IHS Markit: Plastics industry must spend billions on recycling in decades to come

Companies are pledging to use more recycled plastics. Consumers are saying they want to see more recycled plastics being used.

But there's sometimes a difference between ambition and reality.

Traditional mechanical recycling is expected to skyrocket between now and 2050, but that technology will still not be enough to meet expected demand for recycled plastic.

"Chemical recycling," data and services firm IHS Market said, "will be needed to close the gap."

Mechanical recycling is expected to grow from today's 20 million metric tons per year to 112 million to 200 million tonnes by 2050, depending on different potential scenarios IHS Markit sees.

IHS, which provides information, analysis and services to industries and markets, has a new Circular Plastics Service to help transition from a linear to a circular economy.

"Ambitious goals for attaining a circular plastics economy could be achieved by shifting a portion of the future investment required to meet the growing demand for plastics towards advanced recycling methods," IHS reports.

IHS estimates $1.5 trillion spending is needed in global plastics to meet growing consumer demand for plastics between now and 2050. And current market conditions suggest modest progress toward a circular plastics economy primarily through a reliance on mechanical recycling.

But IHS believes more than $300 billion of that total $1.5 trillion can be redirected to recycling — both mechanical and chemical — over the next three decades to help "the goals of an aggressive circular economy case."

A couple of competing forces are at work here. Global demand for plastics only will continue to grow as emerging economies evolve and global living standards improve. While developed economies search for answers to handle single-use plastics beyond disposal, expanding economies will seek to use more and more of that material.

"Our analysis indicates that the situation is likely to become urgent," said Anthony Palmer, vice president of IHS Markit, in a statement. "At the heart of the matter is that the widespread benefits associated with the use of plastics contrast sharply with the way the world manages its end-of-life disposal — the so-called 'Plastics Dilemma.'"

Plastics represent about 12 percent of the world's total municipal solid waste stream. With that waste stream expected to increase from 2.1 billion tonnes in 2020 to 3.5 billion to 3.7 billion tonnes in 2050, IHS said global plastic waste will increase to more than 425 million tonnes by then. That's an increase of 170 million to 190 million tonnes in 30 years.

Plastic consumption mostly will increase in areas including Southeast Asia, India and Africa and outside of North America, Western Europe and China, IHS said.

"This presents formidable logistics issues that will challenge overall efforts to recover and recycle plastics, since these regions are quite distant from the manufacturing centers of plastics production associated with the current produce and export model," IHS said.

With company recycling targets, regulations and voluntary commitments becoming more commonplace, IHS' Palmer said the plastics industry "will need to adapt its investments accordingly."

IHS estimates mechanical plastic processing could plateau at 14 to 22 percent of global demand by 2050, depending on advancements in sorting, design-for-recycling efforts and a process called selective solvent dissolution/precipitation. SSDP uses solvents to dissolve selected plastics from a co-mingled stream before reprecipitating the material.

"The petrochemical industry's core competency — turning raw materials into useful materials by chemical transformation — is being tested in new and profound ways," said Robin Waters, executive director of plastics planning and analysis at IHS. "Closing the circularity gap will require an unprecedented global alignment and adoption of actionable strategies including new business models, new alliances and logistics capabilities. Redirecting classical investments into new recycling efforts will be a critical part of this effort."

IHS estimates chemical recycling, where plastics are broken down to the molecular level, has about 1.2 million tonnes of capacity currently. But technology improvements could increase that number to 44 million to 190 million tonnes by 2050, according to different models studied by the firm.

Chemical recycling, such as pyrolysis using high temperatures with a lack of oxygen, is a proven technology. What's not been proven is the widespread commercial profitability of that approach.

"IHS Markit expects step-change improvement in reactor design, catalysis and product processing to enable large-scale implementation of chemical recycling," the firm said. These improvements could mean that chemical recycling plants could expand significantly in capacity compared with current designs.

"Technology advances would allow significant plant capacity scale-up — for example, from 500-3,000 metric tons per day vs. the 50-300 metric tons per day that are common today and where pyrolysis technology is cost-prohibitive," Jonny Goyal, IHS associate director of technology and infrastructure, said in a statement.