Lightweight, versatile and durable, plastic is everywhere in modern society. Yet one of plastic's greatest strengths is also its greatest weaknessit’s not degradable and a large volume (88%) is sent to landfills, incinerated or lost in the environment. Only about 12% gets recycled each year. If demand for plastics follows its exponential growth trajectory, global plastics-waste volumes would grow to 460 million tons per year by 2030 (from 260 million tons per year in 2016), pushing annual emissions from the plastic lifecycle to 1.34 billion tons of CO2e by 2030 (from 860 million tons in 2019), what is already a serious environmental problem to a whole new level.

This, is the plastics paradox!

Investment Thesis Fit

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Climate Change Pillar(s)

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1/ What is plastic?

Derived from the Greek words, πλαστικός, plastikos (meaning fit for molding) and πλαστός, plastos (molded), the term plastic refers to a material’s ductility during manufacture. This property allows the material to be cast or shaped into numerous forms for a variety of uses. According to the American Chemistry Council, plastic is, a “type of synthetic or man-made polymer; similar in many ways to natural resins found in trees and other plants”.

Today, there are more than 30 different plastic polymers, which combined with a thousands of different additives gives high quality performance plastic materials. 97-99% of these plastics derives from fossil fuel feedstock while the remaining 1-3% comes from bio(plant) based plastics.

The seven primary types of plastic

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2/ Plastic value chain

The plastics value chain includes the full range of activities, which are required to bring a plastic product through the different phases of extracting raw materials, production, distribution to consumers, and final disposal after use (Figure below). While plastic moves from one stage of the chain to the next, it is expected to gain value. Yet the value chain of plastic remains archetypically linear with less than 20% of plastics re-entering the value chain and huge amounts of plastics ending up in terrestrial and marine environments each year, exposing both the environment and marine life to existential problems. In addition, the diverse nature of the different plastic products, different uses and treatment routes at the end of its lifecycle increases the complexity of the value chain as well as the number of diverse stakeholders including chemical and plastic manufacturers, consumer goods companies, retailers, waste management companies, and recycling technology companies.

Plastic value chain: from craddle to grave