Reusing plastics waste could become an important driver of profitability for chemical companies. Incumbent players need to make the right moves now to tap this opportunity.
If plastics demand follows its current trajectory, global plastics-waste volumes would grow from 260 million tons per year in 2016 to 460 million tons per year by 2030, taking what is already a serious environmental problem to a whole new level. In the face of public outcry about global plastics pollution, the chemical industry is starting to mobilize on this issue. Our recent article “No time to waste” showed how industry leadership is moving beyond the use-once-and-discard approach—under which the plastics industry has grown up—and embracing an expanded definition of product stewardship that includes dealing with plastics waste. As we underlined in that article, this is not only what society demands, and is becoming a condition for the industry to retain its license to operate, but could also represent an important and profitable new business opportunity.
That last insight is built on our comprehensive assessment of where future global waste flows will come from, how they could be recycled, and what economic returns this activity could offer—research that has filled a major gap in the public debate. In this article, we outline a scenario for the plastics industry through which 50 percent of plastics worldwide could be reused or recycled by 2030—a fourfold increase over what is achieved today—and that also has the potential to create substantial value. Following that path, plastics reuse and recycling could generate profit-pool growth of as much as $60 billion for the petrochemicals and plastics sector, representing nearly two-thirds of its possible profit-pool growth over the period. We also discuss the levels of support that will be needed more broadly across society, including from regulators, major plastics users such as consumer-packaged-goods companies, and consumers, to get to this outcome.
For petrochemicals and plastics companies—and by extension the chemical industry, since plastics production accounts for well over one-third of the industry’s activities—this presents an array of threats and opportunities, and we outline the kinds of strategic questions they will need to evaluate and the choices to make.
> Read the full article on the McKinsey website
By Thomas Hundertmark, Mirjam Mayer, Chris McNally, Theo Jan Simons, and Christof Witte
The US State of New York is introducing two new bills to combat over-packaging, poor recycling rates and litter issues, including an Extended Producer Responsibility (EPR) program requiring companies such as McDonald’s and Amazon to pay for the cost of packaging disposal and recycling.
The new organization’s mission is to redesign the critical steps of the plastics sorting and recycling system for post-consumer lightweight packaging (LWP) to speed up circularity, born from a need to meet the rising market demand for high-quality recyclates for use in high-end plastic applications.
Starbucks and Hubbub have launched a £1 million (US$1.22 million) “Bring It Back Fund” to increase the uptake of reusable packaging in the F&B industry. The funding will go toward innovative ideas that make it easier for customers to use alternatives to single-use packaging by supporting pilot projects that help shift consumption habits.