INDUSTRY INSIGHTThought Leadership

Unveiling the path to a plastic recycling revolution: The GCC’s quest for sustainability and circular economy

By Saima Musharraf and Onur Dursun, Senior Consultants, Chemicals & Materials Growth Advisory, Frost & Sullivan

Plastic serves a wide array of purposes across various sectors, from household items to industrial operations, yet its disposal poses significant environmental threats. By diverting plastic waste away from landfills and incinerators, the recycling initiatives play a crucial role in conserving resources and preserving the environment. Despite the global shift towards sustainability and the growing importance of plastic recycling, GCC countries such as the Kingdom of Saudi Arabia (KSA), the United Arab Emirates (UAE), and Oman are still in the early stages of developing their recycling infrastructure.

While these nations are key players in plastic production, their efforts to combat plastic wastage fall behind those of the United States and Europe. Nonetheless, amid rapid economic growth and urbanization, there is optimism for change as the region acknowledges the need to address plastic pollution through increasing awareness and ambitious sustainability initiatives to embrace a circular and responsible approach to plastic usage. This insight provides an overview of the current state of plastic recycling in these countries, shedding light on the landscape, challenges, and promising initiatives.

The KSA, UAE and Oman account for more than 75% of the GCC population. With economic development in these countries, the usage of plastic and subsequent generation of waste also account for a major share in the region. With per capita plastic waste generation ranging between 130 to 150 kg annually, the UAE and Oman far exceed the European average. The UAE currently produces solid waste between 1.7 to 1.9 kg per capita per day. The government is setting goals to cut down on per capita solid waste generation, to about 1.2 to 1.0 kg per day by 2030.

Plastic recycling in the GCC

Annually, the UAE alone churns out more than a million tons of plastic waste, the bulk of which meets its ignominious end in landfills. Stemming from diverse sources such as construction and demolition activities, municipal solid waste management, and the industrial and commercial sectors, this plastic deluge underscores the pervasive nature of the crisis. Municipal solid waste, in particular, emerges as a significant contributor, comprising 20 to 25% of the total plastic waste stream and encompassing an array of plastic materials. In the UAE, only 10 to 15% of the total plastic waste is diverted for recycling.

The KSA is the largest plastic waste generator in the GCC, with around 3 million tons of plastic waste generated every year, with the majority share coming from municipal solid waste. The KSA’s plastic recycling capacity is large; however, it mostly caters to less contaminated post-industrial plastic waste, as the infrastructure for sorting the post-consumer waste is sub-optimal.

The primary source of waste feedstock in the GCC is the industrial sector, which includes items like pipes, drums, and bottles, which are typically less contaminated compared to household waste, making them more suitable for recycling. However, a significant challenge lies in waste segregation at the source, particularly in households. Due to a lack of awareness, various types of waste are often mixed, leading to high levels of contamination, which makes it difficult and costly to segregate economically. Moreover, there are limited operational material recovery facilities in the GCC, further complicating the sorting process and exacerbating the challenge of waste management. In the UAE, recoverable materials are collected separately; however, the volumes are quite low and do not significantly contribute to the overall value chain of plastic recycling.

Oman generates more than half a million post-consumer plastic waste in a year, of which only 8 to 10% is recycled. The country lacks the waste segregation infrastructure, as it has only one operational material recovery facility. Source segregation is the key challenge, which stems from a lack of consumer awareness and education regarding the categorization of various types of plastics and a lack of infrastructure. As a result, plastic waste is contaminated, particularly with food waste, where cleaning and segregating incur substantial costs and labor.

The relatively low market value of recyclates presents a considerable challenge to economic viability of the plastic recycling value chain. This financial strain and scarcity of segregated plastic waste have compelled numerous plastic recycling facilities to cease operations in the past. Addressing these intertwined issues requires a concerted effort to enhance public awareness, improve waste segregation infrastructure, and explore innovative approaches to boost the economic sustainability of plastic recycling initiatives in Oman.

Mechanical recycling is the primary plastic waste diversion approach in the GCC. Approximately 15 to 20 large-scale mechanical recycling facilities operate at considerable capacity. Additionally, many small-scale recyclers operate informally to produce downcycled grades of recyclates at poor margins. This contrasts sharply with that of European countries, where plastic recyclates find demand in upcycled applications such as consumer goods, automotive and electronics. The disparity underscores the need for stricter regulations and enhanced infrastructure in the GCC countries. Implementing stringent measures would not only improve the quality of plastic recycling but also unlock the full potential and value of plastic waste within the region.

Waste management practices

The KSA, the UAE and Oman present a promising yet largely untapped market potential in plastic recycling. By harnessing advanced technologies and fostering partnerships between the public and private sectors, the countries can not only mitigate environmental challenges but also create new avenues for economic growth and job creation in the burgeoning circular economy sector.

In line with Vision 2030’s ambitious objectives, the KSA’s recycling sector is poised for significant growth and innovation. With the target of achieving 87% waste diversion, there is a clear opportunity to not only boost recycling rates but also to produce top-quality recyclates tailored for premium applications. This is particularly crucial given the KSA’s expanding manufacturing sector and its increasing emphasis on sustainability. As industries prioritize eco-friendly practices, the demand for plastic recyclates for various applications, especially in food packaging, is set to soar. This presents an exciting prospect for the recycling industry to not only meet these demands but also to contribute to the KSA’s environmental goals and economic development.

In line with their goals of achieving 100% and 80% waste diversion, both the UAE and Oman governments have unveiled plans for large-scale waste-to-energy plants. These advanced facilities are designed to transform municipal solid waste into electricity, thereby decreasing reliance on landfills and cutting down on greenhouse gas emissions. One notable example is the Dubai Municipality’s Waste-to-Energy Project, aiming to process around 1.9 million tons of waste annually and generate up to 185 megawatts of electricity. This initiative mirrors the UAE’s dedication to diversifying its energy sources and promoting environmental sustainability.

In Oman, the Barka Waste-to-Energy Plant, announced in 2019, is set to process up to 4,500 tons of municipal solid waste per year, producing approximately 130 to 150 megawatts of electricity. By converting waste into energy, Oman aims to reduce environmental pollution, lessen landfill reliance, and bolster renewable energy production.

In the pursuit of sustainable waste management, the balance between waste-to-energy technology and recycling emerges as the critical strategy, ensuring the conversion of non-recyclable waste into valuable energy while advocating for recycling to keep materials in the circular economy.

Prioritizing recycling promotes a circular solution that prolongs the lifecycle of materials, and when combined with waste-to-energy, fosters a comprehensive waste management system that upholds both environmental sustainability and energy recovery. We see a good example of such strategy with KSA. Even though the National Waste Management master plan is still not out, the high-level waste diversion targets of achieving 40% recycling, 31% composting, 16% waste-to-energy of all municipal solid waste by 2035, underlines the KSA’s approach of balancing recycling with waste to energy plants.

Extended Producer Responsibility (EPR)

Extended Producer Responsibility (EPR) is a policy approach that shifts the responsibility for the end-of-life disposal of products from municipalities and consumers back to the producers. This paradigm aims to incentivize manufacturers to design products that are easier to recycle, reuse, or dispose in an environmentally friendly manner. This shift was pivotal in developing Europe’s advanced waste management infrastructure, compelling companies to integrate sustainability into their product design and packaging. The implementation of EPR has been instrumental in reducing waste, enhancing recycling rates, and fostering a circular economy in Europe. By placing the responsibility of waste management on producers, EPR has not only significantly reduced the environmental impact of products but also propelled the development of more sustainable production and consumption patterns across Europe.

In the context of the GCC, EPR schemes and regulations will play a key role in getting multi-national consumer goods producers involved in waste management and recycling industry development. Multi-national consumer goods producers are already well-versed in such applications due to their experience with EPR schemes in Europe, and they have their own global mandates to reach sustainability goals. Some of these companies have already started to explore possibilities to get involved in the management of the waste caused by their own products. The major driver of EPR schemes will be government regulations. We have seen the first initiatives being introduced by Be’ah of Oman regarding the management of car batteries and tires. Furthermore, the UAE government is expected to introduce EPR schemes by 2025-26. Lastly, the EPR Schemes are expected to be a part of the National master plan for waste management that is expected to be completed by 2025. This will be significant milestone for the GCC governments to further enable the waste management and recycling industry and the push toward circular economy.

Final thoughts

Meeting national targets of waste diversion and recycling will need tremendous efforts from the government as well as private entities. This creates a never-before-seen opportunity for investors in the region as well as international investors to tap further into plastic waste management as well as the sustainability efforts of the GCC nations.