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Spurred by images of the Great Pacific garbage patch - a growing
accumulation of f loating ocean plastic waste estimated to be
larger than France and weighing more than 593 million pounds - many
global consumers have become increasingly outspoken on plastics use
and recycling. Some consumers are pushing for bans on plastics,
particularly single-use plastics, others choose to substitute
products to minimize plastics waste, and still others are doing
both.
Data shared by both the Ellen MacArthur Foundation and the World
Economic Forum estimate that there will be more plastic than fish
in the ocean by 2050. The Ocean Cleanup, an environmental
technology organization, estimates that 8 million metric tons of
plastic waste are added to the world's oceans annually, much of it
from rivers and mismanaged plastic and municipal waste from Asia.
The non-profit agency estimates the amount of plastic waste added
to the world's oceans will nearly double by 2025.
While recycling is expected to play a central role in resolving
the plastics waste issue, initiatives have thus far been largely
ineffective. It is estimated that only about 4% of the plastic
packaging used globally is ultimately delivered to recycling
plants, while a third is left in various ecosystems, and 40% ends
up in landfill.
Evolving approaches to sustainability
A clear shift is developing in the approach toward
sustainability, as the movement transitions from reactive to
proactive mode. In the reactive phase, the target was preventing
litter and focusing on plastics waste. Thereafter, the focus moved
to managed disposal of plastic waste through incineration,
landfill, export, and recycling. Now, the emphasis is swinging to
circularity, often described as a circular economy, in which the
producer becomes a stakeholder in the careful management and reuse
of plastic and the reduction of end-waste.
Extended Producer Responsibility (EPR) is a clear example of
producer participation in the sustainability movement. EPR
essentially levies fees on packaging and certain plastics products
that are paid by manufacturers. These fees are used to develop
recycling infrastructure and encourage the recycling of content.
EPR policies are currently either in effect or targeted for
near-term implementation in Europe, North America, China, and
India. Presently there are no packaging EPR programs in effect in
the US, although we expect to see programs adopted by 2025.
Europe uses a multi-pronged approach to circularity by setting
targets for plastic recycling and enabling compliance through EPR.
Recent initiatives include a legislative framework to mandate
compliance, including taxation, and a certification mechanism for
eco-design. A new standard will encourage product designs that are
not based solely on functionality, performance, or cost, but on
circularity. With this standard, products will be 100%
recyclable.
Aggressive policies designed to limit single-use plastic
packaging and define specific targets relative to plastics
recycling are being implemented globally. For example, the European
Union has set a common target for the recycling of 50% of plastic
packaging by 2025 and 55% by 2030. In India, the government
announced an initiative to eliminate all single-use packaging by
2022. Further, the city of Mumbai implemented an outright ban on
single-use plastics. Residents caught using plastic bags, cups, or
bottles face penalties of up to 25,000 rupees (£276) and three
months in jail.
Impact on today's - and tomorrow's -
investments
We expect the trend toward greater sustainability in the
industry to continue, which is certainly a positive development.
But the pace of change, the prospect of greater regulations,
including bans, and consumer deselection of certain plastic end-use
products is creating significant investment risk and market
uncertainly. This is especially significant for plastics producers,
processors, and consumer packaging companies, who must invest now
for the future. Additionally, municipalities and governments are
also tasked with investing for growth. They must ensure they have a
comprehensive recycling infrastructure that is optimal, meets
constituent expectations, and is adequately funded. This requires
tremendous planning and a multi-layered view.
In an effort to improve understanding of this rapidly developing
multi-faceted movement, IHS Markit has developed a multi-client
study entitled "Plastics Sustainability: A Sea
Change - Plastics Pathway to Sustainability." The study offers
a base case (trend line) and alternative case (maximum viable
threshold) analysis of the plastics demand growth for six key
plastics markets. The study provides a granular view of the impact
of sustainability on specific end-use segments for key plastic
resins as well as analysis of the implications for upstream base
chemicals and feedstocks for the years 2018 to 2030.
Also included in the study is a review of current and evolving
government regulations, including consumer product companies'
policies for plastics sustainability initiatives in major
geographies. The study offers an in-depth review of the
infrastructure disconnect between post-consumer recycle demand and
supply. It also profiles the major technologies for plastics
recycling and recovery, addressing the gaps in the context of a
circular economy. The research includes insight and analysis from
two leading sources: More Recycling, a research and consultancy
focused on the recycling of post-consumer materials, specifically
plastics; and Environmental Packaging International, a consultancy
specializing in environmental compliance, product stewardship and
sustainability related to packaging and products.
Posted 12 November 2018 by Nick Vafiadis, Vice President, Plastics, IHS Markit