Green Economy Journal Issue 63

CIRCULARITY
CIRCULARITY
Figure 3. Plastics recycling two potential closed-loop models.
The process of “denormalising”
plastic waste will take time and
coordinated effort, but it has begun.
The small-loop scenario would involve many separate
plastic-specific circular value chains, such as one for polyester,
one or many for polyolefins (polyethylene and polypropylene) and
one for polyvinylchloride. This would require collecting plastic waste
and then separating it into district streams based on the material
type for further processing to enable its reuse in the value chain at
near-similar value to its virgin equivalent and at a similar point, for
example as a polymer product.
The large-loop scenario would also involve collecting waste, but
it would involve non-material-specific circular value chains that can
handle multiple types of plastics. This large-loop scenario would
rely to a much greater degree on chemical instead of mechanical
recycling and would return material into the value chain further
upstream as feedstock or monomer.
Both scenarios have distinct characteristics and requirements
(Figure 3). Material companies will need to consider both scenarios
when assessing the opportunities and risks of circular solutions for
their product value chains.
What forces will shape and drive the change?
Aluminium recycling is a useful example of a circular ecosystem for
materials that are highly engineered and processed. To understand
how this process evolved, consider the four forces that have transformed
the materials sector. In his book More from Less, research scientist
Andrew McAfee chronicles how these forces have influenced the
production and consumption of many material value chains in the
US and the UK and led to widespread dematerialisation. Although
plastics recycling hasn’t directly contributed to dematerialisation,
these same four forces are likely to define the shape and rate of
development of a circular chain:
Economic value. In the case of aluminium, the recycled material
was sufficiently valued (relative to virgin feedstock) to attract
funding for the required infrastructure and technology. Capital
markets and companies will continue to be the most effective,
efficient and reliable sources of funding for driving the change.
However, plastics require a significant investment for both
mechanical and chemical recycling as well as the associated logistics
infrastructure for collection and sorting. In addition, plastics require
a substantial amount of coordination of incentives along the value
chain from consumers to collectors to sorters to enable the recycled
product to continue to flow.
Technological progress. Infrared and magnetic technologies to
remove plastic and steel were important capabilities for aluminium
recycling, and the widespread availability of these technologies
certainly accelerated adoption of the process. For plastics, the
advancement of mechanical technology (such as sorting, separation,
cleaning and impurity extraction) and chemical technology (such
as depolymerisation, including enzymatic, cracking and pyrolysis)
will govern the rate and the extent of change.
Public awareness and behaviours. A vital part of consumers
choosing to recycle aluminium was their awareness of its recyclability
and their willingness to separate cans from the rest of their trash.
As a result, 60% to 90% of aluminium cans, depending on the
country, are recovered and recycled. 4 Inspired by the images of
waste, many consumers are now calling for less plastic waste,
but the public must broadly change their behaviours and overcome
their love of disposability. The process of “denormalising” plastic
waste will take time and coordinated effort, but it has begun.
Responsive government. To encourage aluminium recycling,
many regional governments in the US and Europe created a beverage
can deposit, which consumers pay at the point of purchase and
then redeem when they return the can to a designated facility. For
plastics, governments have pushed recycling labelling standards to
REFERENCES
1 Nexant and Grand View Research
Article courtesy of Kearney Consulting. Authors: Andy Walberer, Kish Khemani, partners. Figures 1, 2 and 3 supplied by Kearney Analysis.
distinguish different types of plastics to facilitate separation and
sorting, and some municipal governments have banned single-use
plastic bags. Although these initial responses are helpful, standards
and additional investments are needed, including for recycled
content levels and recycling infrastructure.
What should chemical and consumer companies do?
Public pressure to limit plastic waste is accelerating, creating significant
brand risk for consumer companies and reputational and revenue risk
for chemical companies from demand destruction in high-volume
applications. Individually, companies have already started to respond
with specific initiatives focused on innovation in the chemical recycling
space and efforts to make plastics more recyclable without increasing
the burden on consumers. Collectively, companies have started to
form collaborative alliances and efforts, both industry-wide and with
other players in the value chain to improve collection, sorting, and
recyclate production rates.
Companies that want to take a fresh look can begin by identifying
the opportunities and risks that are emerging in their product value
chains and then considering the scenarios and forces described above
to develop a strategy for how to respond. We suggest action in the
following three areas:
- Understand the risks, exposure and opportunities in their product
value chains and calculate the potential economic impact, both
the upside and the downside, including the reputational impact.
- Monitor the four forces that drive change in the materials sector
and use scenario planning to prepare for either the small-loop
or the large-loop future.
- Collaborate with industry peers, value-chain partners, regulatorysetting
bodies and nongovernmental organisations to ensure
that solutions are scalable and economical, standards can be
established, and public outreach and education are addressed.
Exactly which models will win is uncertain, but what is certain is that
now is the time to proactively prepare and respond.
2 Working Party on Resource Productivity and Waste, Organisation for Economic Co-operation and Development Environment Policy Committee, 26 November 2018
3 Recycling International; Resource Recycling, Inc.
4 International Aluminium Institute via international-aluminium.org
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