According to a report by ‘Circular.co', there are multiple challenges to turn a linear plastics economy into a fully circular economy. According to ‘Plastics Uncovered: Optimizing the Recycled Plastic Value Chain’ there are six key takeaways from its report into circularity. This includes six key points:
Circular Economy
- Plastics is a massive, essential industry at an environmental crossroads.
- Sustainability presents an undervalued economic opportunity.
- Market volatility inhibits long term investment.
- Tailwinds drive growth in recycled plastic.
- Headwinds slow in adoption of recycled plastic.
- Industry needs technology-based solutions for Green Premiums to trend to zero.
The report highlights there are both environmental and economic incentives for a push towards a circular economy. Environmentally, factors such as the need to reduce plastics in the ocean are obvious. However, according to the report without moving towards a more circular economy, plastics production creates over 2Gt of CO2e, equal to 5% of global greenhouse gas emissions and 86% of plastics produced will be landfilled, incinerated, or leaked by 2040. In addition to this and maybe most notably, Microplastics are now in human bodies: The World Wildlife Fund reports an average person ingests 5 grams of plastic per week.
In addition to this, according to the report there are a multitude of economic reasons as to why moving towards a circular economy could still benefit those within the plastics industry. The industry is still growing, the global plastics industry is $600BN Projected to grow to $800+BN by 2030. This is while the Global recycling rate is under 9%, this is while the market size is $50BN. This indicates that the circular market is somewhat unexplored and still has capacity for growth, although there is a tinge of caution that comes with this as the recycled plastics market is known to be volatile, according to the report Average prices doubled 2020 to 2021; then halved from 2021 to 2022.
According to the report and general consensus, there are multiple factors that are slowing progress to a fully circular economy. The first of which is availability, according to the report, companies looking to replace virgin plastic with PCR in their manufacturing processes can’t find what they’re looking for. Market opacity and analog inefficiency makes it challenging to navigate buying PCR at scale. In addition to this, there are also volumes of sorted high quality (low contamination) waste plastic, which stems from a demand issue.
Recycled plastics is also currently up to double the price of virgin plastics, this is due to cost of sorting, transportation and processing, this is known as the ‘green premium’. This leaves big brands reluctant to invest in PCR.
The report also highlights that companies have concerns around the reliability of recycled materials, Impurities or contamination are common in post-consumer resin, impacting the material’s colour, physical properties, and odour.
To read the report in full, click here: https://circular.co/industrybrief