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June 08, 2020 10:44 AM

Europe’s Plastics Strategy is more open ended than closed loop, says Haggai Alon of SMX

‘Regulate the entire value chain, not just the product’

Karen Laird
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    SMX

    Visualising a CVCA regulatory framework

    Supply chain integrity specialist Security Matters Limited, or SMX, is a young company headquartered in Australia that has developed and commercialised innovative technology for asset tracking.

    It works by ‘permanently and irrevocably’ marking any object to allow  ‘identification, proof of authenticity, tracking supply chain movements & quality assurance’, according to the company. The technology comprises a chemical-based hidden "barcode" system, alongside a unique “reader” to identify these codes, and a blockchain record to store and protect ownership data.

    In the plastics industry, technology enables physical and digital tracking of closed-loop recycling, authenticates sustainability claims and improves the sorting of plastic waste.

    In that context, SMX recently inked an agreement with BASF under which the two companies will jointly develop solutions to trace plastics from raw materials, production to distribution and circularity.

    Now, Haggai Alon, CEO and co-founder of SMX has published a White Paper outlining a whole value-chain approach for the plastics industry as an alternative to what he sees as the current emphasis on end-product sustainability.

    The basic idea of the circular economy, says Alon, is a realization of a closed-loop flow of materials through the entire economic chain. Yet the actual EU regulation on plastics implements a non-circular product-oriented policy that tackles only some segments of the plastics value chain.

    It focuses on the products’ initial design and its waste management, without addressing how recycled plastics are to be used. Thus, the current regulatory approach ‘fails to capture the economic benefits of a closed-loop system that exercises a comprehensive process of the entire plastic value chain’, Alon writes.  

    In fact, the vision of the Plastics Strategy is more an open-ended process rather than the closed-loop needed for true circularity. ‘Indeed, the Plastics Strategy focuses only on the initial production of the product (the design and material composition) and the collection of the used products (improved separate collection),’ he continues.

    In other words, the current regulations are geared towards the end products instead of the whole value chain. An integrated closed-loop approach, on the other hand, can create a comprehensive value chain from recyclates to producers of the products, who can, in turn, create recyclable and reusable products.

    SMX proposes an alternative Circular Value Chain Approach (CVCA) system, which takes the idea of the carbon credits system as we know it and transposes this to the plastics value chain.

    Under this system, a certificate representing the right to produce a unit of virgin plastic material would be issued, enabling the credits to be traded between different parties across the value chain. Plastics credits are required for each use of virgin plastic material for the production of new products.

    Additional plastic credits would be allocated when plastic materials are recycled and used in new products. In this way, the system would preserve the economic value of the plastic materials, encourage recycling and reduce the usage of virgin plastic materials in products.

    “The CVCA system provides real financial benefits and incorporates closed- loop regulation that impacts all players in the plastics value chain,” said Alon in a statement.

    “We are confident that this will achieve a true circular economy and greatly reduce the current reliance on virgin and single-use plastics. It will bring about sustainability in the true sense of the word.”  

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