Plastic and its many uses, as well as detrimental effects on the environment, are well known. However, what may not be common knowledge is the size of the plastic recycling industry and its projected growth. According to the Market Research Future (MRFR), the recycling market is expected to grow at 5.82% CAGR in the span of 2019–2028. This growth is driven by brand commitment, demand from consumers, and government regulations.
There is a lot of push going into further developing recycling techniques and infrastructure because recycling can retain value from the plastic waste stream, instead of it is simply discarded. Governments across the globe are devoting an increasing amount of funding towards developing better recycling technology, minimizing single-use plastic packaging, and increasing reusable packaging. They have passed policies that set quotas for how much of a company’s packaging must be recycled and to improve the infrastructure in place for post-consumer recycling. A big driver is how awareness of the impact that plastic disposal has on the environment has grown in recent years. There is a larger number of environmentally-conscious consumers that are demanding brands improve the sustainability measures and properly manage their plastic waste. However, a lack of awareness also largely restrains the plastic recycling market as people are not accurately informed about recycled plastic product use and the cost of recycling plastic material. Additionally, while infrastructure and technology are being improved, current difficulty and inefficiency in the collection of plastic waste and a lack of standardization pose a challenge to market growth.
Hopefully, through government and brand commitments this challenge is likely to be overcome. Europe is deemed as a region that is poised to become the fastest-growing in the market as a result of numerous government initiatives and projects improving recycling facilities and systems in Europe. Globally, 71% of consumers will choose a brand they trust is properly handling their environmental impact. There are already more than 1,000 laws related to plastic pollution, and plastic is one of the top two environmental, social, and governance (ESG) risks for the global sustainable investment market. Alan Jope, the CEO of the British multinational consumer goods company, Unilever, has said that “plastic has its place, but that place is not in the environment.’’ Fortunately, a number of large brand CEOs are coming to this realization. Unilever has committed to reducing its use of virgin plastic by 50% and majorly increase its use of recycled plastic by 2025. Additionally, they have stated they will help collect and process more plastic packaging than what they sell — which would amount to an estimated 600,000 tonnes per year. Accenture has found that environmentally aware consumers losing trust in global brands cost brands $2.5 trillion in 2019 due to lost business.
However, this kind of demand for recycled plastic is straining the recycling market supply where it stands today. There are two main sources of recycled plastic: post-industrial waste and post-consumer waste. Post-industrial waste comes from manufacturing plants, which process plastics into products and then collect the waste. It tends to be in high demand as it is clean and ready to be reground into flakes in order to be used in new products. On the other hand, post-consumer recycling is what is oftentimes taken into account when calculating the percentage of plastic waste that is being recycled. It is primarily sourced from municipal waste management and recycling facilities. It must go through a sorting process, be cleaned, and have labels and food debris removed in order to be deemed suitable for further processing into flakes. It is a larger source of waste but it tends to be unpredictable in quantity/volume as influenced by sorting and collection methods in a particular community, and also tends to be more expensive due to the extensive operations required to prepare the material for use in new products.
When Asia stopped accepting plastic waste from most western countries in 2018, it changed the supply market for recycled plastic in developing economies greatly. Without the import of high-quality, and often subsidized, plastic due to container deposit schemes, it left the industry in these countries relying on locally-sourced recycled plastic to meet the growing demand, and these supply chains are not advanced or formal. Most waste collection is carried out by the informal sector, one that has typically lacked transparency and been tainted by child labor and worker abuse instances. In addition to this, most of the waste is commingled and contaminated, lacking the necessary quality for use in new packaging. To properly meet demand, these supply chains must become transpired, valued, and have efficient material recovery processes. Fortunately, the demand for quality, transparent, and sustainable recycled plastic is growing and will soon become a norm in the packaging industry. This opens the space for investment to go into improving the infrastructure and for companies like MikaCycle to help lead the way towards an efficient, transparent, and reliable supply chain and circular economy.
