Jun-2023

Plastics circularity: overcoming five disruptive truths

The environmental challenge on plastic waste has never been more relevant than it is now as we move towards a net-zero future.

Brian Crotty
OPIS

Article Summary

Plans to make it easier for UK consumers to recycle packaging waste have advanced rapidly in 2023 following the introduction of Extended Producer Responsibility (EPR) reporting requirements. The UK Government’s efforts to make firms that supply household packaging responsible for the costs of dealing with waste showcase how regulators are actively increasing pressure on companies to drive circularity in the plastics value chain.

This is with good reason, however, as the statistics are sobering. If left unchecked, global plastic waste production could reach as much as 460 million metric tons per year by 2030, according to McKinsey. This could elevate the environmental challenge that plastic waste poses to new heights – and as global efforts toward a net-zero future accelerate, acting now is imperative.

Effectively combating this threat and driving increased circularity for the plastics and chemical industries will require a deep understanding of five disruptive truths that must be top of mind for industry players.

Growth in plastics waste
The first disruptive truth is that the quantity of plastic waste is projected to increase by 70% over the next 30 years. According to research by our Chemical Market Analytics team, 2.1 billion metric tons of municipal solid waste were generated globally in 2020, of which 252 million tons constituted plastics used in non-durable products such as packaging. Without intervention, our forecasting models predict that levels of plastic waste will hit almost 3.6 billion metric tons by 2050 – a staggering figure.

Our analysis also suggests that much of this increase in plastic waste will stem from population growth, as well as improved standards of living in regions such as Africa, India and South East Asia. This is set to present significant challenges in the near future as these regions are currently characterised by low collection rates when it comes to plastics. As a result, a significant portion of this waste is entering the global environment through disposal into landfills and other avenues such as global water supplies, which will remain the case unless mitigated against.

The recycling infrastructure challenge
Tackling the plastic challenge is intimately linked with another disruptive truth – that the current pace of recycling is on a trajectory toward failure, as infrastructure projects envisioned today will fall short. Scaled technology and associated infrastructure for plastics recycling – including collection, sorting, processing and end-use application facilities – remain in the very early stages of development in many ecosystems.

Today, many collection systems are under economic pressure and are overwhelmed with waste volumes of all materials. Even in Western Europe and the U.S., waste collection streams and systems have relatively low-input volumes compared with the requirements needed to achieve economies of scale. There are also significant gaps in supply and end-use demand for recycled material, which pose an additional challenge. As regulatory efforts accelerate and investment into solving the collections infrastructure problem increases, an ability to track the potential impact of associated risks, costs and emissions through access to the right data may prove the difference for stakeholders in the years to come.

Supply and demand for recycled plastic
As demand for recycled plastic accelerates, supply will need to increase in parallel. Currently, industries are highly reliant on Post-Consumer Recycled material (PCR) plastics, which are mechanically recycled plastics from either consumer or commercial sources. In the drive to reduce global demand for virgin polymers, the plastics industry requires PCR that can meet quality and traceability standards, especially in highly regulated industries such as food packaging or pharmaceuticals.

Solving the supply crunch will require reimagining use cases for plastic waste that incorporate plastics that cannot be used in highly regulated industries, or that require complicated converting process operations, such as modification of plastics for asphalt. Having the appropriate analytics and insight at hand to assess competing recycling process technologies consistently over time will be pivotal in helping the plastics value chain get ahead of such problems.

Carbon negative plastics recycling
A further challenge is the carbon footprint of the recycling process. As recycling technology evolves, efficiency in materials and operation must remain top of mind. In the context of the wider energy transition, it is vital to carry out deep life cycle analyses that consider not only manufacturers of plastics polymers but also the end products – and the competition that end products face against conventional materials such as glass, paper and metal.

Different technologies exist to recycle plastics, and each has strengths and weaknesses. Mechanical recycling technologies have matured and possess favourable attributes such as lower Capex requirements, lower operating costs for achieving break-even economics and lower CO₂ emissions. However, mechanical recycling is restricted by reduced feedstock flexibility and degradation of plastics after every recycling cycle.

On the other hand, chemical and other recycling technologies such as solvent solution/dissolution, depolymerisation, pyrolysis and gasification can produce recycled content without degradation of properties. However, widespread commercialisation of these technologies has not yet been realised and will be required to move toward achieving true carbon negative plastics recycling.

Moving beyond a fossil-based feedstock peak
The final disruptive truth is that the involvement of fossil-fuel feedstocks in particular present a significant obstacle to achieving effective plastics circularity. According to Chemical Market Analytics’ data, plastics on their own are responsible for approximately 50% of global chemicals demand, and the current level of annual plastics waste generation, even if fully recycled, is not able to satisfy the total global demand for plastics.

While it is theoretically possible in the future for plastics recycling to contribute to a plateau in global use of fossil fuels, processing waste plastics will still require fossil fuels to a certain extent from an energy and raw materials standpoint. Unfortunately, it is unreasonable to expect the recycling of plastic waste to be the total solution for reducing our dependence on fossil fuels – new technological innovations and more efficient processes must come into play. It is, therefore, imperative to be able to track the development of the various technologies and the pace at which they are developing to make the right investment calls.

Achieving long term circularity in plastics production
The potential impact of achieving a circular economy for plastics offers undeniable economic, social and climate benefits for all stakeholders. As businesses and investors increasingly allocate capital to plastic recycling efforts, staying on top of the outlined ‘truths’ will be paramount when it comes to driving effective change as part of efforts toward a net-zero future. Amid changing policy and regulations, securing access to the right business intelligence and analytics are pivotal in helping companies reformulate business strategies as needed to increase circularity when it comes to plastics.