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Leon Kaye headshot

How Close Are We To a New Plastics Economy?

By Leon Kaye

During the World Economic Forum earlier this year in Davos, Switzerland, the Ellen MacArthur Foundation released a report on the New Plastics Economy.

The United Kingdom-based NGO, which is dedicated to the promotion of a worldwide circular economy, acknowledges that plastics have been important to global commerce. But in this 120-page report, the Foundation says too much value is lost as massive amounts of plastic, especially what is used for packaging, ends up in landfill.

Why focus on plastic?

As the production and consumption of this material are expected to increase rapidly in the coming years, the results of an unchecked plastics industry could include long-term risks to public health, further destruction of the world’s oceans and a loss of economic productivity.

Many organizations tout a closed-loop, zero-waste system, also called a circular economy. But the Ellen MacArthur Foundation arguably offers the most detailed research and compelling suggestions on how the world's economy can benefit from treating plastic more as a resource and less as waste. So, almost one year after its release, is the new plastics initiative gaining any traction?

"There is a large consensus that the plastics economy needs a fundamental rethink and redesign,” said Rob Opsomer, the New Plastics Economy Lead with the Ellen MacArthur Foundation, “and that the New Plastics Economy sets an economically and environmentally attractive direction to make that happen."

Opsomer and his colleagues at the Foundation said the response to the report was largely positive. Praise came from individual companies, trade associations and civil society.

Business leaders are facing the stubborn fact that the take-make-dispose process that defines the single-use plastics industry contributes anywhere from $80 billion to $120 billion in material value losses annually.

In addition, economic losses tied to the externalities that result from the plastics industry must be considered. A third of all plastic packaging leaks into the natural environment. This and other environmental problems associated with single-use plastic cost the global economy at least $40 billion a year -- more than the combined profit of the entire plastic packaging industry.

Indeed, there is consensus that the plastics economy requires a fundamental rethink and redesign. The trick, however, is reaching that point at which a circular plastics economy becomes economically viable.

What needs to happen?

According to the Foundation’s researchers, three large shifts need to occur if plastics will ever transform into more of a closed-loop or circular economic system:

1. An effective after-use plastics economy must be developed. To accomplish this, plastics, and their surrounding systems, must improve in quality and economic performance. As a society, we must also undergo a surge in reuse, recycling and composting.

Much of the focus in recent years has been on recycling. And the economics of plastics recycling today are certainly fragile, due to many factors such as low fossil fuel prices. But several levers could significantly improve the economics of plastics recycling, including what the Foundation describes as a Global Plastics Protocol.

More standardization, including shifts such as the replacement of PVC labels or certain pigments with more easily recyclable alternatives, would be one way to integrate the adoption of new best practices in plastics collection, sorting and reprocessing systems, the Foundation says.

2. Plastics industry stakeholders must dramatically reduce all negative externalities, including the excessive release of plastics into the natural environment. Creating an effective post-use plastics economy can provide an economic incentive to keep plastics in such a system, and in turn would help decrease leakage, the Foundation says. The plastic industry also needs to work on improving collection infrastructure in emerging markets, researchers insist.

3. In a reversal of how the industry grew over the past several decades, plastics must also be decoupled from fossil fuels by researching and incorporating more renewabable sources of feedstocks.

The need for next-gen plastics

The use of new feedstocks, such as those derived from plant-based sources or waste (ideally recycled plastics or organic refuse). But one hurdle for the industry is the confusion between conventional plastics and those made from renewable sources.

Some plant-based plastics can be composted; others can be recycled along with conventionally manufactured materials. The reality, however, is that the various forms of plastic we see in stores are different formulations of resin that can't yet be recycled together. Plastics are now designated by seven resin codes, which you'll notice between the chasing arrows on plastic packaging, including the “anything goes” plastic No. 7 (a catch-all code for resins such as nylon and acrylic).

"It is important to distinguish between where a material comes from (whether it is either renewably-sourced or fossil fuel-based) and where it is destined to go to, as in if it is ultimately recyclable, compostable, or neither,” Opsomer told us.

Again, this is a result of a highly fragmented plastics industry. More standardization would certainly help.

Contamination is also a concern with new, and often compostable, plastics. The Foundation suggests using compostable plastics for well-defined and targeted applications such as coffee pods and fast food packaging. Harmonized labeling would minimize the risk of contamination, the Foundation says, allowing industries that are now highly wasteful to become far more efficient.

The role of business

Business should drive any new transition to the New Plastics Economy. After all, many of the world’s largest companies benefit from plastic without having to compensate society for the material's decades-long environmental costs.

Calls for extended producer liability, which puts the onus for collecting and recycling on businesses instead of consumers and municipal governments, would be a start. So far, however, there has been little movement in that direction. And business often paints such measures as excessive regulation.

That being said, governments and other stakeholders in the plastics industry have shown they can play an important role in the transition. The evidence indicates a growing recognition from governments around the world that they can take the lead on a new plastics economy. The alternative for governments is business as usual: Spend taxpayer funds on collecting and sequestering plastic waste.

Over the past year, we've seen a surge of regulatory action on plastics circularity. Dozens of landmark regulations were introduced around the world, notably citizens' approval of restrictions on single-use carrier bags in California in this month’s election. Across the pond, almost a year ago, the European Commission announced its Circular Economy Action Plan, which aims to stimulate the region’s transition to a more closed-loop system.

While many businesses will complain about these new restrictions, the truth is that they can force companies to become more innovative – and perhaps even arrive at new revenue streams as a result of their efforts.

Hence the Ellen MacArthur Foundation is bullish on the prospects for plastic becoming more of an economic generator, rather than a material that leaves behind huge environmental and social costs. The business community’s willingness to reevaluate plastics is higher than ever, as more companies realize that greater standardization in both design and collection systems is overall more efficient in moving society toward a circular system.

As Opsomer explained, the Foundation already started its first convergence efforts, and will release more on the evolution of the plastics industry in 2017.

Image credit: Steven Depolo/Flickr

Leon Kaye headshot

Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.

Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.

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