According to a new analysis from the Circular Plastics Service of the IHS Markit office in Houston, Achieving a circular economy for plastics could be achieved by shifting some of the future investments needed to meet the growing demand for plastics to advanced recycling and mechanical recycling methods.
IHS Markit says the global plastics industry will need to invest around $ 1.5 trillion to meet the growing demand for plastics by 2050. Under current market trends, progress towards a circular economy would be modest, relying mainly on mechanical recycling. More ambitious goals, aimed at reducing landfill, incineration and energy recovery practices as end-of-life solutions for post-use plastics may be achievable by redirecting some of the new manufacturing investments towards a wider range of plastics recycling facilities, including mechanical and chemical recycling, especially as the latter becomes more economically feasible, says IHS Markit.
More than $ 300 billion of the total capital expenditure allocated to new plastics production capacity could be redirected to mechanical and chemical recycling processing capacities, thus meeting the goals of an aggressive circular economy, the analysis says. .
The results are part of the new IHS Markit Circular plastics department, which provides a comprehensive, scenario-based roadmap of how the plastics value chain could shift from a linear economy model to a circular economy model. The research examines two scenarios: progress towards plastic circularity at a gradual and measured pace, and a more aggressive scenario in which progress is accelerated by ambitious goals and policies set by governments and society.
The IHS Markit Circular Plastics service discusses the implications of carbon intensity and the impact on future capital investments in the context of energy transition and carbon valuation in the context of changing policies and regulations. This service quantifies the extent and timing of substantial market changes, identifies the main regulatory and societal risks and ensures continuous monitoring of rapid changes.
“Today, the plastics ecosystem is firmly committed to a transition in which the linear ‘make, use and dispose’ model for plastics is moving to a more advanced state,” said Robin Waters, Executive Director, plastics planning and analysis, IHS Markit. . “In this new case, we keep the resources used as long as possible, extract the maximum value while they are in use, and then recover and regenerate the valuable products and materials at the end of their life. “
Driven by regulation, legislation and growing public concerns, progress towards a fully circular economy for plastics by 2050 is increasingly sought after. Yet the demand for plastic continues to grow as the population and global standard of living increase, notes IHS Markit. A large amount of plastic is used in single-use packaging (SUP) applications, and much of this plastic will eventually end up in the municipal solid waste (MSW) stream.
“Our analysis indicates that the situation is likely to become urgent,” said Anthony Palmer, vice president of IHS Markit. “At the heart of the matter is the fact that the widespread benefits associated with using plastics stand in stark contrast to how the world deals with its end-of-life disposal, the so-called ‘plastics dilemma’.
DSM’s global volume will grow from 2.1 billion metric tons in 2020 to 3.5 billion to 3.7 billion metric tons in 2050, according to IHS Markit. With plastics accounting for around 12% of MWS, that means global end-of-life plastics will reach over 425 million metric tonnes by 2050, an increase from 170 million to 190 million metric tonnes.
“Most of this increase will occur in regions outside of North America, Western Europe and China – regions like Southeast Asia, India and Africa – due to the higher growth in population and standard of living, ”said Palmer.
This presents formidable logistical challenges that will challenge the overall plastics recovery and recycling efforts, as these regions are far from the manufacturing hubs of plastics production associated with the current model of production and export.
“Recycling targets for 2025 and 2030, such as the European Packaging Directive and the growing network of plastics pacts, indicate that the company is heading towards the more aggressive IHS Markit scenario and that the industry will need to adapt. its investments accordingly, ”said Palmer. adds.
At the current rate of progress, recycling plastics via mechanical processes could peak at just 14% of the demand for plastics by 2050, according to the IHS Markit analysis, or perhaps 22% in the collection and disposal scenario. more ambitious recycling identified by the company. The latter depends on significant advances in sorting, simplification of product design for end-of-life recycling and the development of a technology of selective dissolution-precipitation of solvents to advance cleaning, adds the company. .
Currently, mechanical recycling is the most advantageous from an economic, energy and carbon impact point of view. However, limitations to the use of mechanically recycled plastics arise in light of some degradation that occurs during each cycle of reuse, contamination by additives and other factors, explains IHS Markit.
Therefore, although IHS Markit states that it expects mechanical recycling to increase significantly from some 20 million metric tonnes today to 112 million to 200 million metric tonnes in 2050, for baseline scenarios aggressive and aggressive, this process alone will not be enough to achieve ambitious circularity goals. . Chemical recycling will be needed to close the gap, according to the analysis.
IHS Markit says it expects drastic improvements in reactor design, catalysis and product processing with chemical recycling technologies to enable the large-scale implementation of chemical recycling, enabling the aggressive scenario. However, scale has been a problem to date.
“Technological advances would allow a significant increase in plant capacity, for example, from 500 to 3,000 metric tonnes per day, compared to the 50 to 300 metric tonnes per day which are common today and where pyrolysis technology is prohibitive, ”says Jonny Goyal, Managing Partner, Technology and Infrastructure, IHS Markit.
“Pyrolysis technology, that is, high temperature processes, will be able to operate with improved economy and development and will demonstrate reductions in fixed unit costs of up to 50-65%,” he continues.
IHS Markit estimates that advancements along the technology experience curve will allow total chemical recycling capacity to increase from just 1.2 million metric tonnes today to 44 million to 190 million metric tonnes in 2050 for different scenarios modeled by the company.
IHS Markit’s analysis reveals that closing the circularity gap will require a global alignment of stakeholders:
- Governments and regulators should come together and support the development of standardized goals and regulatory actions that provide clarity and promote a circular model for plastics.
- Consumers and alliances must continue to support the move towards circular packaging solutions and provide greater transparency while recognizing the many pressures businesses face.
- Industry needs to develop the required technologies, create assets and manage costs to move to a new circular model for plastics.
“The core competency of the petrochemical industry – transforming raw materials into useful materials by chemical transformation – is being tested in new and extensive ways,” Waters said. “Closing the circularity gap will require unprecedented global alignment and the adoption of concrete strategies, including new business models, new alliances and logistics capabilities. The reorientation of traditional investments towards new recycling efforts will be an essential part of this effort. ”