Plastics : The new Challenges in the Plastic Industry

1. Environmental pressure and sustainability:

Perception of the plastic products:

• Plastic doesn't decompose
• It breaks into microplastics that pollute the ocean and the soil
• That brought the issue to the public attention.

What are the repercussions?

• People start avoiding plastic packaging
• Companies like Unilever, Nestlé committing are now committing to reduce plastic
• Eight millions tons of plastic enter oceans yearly
• Microplastics that are found in food water, human blood

What Industry efforts in that regard?

• Design for recyclability (single-material packaging)
• Use recycled content (rPET, rHDPE)
• Reduce plastic use overall
• Develop biodegradable alternatives

rPET (Recycled Polyethylene Terephthalate): recycled plastic from bottles and containers, remade into new packaging, textiles, or products.
rHDPE (Recycled High-Density Polyethylene): recycled thick plastic from milk jugs, detergent bottles, and pipes, reprocessed into new products.

2. Extended producer responsibility (EPR) regulations:

• Governments making plastic producers pay for end-of-life waste management.
• Producers in the EU must fund collection, sorting, recycling of their packaging
• India implemented a Plastic Credit System through which credits can be bought to offset plastic use
•  In Canada similar EPR schemes are getting rolled out province by province 

What are the hurdles that companies face?

• Higher costs: compliance fees, recycling infrastructure funding
• Complex tracking: must report all plastic produced and imported
• Penalties: heavy fines for non-compliance
• Suppliers must now factor EPR costs into pricing. 
• Products sold in EU and Canada face new compliance requirements.

3. Single-use plastic bans:

A lot of countries have banned or restricted single-use plastics:

• Plastic bags (thin films)
• Straws, cutlery, plates
• Styrofoam food containers
• Plastic cotton swabs
• Oxo-degradable plastics which is a conventional plastic with chemical additives that cause them to fragment into tiny pieces (microplastics) when exposed to heat, light, or oxygen

What are the potential solutions?

• Product redesign: switch to alternatives (paper, PLA, bagasse)
• Cost increases: alternatives often more expensive
• Performance issues: paper straws get soggy and need coatings for example

PLA (Polylactic Acid): plant-based plastic made from corn or sugarcane starch and is biodegradable only in industrial composters
Bagasse: the fibrous pulp leftover after crushing sugarcane to extract juice.

4. Recycling technology gaps:

Only 9% of all plastic is recycled. 

Why plastic is hard to recycle?

• Multi-layer packaging 
• Different plastics laminated together that can't be separated  
• Food residue, labels and adhesives can make recycling difficult 
• Virgin plastic is often cheaper than recycled plastic 
• Proper sorting needs advanced technologies to identify the different plastic types

The issues facing companies regarding recycling:

• Need to design products with recycling in mind, for example the use mono-materials (all PET, all PE)
• Chemical recycling that allows to break plastics down to molecular level is expensive and unproven at large scales
• The collection systems are in need of a better infrastructure in developing countries
• For  better sorting the new technologies need to be used (AI, sensors)
• The use of standardized plastic types can make recycling easier recycling

5. Shift to circular economy:

Design phase:

• Use recyclable materials only
• Avoid unnecessary colours, additives
• Design for easy disassembly

Collection of recyclables and processing:

• Use the deposit-return schemes (bottles, containers)
• Reverse logistics systems
• Advanced recycling facilities
• Apply quality standards for recycled materials
• Supply chain needs the collaboration of designers, manufacturers, retailers, waste managers and recyclers.
• Use the deposit-return schemes (bottles, containers)
• Reverse logistics systems
• Advanced recycling facilities
• Apply quality standards for recycled materials
• Supply chain needs the collaboration of designers, manufacturers, retailers, waste managers and recyclers.

Deposit-Return Schemes: you pay a small deposit when buying a bottled drink, when you return the empty bottle to a collection point

Reverse Logistics Systems: the process of moving products backwards through the supply chain, from consumer back to manufacturer for recycling, refurbishment, or disposal.

6. Bioplastics and alternative materials:

The industry pushing towards "bio-based" and "biodegradable" plastics that are very problematic.

• Bio(bio-based): is  made from plants or renewable sources instead of oil. 
• Biodegradable: they break down naturally using microorganisms

Types of bioplastics:

 
PLA (Polylactic Acid):

• Made from corn or sugarcane
• It only "biodegrades" in industrial composters (60°C+)
• It can contaminate regular plastic recycling
• It doesn"t provide a solution for ocean pollution

PHA (Polyhydroxyalkanoates):

• Made from bacterial fermentation
• It actually biodegrades in nature
• It is expensive and of limited scale
• It has performance issues (brittle, heat-sensitive)

Bio-PE: 

• It is a plant-based polyethylene
• Same as regular PE, the only difference is that it is a renewable source
• It doesn't biodegrade
• It has a lower carbon footprint
• The industry needs to be equipped with composting facilities
• The cost of bioplastics is higher than conventional plastic
• The performance of bioplastics is often inferior to traditional plastics
• Bioplastics constitute less than 1% of total plastics in the market.

7. Supply chain and raw material volatility:

Because plastic prices are tied to oil and gas prices, they are highly volatile and could be affected by:

• Supply chain disruptions, resin shortages
• Natural gas shortages
• Waste import bans, environmental crackdowns
• Container shipping costs

As a result it becomes hard to quote stable prices, and also companies can't pass all the added costs to their customers

8. Stricter quality and safety standards:

Regulators are cracking down on the use of harmful chemicals in plastics.

 
Key Regulations:

• REACH (EU): restricts thousands of chemicals including, Phthalates (plasticizers), Bisphenol A (BPA) in food contact, PFAS (forever chemicals)
• California Prop 65: forces the use of warning labels for harmful substances
• FDA (USA): food contact regulations is tightening
• SVHC List: contains a list of substances of very high Concern

What are the implications of these regulations?

• The need  to test plastics will add laboratory costs to the cost of the production 
• There is a growing challenge to finding alternatives to banned substances
• The amount of compliance and documentation paperwork has increased
• There risk of recalls or lawsuits is now higher

9. Consumer and brand perception:

Consumers want "Bio" alternatives, but the transition towards those alternatives is not that simple.

• 73% of consumers want less plastic packaging (Euromonitor)
• There is an increase of "unpackaged goods" and "refill stations"
• ESG investing penalizes "high-plastic use" companies
• The alternatives of plastic are more expensive
• The alternatives of plastic perform worse than plastic
• Plastic might actually be more sustainable because its lighter and causes less emissions when transported

ESG (Environmental, Social, Governance): a framework for evaluating companies based on their environmental impact, treatment of people, and ethical management, and not just financial performance.

ESG investing: considers environmental, social, and governance factors alongside financial returns when making investment decisions.

What are the steps taken by companies:

• Companies display the recycled content in percentages
• Companies opt for minimalist design that uses less plastic where possible
• Promoting the use of refillable systems and reusable containers
• Explaining why plastic is a better option in a lot of cases (food safety, durability)

10. Lack of global coordination:

Every country has different rules which makes international trade more complicated.

Examples of rules:

• EU: EPR (Extended Producer Responsibility), recycled content mandates, bans on single-use plastic
• USA: State-by-state patchwork (California strict, others are more lenient) 
• India: implementation of the plastic ban and the plastic credit system 
• China: waste import ban,  and the implementation of strict domestic regulations 
• Compliance complexity: companies must know the different rules of every export market
• Testing requirements: different standards (EU vs USA vs Asia)
• Labelling: Recycling symbols are different from country to country

11. Innovation that would help companies to adapt:

• Chemical recycling: it break plastic to monomers and into virgin-quality plastic
• Enzymatic recycling: bacteria and enzymes that consume plastic
• Pyrolysis: the process of heating plastic to create fuel or feedstock
• Barrier coatings: replaces multi-layer with mono-material coating
• Active packaging: a packaging that extends food shelf life and reduces waste
• Edible films: seaweed-based plastics which are biodegradable
• Blockchain: that helps track plastic through supply chain
• QR codes: that contains consumer recycling instructions
• AI sorting: can allows automated waste identification

Conclusion:

The plastic industry is in massive transition:

• From linear to circular economy
• From unregulated to heavily regulated
• From cheap commodity to specialized, compliant material