SABIC: The Recycled Plastics Market Faces Two Major Challenges

Growing global focus on environmental sustainability is driving a boom in the recycled plastics market, which is set to grow rapidly, Janardana Ramanujalu, vice president and regional head of South Asia and Australia at Saudi Basic Industries Corporation (SABIC), said in a recent interview. However, there are still problems with the cost of raw materials and the consistency of certification.

"The global recycled plastics market is expected to grow from US $27.9 billion in 2021 to US $43.5 billion in 2026," Ramanujalu said. The strong growth in global demand for recycled plastics over the next five years is underpinned by advances in recycling technology and a greater awareness of the environmental benefits that recycled plastics offer." He believes the upward trend is being driven by both government and business.

Ramanujalu believes that despite the rapid increase in recycled plastic capacity, it is still not enough to meet demand. Raw material shortages are common, and Ramanujalu noted that new sources of raw materials will be necessary to sustain the industry's growth as demand continues to grow. One alternative source of recycled plastic that is currently being explored is ocean-bound plastic, the part of plastic that has not yet made it into the ocean but will if it is not collected. Mr Ramanujalu said an estimated 8m tonnes of plastic worldwide ends up as sea-heading plastic each year, accounting for 80 per cent of Marine litter, making it a relatively untapped source of post-consumer raw material.

In addition to the source of raw materials, consistency in the certification of recycled plastics across countries is another ongoing challenge for the recycled plastics industry. Ramanujalu says this could be a barrier to encouraging the adoption of plastic recycling. Because it may cause customer confusion and affect perceptions of the reliability of certification standards. Even the definition of seaworthy plastic varies from certification body to certification body. In addition, the economic viability of chemical recycling and its associated certification costs can also create obstacles for recyclers, especially small companies, Mr Ramanujalu said. The cost of adopting chemical recovery infrastructure and technology can be high with no immediate financial returns, while market share remains limited compared to raw plastics.