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Has the world bottled out of the war on plastic? Blue Planet II, David Attenborough’s landmark 2019 TV series featured asphyxiated oceans and dying whales. It sparked a wave of concern about single-use plastics. Companies rushed out targets on reduction and reuse. Individuals vowed to eschew packaging. Savvy London watering holes replaced straws with hollow pasta tubes. 

That scramble has yielded few results. We have not stopped using plastic. Quite the opposite. Consumption has quadrupled over the past 30 years, says the OECD, driven by packaging, consumer products and textiles. And we have not made much progress on recycling and reuse. More than 80 per cent of waste still escapes such efforts. 

The scarcity of recycled plastic is a problem for consumer goods companies, particularly those in highly exposed sectors such as beverages. Targets will be hard to reach. And limited capacity means recycled plastic trades at a 20-30 per cent premium to the virgin kind according to Barclays’ Sustainable & Thematic Research team.

Meanwhile, recycling technology is a work in progress. See, for instance, Lego, which on Monday announced a pivot away from using recycled bottles to make its toy bricks. The recycling process releases more CO₂ than it saves. 

Lex chart showing Recycled plastic is cheaper than virgin plastic and Mid-term recycling targets; Retail; Packaging manufacturing; Food; Beverages; Cosmetics; Apparel

Yet there is a market opportunity. Recycling plastic is an environmental imperative. Reaching company targets will require an annual supply of 40mn tonnes of recycled resins, says McKinsey, for $100bn in investment. Better still, a scaled up recycling system could deliver plastic that is cheaper than new. 

The technology is improving. Mechanical recycling — which basically entails washing and then melting bottles — is cheap, producing plastics at half the cost of new. But it only works for a small number of polymers and requires high-quality feedstock. It will probably be surpassed by advanced recycling — breaking down plastics at the molecular level using chemicals, which also reduces the need for careful upstream sorting. 

That puts the spotlight on companies that are adding capacity. Norway’s Tomra, active in sourcing, and Agilyx, which develops recycling technologies, are cases in point. Chemicals groups such as Eastman are planning facilities, while engineering and construction companies such as Maire Tecnimont run their own.

The sector is still in its infancy, but de-bottlenecking the plastic supply chain will uncork its own rewards.

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