Environmental regulations have been on the rise alongside increasingly strong societal demand for eco-friendly consumer goods. Even though they are responsible for polluting oceans, emitting CO2, and filling up landfills, plastics are at the heart of this transition ; worldwide plastic production is projected to continue to rise by 3.2% annually until 2027.
We have seen steady growth of the recycling industry in developed countries over the years and performance is only getting better, too. In addition, bioplastics offer new, different possibilities. Although they currently represent just 2% of the world market in terms of value, this is quickly increasing. However, these materials are not without their own, unique challenges.
Companies are therefore asking themselves how best to tackle these issues. Recycling, bio-based materials, and biodegradable products offer solutions. To decide on their approach and strategy, manufacturers are thinking about the problem in three dimensions while considering the side effects and the profitability of each. Olivier Jan and Erwan Harscoët, engineers and consultants at Deloitte, help companies decide where to start.
A few years ago, environmental concerns only seemed associated with ‘corporate social responsibility’ and companies were often labelled as greenwashing. Is that still the case ?
Olivier Jan : The world has changed. Not only are regulations now stronger in the packaging industry, but companies’ license to operate are at risk. Nowadays, a business can collapse for social or environmental reasons if consumers and stakeholders believe its activity is having hazardous consequences on the planet or its populations. The entire consumer goods sector has been particularly impacted. Decision-makers are paying close attention to consumers’ new expectations and making efforts to not only meet those expectations, but also get ahead of them.
As a consequence, business structures are changing, leading to make commitments being made centrally and a general increase in competency, with specialist discussions happening. Given how urgent it is to make these decisions, people are also becoming more aware that these choices are complex and require multi-faceted perspectives.
The complexity of the subject seems to be a strategic and intellectual challenge for all the stakeholders we have spoken to. Can you tell us more about the specifics ?
Erwan Harscoët : For most businesses, their environmental concerns take the form of carbon footprint. But this involves different issues, including dependence on fossil fuels and CO2 emissions, of course, but also the impact on biodiversity, consumption of natural resources, various kinds of pollution, and so on. All these aspects are interconnected and not always compatible with one another. For example, the use of bio-based materials can lead to deforestation or reduce availability of food sources.
For plastics, the most important issue is end-of-life. And the first thing that makes this more complicated is the variety of polymers that are used, which complexifies their end-of-life.
Secondly, there are multiple, large families of solutions and ‘bio-based’, is not the most widely used. It is worth noting that in most bio-based applications, a bio-based product will not actually have much impact on its end-of-life management. On the other hand, biodegradability is important. It is a useful solution for certain products, such as small, lightweight pieces of packaging made from soft plastic that are hard to collect and easily fly away in the wind. The advantage in using biodegradable materials here is that if their end-of-life is badly managed, they will still break down by themselves.
Moreover, for products likely to end up in the ocean, being biodegradable is an ideal solution. This is especially true in the many countries where rubbish collection is non-existent or informal (with people scavenging for certain waste products in landfills). For example, resins made from PHA (polyhydroxyalkanoates) break down quickly and effectively in seawater. But, if we want to make a product biodegradable in this way, other characteristics will be lost – specifically, the protectiveness of the plastic. Weighing up different kinds of performance in combination with economic factors is the third complicating factor.
Do we necessarily have to decide between different kinds of performance ? What about thinking outside the box ?
EH : We can try to think differently by changing perspective. For example, you could only market plastics that are valuable enough for people to be interested in collecting and recycling them, like bottles made from transparent PET.
If we look at Germany, some stakeholders are calling for the return of the container-deposit scheme, which was, after all, an old circular economy approach. But some actors in the industry are not in favor of that approach – now, with plastic bottles going into channels for selective sorting, enough value is added for the recycling of all plastic packaging to be cheaper.
OJ. For the argument to work here, you have to consider the entire value chain and take all costs into account, as well as scale effects. The same logic applies to bioplastics production. We need new technologies to develop new kinds of materials, but we also have to question the entire value chain. This goes from the new production processes for bio-based resources, and whether they meet certain environmental and social criteria, to the end-of-life phase of these new materials, and the ways they could be collected and recycled. Some market segments that have greater means at their disposal or are under more regulatory pressure – such as food packaging – can lead the way for other sectors.
With recycling, for instance, beverage manufacturers play a particularly significant role. This industry is very prominent and was the first to be criticized for playing a role in marine pollution. Consequently, it was the first to invest in developing new recycling technologies that benefitted other segments of the packaging sector and other products. Similarly, depolymerisation technologies that are currently in development will also advance the recycling capabilities for plastic containers used by other manufacturers, and synthetic textiles, which at present cannot be recycled.
Do businesses understand these economic arguments ?
OJ. There is much variation from one sector to another. We see a real difference in maturity between manufacturers, with new arrivals sometimes showing a certain naivety. For example, the textile industry has recently become a lot more committed. More announcements are being made, either about making products from natural resources (bio-based materials) or about the circular economy (recycled materials). But the companies that use packaging like plastic bottles, are now going to be making every effort to collect them and use the recycled material for their own products. So, the textile industry is going to be running short on recycled materials if they want to scale this approach up, and they will have to develop their own channels.
The different arguments, industries and approaches (recycling or biodegradable products) can all co-exist. That being said, they aren’t always interconnected. But they can be, especially in the case of companies that know and understand each other. This could lead to bio-based materials for which the end-of-life has also been factored into the equation, or manufacturers from the same sector that bring their products in line with one another, opting for simpler components, using only recyclable materials, etc. This has been observed in the consumer goods sector and should carry over to other markets, such as the automotive industry.
