INDUSTRY INSIGHTThought Leadership

Reinventing plastic for a Circular Economy

Plastic recycling represents a complex challenge across the entire plastic value chain. Stakeholders from  petrochemical companies, to brand owners and recyclers are taking actions with the willingness to develop a sustainable plastic recycling ecosystem.

From a market perspective, the turnover of the global plastic market is estimated at €300 billion whereas the market size of recycled plastics can barely reach €20 billion. The recycling rate of plastic is still very low compared to other materials. The plastic recycling sector remains very fragmented and relatively immature, which is holding back recycling efficiency, quality and profitability.

The whole value chain of plastic recycling needs to adjust its economic equilibrium, treatment capacities, and innovative technologies to embrace a new qualitative leap. It requires an urgent response to address the challenges linked to the low oil market price, the limited efficiency of the collection system, the negative perception of the consumer towards recycled packaging products and last but not least, the lack of regulatory frameworks and standards restricting the intake of recycled plastics.

However, manufacturers are starting to rethink their production methods. Demand for recycled plastics from large brand owners and industrial buyers is increasing, driven in some parts by sustainability targets, change of regulatory frameworks and customers’ desire for environmentally-friendly products. Forecasts predict that the market for recycled plastics is expected to grow by 7% per year by 2025, with a faster pace compared to the increase of virgin plastic production

Screenshot 2021-07-11 19.43.59

Veolia is deeply rooted in this collective action. It currently operates more than 200 material recovery facilities, 32 mechanical and three chemical plastic recycling plants, to produce more than 500,000 tons of plastic resin yearly. With this capability, its teams across the world work hand in hand with key players in the plastic industry. Together, they are reinventing the plastic market by making it more sustainable, from the delivery of high quality recycled plastic resins to the eco-design of new, more sustainable products.

To confirm this ambition, Veolia included plastic recycling in its business objectives as it plans to significantly increase its turnover in this activity to reach €1 billion in 2025.

Investing in technologies and recycling capabilities are key to improve the quantity and the quality of the recycled products. Nevertheless, a cost-efficient solution to collect recyclables at source remains fundamental to build a sustainable plastic recycling ecosystem.

Incentivize eco-friendly behavior with RECAPP

In the United Arab Emirates, Veolia has launched RECAPP. It is the first mobile application that provides door-to-door collection services for recyclables including plastic bottles and aluminium cans. With this free of charge service, environmentally-friendly behaviours are encouraged with a system of points and vouchers. Major players from the whole value chain such as Agthia Group, Borouge, Carrefour, The Coca-Cola Company, Nestlé, Unilever and Pepsico, are supporting this initiative.

Launched in November 2020, the initiative gathers today a community of more than 4,000 users based in Abu Dhabi and counts more than 19,000 kg of recyclables collected that will be recycled. In daily touch with the users, RECAPP is proud to notice a deep interest and involvement of its community toward recycling efforts.  RECAPP empowers each individual in their recycling process by offering an easy and efficient way to schedule pick-ups for recyclable material such as plastic bottles and aluminum cans. It also offers a reward program to incentivize recycling among its members. “The more you recycle, the more points you win” is the core principle of RECAPP. RECAPP brings along a solution to challenges faced as residents and citizens strive to partake in the circular economy and transition to more sustainable households

Veolia’s journey is about collection, technological innovation, but first and foremost a shift towards a sustainable business model.

Decoupling the price of recycled resins from virgin plastic is key for the development of a healthy plastic recycling industry that produces quality products on the long term and that supports a growing demand.

Since 2019, there are encouraging signs coming from the PET market as the price of the recycled food-grade PET resin started being decoupled from the fluctuation of the virgin resin and the oil price.

This trend was made possible because of the environmental commitments taken by petrochemical companies and  brand owners to increase their recycled content. At the same time, recyclers managed to provide high quality products in line with the stringent specifications set by brand owners.

This cooperation across different sectors of the value chain enabled the emergence of a sustainable PET recycling ecosystem with a business model that can be extended to other plastic resins.Ronald Richa, Plastic Recycling General Manager at Veolia Middle East said “Plastic recycling is the cornerstone of today’s ecological transformation. For this ecological transformation to succeed, players across the plastic value chain must join their efforts.”