Addressing the plastic problem is first step towards creating circular economy
Given the massive volume of waste created in predominantly linear systems, addressing the plastic materials issue is central to the success of a circular economy
L-R: Ada Perniceni, Jose Antonio Alberich and Dorival Bordignon - Partner at Kearney Middle East.
For centuries, global economies have used the extract-produce-waste linear industrial model. However, the need to create a more sustainable economy, meet the demands of a growing population, comply with emissions targets, and achieve better social outcomes has drawn the attention of governments and private companies towards a circular economy.
This is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. This approach is gaining momentum around the globe, and closer to home, the UAE government has kicked off the Scale 360 initiative in collaboration with the World Economic Forum. This initiative explores the potential for Fourth Industrial Revolution technologies to accelerate the circular economy transition for plastics and electronics.
Given the massive volume of waste created in predominantly linear systems, addressing the plastic materials issue is central to the success of a circular economy. Despite the many applications and benefits of plastics, tackling the technological, economic, and infrastructure challenges will be vital to reducing the large amount of waste the world is creating.
Closed-loop recycling can help retain plastic products and materials within value chains. In addition, redesigning products to reduce how much plastics they use and opting for renewables sources instead of fossil-based feedstock will add to the range of actions needed to make plastics a more sustainable option.
Five factors are driving the rapid advance of the circular economy across the world with a strong emphasis on plastics.
NGOs, think tanks, and the media are raising awareness about the issue
Non-governmental organisations (NGOs) and think tanks have been working to raise awareness about the problems with plastics and guide other stakeholders towards solutions.
For example, the Ellen MacArthur Foundation, the Alliance to End Plastic Waste, and Mistra are driving the change towards a more sustainable future. In June 2020, the Ellen MacArthur Foundation and a group of retailers and NGOs – including the CEOs of Inditex, Nestlé, Unilever, H&M Group, Danone, Coca-Cola, PepsiCo, L’Oréal, Ikea, Stella McCartney, and Barclays Bank, along with organisations such as WRAP and Global Fashion Agenda – issued a joint statement committing to building a circular economy as industries begin to recover from the Covid-19 pandemic.
Locally, the GCC launched a similar platform for companies to work on their circular economy agendas. Members of the Coalition of Innovation in Recycling towards a Closed Loop Economy (Coalition Circle) include petrochemicals players, consumer goods companies, government entities, and NGOs.
While these initiatives are focusing on engaging product designers and manufacturers in new forms of materials efficiency, NGOs and think tanks are promoting the circular economy model at the policy level. They continue to play important roles in exploring new ideas, innovations, and technologies – promoting circular economy strategies within the private and public sectors and raising awareness about the issues and the solutions.
Concerns about the environment are rapidly growing
Consumer attitudes about sustainable materials and practices are changing
More people now see that the world is facing major environmental challenges that require urgent and coordinated actions. Consumers are changing their mindsets, realising that their daily actions such as recycling and ethical buying can have a major impact. And they expect governments and companies to do their part.
Kearney’s 2020 Earth Day Consumer Sentiment Study shows that plastics – at least the single-use variety – have fallen out of favour. More than half of the consumers surveyed said they planned to reduce how much single-use plastic they used over the coming year.
The GCC region is seeing a similar trend. Attitudes about sustainability are changing and challenging companies to become more sustainable. Indeed, consumers, especially millennials, are looking beyond price, seeking out brands that match their personal values.
Concerns about the environment are rapidly growing, with plastic pollution, loss of biodiversity, and climate change being the three top priorities.
Companies are adapting to win consumers and public opinion
Many consumer-packaged goods companies are making bold commitments to reduce their use of plastics as consumers’ expectations and public opinions about sustainable corporate practices shift. The green wave has rapidly spread across the world, including the Middle East.
More than 500 companies have now joined the New Plastics Economy Global Commitment, led by the Ellen MacArthur Foundation, in collaboration with the UN Environment Programme.
Through the Global Commitment, businesses and governments commit to change how they produce, use, and reuse plastic. They are aiming to eliminate unnecessary plastic items; innovate so that all plastic being used is designed to be safely reused, recycled, or composted; and circulate everything used to keep it in the economy and out of the environment.
Regulations are adapting to drive and sustain the circular economy
A growing number of countries are introducing environmental regulations that affect plastics consumption. In 2019, UN member states agreed to take action by significantly reducing single-use plastic products by 2030 and increase to up to 28 percent penetration of recycled material on virgin polymer sales by 2035.
Several GCC member states have imposed new restrictions on the use of plastics. For example, in the first months of 2020, Abu Dhabi announced a plan to eliminate disposable plastic bags by 2021. The plan also foresees the introduction of a bottle-return scheme to encourage recycling. Oman has also banned single-use plastic bags.
Technological progress is paving the way for circular practices
Rapid progress of technology in the recycling value chain is a catalyst for the circular economy, not only to make large-scale recycling possible, but also to make it economically attractive. Plastics recycling has advanced thanks to advancements in mechanical technology such as sorting, separation, cleaning, and impurity extraction, along with chemicals technology such as depolymerisation.
For instance, AI-powered robots can modernise the recycling infrastructure to reduce sorting costs and unlock the value of material streams. Additionally, chemicals recycling, a technology that breaks long plastic polymer chains down into shorter hydrocarbons, has matured to allow for the operations of large commercial facilities.
Closed-loop recycling can help retain plastic products and materials within value chains
Making the difference in the global circular economy
Transforming the value chain is only possible with an ecosystem that has interlinked stakeholders that need to collaborate and coordinate their efforts. The right regulations, academic–industry cooperation, greater availability of industry data, and new partnerships across the plastics value chain are needed to power the transition toward a circular economy.
Plastics produced by GCC petrochemicals companies have been an important contributor to the region’s economic development, and large investments will make this industry even more relevant in the coming years.
With most of the local production volume being exported, these companies face an array of shifting consumer attitudes, business practices, and regulations in favor of a circular economy, which can substantially impact the demand for virgin plastics.
A proactive approach which is led by long-term strategies, business models, and operations to participate in the circular economy is required. Some local companies have already started to invest in circular product portfolios and recycling capabilities.
With more companies joining the change, GCC players can lead by example and start creating the next wave of the circular economy to reshape the flow of materials across the world.
Ada Perniceni, Jose Antonio Alberich and Dorival Bordignon – Partner at Kearney Middle East.
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Addressing the plastic problem is first step towards creating circular economy
Given the massive volume of waste created in predominantly linear systems, addressing the plastic materials issue is central to the success of a circular economy
L-R: Ada Perniceni, Jose Antonio Alberich and Dorival Bordignon - Partner at Kearney Middle East.
For centuries, global economies have used the extract-produce-waste linear industrial model. However, the need to create a more sustainable economy, meet the demands of a growing population, comply with emissions targets, and achieve better social outcomes has drawn the attention of governments and private companies towards a circular economy.
This is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. This approach is gaining momentum around the globe, and closer to home, the UAE government has kicked off the Scale 360 initiative in collaboration with the World Economic Forum. This initiative explores the potential for Fourth Industrial Revolution technologies to accelerate the circular economy transition for plastics and electronics.
Given the massive volume of waste created in predominantly linear systems, addressing the plastic materials issue is central to the success of a circular economy. Despite the many applications and benefits of plastics, tackling the technological, economic, and infrastructure challenges will be vital to reducing the large amount of waste the world is creating.
Closed-loop recycling can help retain plastic products and materials within value chains. In addition, redesigning products to reduce how much plastics they use and opting for renewables sources instead of fossil-based feedstock will add to the range of actions needed to make plastics a more sustainable option.
Five factors are driving the rapid advance of the circular economy across the world with a strong emphasis on plastics.
NGOs, think tanks, and the media are raising awareness about the issue
Non-governmental organisations (NGOs) and think tanks have been working to raise awareness about the problems with plastics and guide other stakeholders towards solutions.
For example, the Ellen MacArthur Foundation, the Alliance to End Plastic Waste, and Mistra are driving the change towards a more sustainable future. In June 2020, the Ellen MacArthur Foundation and a group of retailers and NGOs – including the CEOs of Inditex, Nestlé, Unilever, H&M Group, Danone, Coca-Cola, PepsiCo, L’Oréal, Ikea, Stella McCartney, and Barclays Bank, along with organisations such as WRAP and Global Fashion Agenda – issued a joint statement committing to building a circular economy as industries begin to recover from the Covid-19 pandemic.
Locally, the GCC launched a similar platform for companies to work on their circular economy agendas. Members of the Coalition of Innovation in Recycling towards a Closed Loop Economy (Coalition Circle) include petrochemicals players, consumer goods companies, government entities, and NGOs.
While these initiatives are focusing on engaging product designers and manufacturers in new forms of materials efficiency, NGOs and think tanks are promoting the circular economy model at the policy level. They continue to play important roles in exploring new ideas, innovations, and technologies – promoting circular economy strategies within the private and public sectors and raising awareness about the issues and the solutions.
Consumer attitudes about sustainable materials and practices are changing
More people now see that the world is facing major environmental challenges that require urgent and coordinated actions. Consumers are changing their mindsets, realising that their daily actions such as recycling and ethical buying can have a major impact. And they expect governments and companies to do their part.
Kearney’s 2020 Earth Day Consumer Sentiment Study shows that plastics – at least the single-use variety – have fallen out of favour. More than half of the consumers surveyed said they planned to reduce how much single-use plastic they used over the coming year.
The GCC region is seeing a similar trend. Attitudes about sustainability are changing and challenging companies to become more sustainable. Indeed, consumers, especially millennials, are looking beyond price, seeking out brands that match their personal values.
Concerns about the environment are rapidly growing, with plastic pollution, loss of biodiversity, and climate change being the three top priorities.
Companies are adapting to win consumers and public opinion
Many consumer-packaged goods companies are making bold commitments to reduce their use of plastics as consumers’ expectations and public opinions about sustainable corporate practices shift. The green wave has rapidly spread across the world, including the Middle East.
More than 500 companies have now joined the New Plastics Economy Global Commitment, led by the Ellen MacArthur Foundation, in collaboration with the UN Environment Programme.
Through the Global Commitment, businesses and governments commit to change how they produce, use, and reuse plastic. They are aiming to eliminate unnecessary plastic items; innovate so that all plastic being used is designed to be safely reused, recycled, or composted; and circulate everything used to keep it in the economy and out of the environment.
Regulations are adapting to drive and sustain the circular economy
A growing number of countries are introducing environmental regulations that affect plastics consumption. In 2019, UN member states agreed to take action by significantly reducing single-use plastic products by 2030 and increase to up to 28 percent penetration of recycled material on virgin polymer sales by 2035.
Several GCC member states have imposed new restrictions on the use of plastics. For example, in the first months of 2020, Abu Dhabi announced a plan to eliminate disposable plastic bags by 2021. The plan also foresees the introduction of a bottle-return scheme to encourage recycling. Oman has also banned single-use plastic bags.
Technological progress is paving the way for circular practices
Rapid progress of technology in the recycling value chain is a catalyst for the circular economy, not only to make large-scale recycling possible, but also to make it economically attractive. Plastics recycling has advanced thanks to advancements in mechanical technology such as sorting, separation, cleaning, and impurity extraction, along with chemicals technology such as depolymerisation.
For instance, AI-powered robots can modernise the recycling infrastructure to reduce sorting costs and unlock the value of material streams. Additionally, chemicals recycling, a technology that breaks long plastic polymer chains down into shorter hydrocarbons, has matured to allow for the operations of large commercial facilities.
Making the difference in the global circular economy
Transforming the value chain is only possible with an ecosystem that has interlinked stakeholders that need to collaborate and coordinate their efforts. The right regulations, academic–industry cooperation, greater availability of industry data, and new partnerships across the plastics value chain are needed to power the transition toward a circular economy.
Plastics produced by GCC petrochemicals companies have been an important contributor to the region’s economic development, and large investments will make this industry even more relevant in the coming years.
With most of the local production volume being exported, these companies face an array of shifting consumer attitudes, business practices, and regulations in favor of a circular economy, which can substantially impact the demand for virgin plastics.
A proactive approach which is led by long-term strategies, business models, and operations to participate in the circular economy is required. Some local companies have already started to invest in circular product portfolios and recycling capabilities.
With more companies joining the change, GCC players can lead by example and start creating the next wave of the circular economy to reshape the flow of materials across the world.
Ada Perniceni, Jose Antonio Alberich and Dorival Bordignon – Partner at Kearney Middle East.
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