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The commercial case for plastics recycling

23 June 2023

 

Establishing a circular plastics economy not only has the potential to mitigate the environmental pollution caused by plastics, but also presents a commercial opportunity for producers and consumers alike.

Devising an effective plastics recycling infrastructure could prevent over $120bn from being lost through plastic waste annually in the Gulf region, according to the Gulf Petrochemicals & Chemicals Association. 

GCC countries could reap significant socioeconomic benefits from developing a plastics recycling infrastructure. The sector is estimated to create about 1,500 direct jobs and have a $650m GDP impact for every million tonnes of plastic that is recycled. 

“By 2030, we project a global shortage of up to 25 million tonnes of recycled plastic,” say Devesh Katiyar, principal, and Jayanth Mantri, manager, at Strategy& Middle East, part of the PwC network. 

“This provides a unique opportunity for the Middle East and North Africa (Mena) region to create a circular plastics economy by developing a dual feedstock advantage.  

“The region should focus on energy-intensive advanced recycling technologies as they confer a substantial cost advantage given the access to cheap and abundant renewable energy,” they add.

Region prepares for circular plastics economy

Commercial prospects

Although the commercial opportunities that plastics recycling offers remain largely untapped in the Gulf, recent initiatives and collaborations suggest that governments and industrial players are increasingly being drawn to the commercial case that a circular plastics economy presents.

Rebound, a subsidiary of Abu Dhabi-based investment fund International Holding Company, facilitated the launch of the Rebound Plastic Exchange in September 2022. It serves as a global business-to-business marketplace to trade recycled plastics and aims to enable the recycling of 5 million tonnes of plastic though the platform by 2025. 

Rebound also signed an agreement with Japan’s Jeplan in late May to jointly study ways to develop the polyethylene terephthalate (PET) recycling ecosystem in the UAE. The two firms signed a letter of intent for a demonstration project to build a PET chemical recycling plant in the UAE as part of the country’s preparation for hosting the 28th UN climate change conference (Cop28) in November.

During the World Economic Forum annual meeting in Switzerland in January of this year, Saudi Basic Industries Corporation (Sabic) announced it was considering investing in a commercial advanced recycling facility with a capacity of about 200 kilotonnes a year. 

In its recently released 2022 Sustainability Report, Sabic highlighted “plans already in motion to significantly upscale volumes of its Trucircle circular materials globally”. 

Trucircle is a portfolio of Sabic’s products, services and technologies that aim to prevent land and marine pollution resulting from plastics use and support stakeholders in the plastics value chain in the adoption of sustainable practices. Sabic aims to process 1 million metric tonnes of Trucircle circular materials a year by 2030.

Petrochemicals projects

Big-ticket petrochemicals projects in the Gulf are set to enter operations during this decade. These include the Borouge 4
project in Abu Dhabi, the Ras Laffan ethane cracking facility in Qatar, the Amiral petrochemicals and derivatives complex
by Satorp in Saudi Arabia and the Duqm petrochemicals scheme in Oman.

As suppliers of feedstock for the manufacturing of plastics, such projects hold the key to the development of a thriving circular economy, says Hani Tohme, managing director of Middle East and head of sustainability in the Mena region at Roland Berger, a Munich-based international management consultancy. 

“The growth in production could allow these companies to realise economies of scale, reducing per-unit production costs and offering competitive pricing on the global stage. 

“Furthermore, with the establishment of these petrochemicals complexes, the region could attract downstream industries, fostering local industrial development and creating new employment opportunities. This could lead to the creation of a robust ecosystem that supports and benefits from the petrochemicals and plastics industry,” he adds. 

To fully capitalise on these benefits, however, producers need to integrate sustainability into their operations. 

“By demonstrating a commitment to sustainable practices, such as using recycled plastic as feedstock, implementing carbon capture technologies and enhancing energy efficiency, Mena producers can differentiate their offerings in the global market. This commitment can open up opportunities in sectors that demand greener products and potentially enable access to future markets in a world that is moving towards circular economies,” he says. 

“The spike in plastics production could bring economic benefits to the Mena region but aligning these activities with global sustainability trends is vital for long-term success.” 

https://image.digitalinsightresearch.in/uploads/NewsArticle/10963257/main.gif
Indrajit Sen

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