Solving the plastic problem is more than a global mandate—it’s an opportunity

Seventy years ago, manufacturers saw the dawn of plastics as a revolution. After all, plastics weigh less than comparable materials such as glass or metal, which can lead to cost reductions in fuel for transportation and raw materials for production. Plastics hold a coveted place in today’s manufacturing for reasons that range from purely economic—low cost for high volume, quality, and repeatability—to hygienic, as plastic medical devices are easily sealed and sterilized, eliminating cross-contamination.

Thanks to these amazing properties, plastic has become ubiquitous in daily life. Plastic is so omnipresent that traces of it are found in some of the most unexpected places, from the peak of Mount Everest to perhaps the most disturbing: inside the human gut.

But as consumers have grown smarter about the global and economic cost of plastic, companies can no longer fall back on its limited claims of value. Manufacturers are using too much plastic, and they know it.

So how much is too much plastic? In the past 40 years, global plastic production has quadrupled, with more than 8.3 billion metric tons of it now around the globe. That’s because the vast majority of plastic ever produced still exists on the planet. And if that production pace continues, in 30 years, there will be enough plastic waste “to double-bag the Earth,” Harvard Business Review reported.

This year hasn’t helped. Just as zero-waste trends started to pick up and more people began buying reusable containers and washable items, suddenly and unexpectedly the COVID-19 crisis hit, forcing consumers back into a plastic-dependent, single-use world. Across the globe, the COVID-19 crisis spurred a rapid expansion in the production of plastic products, including masks, gloves, hand-sanitizer bottles, protective medical suits, test kits, food takeout containers, and delivery packaging—all items central to the new, locked-down, hyperhygienic way of life. For example, people in Bangkok used up 62% more plastic in April than they did in 2019. With the market impact and new opportunities created due to the pandemic, the plastic market is expecting an accelerated growth in coming years. However, this current market opportunity for plastics—driven by the necessity for safety amid a pandemic—is also troubling for the future.

With such economic benefits, what is the problem with producing plastic? The main issue is in its waste: It is estimated that consumers throw away the equivalent of $100 billion (PDF, p. 15 and 25) of economic value in single-use plastic each year. Take, for example, plastic utensils: Many are used for mere minutes and then thrown away, eventually ending up in landfills. Less than 9% of plastic produced gets recycled globally. The rest ends up incinerated, thrown into landfills, or worse: The plastic pollution problem is affecting nature—in particular, the plastic contamination in the ocean.

Why does so little plastic waste get recycled?

In the short run, it’s because making virgin plastic is less expensive than recycling. Why?

• Virgin plastic is made from inexpensive crude oil. Raw material costs were already declining, but the 2020 collapse of crude oil prices caused a sharp fall in the price of virgin plastic, thus increasing its short-term economic appeal. At the same time, the cost of recycled plastics remains high due to inefficient recovery systems, and manufacturers in some areas are switching back to virgin plastic instead of using recycled product, thus increasing demand.

• Plastic recycling infrastructure is overwhelmed and inefficient. Since 2018, when China started refusing American plastic waste due to its high level of contamination, the US recycling industry has been overwhelmed, forced to send its waste to landfills or to other countries. As a result of this poor management, the United States is now the largest producer of plastic waste in the world. The plastic waste problem has reached a new level of urgency; more local plastic waste management and recycling facilities need to be built, and governmental action may be required.

• Plastic production is not standardized, compounding recycling inefficiencies. With traditional mechanical recycling techniques, it is impossible to mix different types of plastics or even different colors of plastics. For recyclers, it means collecting a lot of the same type of plastic and stocking enough of this one material for it to be worth recycling. For example, it’s really difficult to collect enough plastic forks to be worth the cost of recycling those forks; therefore, plastic forks are generally not recycled.

If there were more standardization—all plastic forks are the same plastic and the same color—then it would be easier to collect enough of those to be economically viable to recycle. In this spirit, initiatives such as the NextGen Cup and Beyond the Bag challenges are bringing major companies together at a precompetitive level to rethink widely used products such as paper cups and plastic bags. The goal is to make these items standardized so they can all be recycled—even if they come from different brands.

Why are manufacturers slow to act on solving the plastic problem?

Companies not yet convinced to eliminate their use of plastic run the risk of losing business to competitors that publicize their quantifiably greener practices, being fined for irresponsible management of single-use plastic, or discovering it’s difficult to raise capital because they’re still dependent upon plastic. Businesses are currently experiencing early instances of these pressures in the market.

That said, transitioning away from plastic—an inexpensive, versatile, durable, and familiar material—is not easy. Often, injection-molding machines and other plastic-creation equipment have been paid off, and investments in physical capital to support new materials and machinery can be hard to justify. That’s where internal leadership, such as CEO commitment, is critical.

There are consequences and costs to ignoring this difficult-but-necessary transition, and for those businesses ready to make the leap, there are excellent opportunities.

Although some solutions may come from regulatory actions—such as plastic bans popping up around the world—the most promising one is consumer power. Exasperated with their options, people around the world are demanding a change and voting with their wallets. And for manufacturers, this presents opportunities to respond to this new demand—and reap the following benefits.

• Reduce operational costs. French industrial architect and designer Philippe Starck partnered with Italian furniture manufacturer Kartell to design and make a chair using 100% recycled material sourced from Kartell’s own industrial waste. This is the first time that the furniture company used materials derived solely from the scraps of its industrial production, saving costs in raw materials and waste management.

• Build a competitive advantage. With one in three customers already choosing products with sustainability in mind, manufacturing companies could see increased potential revenue of $338 billion from new sustainable products and services, as well as the associated customer goodwill and loyalty that come from these offerings.

• Explore new investments. Earlier in 2020, Larry Fink, CEO of multinational investment management corporation BlackRock, wrote an open letter to CEOs that outlines a new important benchmark for investors: a company’s environmental, social, and governance (ESG) policies. Fink stressed the importance of a company’s use of energy and materials; workforce health, safety, and diversity; and business ethics, shareholder rights, and executive compensation policies. Bank of America Merrill Lynch analysts estimated that ESG funds will see $20 trillion of asset growth in the next 20 years.

It’s more than simply an opportunity for manufacturers; it’s is also a responsibility for them to begin transitioning away from plastic overuse. And manufacturers can take steps to help accelerate this profound and necessary change.

1. Employ alternatives to plastic materials

At the material level, manufacturers can take advantage of regenerative materials and other alternatives to fossil fuels that are coming on the market. For example:

• Mushroom fibers are replacing Styrofoam.

• Fish skin and algae are replacing plastic packaging film.

• Bioplastics and compostable plastic materials—designed by companies such as Arkema and SABIC—are being used as replacements in a number of industries, including automotive and electronics.

There are many opportunities for companies to start implementing these modern and sustainable materials. And there are benefits: Some companies using such materials earn certifications they can use to promote their products on Amazon’s Climate Pledge Friendly channel, where customers can buy more environmentally friendly items.

2. Adopt the circular model

At the business-model level, some companies are rethinking the design and lifecycle of their plastic products and adopting the circular model. For example, the Loop shopping platform is reimagining grocery and product packaging. The company is driving the creation and use of reusable, returnable packaging from well-known brands; for example, people can buy Haagen-Dazs ice cream in stainless-steel pint containers and Dove deodorant in glass tubes.

The Ellen MacArthur Foundation, which is helping accelerate the transition to a regenerative circular economy, estimates that converting just 20% of plastic packaging to reusable, circular models is now a $10 billion business opportunity. And a number of well-known companies are currently strategically partnered with the foundation, including IKEA, SC Johnson, Philips, and BlackRock.

3. Implement new technology

Technology is also evolving to help the industry transition. Design tools such as Autodesk Moldflow software helps designers more easily include alternative materials throughout the design process, see the impact of each material on the product’s recyclability, and forecast the energy required to manufacture the item. Autodesk Fusion 360 gives designers the ability to more easily recognize the value of, and use, select sustainable materials such as Arkema’s Rilsan PA11, a high-performance polymer of 100% renewable origin.

Other technologies, such as artificial intelligence (AI), can be leveraged throughout the product lifecycle. For example, AMP Robotics is using AI and robots in waste-management facilities to quickly distinguish materials that can be recycled from those that can’t, ultimately increasing recycling rates.

There is no time left. Projections show that if action isn’t taken to mitigate carbon emissions now, human society will miss the 1.5°C Paris Agreement maximum-temperature increase target by a wide margin. Plastic waste is already contributing in major ways to global warming, from producing it using fossil fuels to it ending up in ecosystems at the end of its useful life. Current estimates are that plastics production will generate 15% of global emissions by 2050, the equivalent of all the world’s forms of transportation today. Additionally, if no action is taken, there may be more plastic than fish (PDF, p. 14) by weight in the ocean by 2050.

Manufacturers have a big role to play, but consumers will have a significant and measurable role to play, too. Consumers can continue to put pressure on brands to demand change in their use of plastic. In 2018, Greenpeace called out 10 major brands for their massive contributions to plastic pollution. As a result, all those companies have now adopted sustainability pledges and advanced public engagement toward reducing their plastic use or using more recycled content. In 2019, Trader Joe’s announced that it will be pursuing more sustainable packaging—after a Greenpeace petition with nearly 100,000 signatures took the chain to task.

The nonprofit organization Break Free From Plastic recently released its annual brands audit of the world’s top polluters for 2020. With a little research, consumers can use the data to help them make more informed choices about the brands they want to support.

During her opening video of the Circularity 20 conference, Dame Ellen MacArthur said, “The global commitment [is to] eliminate the plastic we don’t need, innovate for the plastic we do, and make sure that that [plastic] is cycled.” MacArthur acknowledges that, yes, plastic is needed—especially for medical purposes—but it has to stay within the economy, where it has a real value, and out of the ocean.

Humans have the collective intelligence to design plastic out of daily life—and, ultimately, out of the ecosystem. For manufacturers, reinventing their business models to cut out plastics is a valuable opportunity to potentially capture billions of dollars offered by the circular economy while also contributing to a solution for one of the world’s largest—and most urgent—problems.