A recent study conducted by IHS Markit focused on the growth of recycled materials and how it might impact demand for products. The study found that currently, even with demand for recycled resin at 10 percent, if plastic consumption continues at the same rate, plastic waste will grow from 6.5 billion to over 10.5 billion metric tons by 2030.
"In their base case, which assumes incremental improvement in plastics recycling infrastructure by 2030, the demand for recycled resin could go from 10 percent to 12 percent," said Bob Patel, CEO and chairman of the management board for LyondellBasell. "In another, more aggressive case, which assumes rapid advancement in recycling technology and infrastructure, the amount of recycled material could dramatically expand to approximately 27 percent."
For this outcome to be realized, Patel noted several pieces in this complex puzzle have to fall into place very quickly.
"And while there's no doubt that change is taking place at a faster rate than any time in history in our industry, can it go fast enough to realize the aggressive case?" he asked.
In a discussion titled "Impact of Sustainability Trends on Global Markets" at the World Petrochemical Conference 2019 by IHS Markit, held recently in San Antonio, Patel outlined some very high hurdles the industry must clear to address plastic waste.
"First, economics and trade can rapidly change," Patel observed, adding that the U.S. typically experiences economic recession every nine to 11 years.
"This current expansion is in its 11th year," he said. "I can't predict when or how the economy will change, but we know from history it is not a question of if, but when. Just in the past several years, historical trade patterns have been disrupted. That means news of new trade deals emerges nearly monthly."
Second, Patel said, governments are t aking action to implement policies with goals of reducing plastics waste, but these policies are often crafted without a broad understanding of the available alternatives or the limitations of waste collection, sorting and processing infrastructure.
"For example, in 2016 in the United States, 50 percent of polyethylene material purchased for recycling was of unsuitable quality for processing," he said.
Finally, current technologies and infrastructure are limited and unable to handle the significant volume in an economically efficient way.
"And while chemical recycling holds immense promise and meaningful work is being done, including by companies like ours, this technology is really still in its infancy," he said.
Four pillars
In addition to his responsibilities with LyondellBasell, Patel also serves as the vice chairman of the Alliance to End Plastic Waste.
"Our aim with the alliance is not to solve this problem just within our industry, but to add a cross-value-chain effort of brand owners, retailers, converters, waste handlers and, of course, chemical companies," he said.
Patel explained the alliance is supported by a strategy of "four pillars": to catalyze investment in enhanced waste infrastructure and thereby prevent plastic from reaching the environment; to innovate new materials, designs, technologies and business models based on science and economics; to engage and collaborate with governments businesses and consumers to drive effective solutions; and to develop solutions to address and clean up areas of existing plastic waste in the environment.
"This is a multi-pronged approach and one that cannot wait 10 years until we innovate. We must innovate quickly, and we must implement other solutions more rapidly -- and sooner," Patel concluded.
John Page, vice president of oil, mid-downstream and chemical consulting for IHS Markit, moderated the discussion.