we will check into this and get back to the person who asked. Yes.
Let's do that.
Okay. Then we have one that I think you probably would be able to handle and answer. In percentage, what is the contribution of DRS for plastics collection in Europe.
So of course, on DRS, it's only implemented in certain countries in Europe. We don't have that in all countries. No other systems are able to do that. Typically, you would only get Half in more voluntary system price 50%, but 40% to 50% is normally what you would get. Well, when you have a deposit return system, you will get above These things, if you make it financially beneficial, You see that acceleration.
And of course, that's what you have in the deposit return system. There is an incentive with the consumer to return the bottles. And that's why we are getting significantly higher return rates.
Okay. Thank you. I know we have some connection issues, but I'm hoping that most of the visitors got a lot most of that information. We have another regional question. How do you consider the position influence of TOMRA in Latin and South America?
Do you think we are in a good way in Brazil?
I think there is a significant potential in Brazil. And I think for all our divisions actually, I think on food sorting, there is a significant potential. I think on recycling waste management, Implementing best practices, there is a significant potential and, of course, reduced litter and collection of plastic beverages through deposit return So I think I hope that Brazil will become ambitious in their targets To also tackle environmental issues and climate change to really drive that forward. And we are very willing and open to contribute in supporting that development.
We had one question again related to the poor connection and they're asking
I think this
is the last one that we can do. To repeat the answer to the last question, I'll repeat the last question. And percentage, what is the contribution of DRS for plastics collection in Europe?
Yes. So what I said It's that, first of all, we don't have the positive return system in all countries in Europe today. And there are Certain countries that they implemented it, you have it in the Scandinavian countries, you have it in Germany, you have it in Holland, you have Svenja, Slovakia, and there might be some that I missed, but I think that is more or less those. And what we typically see when we introduce a deposit return system compared It's going from typically with voluntary schemes, 40% to 50% is what you typically get collected. While when you have a well functioning deposit system, you get above 90%.
And this is really what happens when you create incentives for consumers To do it's financially beneficial to do the collection, which then drives A much higher collection versus a voluntary scheme. So you almost collected double by having a well functioning DRS.
Okay. Thank you.
Hopefully, the connection was good now and everybody got the answer.
I think it was good this time. Tova, thank you very much. I know you're very busy, especially today. Thank you very much for sharing your insights. My biggest takeaway is there's a lot to do.
But if we work together, we definitely can close the loop, not only on plastics, but in other materials streams as well. Thank you all very much for joining. We hope we were able to give you the answers you were looking for and we look forward to seeing you the next time. Thank you.
Thank you.