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No Time to Waste: What Plastics Recycling Could Offer

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No Time to Waste: What Plastics Recycling Could Offer © Kemter/Getty Images No time to waste: What plastics recycling could offer Plastics waste is hurting the chemical industry as well as the environment. By taking the lead on recycling, chemical players could add a new dimension to the industry and help solve the problem. Thomas Hundertmark, Chris McNally, Theo Jan Simons, and Helga Vanthournout It’s not news that the plastics-waste issue is becoming acknowledging that the “use once and discard” a crisis and that, in the eyes of the public, the model, which the plastics industry has grown up chemical producers that make all those plastics are with, should be replaced by a new model where deeply implicated. The public’s concern is already plastics are recycled as much as possible. translating into new regulations on plastics in the European Union and elsewhere, and major customers, This marks a watershed moment for the chemical such as the consumer-packaged-goods (CPG) industry, given that more than one-third of the industry, are ramping up efforts to increase recycled industry’s sales are made up of petrochemicals and content and reduce their plastics consumption. plastics production and plastics-related products. What is news, however, is that chemical-industry But as the industry starts to mobilize, there is a leadership has started to declare that its concept lot of uncertainty about what steps represent the of stewardship and sustainability now extends to best way forward. We believe that the chemical dealing with plastics waste. It is also increasingly industry has a central role to play in unlocking 1 McKinsey on Chemicals September 2018 many of the challenges of the plastics-waste issue. plastics materials makes economic sense, there We also believe there are opportunities to build a should be a clear advantage to making this shift. new and profitable branch of the industry based on recycled plastics, which our research suggests could Beyond the policy decisions that will set the overall represent a profit pool of as much as $55 billion a year direction, let’s look in more detail at three areas that worldwide by 2030.1 will be crucial to making this ramp-up in recycling possible and in which the chemical industry is likely Don’t waste all that good plastics waste to have a role to play. Plastics waste washing up on pristine shorelines, from Antarctica to the Arctic, and vast floating Meeting technology needs in recycling islands of plastics waste in the Pacific Ocean have There are three principal approaches to the reuse of received much media coverage and contributed to plastics: mechanical recycling, chemical recycling, the shift in consumer sentiment. Our colleagues have and processing the plastics waste back to basic suggested ways that government and industry can feedstock. All have suffered from a vicious cycle, stop the flow of waste into the oceans and this tragic where a lack of raw materials due to low rates of environmental degradation.2 In this article, we focus recovery of used plastics has limited their growth on the plastics-waste question from a recycling- and dampened interest in their further development potential perspective. and investment; this could now be reversed. From this perspective, marine plastics pollution Mechanical recycling takes used plastic and may be best understood as the highly visible tip of physically processes it back to resin pellets, leaving the iceberg. The majority of used plastics go to the polymer chain intact. Recycling of polyethylene landfills and incineration, where materials are terephthalate (PET) and high-density polyethylene lost forever as a resource. Our research shows has been established as a viable business, but there that currently only 16 percent of plastics waste is is room for further process optimization. A key reprocessed to make new plastics; the “leakage” challenge is finding how to preserve the performance into oceans is primarily due to lapses in landfill quality of resins through recycling steps and avert management or a complete lack of waste-disposal the deterioration that currently occurs. systems (Exhibit 1). Chemical recycling, also referred to as monomer From a resource-efficiency and conservation recycling, puts used plastics through a chemical perspective, this analysis suggests that a huge process that breaks them back down to their amount of potential value is currently being lost— monomers. Such an approach is only feasible value that could instead be captured by better for condensation-type polymers that can be approaches to reusing plastics waste. re-monomerized, such as polyesters (notably PET) and polyamides, but this still represents substantial An array of policy decisions will be needed at the volumes, and there remains considerable scope for national and local levels to bring to reality the process improvements. switch of the plastics-waste flow from landfill and incineration to recycling. But in general terms, Processing back to feedstock requires breaking for those parts of the world that are not awash in polymer chains down to hydrocarbon fractions abundant hydrocarbons and where the reuse of through catalytic or thermal processing. A number No time to waste: What plastics recycling could offer 2 Industry Pub 2018 No time to waste: What plastics recycling could offer Exhibit 1 of 2 Exhibit 1 The majority of plastics waste currently goes to landfills and incineration. Global polymer flows, millions of metric tons per annum, 2016 rocess losses 4% Feedstock recycling <1% Chemical Mechanical (polymer) recycling 12% (monomer) recycling <1% 330 180 300 110 2602 Collected for ( = 100%) recycling 16% Durable1 ncinerated 25% Landfills 40% Nondurable1 150 nmanaged dumps or leaks 19% Virgin olymer Applications Waste feedstock production creation2 1 Durable applications with an average lifetime >1 year will end up as waste only in later years; nondurable applications go straight to waste. 2 150 million metric tons of mixed plastic waste from nondurable applications that end up as waste in same year, plus 110 million metric tons of mixed plastic waste from production in previous years. Source: McKinsey analysis of technologies are under development. Among these, to 220 million metric tons per year, if current flows pyrolysis may offer the biggest potential, because to landfill and incineration are redirected and it should be able to process a wide range of low- recycling capture improves. The waste-management quality mixed-plastics-waste streams. This could be industry that collects plastics waste and does particularly useful for processing flexible packaging, preliminary processing has its own set of challenges— a major portion of the waste stream, which today’s notably a lack of scale even now—and these will need mechanical recycling processes cannot handle well. to be addressed if it is going to be able to handle these massive new flows. Strengthening the waste-management chain Our projections suggest that the volume of plastics In developed economies, the industry tends to have going to recycling could increase fivefold by 2030, high costs due to small scale and lack of efficient 3 McKinsey on Chemicals September 2018 collection and sorting processes, with so far limited From waste to resource: Adding a new application of automation. In emerging economies, branch to the chemical industry plastics waste is typically processed through If all these factors can be aligned, chemical informal systems—individual workers picking companies can help to solve the plastics-waste through waste dumps, with hand sorting at collection problem. Less recognized is the potential within this points and landfill sites—and this represents a for chemical-industry players to build new kinds of processing structure that cannot easily be scaled up. profitable businesses, which, as noted above, could represent a profit pool of $55 billion per year by 2030. In our view, the chemical industry could have at least a temporary role in supporting the plastics-waste- Under a scenario where much larger quantities of management sector as it ramps up its operations. plastics waste are routed for reuse instead of going In industries such as aluminum and paper, where to landfill and incineration, we see a potential recycling has become part of the industry’s structure, for chemical companies to transform two areas: producers played an important role in getting polymers produced from mechanical recycling, and the whole field of pyrolysis and chemical recycling recycling established, including making investments of used plastics. Projecting a step further, it’s in and having ownership of recycling infrastructure. possible to imagine a wholly new configuration of A seat at the table petrochemical and plastics plants. There has been confusion on the part of all First, petrochemical and plastics companies are stakeholders—which, besides the chemical industry, strongly placed to advance the development of include policy makers, consumers, the waste- improved technologies for mechanical recycling management industry, OEMs, and others—about and the markets for polymers made from mechanical who is responsible for managing plastics waste. recycling. Some companies have started to make Customers and consumers have been so happy with moves in this area—for example Borealis and the versatility, convenience, and low cost of plastics LyondellBasell have recently acquired polymer- that they have accepted the downsides linked to recycling companies in Europe—but there is clearly plastics’ ubiquity and durability, such as pollution. scope to develop this area further in view of the But the history of the chemical industry has many much increased used-plastic volumes that could examples where public opinion has ultimately become available. reversed its view on such trade-offs: from lead paint to chlorinated fluorocarbons to chlorinated solvents, Second, in pyrolysis and chemical recycling, and so on. petrochemical and plastics companies are arguably ideal candidates to work on technology enhancements The chemical industry is increasingly aware that it’s that will be needed to make those processes work at another of these transition points.
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