VIENNA (ICIS)--This graphic (below) helps put the plastics recycling debate into context. Most ethylene, globally, is used to make polyethylene, most polyethylene goes into packaging of some sort, most the reusable type.
As the pace of recycling increases, driven by legislation and probably by stronger anti-plastics public opinion, greater efforts will be made to recycle more. There will be a material impact on virgin polymer demand.
There are pitfalls or restrictions along the way to what might constitute a more circular plastics economy. Work is ongoing to identify the pinch points that, once tackled successfully, would make recycling work more efficiently. Companies that can process waste plastic often cannot get scrap. The price of recyclate often times is hardly attractive.
Legislation will make the system work and so companies active in plastics and in recycling might expect more of a stick rather than a carrot approach from regulators.
Working from the standpoint of a linear market economy it is sometimes difficult to envisage the impact of greater circularity. Where will value be created in the new system? Potentially, where will it be destroyed.
There is no doubt that plastics are one of the backbones of our modern, industrialised society. That role will continue. Demand for virgin polymer will grow but there will be more circularity.
Plastics recycling has become a “licence to operate” issue and needs to be prioritised accordingly, European Petrochemical Association (EPCA) president and Arkema executive vice president Marc Schuller says, quoted in a pre-EPCA meeting publication.
“We are at the start of the journey towards building a circular economy,” he adds. “This means we can begin to develop some key principles to guide us along the road, but it is too early to develop a full understanding”.
That is part of the problem. One perception of the scale of the risk and of the opportunities that increased recycling represents will differ, quite markedly, from another.
The petrochemicals report from the International Energy Agency on Friday (5 October) largely ignores circularity. If petrochemicals are one of “the key blindspots in the global energy debate, as it says, then that suggests that plastics recycling is one of the key blindspots in petrochemicals, at least on the part of some suppliers.
“Essentially we are talking about a paradigm shift for our industry based on the concepts of Redesign, Reduce, Recycle, Reuse and Regenerate,” Schuller adds. Another executive quoted in the pre-EPCA publication suggests that circularity represents a transformation of the culture of his company.
Not understanding the full import of plastics recycling or of greater circularity threatens critical analysis of the drivers of polymer and of petrochemicals demand.
Chemical companies are taking a variety of approaches to recycling and circularity. There is the even keener, traditional focus on waste consumption, reduction and possibly recycling at the plant level. There are new business models that push some companies downstream into processing plastics waste. Recycling back to feedstock appears to offer one of the most attractive prospects for the petrochemical producer.
A paradigm shift for the industry, however, implies much greater change for individual producers.
The circular economy is more than waste management. Chemical producers are the central part of value chains that are in transition. It is up to individual producers to decide whether they want to put themselves in a position to lead that transition or deal retrospectively with the consequences.
Chemical companies will have to open up to greater dialogue in their supply chains. They have to be more aware of the needs of players in those chains and how they will be served to deliver greater circularity. Moving away from the ‘take, make and dispose’ model to deliver a ‘win-win-win’ solution will not be easy or made without casualties.