Since 1965 until 2015 the demand has increased 22-fold or double GDP growth (6.4% p.a.). In most cases plastics show a much higher sustainability over the life cycle than other materials and often they are additionally more affordable, if you base the price on performance and not on weight. Consequently, other materials, like cement (3.6% p.a.), aluminum (3,6% p.a.) or steel (2.4% p.a.) have shown much less growth.

When we look at 2030 or 2050 plastics demand forecasts, we can expect that those exceptional growth rates of plastics production and demand are likely to continue (4.7% p.a.), but a bit lower, due to an increasing substitution of virgin material through recyclates. The bullish investment priorities of integrated oil and dedicated polymer producers support those growth predictions. Growth is driven by

1. innovative products and sustainable applications, especially in demanding technical applications (e.g. lighter, more complex parts; better food preservation; building insulation, other functionalities, etc.),
2. continued substitution of or combination with glass, metals, natural materials for price-performance reasons as well as
3. servicing a growing middle class economy. If we just look at the last point, we see that Western economies consume currently approx. 45 kg polyolefin plastics per capita and year. China is catching up fast at currently 35 kg/capita. Next waves are expected in India (6 kg/capita) and Africa (<3 kg/capita).

Plastics Are Under Scrutiny

The durability of plastics and many other positive properties in applying plastics, make it a problem for all of us, when it ends up in the environment. This is specifically true for short term (<1 year) or even single-use plastics products, which are 5,800 million t (70%) of the historic, cumulative plastics production from 1950 to 2015. Although approx. 500 million t of plastics waste was collected for recycling, only approx. 100 million t (1,2% of cumulative production) have been really recycled. The rest has been incinerated or landfilled. The recycling share is continuously increasing, especially in countries that have landfill restrictions in place, but the ratio is still too poor to make a significant impact. The problem surfaced earlier this year, when China/Hong Kong, who account for 2/3 of the plastics recycling of 15 million t in 2015, stopped importing plastics waste.

Recent German numbers of Beteiligungs- und Kunststoffverwertungs GmbH (BKV) suggest that 15-20% of discarded/leaked plastics are “micro-plastics” (cosmetics, fibers, agriculture, etc.) and 80-85% are “macro plastics”, i.e. littering of packaging, single-use items, etc.

Increasing pressure from NGOs, regulations on plastics products, massive initiatives by brand owners and retailers are defining a new playing field of a circular plastics economy. For the resins producers it has become obvious that a continued virgin material production without thinking about the fate of the plastics wastes is no longer a viable strategy, as it will ultimately take away their license to operate.

Players in the plastics chain need to look at plastic waste as a valuable resource. They are well-advised to take extended product responsibility and actively explore the business opportunities of a new, future circular plastics economy.

So, the pressure and situation are clear. Two general recommendations can be easily formulated in the following sequence:

1. Drastically reduce the leakage of plastics waste into natural systems (e.g. deposits, taxes, collection incentives, forbid certain single use applications / products, etc.) and
2. create an effective circular plastics economy (e.g. re-design plastics/compounds with an optimum between performance and waste impact, reuse, sort, recycle, recover, capture, incinerate, etc.).

To prevent plastic waste leaking into the environment, waste collection infrastructure is crucial, but this is lacking in many countries. Even with a sophisticated waste collection and processing system in place, mechanical recycling will not be able to fully close the loop. Suez reported in 2017 that it produces 150 kt/a of recycled polymers from 400 kt/a of collected plastic waste in Europe. Some of the challenges that cause quality issues in recycling:

• Complex packaging designs, e.g. multi-layers, pose recycling challenges, but companies, like APK, who developed a process called “Newcycling,” are working on solutions to separate e.g. PE and PA.
• PE and PP have many different grades as well as different additives/catalysts, pigments with a broad range of molecular structures and properties that are tailored to specific applications.

Going Circular: How to Close the Loop?

Mechanical separation of the polymer without destroying its structure, followed by additivation and extrusion/compounding, allows to produce recycled granules with almost the same properties of the virgin material. This is unfortunately not often the case.

Mechanical recycling of polymers is a growing opportunity, but full circularity in plastics also needs conversion technologies that allow feedstock recycling (chemical recycling via depolymerization, cracking, pyrolysis or gasification), energy recovery or full oxidation of the plastics material to CO₂, which might need to be captured (CCU/CCS). You might argue that the use as plastics has been only an interim application, before burning it, which would have been the prime application, when using natural gas or crude oil in the first place. There is not a single circle that fits to all polymers and applications. Choosing the right circle largely depends on the individual situation of the waste composition, the polymers and by-products as well as the supply chain infrastructure. But any circle is better than no circle, which means an uncontrolled leakage into the environment.

Demand growth for virgin polymers will be impacted, but the circular economy is also a business opportunity for polymer producers. The first signs can be seen, by polymer producers like Borealis’ STOP ocean plastics project in Indonesia or their acquisition of MTM Plastics and Ecoplast, a German and an Austrian recycler. Another example is LyondellBasell´s recycling joint venture QCP with Suez.

Those are good examples of resins producers taking on an extended product responsibility, including waste management, allowing them to play a significant role in the future circular plastics economy, rather than being part of the problem and potentially losing their license to operate in society.

Closing the loop for plastics in a circular economy to address the littering and waste management issue should be a priority for industry and is part of the broader sustainability agenda that includes the need to reducing carbon footprint by resource and energy efficient production. The latter is a separate topic that we have not discussed here. The use of renewable monomers or production of fully bio-degradable polymers addresses additional needs, but also requires a thorough life cycle eco-performance analysis compared to other alternatives, that takes into account plastic’s lightweight, food preservation, insulating and other application properties. Covestro´s ambition to produce aniline from field corn, wood or straw are good examples for a more resource and energy efficient monomer production as is the successful integration of 20% CO₂ as raw material in the production of polyether polyols, a building block for polyurethanes. Econic Technologies follows a similar route to produce polyols flexibly from 20-50% CO₂.

Ready for the Future

For the future of our German and European industrial base it is good news to see that new circular plastics economy opportunities are driven by innovation from local companies. Unlike the production of virgin plastics materials, this does not require access to advantaged hydrocarbon feedstocks or energy to be competitive. Capturing these opportunities will allow European and German companies to play to their strength.