New plastics economy could revolutionise industry

Applying circular economy principles to global plastic packaging flows could ‘transform’ the plastics economy and ‘drastically reduce negative externalities’ such as leakage into oceans, according to a report by the World Economic Forum (WEF) and Ellen MacArthur Foundation (EMF).

The 118-page report, ‘The New Plastics Economy: Rethinking the future of plastics’, uses analytical support from American consulting firm McKinsey & Company to create a vision of a closed-loop global plastics economy and suggests steps that could be taken to bring about the systemic shift needed to make the vision a reality.

The report finds that while plastics and plastic packaging are an integral part of the global economy and deliver many benefits, most of the material is only used once, with 95 per cent of the value of plastic packaging material, worth between US$80-120 billion (£56-84 billion) a year, being lost to the economy.

It further states: ‘A staggering 32 per cent of plastic packaging escapes collection systems, generating significant economic costs by reducing the productivity of vital natural systems such as the ocean and clogging urban infrastructure. The cost of such after-use externalities for plastic packaging, plus the cost associated with greenhouse gas emissions from its production, is conservatively estimated [by the United Nations Environment Programme] at $40 billion [£28 billion] annually – exceeding the plastic packaging industry’s profit pool.’

In addition, the report highlights that using projected growth in consumption in a ‘business-as-usual’ scenario, the world’s oceans are expected to contain more plastics than fish (by weight) by 2050, and that by the same year the global plastics industry will consume 20 per cent of total oil production and 15 per cent of the annual carbon budget.

Vision for the new plastics economy

However, the ‘new plastics economy’ envisioned by the WEF and EMF involves a new approach based on creating ‘effective after-use pathways for plastics, drastically reducing leakage of plastics into natural systems… and decoupling plastics from fossil feedstocks’.

The report reads: ‘Creating an effective after-use plastics economy is the cornerstone of the New Plastics Economy and its first priority. Not only is it crucial to capture more material value and increase resource productivity, it also provides a direct economic incentive to avoid leakage into natural systems and will help enable the transition to renewably sourced feedstock by reducing the scale of the transition.’

Pathway to achieving the vision

Major collaboration would be needed to bring about such systemic change, the report suggests, with stakeholders across the global plastics value chain including consumer goods companies, plastic packaging producers, plastics manufacturers, collection companies, sorters and reprocessors, cities, policymakers and NGOs all playing a part.

Several actions are suggested in order to develop an economy that achieves the report’s vision, including:

  • radically increasing the economics, quality and uptake of recycling;
  • scaling up the adoption of reusable packaging;
  • scaling up the adoption of industrially-compostable plastic packaging for targeted applications such as bags for organic waste and food packaging for events, fast food enterprises, canteens and other closed systems;
  • improving after-use collection, storage and reprocessing infrastructure in high-leakage countries;
  • steering innovation investment towards creating materials and formats that reduce the negative environmental impact of plastic packaging leakage; and
  • increasing the economic attractiveness of keeping materials in the system.

The report proposes the creation of ‘an independent coordinating vehicle’ to set direction, establish common standards and systems, overcome fragmentation and foster innovation opportunities, enabling large-scale pilots and ‘moon shot’ innovations.

Following the report’s publication, the EMF plans to establish an initiative to act as a cross-value-chain ‘global dialogue mechanism’ and drive the systemic shift towards fruition of its ‘new plastics economy’.

The organisation says that the initiative is ‘timely’, given the growing appreciation of the circular economy among leaders and policymakers – evidenced by the European Commission’s recent Circular Economy Package and funding programmes – as well as new technologies and investment in design, reprocessing and sources.

‘Triggering a revolution’

New plastics economy could revolutionise industry
The front page of the 'The New Plastics Economy' report
Following the publication of the report, Dame Ellen MacArthur, Founder and Chair of Trustee for the EMF commented: “Linear models of production and consumption are increasingly challenged by the context within which they operate – and this is particularly true for high-volume, low-value materials such as plastic packaging.

“By demonstrating how circular economy principles can be applied to global plastic flows, this report provides a model for achieving the systemic shift our economy needs to make in order to work in the long term.”

Dominic Waughray, a member of the World Economic Forum’s Executive Committee, added: “This report demonstrates the importance of triggering a revolution in the plastics industrial ecosystem and is a first step to showing how to transform the way plastics move through our economy. To move from insight to large-scale action, it is clear that no one actor can work on this alone; the public, private sector and civil society all need to mobilise in order to capture the opportunity of the new circular plastics economy.”

Dr Martin R. Stuchtey, Director of the McKinsey Center for Business and Environment, concluded: “Plastics are the workhorse material of the modern economy – with unbeaten properties. However, they are also the ultimate single-use material.

“Growing volumes of end-of-use plastics are generating costs and destroying value to the industry. After-use plastics could – with circular economy thinking – be turned into valuable feedstock. Our research confirms that applying those circular principles could spark a major wave of innovation with benefits for the entire supply chain.”

Supported by the MAVA Foundation, a philanthropic organisation that runs a programme that seeks to affect the global trends surrounding a sustainable economy, the report was produced as part of Project MainStream, a multi-industry initiative that aims ‘to accelerate business-driven innovations to help scale the circular economy’.

The full ‘The New Plastics Economy’ report can be downloaded for free from the Ellen MacArthur Foundation website.