world in transition
Plastic wrap
Plastic has become a ubiquitous material thanks to its amazing properties. Due to its detrimental impact on both the environment and health, however, governments and regulators are starting to take action.
The popularity and prevalence of plastic is down to its resilience and affordability. It is lightweight in nature, high strength-to-weight ratio, water resistant, insulating, cheap and easy to mass manufacture. It has revolutionized packaging and preservation and will continue to play a key role in construction, automotive and electronics applications going forward.
Plastic is on its way to become a genuinely regulated material
Unfortunately there are two major issues with plastic. First, the production of plastic is largely reliant on fossil hydrocarbons which are nonrenewable resources. Second, unlike other materials, such as metals or paper, plastic recycling remains marginal and around 79% of plastic waste sits in landfills.
Consequently, governments are starting to crack down on its use. The EU, the US, the UK and China have all announced recent measures designed to curb the use of plastic products and packaging. Plastic is on its way to become a genuinely regulated material.
Government policies alone may take time to have a material effect but when combined with an evolution of consumer purchasing behaviour and corporates’ actions to curb plastic usage, the single-use plastic value chain is starting to face serious challenges and demand headwinds.
Global plastic production by industrial sector, 2015
Source: UN, adapted from Geyer, Jambeck, and Law, 2017.
This trend will create both winners and losers. For example, the pulp and paper packaging industry is well positioned to benefit from a gradual transition out of plastics, especially pulp producers which also control forestry assets.
Greater regulatory pressure will also present a boost for plastic alternatives. Bio-plastic is made from renewable feedstock and is now a reality. It is a small sector at this point but has great potential for exponential growth in the wake of this regulatory crackdown.
The direction of travel from a regulatory perspective appears clear and plastic is on its way to becoming a regulated material in a number of countries. The transition to a more sustainable model will put pressure on single-use plastic producers but will also provide a boost to the development and production of alternatives.
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