巴克莱-美股-可持续产业-塑料垃圾：不要丢掉你的瓶子-2019.6.19-72页 (2).pdf

*For l i s t of addi t i onal aut hors,s ee page 2 Thi s i s a Speci al Report t hat i s not a debt res earch report under U.S.FI NRA Rul e 2242.Barcl ays makes i t s debt res earch report s av ai l abl e t o el i gi bl e i ns t i t ut i onal i nves t ors onl y.Barcl ays Capi t al I nc.and/or one of i t s affi l i at es does and s eeks t o do bus i nes s wi t h c ompani es c overed i n i t s res earch report s.As a res ul t,i nves t ors s houl d be aware t hat t he f i rm may have a c onf l i ct of i nt eres t t hat c oul d affect t he obj ect i vi t y of t hi s report.I nves t ors s houl d c ons i der t hi s report as onl y a s i ngl e f act or i n maki ng t hei r i nves t ment deci s i on.Thi s res earch report has been prepared i n whol e or i n part by equi t y res earch anal ys t s bas ed out s i de t he US who are not regi s t ered/qual i f i ed as res earch anal ys t s wi t h FI NRA.Please see analyst certifications and important disclosures beginning on page 6767.SI GNATURE#cl i mat echange#t rans at l ant i cSus t ai nabl e&Themat i c I nves t i ng Plastic Waste:Don t lose your bottle With only 16%of global plastics recycled,society is under pressure to address plastic waste.We believe PET bottles are here to stay,though significant investment is required in its waste management.We expect consumer deposit schemes and emerging recycling technology to support the transition to a circular economy for PET.Sustainable&Thematic Investing*Kat heri ne Ogundi yaHi ral Pat el +44(0)20 3134 1391+44(0)20 3134 1618 kat heri ne.a.ogundi yabarcl ays.c om hi ral.pat el barcl ays.c om Barcl ays,UKBarcl ays,UKSpeci al Report I Res earch 19 June 2019Contributing Authors U.S.CHPC&Beverages U.S.CHPC&Beverages European Consumer Staples European Food Retail Lauren R.Lieberman+1 212 526 3112 BCI,US Shirley C.Serrao,CFA+1 212 526 7518 BCI,US Ewan Mitchell+44(0)20 3134 3724 Barclays,UK James Anstead+44(0)20 3134 6166 Barclays,UK U.S.Chemicals U.S.Chemicals European Utilities European Utilities Duffy Fischer+1 212 526 3212 BCI,US Michael Leithead,CFA+1 212 526 0018 BCI,US Peter Crampton+44(0)20 3555 0125 Barclays,UK Dominic Nash+44(0)20 3134 2364 Barclays,UK European Oil Services&Drilling U.S.Basic Industry,Chemicals,Paper&Packaging U.S.Basic Industry,Chemicals,Paper&Packaging European Basic Industry,Chemicals,Paper&Packaging Mick Pickup+44(0)20 3134 6695 Barclays,UK Brian Lalli*+1 212 412 5255 BCI,US Andrew Keches,CFA*+1 212 412 5248 BCI,US Maggie ONeal*+44(0)20 7773 6924 Barclays,UK*This author is a debt research analyst in the Fixed Income,Currencies and Commodities Research department and is neither an equity research analyst nor subject toall of the independence and disclosure standards applicable to analysts who produce retail debt research reports under US FINRA Rule 2242 Barclays|Sustainable&Thematic Investing 19 June 2019 3 CONTENTS UNWRAPPING THE PLASTICS ISSUE.7 Revolution for the plastics industry.7 PET plastics are here to stay.9 Recycling is the optimal waste management strategy.10 3 key pressure points for PET recycling.14 CONSUMER COMPANIES HAVE LED THE WAY.15 Setting ambitious rPET targets.15 Ambition vs reality:shows need for more rPET.16 POLICY ACTION IS URGENTLY NEEDED.17 Europe leads the way.17 US forced to adapt after Chinas foreign waste policy changes.18 Chinas ambition to build a circular economy.19 ALL ROADS LEAD TO A CONSUMER DEPOSIT SCHEME.20 Consumer Deposit Schemes boost recycling.20 Different Consumer Deposit Scheme models are available.23 with the Norwegian model becoming the favourite.24 Recycling yields to be boosted by emerging technology.25 We forecast PET recycling rates are likely to reach 70%by 2030.26 INVESTOR GUIDEBOOK.28 Three broad segments within the PET theme.28 PET Landscape.29 1.Consumer Deposit Scheme beneficiaries.30 2.Emerging recycling technologies.31 3.Companies exposed to changing attitudes towards PET waste.34 ESG:Plastic waste&recycling.35 QUESTIONS FOR MANAGEMENT.36 SECTOR IMPLICATIONS.38 Global Equity Research Beverages.39 Equity Research European Food Retail.44 Global Credit Research Paper&Packaging.47 Global Credit Research Chemicals.52 Equity Research US Chemicals.55 Equity Research European Utilities.57 Equity Research European Oil Services&Drilling.58 APPENDICES.59 Appendix 1:Global policy heatmap.60 Appendix 2:Biodegradable PET.61 Appendix 3:rPET commitments.62 Appendix 4:Regional differences in Consumer Deposit Schemes.63 Appendix 5:Company interviews.64 Barclays|Sustainable&Thematic Investing 19 June 2019 4 EXECUTIVE SUMMARY The plastics industry is undergoing a revolution as it seeks to address the c160m metric tonnes of plastic waste which leaks into the natural environment or ends up in landfill each year,representing more than 55%of the total plastic waste produced(Geyer).We view PET plastic packaging and in particular beverage bottles as pivotal to this issue:it constitutes more than 10%of plastic waste.However,since PET bottles provide significant advantages(weight,durability and versatility)over alternative materials,we believe that they are here to stay,unlike other single-use plastics which have been subject to widespread bans.Heightened consumer awareness is forcing companies and governments to set ambitious recycling targets,but PET waste management will have to adapt in order for these targets to be met.To boost low collection rates and poor PET recycling yields,we view a Consumer Deposit Scheme as the policy instrument of choice,further supported by emerging technology.In this report we focus on PET plastic packaging and the recycling infrastructure required to support its long-term use within the circular economy.We argue PET should be viewed as an opportunity,with the demand for high-quality recycled PET likely to incentivize investment across the PET waste management value chain.Given that by 2050 it is estimated there will be more plastic than fish in the oceans,urgent action is required.At present,plastic waste can be disposed of in three ways:recycling;incineration;or landfill.Each has a different environmental footprint and economic impact.The OECD estimates that between 14-18%of the waste plastics generated globally is collected for recycling and 24%is incinerated.The remainder is disposed of via landfill,open burning,or uncontrolled tipping.This has resulted in plastic bottles becoming the perfect analogy for the battle against climate change and marine pollution,with heightened consumer awareness following popular TV documentaries like Blue Planet II(BBC)and Our Planet(Netflix).We believe that recycling is the way forward for managing PET waste and have observed that government policy is moving in this direction,with the EU Commission mandating minimum recycled content in beverage containers from 2023.Companies have gone one step further;for example,Coca-Cola has pledged to produce beverage bottles containing at least 35-50%recycled PET by 2025.However,it will be a challenge for companies to meet minimum regulatory targets,let alone their own more ambitious targets given the delta between current recycling rates.We believe this can be attributed to three key pressure points in recycling infrastructure(Figure 1):The first is that collection rates for PET waste are generally low.Secondly,the waste that is collected is often contaminated and can therefore not be recycled into food-grade plastic.Finally,current recycling can only convert 50-70%of collected PET into rPET,resulting in low recycling yields.We believe Consumer Deposit Schemes(CDS),which have been successful in countries such as Germany and Norway,will be the policy instrument of choice as we transition towards a circular economy given a CDS can boost collection rates while reducing contamination.Supplemented by emerging recycling technology,which can upcycle low quality waste materials,we believe PET bottle recycling rates in developed countries could reach 70%by 2030(now 53%in Europe and 29%in the US).Our Investor Guidebook(page 28)assesses the impact of growing PET waste awareness on sectors across the value chain.We map out the companies exposed to the plastic waste theme:1)CDS beneficiaries;2)emerging recycling technologies;and 3)companies exposed to changing attitudes towards PET waste.Our Barclays PET Landscape(Figure 27)highlights companies that have exposure,including listed and private companies by region.In light of the UKs CDS consultation,we model the potential opex and capex costs to companies in our coverage.We believe Beverage companies and Food Retailers are likely to bear the brunt of the estimated 641m annual operating costs.Furthermore,our sector analysts highlight that the distribution of these costs will not be homogenous across the beverage companies,with companies such as AG Barr disproportionately negatively impacted by a CDS compared to its competitor Coca-Cola European Partners.Conversely,Packaging producers,Utilities and Oil Services&Drilling are likely to see positive upside from changing attitudes to plastics and increased demand for recycled PET,respectively.The impact on listed US Chemical producers is muted given their very limited exposure to PET(Figure 2).Why read this report?Given that plastics are here to stay,we believe plastic waste management is going to be a key area of focus across the value chain as we transition to a circular economy.Ultimately,we believe plastic waste is not only a sustainability issue,but also presents a financial opportunity arising from the transition towards a circular economy.To aid company engagement,we outline our key ESG considerations and provide investors with questions for management(page 35-37).Barclays|Sustainable&Thematic Investing 19 June 2019 5 FIGURE 1 Barclays Plastic Waste:Dont lose your bottle Source:Barclays Reports,Company statements,EU Commission,OECD Barclays|Sustainable&Thematic Investing 19 June 2019 6 FIGURE 2 Barclays Sector Implications Source:Barclays Research,DEFRA Barclays|Sustainable&Thematic Investing 19 June 2019 7 UNWRAPPING THE PLASTICS ISSUE Plastic is an incredibly versatile material which,we believe,will continue to be a fundamental resource.Nevertheless,the plastics industry is undergoing a revolution as it seeks to address the 160m1 tonnes of plastic waste which leaks into the natural environment or ends up in landfill each year,representing more than 55%2 of the total plastic waste produced.We view PET3 plastic packaging and in particular beverage bottles as pivotal to this issue:it constitutes more than 10%of plastic waste and,even when recycled,is often downgraded into lower quality plastics such as plastic fibres.This report therefore focuses on the likely evolution of the PET industry as it seeks to move towards greater levels of recycling,as we transition to a circular economy.With many companies across the PET supply chain now signed up to the New Plastic Economy Global Commitment(led by the Ellen MacArthur Foundation)as well as setting their own ambitious targets,we see huge momentum for change over the next decade.This all comes at a time of significant change to the global plastic waste management value chain,with Chinas recent implementation of the Green Sword policy,which bans the export of plastic waste materials to China,putting significant pressure on local infrastructure around the world to adapt.Given plastics are here to stay,the question is how will this renewed focus on plastic waste manifest?Revolution for the plastics industry The term plastic encompasses a huge range of different plastic types and uses,from low density plastics(such as polyethylene,which is widely used in the packaging industry)to rigid,high density plastics(such as polycarbonate,which is predominantly used in construction).The different plastics and their different uses have varying product lifetimes.This is significant as it is the plastics with the shortest usage life which create the greatest volume of plastic waste.Plastic packaging,as Figure 3 shows,has the shortest lifecycle and,accordingly,is an area of focus for environmental and waste management policy.FIGURE 3 Plastic packaging,which is largely polyethylene based,has a short product lifetime and is therefore more likely to end up in landfill or the natural environment Source:Geyer et al.Production,use,and fate of all plastics ever made(2017).Note:The product lifetime distributions for the eight industrial use sectors plotted as log-normal probability distribution functions(PDF).1 Geyer et al,Production,use,and fate of all plastics ever made(2017);Barclays Research 2 Geyer et al,Production,use,and fate of all plastics ever made(2017);Barclays Research 3 PET is an abbreviation for polyethylene terephthalate Barclays|Sustainable&Thematic Investing 19 June 2019 8 Seven types of plastic used for packaging Even within the plastic packaging industry,it is important to be aware that there are a number of different types of plastic.We highlight in Figure 4 the seven different types of plastic packaging,including general properties,common uses and recyclability.FIGURE 4 Different plastic packaging types and their uses Source:Barclays Research,Our World in Data(2018),Geyer et al Production,use,and fate of all plastics ever made(2017)We focus our analysis on PET plastic In this report we focus on PET as it has been an area that consumers,companies and governments are honing in on given its properties and common uses across both consumer and commercial verticals.In recent years,plastic bottles,plastic bags and plastic straws have become the perfect analogy for the battle against climate change,with the David Attenborough effect4 having already had an impact on plastic usage following the highly acclaimed TV series Blue Planet II(BBC)and Our Planet(Netflix).Various domestic campaigns focusing on plastic bags and plastic straws have worked well,however at the global level there is a growing need for society to address PET plastic bottles.We are focusing on PET because we believe that plastic bottles are here to stay,unlike other 4 Sir David Attenborough is a natural historian and English broadcaster.His critically acclaimed documentary series Our Planet(Netflix)and Blue Planet(BBC)have brought the environmental damage caused by mismanaged plastic waste to the forefront of consumers minds.Barclays|Sustainable&Thematic Investing 19 June 2019 9 single-use plastics,such as LDPE plastic bags which are already being banned5.Refer to Appendix 1 for the latest global policy measures addressing other single-use plastics.Additionally,we believe that the attention on PET bottles has reached a critical mass,with consumers,think tanks,companies and governments all calling for change.Our note sets out how investors can prepare for this change.PET plastics are here to stay Each year,an estimated 160m6 tonnes of plastic waste leaks into the natural environment or ends up in landfill,representing more than 55%6 of the plastic waste produced.Of this,we estimate tha