Developments towards polymer circularity

Driven by new regulations introduced in major markets, the demand for and interest in circular plastics is growing. For example, the European Green Deal proposes to make plastic packaging fully recyclable by 2030 and will also introduce mandatory rates of recycled content that producers must include in new plastic packaging. Other countries have also set specific polymer recycling targets for the foreseeable future. South Korea aims to increase its recycling rate from currently 34 to 70 percent by 2030. Canada will require plastic packaging to contain at least 50% recycled content by 2030 as part of its plan to achieve zero plastic waste by 2030, which highlights the urgency of governments to change plastic waste streams.

The two prevailing techniques for polymer recycling are mechanical recycling and chemical recycling. Mechanical recycling, a well-established method which has been around for decades, involves the sorting and processing of plastic scrap by waste management and recycling companies into bales of a single polymer type. Chemical recycling, on the other hand, is a growing subsector of the plastics recycling industry and deals with hard-to-recycle mixed plastic waste. It converts the plastic waste back into hydrocarbons or monomers such as ethylene and propylene through a process called pyrolysis.

Currently, 1.1 million tons per year of plastics are chemically recycled in the European Union, and planned investments may threefold the capacity to 3.7 million tons/year by 2030, according to Plastics Technology Magazine. According to McKinsey research, chemical recycling (also called advanced recycling) is expected to account for 4 to 8 percent of global polymer demand (~500 million metric tons/year) by 2030.

The KnowledgeAgent Chemicals & Agriculture team helps clients to continuously monitor the latest developments, trends, and opportunities in circular polymers. Among its numerous projects, the team is:

  1. Obtaining and benchmarking mechanical/chemical recycling commitments by petrochemical companies

A client asked the KnowledgeAgent team to identify and compare all commitments made by petrochemical companies in the Middle East and Asia for circularity efforts in polymer recycling by 2025, 2030 and 2035, to get a better understanding of the overall market trajectory of polymer recycling technologies in these regions. Although many of these petrochemical companies have launched first pilot scale or commercial scale recycling capacities, most of them have not announced and committed to specific targets in the future (e.g. annual recycling capacities or sustainable plastics production as percentage of total product portfolio).

  1. Analyzing investment in pyrolysis production capacity in global key regions

The KnowledgeAgent team was tasked to compile an exhaustive list of all new pyrolysis projects established in 2022 and 2023 (YTD) in key regions across the globe. The analysis yielded total pyrolysis capacity growth and aggregate investment value in all key regions, including North America, South/Central America, Europe and APAC.

  1. Tracking pyrolysis-oil related product portfolio changes

The KnowledgeAgent team provided an in-depth analysis of product portfolio changes of large petrochemical companies like Shell, Clariant, Dow and others to gain an understanding of recent strategic shifts and investments in pyrolysis-oil related products used in chemical recycling of polymers. The research allowed the client to get a clear understanding of the current status of commercialization of these products.

  1. Identifying sustainability partnerships between petrochemical players and CPG brand owners

Delving deeper into the plastic recycling value chain, the KnowledgeAgent team investigated if petrochemical companies also increase their downstream activities by launching commercial partnerships with CPG brand owners in the utilization of more sustainable plastic materials, such as plastic packaging with higher levels of recycled content. The analysis showed that numerous CPG companies have indeed announced partnerships with petrochemical companies to be able to introduce products packaged in more sustainable plastic materials. However, as of 2023, the use of sustainable plastic materials remains relatively limited in relation to the overall CPG product portfolio.

Do you want to get a better understanding of recent changes and developments in your market? Get in touch with our Chemicals & Agriculture team to inquire about our comprehensive research services:

  • Market size estimation (including future development)
  • Analysis of market trends, drivers and barriers
  • Overview of current and future regulatory environment
  • Competitor analysis
  • Supply chain analysis
  • Product portfolio comparison of market players
  • Competitor profiles of market participants (including financial data, strategic news, SWOT, etc.)
  • M&A or general market activity

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