More recycled plastics will not change polymers demand outlook - Dow CEO

Author: Joseph Chang


NEW YORK (ICIS)--Greater demand for recycled plastics will not change the overall demand outlook for polymers, the CEO at US chemicals major Dow said.

“End use polyethylene (PE) demand would still continue to grow [at] 1.3-1.5 times [to GDP]. It may mean you need less new [virgin] capacity coming on, but you have to blend more recycled material with the virgin content,” said Jim Fitterling during an investor call hosted by Bernstein.

“There are very few products where the end product is fully 100% post-consumer recycled (PCR) material to get the properties you need. You need to blend PCR with some virgin materials. And when you get into structural products like wood decking and other things, you have to blend in other fillers,” he added.

Dow aims to increase PCR content in its products and also design fully recyclable packaging.

In February, the company signed a memorandum of understanding (MoU) with India-based Lucro Plastecycle to develop and launch PE films using PCR plastics in India.

Dow is also advancing chemical recycling of plastics through partnerships with Fuenix and Mura Technology which would supply feedstocks for Dow’s crackers.

The company appears to be taking a capital-light approach on plastics recycling for now.

“We’re not going to put all of our incremental dollars into [plastic recycling] but leverage our dollars through partnerships with Circulate Capital, Closed Loop Recycling and others to really drive investment in recycling," said Fitterling.

"Because the demand is there from the downstream brand owners for more recycled content, and we see that in our own plastics chain. Our products with recycled materials in them grew almost double versus last year, so we’re going to continue to see that kind of trend."

Dow's CEO does not see a “dramatically positive” impact from recycled plastics but believes the producer can be cost competitive and take advantage of a fast-growing market.

“It’s a little bit more expensive today to make recycled materials than it is to make virgin materials, but I think that will change over time. And we have to take into account what’s happening with policies around carbon taxes or emissions trade schemes, and prices on carbon,” said Fitterling.

“Whether it’s CO2 [emissions reductions] or recycled plastics, we’re embracing it as an opportunity for innovation and growth, and we think it’s the right thing to do for the world."

Focus article by Joseph Chang

Thumbnail image shows plastic being recycled. Photo by Divyakant Solanki/EPA-EFE/Shutterstock