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Publication de l’article Recycled and Virgin Plastics Prices Dynamics: Towards Substitution Effects? par Lise Peragin dans la revue Environmental Modeling & Assessment.
https://doi.org/10.1007/s10666-025-10089-z
As European regulation on circular economy promotes the use of recycled plastics over virgin ones, the relationship between primary and secondary plastics markets is of high relevance. Due to competition effects, these two markets are closely interrelated. This connection is influenced by the quality of recycled plastics, which determines their technical substitutability. When they possess similar properties to their virgin counterparts, their demands —and consequently their prices— are more likely to be interconnected. To estimate the influence of these technical characteristics on substitution effects, cross-price elasticities between a wide range of plastics are calculated using non-stationary panel methods. Long- and short-run parameters are estimated through FMOLS, DOLS, and PMG estimators for 23 types of recyclates in Europe, from 2002 to 2019. Short-run analysis is completed with panel VAR and Granger causality tests. The prices of naphtha, plastic waste and imported plastics from China are also considered. The results put in evidence substitutability. Virgin plastics have a positive and higher influence on the price of recycled plastics than naphtha. Plastic waste and imports prices have a minor influence. A distinction between common and technical plastics also emerges.