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Our Insights 12 Nov 2018

Creating a Circular Economy for Plastics

By Nicola Ledsham

This is the third in a six-part series that explores five focus areas for businesses to address in plastic strategies, accelerate change and pursue the necessary scale of innovation and collaboration to address the plastics challenge. You can read the second blog in this series here.

Our current system is failing to capture the economic benefits of plastics. According to Helen Jordan from the British Plastics Foundation, “we need to stop thinking of plastic as ‘waste,’ but as a renewable resource that needs to be disposed of correctly.”

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Society needs to stop thinking of plastic as ‘waste,’ but as a renewable resource that needs to be disposed of correctly.

A circular economy is restorative and regenerative by design. This means materials constantly flow around a ‘closed loop’ system, rather than being used once and then discarded. In the case of plastic, this means simultaneously keeping the value of plastics in the economy, without leakage into the natural environment. But this is easier said than done. The Ellen MacArthur Foundation reported that more than 40 years after the launch of the first universal recycling symbol, just 14% of the plastic packaging used globally is recycled, while 40% ends up in landfill and 32% in ecosystems (with the remaining 14% used for incineration or energy recovery). To move society away from the “take, make, dispose” mindset that has long-informed business models, a fundamental rethink is required. This will involve improving recycling, promoting reuse, creating a market for recycled materials and redesigning products with end of life in mind.

Boosting Demand for Recycled Plastics

Poorly functioning markets for recycled plastics is one of the biggest barriers facing a circular plastics economy, presenting a challenge to improving global recycling rates. The raw feedstocks for most plastics are fossil fuels, which are currently cheaper to use than recycled materials. As such, the economics of plastic recycling are weak. While we see many companies making bold new commitments and goals for recyclability, few are thinking about their role in creating demand – that is, stimulating end markets for recycled material. To drive demand, companies must commit to using post-consumer resin (PCR) wherever possible. Using PCR will stimulate demand for the materials, creating vital end markets that make the domestic recycling stream viable.

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End-of-life needs to be front of mind throughout product development processes.

Designing for Recyclability

Today, producers of plastic and packaging have little or no incentive to consider recycling or reuse when they design products, but end-of-life needs to be front of mind throughout product development processes. Plastics are made from a range of molecular chains called polymers, which perform a wide variety of properties and can be highly customised to meet each manufacturer’s specific requirements. This diversity complicates the recycling process. One solution would be to take note of industry guidelines – including those from WRAP – that advise packaging manufacturers, brand owners and retailers on how to embed recyclability principles into their design processes. Such guidance includes reducing the use of colourants, labels, sleeves and adhesives to simplify the recycling process. In a bid to streamline the market and simplify recycling, Marks & Spencer are assessing the feasibility of making all own-brand plastic packaging from one polymer by 2022 (they have already moved from 11 polymers down to 4 today). In addition, much of the packaging we currently rely on is flexible – including crisp packets and pet food pouches – which are made from multiple materials, adhesives and coatings that cannot be easily separated and recycled. To overcome this, CEFLEX – a consortium of European companies and associations representing the flexible packaging value chain, is working to develop robust design guidelines for both flexible packaging and the infrastructure used to collect, sort and recycle it.

Keeping Plastic out the Environment

While there is huge progress to be made in all markets, much of the plastic waste currently circulating in the world’s oceans is thought to originate in just five Asian countries: China, Indonesia, the Philippines, Vietnam and Sri Lanka. If we want to make a dent in the quantity of plastic released into the oceans, the private sector has a role to play in including these economies in the solutions and investing in waste collection and recycling infrastructure. Last year, Unilever introduced new technology to recycle plastic sachet packaging – commonplace in developing countries and notoriously challenging to dispose of responsibly without a viable recycling solution. The so-called CreaSolv Process Technology enables sachets to be recycled into another generation of sachets, and residue film can be used to create other products, such as plastic pallets. The technology is being piloted in Indonesia, where the company sells more than half of its products in sachets. In parallel, the consumer goods giant is setting up waste collection schemes to collect sachets by working with local waste banks, governments and retailers.

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The exciting opportunity for chemical recycling is that waste plastic can be used to make food-grade PET – not just from plastic bottles, but also waste recovered from oceans and even polyester textiles.

Closing the Loop with Chemical Recycling

Unlike mechanical recycling, which is inevitably constrained by contamination and complications arising from material separation, chemical recycling is a process by which the material is stripped down to its original chemical building blocks, so that they can be built back up again into new products. The exciting opportunity for chemical recycling is that waste plastic can be used to make food-grade PET – not just from plastic bottles, but also waste recovered from oceans and even polyester textiles. For a long time, chemical recycling has often remained in the margins of public discourse about plastic waste (mostly due to a lack of investment and infrastructure), but it is currently the focus of intense innovation. Alongside the chemical industry, consumer goods companies are heavily investing in the technology – Loop Industries, a leading innovator in this space, has signed deals with PepsiCo, L’Oréal, and Evian (a subsidiary of Danone); and Coca Cola is a member of DEMETO’s advisory board, a consortium of partners all working to make the chemical recycling of PET a sustainable, profitable and scalable process.

A circular economy for plastics offers a promising vision for stemming the tide of plastic waste, but converting this aspiration into a fully functioning, closed-loop system will require greater cooperation from all key actors in the value chain. The recent announcement of the New Plastics Economy Global Commitment – the first-of-its-kind collaboration that aims to create a ‘new normal’ for plastics – is certainly a step in the right direction.

Key considerations:

  • Look to build economies of scale: Support projects and initiatives that improve the economics of recycling infrastructure and recycled polymers.
  • Embrace a holistic approach: It is not enough for companies to be concerned about their own materials and what they are made of – they need to be aware of how they impact the wider system of collection and recycling.
  • Think local as well as global: Plastic waste causes global pollution, but solutions need to be delivered at a local level if they are to have long-lasting impact. Interventions should always reflect localised infrastructure which will vary around the globe.
  • Collaborate to innovate: Collaboration between resin suppliers, packaging manufacturers, brands, waste contractors and recyclers is the only way to build a circular economy with benefits throughout society.
  • Think long term: For companies willing to invest for the longer term, there will be significant commercial reward as recycling infrastructure and technology mature and packaging design evolves.

 

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