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Time for industry to put a plastics circular economy into practice, piece by piece

By Tom Eng, senior vice president and head of TOMRA Sorting Recycling

21 November 2018

When it comes to creating a plastics circular economy, collaboration is key. But with a global political consensus on implementing a new plastics economy so far off, perhaps it is time for industry to lead on putting theory into practice, one piece at a time.

The fact is, technology exists to design and manufacture reusable plastic products in a profitable way, through recycling and reintroducing them into the value chain rather than disposing of them. Many manufacturers, recyclers and brand owners are already realising the financial, corporate and sustainable benefits of doing this. But more can be done.

Here, I set out what an industry-led plastics circular economy looks like and four approaches businesses can begin to implement today.

Today’s plastics challenge

Currently the majority of plastic production is linear, rather than circular, meaning that single-use products are manufactured and then incinerated, discarded or lost. In fact, in 2016 only 10 percent of plastic packaging was recycled and just 2 percent of this was ‘closed loop’ recycled, with some 32 percent lost into oceans and the environment and 40 percent landfilled, according to Ellen MacArthur Foundation.

Let’s not forget that the widespread use of plastics is a modern phenomenon, only dating back to the 1950s. While plastic use has increased rapidly, systems for managing the material haven’t kept pace, resulting in an increase in plastics in municipal waste from 1 percent in 1960 to 10 percent in 2005. Shockingly, it’s estimated that only nine percent of all plastic waste ever created has been recycled, according to 2017 research published in Science Advances. Counteracting these trends will be good for the environment, the world’s resources and for business.

Manufacturing and recycling technology

The problem isn’t that these plastics can’t be effectively recycled. Technology is perhaps the strongest link in the supply chain, with advanced processes and machinery available to produce, collect, sort and recycle multi-use plastic products including PET, PE, PVC, PS and even complex materials such as black polymers.

Importantly, this can be done in a profitable way with recycling businesses enjoying increasing returns and manufacturers adopting more sustainable practices. This will only improve in the future, as brand owners and consumers create demand in the market for non-virgin goods, and as innovations through digitisation and automation enable more supply chain efficiency.

Collaboration is key, but a consensus is far away

If the technology exists, what is preventing the creation of a plastics circular economy? The main barrier is creating a global political consensus. In many countries, there simply isn’t the political appetite to make the systemic changes needed to establish a working new plastics economy. So, the implementation of a more circular system relies less on cost or technology, but more on the political desire to establish a model tailored to the circular economy.

The global political and trade climate is currently in disarray. As of July 2018, the USA and China had issued $100bn (€87.2bn) in trade tariffs on each other’s exports. Similarly, many European nations are understandably distracted by uncertainty around Britain’s exit from the EU, resulting in political obstacles at every turn and subdued investment from businesses.

The same disharmony can be seen on sustainability and environmental questions, for example, as the USA notoriously backed out of the Paris Climate Agreement in June 2017. This all reduces the priority and visibility of plastics recycling for governments and domestic businesses alike.

So, another symptom and sign of the discord is that government policy towards plastic waste and plastic pollution varies wildly across the world.

There are still positive moves towards a joined up approach to plastics, such as the European Parliament’s plastics strategy introduced in January 2018 which aims to “protect the planet, defend our citizens and empower our industries” by making all plastic packaging on the EU market recyclable by 2030. An action plan from Brussels is certainly better than nothing, but it will only succeed by systemic changes and private-sector investment at a domestic level in EU member states.

Other policies have only added to the uncertainty. The Chinese National Sword and Blue Sky campaigns have created real market disruption in 2018. This is the country’s latest and strictest regulation on imports of solid wastes as raw materials, banning various types of plastic waste and setting tougher standards on the limit of contamination in scrap plastic from 90-95 percent purity to 99.5 percent.

Although China’s National Sword is meant to prevent the country becoming a dumping ground for illegal and contaminated waste, it is also intended to work towards a ‘blue sky’ plastics circular economy. In some instances, it has reinvigorated domestic recycling capacity in markets around the world, such as New South Wales where the government introduced a AU$66.9m (€41.84m) support package to boost domestic sorting, processing and recycling of waste materials. In others, it has resulted in growing piles of waste that can’t be exported.

To summarize, leading global organisations like the New Plastics Economy initiative and PlasticsEurope are right that we need collaboration – a holistic approach between governments, manufacturers, retailers, recyclers and consumers.

But the current political climate highlights how far away this consensus really is. In reality, we can’t wait for a consensus to be reached.

Instead, manufacturing, recycling and waste management businesses are best placed to drive progress towards the plastics circular economy. They can a take pragmatic approach today to help work towards the end goal, while also gaining commercial opportunity and maintaining profitability.

Without this greater ambition and more radical change from businesses, ‘circular economy’ risks becoming just another buzzword.

An industry-led plastics circular economy

To give a better idea of what an industry-led approach looks like, I suggest four key areas that industry can lead on today, if properly supported by government policies and consumer demand.

1. Investment and innovation in product design

A circular economy isn’t just about recycling existing plastic packaging and products. Around 80 percent of a product’s environmental impact is determined at the design stage, so manufacturers in particular should focus on transforming the way products are designed and produced.

This includes introducing new design standards for products to be more durable, easier to repair and disassemble, thus improving the economy’s resource efficiency. It also means using biodegradable and compostable plastics (for example by changing labels attached to bottles) as well as shrinking use of microplastics in beauty and industrial products.

The main change here is a cultural one: how many businesses actually design products with a focus on longevity, reuse and recycling, when their core business questions are cost and speed to market?

While innovation requires investment, businesses will reap the rewards in the mid-term. Plus, as part of the EU’s circular economy package, European manufacturers can access €100m in finance from the commission to help minimize plastic waste at source and develop smarter and more recyclable plastics materials.

Having these standards is also in the interest of consumers, who would benefit from better quality and longer lasting products.

2. Identify new sectors and markets

A new generation of economic activity in recycling and waste management means opportunities for businesses to access new sectors and markets. One fledgling sector is the ocean economy, which represents all companies that operate directly or indirectly in the marine environment, from shipping and fishing businesses to offshore renewable energy farms and plastics recycling operations.

The ocean economy’s economic value is predicted to double to $3 trillion (€2.63 trillion) by 2030, according to the UK government’s Future of the Sea report. Innovations open to businesses include ocean waste management machinery, autonomous vessels and deep-sea mining.

Government investment is here for businesses to access, such as tax relief and other incentives to reduce the administrative burden on shipping and port-based businesses which comply with new rules to ensure waste is returned to land for proper management.

3. Recognize profitability in recycling

The originator of the circular economy concept, Walter Stahel, recently said that if a businessperson suggests opening a manufacturing plant to make profit, Walter counters that they can make five times as much from opening a remanufacturing plant.

Businesses are increasingly seeing the profitability in recycling and reusing – whether through dedicated waste management companies setting up plants, or through manufacturers creating their own recycling depots.

For example, the US recycling industry is expected to more than double in size between 2016 and 2020, with revenue set to increase from $56bn (€48.9bn) to $139bn (€121.2bn). If this growth is replicated in other domestic marketplaces then the global green economy will continue to grow. This will create opportunities for businesses to diversify into recycling and waste management, rather than simply exporting waste, creating new jobs and revenue streams.

With packaging in particular, there is still opportunity for businesses to profit from the previously uncompetitive market of plastics recycling. Consumers are increasingly making conscious purchasing decisions to select recyclable packaging rather than virgin plastic, and the EU’s strategy will make all EU plastic recyclable by 2030. Packaging businesses that act on this now will be best placed in the market in 12 years’ time.

4. Explore new business models

In the current plastics economy, it is often cheaper to buy a new product than repair or reuse an old one. The most ambitious manufacturers could begin to explore fundamental changes in their business models, promoting longevity and durability of goods instead of low cost.

Waste campaign group Feedback suggests that to build a sustainable society we need to change the “resource-extractive, consumption-based business model” of today’s global corporations. Instead, grassroots initiatives which encourage mending and reusing at a local level, such as a shopping mall in Sweden which contains only second-hand, upcycled and repaired products, could help optimize resources.

Grassroots programmes are inspiring and show that there is a different way but, with the scale of change required in the plastics economy, they need to be combined with manufacturer initiatives and significant government intervention and rewards. Currently, fiscal regimes across the world rarely incentivize using secondary materials or services, such as repairs, that can help save resources.

Better regulations, which don’t classify a material as waste unless there is no alternative use for it, and public procurement rules which favor resource efficient businesses, could play a key role in stimulating greater market demand.

Last thought: a model example

While achieving consensus on a plastics circular economy is far off, there are examples of industry successfully taking the lead on putting resource efficiency into practice.

For example, Montello S.p.A. in Italy successfully converted its business from a steel producer in 1996 into one of Europe’s most advanced waste processing facilities and Italy’s only waste processing facility capable of managing the complete cycle.

Today the facility recovers 150,000 tonnes of post-consumer plastic annually, 80 percent of which is transformed into secondary raw materials and 20 percent into secondary solid fuel, with a negligible amount sent to landfill.

I believe that the future of plastics will be a circular economy – driven by technology and collaboration, and backed up by consumer demand and government policy. Rather than waiting for this resource revolution to come, businesses can and should start the change today with an industry-led new plastics economy.

For more information on TOMRA Sorting Recycling, the world leader in sensor-based recycling sorting solutions, visit