New research from Wood Mackenzie indicates that the plastics industry requires a paradigm shift towards an absolute decoupling of materials consumption from growth of the economy if its sustainability targets are to be achieved.
“This shift, a term we call the materials transition, is the process through which we account for – and seek to minimise – the costs of extracting and disposing of raw materials consumed in the global economy. The materials transition is driven by societal concern, regulatory interventions and technological innovation,” said Guy Bailey, Wood Mackenzie Head of Intermediates and Applications.
Wood Mackenzie modelled two scenarios focused on the major packaging polymers - polyethylene (PE), polypropylene (PP) and polyethylene terephthalate (PET) to explore how the material transition would affect plastic production and waste generation for plastic packaging.
The ‘Current Path’ scenario represented the world if it continues as it is today, while a ‘Sustainable Future’ scenario saw more stringent legislation implemented to incentivise companies to be ambitious.
Under Wood Mackenzie’s ‘Current Path’ scenario, the global recycling rate for the selected polymers would more than double between now and 2040, rising from 17% to 38% of polymer produced for packaging applications.
The ‘Sustainable Future’ scenario revealed a significant increase in volumes of packaging going through mechanical recycling processes, and significant investment in chemical recycling technologies and capacities, leading to a faster growth in the recycling of flexible, multi-material and coloured packaginging.
The cumulative impact of these changes is another near doubling of the recycling rate for the observed packaging polymers, rising to approximately 67%. In 2040 alone, this would result in an additional 53 million tonnes of packaging plastic prevented from going into landfill, energy recovery or unmanaged waste streams in comparison to the ‘Current Path’ scenario. Cumulatively, from 2020 to 2040, this would rise to 382 million tonnes.
“It’s clear to see that chemical recycling has the potential to significantly increase recycling levels. However, the impact of this on the value chain will depend on how circular the recycling chain is. For instance, how much recycled plastic is ‘downcycled’ into non-circular products – such as reclaimed plastic bottles recycled into polyester fibres – and the precise split between recycling routes,” added Bailey.
According to Wood Mackenzie’s analysis, up to a total of 95 million tonnes of displaced demand for virgin polymers, virgin monomers and oil and gas inputs could result.
“Looking to 2050 and beyond, we might see an even more radically changed environment. Further gains in recycling through new technologies. Competition from new materials, such as bio-polymers. Changing consumer trends, with rampant e-commerce supported by increasingly durable packaging applications. All of this could lead to a world where packaging doesn’t require any net new inputs from the energy and petrochemical sectors,” said Bailey.
Wood Mackenzie’s two scenarios illustrate the extent to which decision makers can alter the current trajectory to achieve growth that satisfies society’s demands without further stressing the environment.
“As in other sectors, the packaging industry – and the industries that support it - will need to navigate a complex mix of regulatory interventions and technological investments to thrive in the materials transition,” Bailey concluded.