Creating a market for recycled materials in the new plastics economy
A year ago at the World Economic Forum in Davos, a report from the Ellen MacArthur Foundation found that most plastic packaging is used only once; 95% of the value of plastic packaging material, worth $80 billion-$120 billion annually, is lost to the economy after a short first use. In the design of a “New Plastics Economy,” which challenges institutions to move away from the existing linear, take-make-dispose economy, theoretically, these captured plastics can instead be recycled to be used over and over.
Linear solutions for plastic waste miss out on opportunities to capture and use these resources. As it stands from an economic standpoint, the value of capturing plastics for processing is only as high as the profitability of these materials after collection and logistics. Most waste outputs fall outside the scope of recyclability by this rule, and producing new, virgin plastic is currently less costly than purchasing recycled materials on back-end channels.
Thus, it is up to manufacturers and brands to create and expand the market for recycled plastics by purchasing recycled materials to make their products, selling them to consumers and then making the product easily recyclable.
Procter & Gamble announced that it has teamed up with us at TerraCycle and SUEZ, the largest waste management company in Europe, to source, develop and put out the first fully recyclable shampoo bottle made from up to 25% recycled beach plastic for the world’s #1 shampoo brand, Head & Shoulders. The first 150,000 bottles will be available in France this summer, making it the world’s largest production run of recyclable shampoo bottles made with beach plastic, and a major step in establishing a unique supply chain that supports a new plastics economy.
Working directly with NGOs and other beach cleanup organizations, TerraCycle sources the shipments of rigid plastics collected through beach cleanup efforts, capturing these materials for recycling for the first time, at no cost to participants. TerraCycle’s partnership with SUEZ tackles logistics (collection and shipment) and processing (separation and material pelletization) of these mixed plastics so they can be used as recycled raw material.
The scale of the beach plastics project focuses on the goal of incorporating more post-consumer recycled content (PCR) across other P&G brands and globally, inspiring other world entities to do the same. P&G has been using PCR plastic in packaging for over 25 years, last year using over 34,000 metric tons, and its Hair Care division is projected to see half a billion bottles per year include 25% post-consumer recycled content (PCR) by the end of 2018.
Of the more than 300 million tons of new, virgin plastic produced globally per year, it is estimated that up to 129 million tons (43 percent) of the plastic used is disposed of in landfills; in the United States, the EPA’s most recent report places the plastics recovery rate for recycling at 9 percent.
But the benefit of putting forth the resources to divert plastics from landfills and create a market for them in the value system is many-fold. Approximately 10–20 million tons of plastic end up in the oceans each year. These include microplastics, which result in an estimated $13 billion a year in losses from damage to marine ecosystems (not to mention the severe degradation to natural capital suffered by animals and their habitats) and financial losses to fisheries and tourism. If things don’t change, we are projected to see more plastics than fish in the ocean by 2050.
Consumer product companies that make the commitment to put out products made from non-virgin raw material create circular systems that can be nurtured for sustainable growth. By rolling out their own sustainability efforts and taking the initiative to foster new infrastructures, manufacturers and brands connect with consumers and drive the shift towards a new plastics economy.