THE PLASTIC REPORT 2021 - Orkla

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THE PLASTIC REPORT 2021 - Orkla
THE
PLASTIC REPORT
           2021

              1
THE PLASTIC REPORT 2021 - Orkla
Contents

      About Orkla                                                                              Preface                                                           3
      Orkla is the Nordic region’s leading actor in brands and concept solutions for           Summary                                                           4
      grocers, pharmacies, bakeries and institutional catering. The Orkla companies in
      Sweden have a turnover of around SEK 9,000 million and have more than 3,000
                                                                                               Circular plastics use                                             6
      employees at 18 plants and offices. Orkla works to contribute to a more climate          Challenges and opportunities:
      smart daily life and is behind many of Sweden’s most well-known brands, such as          Collection and recycling of plastics in Sweden
      Grumme, Felix, Abba, KronJäst and OLW. With production from Eslöv in the south to
      Vansbro in the north, Orkla is a strong local community actor. More than 90 per cent     Higher targets demand strong efforts on every level               11
      of what Orkla sells in Sweden is prepared and produced in Sweden, often in close         Case: Felix switched black to transparent for greater recycling   14
      cooperation with contract growers.
                                                                                               Case: Bower wants to create incentives to recycle                 15
      Orkla conducts broad and strategic sustainability work, with climate targets that are    Use of recycled plastic
      validated by Science Based Targets to be in line with the 1.5 degree target. Reduc-      Pure streams for increased use of recycled plastic                17
      ing the climate impact from our facilities is a major focus. The company works to
      reduce the climate footprint of its entire value chain and focuses especially on more
                                                                                               Case: Orkla’s vitamins and dietary supplements
      environmentally friendly packaging, plant-based food and giving consumers clear          get climate-smart packaging                                       20
      information to be able to make climate-smart choices. By 2025, Orkla also wants to       Case: 100%-recycled materials for Coca-Cola                       21
      cut food waste and other waste in production in half.
                                                                                               Biobased plastic
      Packaging is an important part of all of Orkla’s products. At the same time, the pack-   Biobased plastic reduces carbon dioxide emissions                 23
      aging can have an impact on the environment and the climate. Orkla works to ensure
                                                                                               Case: Plastic packaging made of “captured” carbon dioxide         25
      that all of the company’s packaging will be able to be recycled and to increase the
      percentage of packaging of fossil-free or recycled materials.                            Case: Tall oil becomes the base of OLW’s crisps packaging         26
                                                                                               Next steps for a circular future                                  27
      Orkla’s packaging targets for 2025 are:
                                                                                               People interviewed                                                28
      • 100 per cent recyclable packaging
      • 75 per cent packaging made of recycled materials                                       References                                                        29
      • 50 per cent plastic packaging made of recycled or renewable materials.                 Contact                                                           30

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
THE PLASTIC REPORT 2021 - Orkla
To everyone who
        cares about our planet
        Will the 2020s become the decade that we make great strides to make              recycled and fossil-free plastics. We believe that this work begins to provide
        plastic a part of the circular economy? Many of the technical prerequisites      increased understanding and knowledge regarding the various parts of the
        are in place, but it is important to establish a profitable model. Plastic       system. Here, we as producers have a major responsibility, but suppliers and
        packages are praised and derided. They are easy to transport and pro-            recycling companies also have a responsibility. We are also convinced that it
        vide good protection, at the same time that they are often made of fossil        will also require incentives and regulations to achieve a functioning market for
        resources or are mostly only used once.                                          recycled plastic, or to build a new deposit-refund scheme. Many consumers
                                                                                         already help out by source sorting and prioritising packaging of recycled or
        There are many people who believe that we need to reduce the use of              fossil-free plastic. But we cannot wait for the consumers to demand change
        plastic. But until we have good alternative materials, we also need to do        from us.
        everything we can to achieve a circular ecocycle for plastic and to reduce
        the negative environmental impact.                                               As leaders for the companies in Orkla Sweden, we are hopeful, and we see a
                                                                                         number of good initiatives both within and outside our companies.
        At Orkla in Sweden, we want to actively work for greater cooperation in
        the entire value chain. Because one thing is certain – this is no “quick fix”.   We are open to the problem description being able to be expressed in different
        Nor is it something that one single actor can achieve alone. We can only         ways depending on where in the chain one is. Our hope is to open up for more
        do it together.                                                                  discussions that are about how we can together find good solutions. What we
                                                                                         see as an important step in order to manage our planet’s resources smarter.
        Many reports have been written about plastic, but most often based on a
        very niched perspective. We have lacked a broader perspective, and what          Enjoy your reading!
        is most relevant for the market in Sweden. With this report, we hope to
        be able to shed light on various points of view and at the same time put
        facts in print regarding plastics as packaging material. We also want to
        point out the prerequisites that are required to achieve a circular system
        in Sweden.

        The areas we have chosen to focus on are the system for circular plastics
        use in terms of collection and recycling, as well as the use of
                                                                                         1. Henrik Julin, Managing Director, Orkla Foods Sweden. 2. Jessica Nithenius, Managing Director, Orkla Care
                                                                                         Sweden. 3. Johan Görgård, Managing Director, Health & Sports Nutrition Group. 4. Malin Jennerholm, Managing
                                                                                         Director, Orkla Confectionery & Snacks Sweden. 5. Maria Lundman-Hedberg, Managing Director, Orkla Wound
                                                                                         Care. 6. Thore Svensson, Managing Director, KåKå, Jästbolaget & OFI S&D.
                                                                                                                                                                                                  3
ORKLA SWEDEN – THE PLASTIC REPORT 2021
THE PLASTIC REPORT 2021 - Orkla
Summary
        Sweden’s total plastic waste per year amounts to approximately 1.7              Recycled plastic raw materials can become other products
        million tonnes. Around 80 per cent of the waste falls out of the recycling      For many kinds of plastic, there is also no secondary market, which
        system and goes to energy recovery. In order to keep using plastic and          means that fractions that cannot be sold go directly to incineration
        derive benefits from the environmental advantages that it also has, we          instead of recycling. Since there is little demand for recycled raw ma-
        need well-functioning recycling systems. We also need to lower our              terials, it is also an obstacle in the recycling. Recycled plastic accounts
        dependence on fossil resources. Actors in the industry agree that coop-         for a minimal part of all new plastic packaging in Sweden. Several voices
        eration throughout the entire supply chain is needed to achieve large-          are being raised to bring about well-functioning incentives and there-
        scale recycling. However, as yet, we have a long way to go to achieve a         by drive behaviour in the right direction. Many products are excellently
        circular system for Swedish plastic packages.                                   suited to be made of recycled plastic raw materials, such as bin sacks,
                                                                                        pots or plastic profiles, but the conditions for new plastic packaging are
        Far too little plastic material is recycled                                     still worse. One of the challenges is the quality of recycled plastic raw
        Orkla’s Sustainability Barometer indicates that 8 out of 10 Swedes feel
                                                                                        materials.
        that it is important to recycle plastic packages. In spite of this, only half
        of the plastic packages are sorted out for material recycling and only          According to Orkla’s Sustainability Barometer, 62 per cent of the
        10-20 per cent become new products. The statistics are misleading and           consumers prefer to buy packages of recycled plastic.
        the measurement point for material recycling is now changing so that it
        better reflects how much actually becomes new materials, and the EU
        target for 2025 is being raised to 50 per cent.

        In Motala, there is today a fully automated facility that sorts out four
        fractions of plastics. Technical conditions still do not exist to be able to         8 out of 10 Swedes
        sort out and recycle laminate, plastic dyed black and plastic mixed with
        other materials. Recyclability is the single most important factor for us            feel that it is important to
        to achieve a circular system. But Sweden needs its own washing and
        granulation capacity in order to fully close the ecocycle.
                                                                                             recycle plastic packages.
                                                                                             Source: Orkla’s Sustainability Barometer 2020.

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
THE PLASTIC REPORT 2021 - Orkla
Summary
                                                                                        Interest in biobased plastics has grown
          Fossil-free plastic and chemical                                              in recent years, but the biobased plastic
          recycling making progress                                                     accounts for just 1 per cent of all plastic
          A complement to mechanical recycling is chemical recycling. Chemical          produced annually in the world, which
          recycling enables the recycling of all plastic, but the technology is still
          in an early phase and challenges remain to be solved before it can be
                                                                                        is around 320 million tonnes.
          widely used.

          Today, biobased plastics are mainly made from biomass, such as sugar
          cane and cellulose, and it is an ever-present question of how much raw
          material is available.

          From an unwanted greenhouse gas, carbon dioxide may come to be
          a useful raw material to produce plastic in the future. Today, there are
          already a number of companies that use plastic made of the carbon
          dioxide molecule as the raw material.

          Sweden is a part of a larger ecocycle and we need to change our entire
          mindset over time. Major changes in attitudes and behaviours are need-
          ed to create a sustainable change for coming generations. We need to
          understand that all resources we take out from the Earth must be recir-
          culated as much as possible.

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
THE PLASTIC REPORT 2021 - Orkla
CIRCULAR PLASTICS USE

        Why do we need a circular
        system for plastic?

                                                                                       ”
        Plastic as a packaging material has several advan-
        tages. This is why it is a very common packaging ma-                            In Sweden, we mainly need to focus on

                                                                                                                                                                                                       CH
        terial, especially in the fast-moving consumer goods

                                                                                                                                                                                                       ES
                                                                                        achieving a well-functioning recycling

                                                                                                                                                                                                -B
                                                                                                                                                                                                   A
        industry (FMCG). At the same time, many consumers                               system where we recycle at least 80-90                                              KA
                                                                                                                                                                                 TRIN MOL
                                                                                                                                                                                              IN

        express concern about plastic’s environmental im-                               per cent of all plastic.
                                                                                        K AT R I N M O L I N A - B E S C H
        pact. Katrin Molina-Besch, Associate Senior Lecturer                            A S S O C I AT E S E N I O R L E C T U R E R , FA C U LT Y O F E N G I N E E R I N G , L U N D U N I V E R S I T Y
        at the Division of Packaging Logistics at the Faculty
        of Engineering of Lund University, explains the envi-
        ronmental advantages and disadvantages of plastic                            And what are the disadvantages?
        and how we can address the challenges.                                       “One disadvantage of plastic is of course that it is often produced from
                                                                                     fossil resources, such as oil and gas. Compared with other packaging
                                                                                     material, we have also not come as far in creating a circular system.
        What are the advantages of plastic                                           This is not mostly about insufficient technical conditions, but rather the
        as a packaging material?                                                     difficulties in bringing about a financially profitable circular model for
        “The environmental advantages of plastic are that it is a light-weight       plastic.”
        material, which means less transport energy compared with materials,
        such as glass and metal. Plastic also has good barrier properties that       What is most critical to countering the disadvantages
        protect the contents of the packaging from external factors, such as         of plastic as a packaging material?
        moisture or oxygen, and also at a low cost since less material is needed     “In Sweden, we mainly need to focus on achieving a well-functioning
        to achieve the same barrier properties compared with other kinds of          recycling system where we recycle at least 80-90 per cent of all plastic,
        materials. Through its barrier properties, plastic contributes to preserv-   which we do with several other kinds of materials. In the long term, we
        ing the quality of food for a longer time, which is important from a food    also need to reduce our dependence on fossil resources and switch to
        waste perspective.”                                                          renewable materials.”

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
THE PLASTIC REPORT 2021 - Orkla
CIRCULAR PLASTICS USE

                                                                                           ”
        Why do we need to focus especially on recycling?
        “If the plastic is placed in a recycling container, it means that the plastic
        can be treated as a resource that can be recycled rather than waste that
                                                                                           Another environmental advantage of fossil-free
        is incinerated. When we incinerate fossil resources, we contribute to              plastic is that production of the plastic most often
        global warming.                                                                    takes place through renewable energy.
                                                                                           K AT R I N M O L I N A - B E S C H
        “When more packages are recycled instead – and the material is mostly
        used several times without being degraded – we also don’t need to use
        as many resources to make new packaging, which also entails major
        environmental gains.”
                                                                                        What are the advantages of fossil-free plastic?
        Why are certain kinds of plastic recyclable                                     “Fossil-free plastic is a plastic that has been made of renewable raw ma-
        and others aren’t?                                                              terials instead of fossil raw materials. Common raw materials in this con-
        “Before the plastic can be recycled, it has to be sorted according to what      text are, for example, sugar cane, corn starch and potato starch. Another
        kind of plastic it is. But today, the automated system may have difficulty      environmental advantage of fossil-free plastic is that production of the
        in distinguishing, for example, black plastic, which is then sorted out         plastic most often takes place through renewable energy, which entails
        and incinerated. Mixed plastic materials that consist of several layers of      a lower climate impact in the production compared with fossil plastic,
        different kinds of plastic are also impossible to distinguish and separate.     which most often also uses fossil energy in the production process.
        Some kinds of plastic are also used in too little volumes in order for it to    Another advantage of fossil-free plastics is that when they are inciner-
        be financially viable to recycle the plastic since there is no demand for       ated, there are no emissions, while when we incinerate fossil plastic, we
        the recycled material.”                                                         contribute to the greenhouse effect.”

                                                                                        What disadvantages does the fossil-free plastic have?
                                                                                        “One of the major disadvantages is that the fossil-free plastics that exist
                                                                                        today are often produced from raw materials that could have been food,
                                                                                        such as corn and potatoes. As long as we do not succeed in recycling
                                                                                        more plastic, it means that the production of fossil-free plastic can
                                            LE O R N                                    compete with the food production. Moreover, the agriculture for the
                               YC L AB                    OT                            cultivation of these renewable raw materials is also not free from envi-
                             C
                           RE                                ?                          ronmental challenges. Therefore, it’s important that increasingly more
                                                                                        fossil-free plastic is instead produced from waste products from, for
                                                                                        example, farming or forestry.

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
THE PLASTIC REPORT 2021 - Orkla
CIRCULAR PLASTICS USE

        So what is best – fossil-free or recycled plastic?

                                                                                          ”
        “I believe that we need both of the changes: we need to both go from
        fossil dependence to fossil-free and be able to recycle more of the pack-
                                                                                          Packaging suppliers and producers
        ages we produce. To really capture the environmental gains in a better
        recycling system for plastic, we would also need to create a so-called
                                                                                          probably need to reduce the number
        closed loop, a system where all of the packages recycled can become               of kinds of plastics they use.
        new packaging material again, like in the PET system. It’s extra important        K AT R I N M O L I N A - B E S C H

        in the food industry, where the requirements on food safety mean that
        the recycled plastic must only come from other food packaging.

        “When we have a better recycling system in place, we also do not             How can we achieve a better recycling system?
        need to consume as much renewable raw materials to produce new               “In order to achieve large-scale recycling, the entire supply chain and all
        packaging.”                                                                  of society have to contribute. It should preferably also take place across
                                                                                     the borders – Sweden is after all not isolated from the world and we
                                                                                     both export and import products. Packaging suppliers and producers
                                                                                     probably need to reduce the number of kinds of plastics they use. Today,
                                                                                     one can choose whatever plastic one wants, which means that demand
                                                                                     for the recycled material of some of these plastics may be very small.

                                                                                     “In order for the food industry to be able to use more recycled plastic,
                                                                                     one or more entirely closed recycling systems are also needed or even
                                                                                     better sorting, which guarantees that it is precisely food packages that
                                                                                     become food packages again, to thereby guarantee food safety.”

                                                                                                     “In order to achieve large-scale
                                                                                               recycling, the entire supply chain and
                                                                                                   all of society have to contribute.”

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
THE PLASTIC REPORT 2021 - Orkla
THE SWEDISH SYSTEM FOR A CIRCULAR PLASTIC USE

      Plastic’s way towards circularity
                                                                            RECYCLING STATION & COLLECTION CLOSE TO PROPERTIES
                                                                            The consumer sorts and leaves used packaging at collection points close
                                                                            to the properties or at recycling stations, which is handled by Förpack-
                                                                            ings- och tindningsinsamlingen (Packaging and newspaper collection
                                                                            - FTI), which is owned by multiple material companies, including Swedish
                                                                            Plastic Recycling. The material companies are in turn owned by the pro-
                                                                            ducers. Around half of all plastic ends up in household waste and today
                                                                            is not sorted, but goes directly to waste incineration.

                      MARKET                                                                                      SORTING
     Producers make products                                                                                      FTI transports all collected plas-
    that are packaged and sold                                                                                    tic packaging to Motala where
                 to consumers.                                                                                    Swedish Plastic Recycling sorts
                                                                                                                  it. The plastic packaging that
                                                                                                                  cannot be sorted out or recycled
     Ultimately, today around 10-20%                                                                              for various reasons, around 50
                                                                                                                  per cent of the packaging today,
     of the plastic packaging that is put                                                                         goes to waste incineration.
     on the market is recycled.

                                                                                                                         WASHING & GRANULATION
                                                                                                                         Sorted packages are washed
    PACKAGING MANUFACTURERS                                                                                              and granulated. A process
    Recycled granules are bought by packaging man-                                                                       that does not exist in Sweden,
    ufacturers who make new packages out of the                                                                          but does exist in other coun-
    material. The plastic granules can also be used                                                                      tries in Europe.
    in entirely different contexts, such as becoming
    flower pots or furniture.

                                                       WASTE INCINERATION
                                                                                                                                                       9
ORKLA SWEDEN – THE PLASTIC REPORT 2021
THE PLASTIC REPORT 2021 - Orkla
CHALLENGES AND OPPORTUNITIES

                                         Collection and recycling of
                                                  plastics in Sweden

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
COLLECTION AND RECYCLING

        Higher targets demand strong
        efforts on every level
        A total of around 1.7 million tonnes of plastic waste
        arises in Sweden yearly, of which most today, around

                                                                                                 10-20 %
        80 per cent, falls out of the recycling system and
        goes to energy recovery. The emissions from waste
        incineration of plastic amounted to 2.6 million tonnes
        in 2018 and thereby accounted for more than half                                          of the plastic packaging
        of the electricity and district heating sector’s emis-                                    is recycled today
        sions1. Despite these significant emissions, Sweden’s
        targets for recycling of plastic have, however, not
                                                                                        much actually becomes new materials. At the same time, the recycling
        been higher than what we could achieve. In 2019,
                                                                                        target for plastic packaging is also being increased by 20 percentage
        the degree of recycling for plastic packaging was                               points to 50 per cent by 2025. Since it is a new way to measure, there
        49 per cent and we thereby achieve the recycling                                are no exact statistics, but the actual recycling in plastic packaging is
        target of 30 per cent in Sweden according to the                                today probably at 10-20 per cent.

        method used to report to the EU.                                                “We have a long way to go to reach the whole way and we need to work
                                                                                        in every part of the chain: producers, consumers and the recycling in-
                                                                                        dustry, in order to succeed. In order for us to reach the EU’s new recy-
        “The target becomes misleading today since what is measured is what
                                                                                        cling target, we assess that 80 per cent of the plastic packaging put on
        percentage has been sorted out by the consumer and gathered in to be
                                                                                        the market must be collected,” says Mattias Philipsson, CEO of Swedish
        recycled. The percentage that actually becomes new raw materials and
                                                                                        Plastic Recycling.
        new products is significantly lower than the statistics show,” says Åsa
        Stenmarck, who heads the National Plastic Coordination at the Swedish
        Environmental Protection Agency.                                                Collection close to homes one way forward
                                                                                        A strong increase from a level that is already high today in an interna-
        As of 2020, recycling for what is reported to the EU will therefore be calcu-   tional comparison is not done all at once. And time is running out to
        lated differently so that what is reported as recycling better reflects how     achieve the target within just five years. Studies show that the total

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
79%
  COLLECTION AND RECYCLING

           amount of collected packaging per person is significantly higher in
           municipalities with collection closer to homes2, something that the
           government decided to introduce throughout Sweden although it is still
                                                                                                                              of Swedes source sort
           unclear when.                                                                                                           their waste.
           Even if consumers get better at doing their part, there are still large leaks
           in the system. But technology is advancing and a lot has happened in
           plastic recycling in Sweden in connection with the sorting plant that
                                                                                                                                                 Source: Orkla’s Sustainability Barometer 2020.
           Swedish Plastic Recycling commissioned in January 2019.

           “The plant is fully automated and today sorts out four fractions of plas-                      Producers and packaging companies need to change their way of work-
           tic. Around half of the plastic packaging that comes to the sorting plant                      ing, and put demands on package design in order to achieve the targets.
           goes on to washing and granulation and the rest goes to incineration,”
           says Mattias Philipsson and continues:                                                         “Recyclability is the single most important factor for us to achieve a cir-
           “In order to fully close the ecocycle, we need our own washing and                             cular system. It is not worth much for a product to be made of recycled
           granulation capacity in Sweden.”                                                               materials if it is not recyclable in its turn,” says Fredrik Pettersson, Man-
                                                                                                          aging Director of Stena Recycling.
           Technical limitations mean that, for example, laminate, plastic dyed
           black and plastic mixed with other materials, such as metal, is sorted out.                    For Kristin Geidenmark Olofsson, Director of Regulatory Issues and
                                                                                                          Strategic Innovation at the packaging company Trioplast, it is important
                                                                                                          that this mindset comes into the chain early on:
                                                                                                          “If we don’t already develop packaging for recycling of the material in
                                                                                                          the design phase, it can’t become a good new raw material. What should
                                                                                                          a bag for food look like to be recyclable? As product owners, we have to
       Plastic packaging is treated differently in the world                                              begin thinking longer: ‘What happens later and how can we make sure
                                                                                                          that it works?’ What would your package look like if you rented it? We
                                                                                                          have to begin thinking like this in the entire chain.”
         0.5 %                       40 %                 0,? %                        32 %
        SWEDEN                        WORLD               SWEDEN                        WORLD
                                                                                                          Market for recycled material requires incentives
                      LANDFILL                                          NATURE
                                                                                                          For many kinds of plastic, there is also no secondary market, which
                                                                                                          means that fractions that cannot be sold go directly to incineration
Source: Sweden figures an estimate from Plastkretsen Sverige, 2018 and the world Ellen MacArthur, 2013.   instead of recycling.

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
COLLECTION AND RECYCLING

        “Since there is little demand for recycled raw materials, it is also an ob-
        stacle in the recycling. There is quite a lot of plastic in the system that is
        not recycled because there is simply not a market for it, and we have to                      Different kinds of recycling
        begin creating incentives to get a functioning market started,” says Åsa                      In mechanical recycling, the collected plastic is ground down into small
        Stenmarck.                                                                                    bits that are then remelted and formed into new products. Mixed and
                                                                                                      impure plastic becomes difficult to recycle with mechanical recycling.
        Society also has its role to play in establishing behaviour and
                                                                                                      Chemical recycling means that thermochemical processes are used to
        a functioning market.
                                                                                                      be able to filter undesired substances and dyes out of the plastic, which
        “We can’t place all of the responsibility on incentives, but they are an                      is then made into oil, which in turn can be used in new production.
        important part in order to achieve a functioning circular system. But it                      Chemical recycling enables the recycling of all plastic, but the technol-
        is important how we develop the incentives – they drive our behaviour.                        ogy is still in an early phase and challenges remain to be solved before
        For example, what would happen if instead of taxing plastic bags that                         chemical recycling can be widely used.
        are recyclable and good products to put recycled plastic in, we placed a
        tax on packaging that is not recyclable,” says Fredrik Pettersson.

        46%                                                                                                                         61%
                                                                                                                                    of Swedes are
         of Swedes find that it is often                                                                                            worried about plastic’s
         hard to know if a package can

                                                                            54%
                                                                                                                                    environmental impact.
         be recycled or not.                                                                                                        Source: Orkla’s Sustainability Barometer 2020.
         Source: Orkla’s Sustainability Barometer 2020.

                                                                             of Swedes are worried
                                                                             about the amount of
                                                                             plastic in the sea.
                                                                             Source: Orkla’s Sustainability Barometer 2020.

                                                                                                                                                                                     13
ORKLA SWEDEN – THE PLASTIC REPORT 2021
Case:

                                                    Felix switched black to transparent
                                                                   for greater recycling

       In 2020, the Orkla brand Felix replaced its black one-portion
       bowls with translucent bowls, which makes it possible to
       recycle another 91 tonnes of plastic per year.

       “Today, it’s not possible to recycle black plastic. By switch-
       ing from black to clear plastic in our one-portion bowls
       from Felix, we make it possible to get more plastic into the
       circular flow and thereby more climate-friendly packaging
       can be produced. This is one of a number of sustainability
       initiatives from Felix during the year. We welcome more
       people to hasten this transformation so that we can reduce
                                                                                   We can recycle

                                                                               91 tonnes
       the climate impact of packaging together,” says Thomas
       Sjöberg, Marketing Manager, Orkla Foods Sweden.

                                                                                a plastic per year just
                                                                               by changing the colour
                                                                                    of the plastic.

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
Case:
                       Bower wants to
                       create incentives to recycle
            The Orkla brand Grumme cooperates with Bower (formerly “PantaPå”),
            which lets consumers get money back on all kinds of packages directly
            at the recycling station, by scanning the package’s bar codes with the
            Bower app. The money is gathered in the app and can then be re-
            deemed to a bank account or be received as discount coupons that can
                                                                                             In less than
            be used in stores. The app also shows users how much carbon dioxide          one year, more than
            they save by recycling, as well as how they should recycle the package.
            It is only products from Bower’s affiliated partners that can be scanned.
                                                                                         10,000
                                                                                         Grumme packages
            For Grumme, the cooperation with Bower is a way to increase the incen-
                                                                                         have been returned
            tive for the consumer to turn empty plastic packages in for recycling, and    through the app.
            thereby increase the amount of recycled plastic in the market.

            “Today, there is a shortage of the kind of recycled plastic that we want
            to use in our packaging. By cooperating with Bower, we hope to con-
            tribute to more plastic being recycled in Sweden and being able to be
            reused in new packages,” says Jessica Nithenius, Managing Director of
            Orkla Care Sweden.

            “Since we introduced the possibility of registering the recycling station
            close to homes that many multi-family dwellings use, a whole 17,000
            new recycling stations have been registered in the app. This really
            shows how many people want to use the app to recycle their used
            packages,” says Suwar Mert, CEO of Bower.

                                                                                                               15
ORKLA SWEDEN – THE PLASTIC REPORT 2021
CHALLENGES AND OPPORTUNITIES

                                         Use of recycled plastic

                                                                         16
ORKLA SWEDEN – THE PLASTIC REPORT 2021
USE OF RECYCLED PLASTIC

        Pure streams for increased use of
        recycled plastic
        Recycled raw materials are uncommon in the plastic                                    By using 100 per cent recycled
        industry today and a minimal part of recycled materi-                                 plastic in Orkla’s drink bottles from
        als are used in new packaging. But functioning solu-                                  BOB and FUN Light, the climate impact
        tions and systems exist.                                                              is reduced by 75 per cent.

        Many products are excellently suited to be made of recycled plastic             Trioplast has long innovated with recycled plastic and has come far
        raw materials. Today, plastic from recycled plastic packaging is often          in terms of using recycled raw materials. But in total, recycled plastic
        used for garbage bags, pots or plastic profiles, but rarely for new plastic     accounts for a minimal part of all new plastic packaging in Sweden.
        packaging. One of the challenges is the quality of recycled plastic raw
        materials.                                                                      Strict regulations for food packaging
                                                                                        In order to ensure that there are no substances in the raw materials that
        “With new materials, we know exactly how it works and it is the same            are unsuitable in contact with food products, there are special regula-
        every day we produce. With recycled raw materials, it becomes a mix             tions for the use of recycled plastic in food packaging. In order for
        and it is a new material every time. It’s a process to learn how the material   recycled plastic to be able to be used, the plastic must have been recy-
        behaves and get the machines to work with it,” says Kristin Geidenmark          cled and certified in a process approved by the European Commission.
        Olofsson, Director of Regulatory Issues and Strategic Innovation                To be approved, there must be traceability in the system. In practice, this
        at the packaging company Trioplast.                                             means that it is virtually only recycled PET that is today approved since it
                                                                                        is the only plastic fraction that we have a recycling system for in Sweden
                                                                                        and at an EU level with traceability.

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
USE OF RECYCLED PLASTIC

        The other option for reusing recycled material for food packaging is to
        encapsulate the recycled material with at least one layer of a functional
        barrier of new material.

        “Today, there is no definition for what a functional barrier is or how one
        verifies it for polyolefin films. Basic research is needed for how verification
        should be done and the European Commission needs to define the ter-
        minology so we know what we should work by,” says Kristin Geidenmark
        Olofsson at Trioplast, which despite the problems is working in projects
        to develop food packaging from recycled plastic with a protective barrier.

        “The legislation goes slow and to some extent we have to hope that
        producers and packaging developers work around the system with in-
        novation so that one meets the requirement, but can still have recycled
        plastic raw materials to some extent. Plastic recycling is not digital, recy-
        cled plastic can be mixed with new raw materials. 20 per cent recycled is
                                                                                          Pure granules the key in development
        better than 0 per cent,” says Åsa Stenmarck at the Swedish Environmental
                                                                                          But even if one works with protective barriers, Trioplast sees pure
        Protection Agency.
                                                                                          recycled plastic as a crucial factor.

                                                                                          “We have scanned the European market for recycled plastic and the
                                                                                          purest granules are found from small collection systems, so if we tighten
   Whether or not the package can be recycled                                             up the collection system, we get purer granules,” says Kristin Geidenmark
                                                                                          Olofsson at Trioplast.
   is the most important information on a
   product package, according to Swedes.                                                  In addition to the PET system, this currently concerns closed collection
                                                                                          systems from companies or the public sector that create systems with
                                                                                          pure fractions.

                                                               62%
                               prefer to buy packages of recycled
                                                                                          The pure recycled granules are attractive and believed to be a commodity
                                                                                          in short supply in the future. For the recycling company Stena Recycling,
                                                                                          which was early in working for a circular recycling of plastic, it is impor-
                                       plastic than regular plastic.                      tant for a circular system to also focus on what plastic is used where.
                                         Source: Orkla’s Sustainability Barometer 2020.

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
USE OF RECYCLED PLASTIC

        “Even in well-functioning circular systems for plastic, we will always
        need to add virgin material. Therefore, we need to think about what
        plastic we will use for what application. Perhaps we should not initially
        use recycled plastic for the most demanding applications, but rather
        begin with simple applications to hold down costs and first get a func-
        tioning system. If we begin with the most difficult first, there is a risk that
                                                                                                      Functioning systems require regulations
        it slows the pace,” says Fredrik Pettersson, Managing Director of Stena
                                                                                                      “Consumers are bad at sorting out plastic as it is today and getting the
        Recycling.
                                                                                                      consumer to distinguish between styrene plastic and polypropylene
                                                                                                      does not feel realistic. But, on the other hand the PET deposit flow
                                                                                                      works very well. Deposit systems are something that the customers like,”
                                                                                                      says Åsa Domeij, Sustainability Manager at Axfood and Chairman of the
                                                                                                      government’s delegation for the circular economy.

                                                                                                      Åsa Domeij does not believe that the business community would man-

                                        67%
                                                                                                      age to build new deposit systems without compulsory regulations from
                                                                                                      the political sphere. The market value of recycled plastic is bad because
                                                                                                      the market has to resolve the issue itself. It is simply not profitable to
                                  thinks that it is impor-                                            conduct collection, keep the plastic streams separated, or invest in high-
                                  tant that the products                                              tech refinement as long as the price for secondary material is low and
                                  one buys have recycla-                                              new raw materials are inexpensive.
                                      ble packaging.                                                  “In business, we can drive the development. But it also depends on the
                                                                                                      political decisions to achieve systems that work. It is necessary for the

                                                                            8%
                                                                                                      political sphere to help with economic incentives,” says Åsa Domeij.

                                                                     of the world’s oil use goes to        “Political decisions are necessary
                                                                      the production of plastic.
                                                                                                           to achieve systems that work
                                                                                                           and politicians must help with
                                                                                                           economic incentives.”
                Source: Orkla’s Sustainability & IVL Swedish Environmental Research Institute.

                                                                                                                                                                                   19
ORKLA SWEDEN – THE PLASTIC REPORT 2021
Case:

                              Orkla’s vitamins and dietary supplements
                                           get climate-smart packaging
       The majority of all packaging from the Orkla brands Pharbio, Pikasol,
       Gevita and Active Care are made of recycled plastic. In total, there are
       27 different products that received new packaging in 2020.

       The new bottles consist of 100 per cent recycled PET. They have also
       been made thinner to reduce material consumption and clear to facili-
       tate recycling. The bottles have also been given new labels, now made
       of biobased plastic. However, the caps are initially still made of fossil
       plastic as the quality requirements on the caps have not yet been met
       with other materials.

       In order to make the bottles more space-efficient and reduce emis-
       sions in transports, the shape is rectangular. The production of the
       new bottles is also more climate smart. Around 80 per cent less energy
       is needed for the production of the bottles made of recycled plastic
       compared with bottles made of new plastic.                                  80%
                                                                                   less energy is needed for the
       “Our hope is that we will soon be able to have a closed recycling
       system for these kinds of packages, just like for juice and soda bottles    production of the bottles made
       of PET,” says Jessica Nithenius, MD of Orkla Care Sweden.                   of recycled plastic compared with
                                                                                   bottles made of new plastic.

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
Case:

                       100%-recycled
                       materials for Coca-Cola
        In January 2020, Coca-Cola in Sweden began to shift the locally pro-
        duced PET portfolio to recycled plastic, called rPET. A transformation
        that went very quickly despite very high quality standards. The initiative
        should be seen in the light of how Coca-Cola’s packaging strategy is
        to deliver on the goal of achieving zero net emissions of greenhouse
        gases in the entire value chain by 2040. Packaging accounts for 54 per       The return system that exists in Sweden for beverage packaging via
        cent of Coca-Cola’s climate footprint in Sweden. Three clear goals for       Returpack enables a high degree of material recycling. Lisa Wahlström
        reducing the packaging’s climate footprint are that all packages will be     emphasises that the supply of renewable materials or chemically recy-
        recyclable, will be collected for recycling and will consist of 100 per      cled materials is important over time to compensate for the material
        cent recycled or renewable materials.                                        losses that arise in the recycling processes.

        “Every package we put on the market shall be able to be collected,” says     “But here, we have to work together with the recycling companies to
        Lisa Wahlström, Communication and Sustainability Director, Coca-Cola         create a circular flow in the entire value chain,” says Lisa Wahlström.
        European Partners (CCEP) Sweden. By shifting over to rPET, CCEP
        expects to reduce the amount of newly made plastic by 3,500 tonnes           It was no coincidence that Sweden was the first country to launch rPET.
        and reduce the PET bottles’ climate footprint by 25 per cent per year.
                                                                                     “We see that Swedish consumers want to make sustainable choices,
                                                                                     which makes it easier to make a commercial decision. Our Swedish
                                                                                     customers also presuppose that we take a leadership role. It demands
                                                                                     courage to believe in the right thing and I see a growing willingness in
                                                                                     the industry to support and help each other,” says Lisa Wahlström.

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
CHALLENGES AND OPPORTUNITIES

                                         Biobased plastic

                                                                  22
ORKLA SWEDEN – THE PLASTIC REPORT 2021
BIOBASED PLASTIC

        Biobased plastic reduces carbon
        dioxide emissions
                                                                                     If targeting more environmentally aware consumers, the transition from
                                                                                     fossil to plant-based plastic in the packaging is even more important,”
        Today, the development for biobased plastic is                               says Helena Lindh, Sustainability Expert at Tetra Pak North Europe.
        mainly driven by environmentally aware customers
                                                                                     According to Orkla’s Sustainability Barometer 2020, 3 out of 10 consumers
        and consumers who want to reduce carbon dioxide                              are prepared to pay more for products with biobased plastic packag-
        emissions. But the biobased plastic only accounts                            ing. But despite this, biobased plastic is just less than 1 per cent of the
        for almost 1 per cent of the more than 320 million                           world’s plastic production today.

        tonnes of plastic that are produced in the world                             Today, biobased plastics are mainly made from biomass, such as sugar
        annually.                                                                    cane and cellulose, and it is an ever-present question of how much raw
                                                                                     material is available for biobased plastic:

        “Biobased plastic is an important part in the circular ecocycle and can      “Not enough is the simple answer, but we don’t really know. More analy-
        absolutely be one piece of the puzzle. Even if biobased plastics in purely   ses of this really need to be done. I think that maybe 50 per cent of our
        technical terms cannot replace all plastics, all plastic packages can be     plastic production could be biobased and 50 per cent recycled in the
        made of biobased plastic,” says Åsa Stenmarck, who is the manager for        future. But at the same time we also need to reduce the amount of plastic
        the National Plastic Coordination at the Swedish Environmental Protection    overall in order for the raw materials to suffice,” says Åsa Stenmarck.
        Agency.

        Interest in biobased plastics has grown in recent years and is driven
                                                                                                                            are willing to pay more for

                                                                                                  36%
        mainly by environmentally aware customers and consumers.
                                                                                                                            packaging of biobased plastic,
        “We notice that there is a strong demand in the Nordic countries for                                                compared with 27% who say they
        carton packaging with plant-based plastic in the cork and in the laminate.                                          are not at all willing to pay more.
                                                                                                                            Source: Orkla’s Sustainability Barometer 2020.

                                                                                                                                                                             23
ORKLA SWEDEN – THE PLASTIC REPORT 2021
BIOBASED PLASTIC

        Tetra Pak, which is the world’s largest user of biobased plastic, sees that
        the development must take place gradually.

        “We use a growing percentage of plant-based plastic, but see that there
        is still a limited supply and the transition is not taking place overnight,”
        says Helena Lindh at Tetra Pak.

        New technology hastening the development
        From an unwanted greenhouse gas, carbon dioxide may come to be a
        useful raw material to produce plastic in the future. There are already
        a number of companies today that use plastic made from the carbon              “But we need multiple measures for this to be possible. As long as we
        dioxide molecule as raw material through various techniques, for shoes         have competition from inexpensive fossil oil, this change won’t happen
        and for foam in mattresses, but packages are also in development.              on its own and we can’t demand that the consumer drives the change.
                                                                                       Political incentive would be needed here to achieve a real change,” says
        But the technical development costs money and with a declining world
                                                                                       Åsa Domeij.
        market price on oil, it is hard for the biobased raw material to compete.

        Åsa Domeij at Axfood highlights the need for us to have access to more
        production of biobased plastic also in our part of the world, from for
        example leftover forest raw materials, as a complement to increased use                 Biodegradable plastics in a Swedish context
        of recycled materials.                                                                  Biobased plastics should not be confused with biodegradable or
                                                                                                compostable plastics. Biodegradable and compostable plastics can
                                                                                                be made of both fossil and renewable raw materials. In contrast to
                                                                                                what one might think, this plastic is not broken down in nature, but
                                                                                                rather requires specific industrial conditions for biological degrada-
                                                                                                tion to occur. If degradable plastic ends up in nature, it is broken up
                                                                                                into microplastic, just like other plastic. Today, there is no recycling
                                                                                                system in Sweden that can handle biodegradable plastic packaging.
                                                                                                Therefore it is not suitable in plastic packaging or other products that
                                                                                                are intended to go to recycling.

                                                                                                                                                                           24
ORKLA SWEDEN – THE PLASTIC REPORT 2021
Case:

                       Plastic packaging made of
                       “captured” carbon dioxide
            The cosmetics company L’Oréal, the energy company Total and the
            technology company Lanza Tech have developed a technique that can
            convert captured carbon dioxide into plastic bottles.

            The process builds on a technology developed by the American Lanza
            Tech. It uses bacteria that can produce ethanol from climate emissions
            through fermentation. The ethanol is then converted to polyethylene
            by French Total and lastly it becomes bottles that should carry products
            from the French cosmetics company. The climate gases that are to be
            raw materials are intended to be taken from a steel mill.

            If they succeed in the launch, it will probably be the world’s first pack-
            aging made of plastic produced from “captured” and recycled carbon
            dioxide from industrial emissions.

                                                                                         By 2025, French L’Oréal plans on
                                                                                         launching shampoo bottles made
                                                                                         of captured carbon dioxide.

                                                                                                                               25
ORKLA SWEDEN – THE PLASTIC REPORT 2021
Case:

                        Tall oil becomes the base
                        of OLW’s crisps packaging
            In autumn 2020, under the brand OLW, Orkla began working to introduce
            new crisps packages made of Finnish tall oil, which is a residual product
            from the forest industry. The plastic in the new crisps bags thereby have
            half of the climate footprint compared with fossil plastic. The ambition is
            to gradually introduce bags of plastic from tall oil for all snack packages.

            The bags are third-party certified by the organisation ISCC. This is done
            through a so-called mass-balance solution, which means that the pack-
            aging supplier in its general production replaces fossil oil with tall oil to
            a corresponding amount that is used to make the OLW crisps bags.

            “The most important for us is that it actually contributes to a concrete
            reduction of climate emissions. Our attitude is that we have to begin
            somewhere, begin doing things to find more climate smart solutions,”
            says Sara Malmström, Quality and Sustainability Manager at Orkla
            Confectionery & Snacks.

                                                                                            The biobased plastic in the new crisps
                                                                                            bags have half of the climate footprint
                                                                                            compared with fossil plastic.

                                                                                                                                         26
ORKLA SWEDEN – THE PLASTIC REPORT 2021
PACKAGING OF THE FUTURE

                                                                                       What else can you say about chemical recycling?
                                                                                       “Because chemically recycled plastic can be viewed in the same way as

        Packaging                                                                      newly made plastic, it will also be able to be used in direct contact with
                                                                                       food. The material is already commercially available in Europe today and

        of the future
                                                                                       it is of course an alternative we are considering. But we must remember
                                                                                       that chemical recycling will always be a complement to mechanical recy-
                                                                                       cling so we should not forget to stimulate and support the development
        Pavel Komůrka is the Sustainability Coordinator                                of new and improved recycling techniques. It leads to higher quality in the
                                                                                       recycled plastic package waste. Moreover, the chemically recycled plastic
        and in charge of package innovation in the
                                                                                       must also be able to be recycled again.”
        Orkla Group. This is how Pavel views the
        packaging of the future.                                                       Hybrid or mixed packaging materials, which are
                                                                                       normally difficult to recycle, are common today.
                                                                                       What do you see in terms of solutions for the future?
        What are the greatest challenges for us to be                                  “I see two routes here: on one hand, we need to actively look for suita-
        able to achieve a circular plastics use?                                       ble alternatives to the hybrid-packaging materials that at the same time
        “The greatest challenge I see in the upcoming decades is to change our         can provide acceptable product protection. For example, at Orkla we are
        mindset. Major changes in attitudes and behaviours are needed to create        looking at a transition from combined plastic packaging to monomaterial
        a sustainable change for coming generations. We have to understand that        structures that have a higher potential for recycling. But we also need to
        all resources we take out from the Earth must be recirculated as much as       work on innovation and research to develop and enable recycling, both
        possible.”                                                                     mechanical and chemical, of this kind of material.”

        What visions of the future do you have in
        terms of the use of recycled plastic?                                          In summary, what does the future look like for plastic?
        “I see that we will begin by maximising the use of recycled plastic in         “At the same time that we see that concern and mistrust of plastic is
        packaging other than food packaging since the use of recycled plastic in       growing in society, plastic is also a material that will be needed in the
        food packaging has its limitations – we must never compromise on food          future as well. Instead of focusing on eliminating plastic, we need to teach
        safety. We can also use recycled plastic for secondary plastic packages.       ourselves and our children how we achieve a circular plastics use, make
        A lot is also beginning to happen in chemical recycling, which is especially   wise environmental choices and reduce the amount of plastic where
        interesting for the food sector.”                                              possible.”

                                                                                                                                                                      27
ORKLA SWEDEN – THE PLASTIC REPORT 2021
PEOPLE INTERVIEWED

        People interviewed

      Åsa Domeij is the Sustainability        Mattias Philipsson is the CEO          Kristin Geidenmark Olofsson is the        Åsa Stenmarck is in charge of the National
      Manager at Axfood and Chairman          of Swedish Plastic Recycling.          Director of Regulatory Issues and         Plastic Coordination at the Swedish Environmental
      of the government’s delegation                                                 Strategic Innovation at the packaging     Protection Agency and among other things, was
      for the circular economy.                                                      company Trioplast.                        previously the government’s special investigator
                                                                                                                               on the environmental effects of plastic.

        Katrin Molina-Besch is an Associate   Pavel Komůrka is the Sustainability    Helena Lindh is a Sustainability Expert   Fredrik Pettersson is the Managing
        Senior Lecturer at the Faculty of     Coordinator and in charge of package   at Tetra Pak North Europe.                Director of Stena Recycling.
        Engineering of Lund University.       innovation in the Orkla Group.

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ORKLA SWEDEN – THE PLASTIC REPORT 2021
References

1 Swedish Environmental Protection Agency http://www.naturvardsverket.se/Sa-mar-miljon/Statistik-A-O/Vaxthusgaser-utslapp-fran-el-och-fjarrvarme/
2 Avfall Sverige https://www.sopor.nu/nyheter/fastighetsnaera-insamling-ger-baettre-sortering/

About Orkla’s Sustainability Barometer 2020:
The Sustainability Barometer surveys Swedes’ views of sustainable everyday life and was conducted for the
second consecutive year. Orkla’s Sustainability Barometer is based on a web-based quantitative study, which was
conducted by Ipsos on behalf of Orkla in October 2020. The basis consists of 1,000 Swedish respondents who
correspond to a representative selection with regard to gender, age and region. All respondents were over 18.
The same study was also done in Norway, Denmark, Finland, Estonia, Latvia and Lithuania.

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ORKLA SWEDEN - THE PLASTIC REPORT

Orkla Sweden • kommunikationorklasverige@orkla.se • Tel +46 (0)10-142 40 00                                 30
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