April 22, 2021 • Posted in Market Insights

Our Role in Creating a Circular Economy for Plastics

In the U.S., the rising use of single-use plastics has far outpaced our ability to process the waste. When compared with the recycling practices of the European Union and developed countries in Asia, the U.S. falls short — yet, inaction by any country threatens the global sustainability balance. In this blog, we’ll go around the world to highlight countries that have made successful strides in reducing their waste footprint and identify the challenges and opportunities for the U.S.

The State of Global Waste 

The world generates over 2 billion tons of solid waste annually; plastic, paper, cardboard, metal and glass account for more than half of that waste in developed countries. The accumulation of waste has been exacerbated by COVID-19, as collection and recycling efforts were curtailed, homebound consumers increased purchases of packaged goods, and plastics played a vital role in promoting social distancing and furthering safety and healthcare. While the pandemic has amplified the importance of plastics in our lives, it also has spotlighted the underdeveloped infrastructure of North America’s recycling industry.

The U.S. only recycles or composts 35% of its waste, leaving the rest to go to landfills. Our recycling rate is one of the lowest among developed nations, with countries like Germany and Austria recycling over half of their national waste. More countries across the globe are embracing a commitment to reducing waste and establishing sustainable processes.

In regions with more advanced recycling industries, government intervention has played a key role. Among the major obstacles to plastics recycling is its volatile economics; prime resin prices can fluctuate and often fall below the cost of recycled plastics, discouraging their use. Another obstacle is public ignorance and indifference. Those nations leading the recycling charge have pursued uniform national policies by establishing robust recycling standards, public information campaigns, and economic incentives to level the economic playing field and incentivize both collection and investment in infrastructure.

Reducing global waste doesn’t just impact society or the environment — it also has significant economic implications. For example, replacing just 20% of single-use plastics packaging with reusable alternatives is conservatively estimated to be an opportunity worth at least $10 billion.  

Below, we highlight just a few of the world’s recycling leaders and their journeys to establish a more responsible, circular economy.

Taiwan: From Garbage Island to a Recycling Refuge

Looking at Taiwan today, you would never guess that just over two and a half decades ago, it was nicknamed “Garbage Island.” The country’s booming economy at the time led to a dramatic rise in consumption, resulting in just 70% of its trash being collected with a minimal 5% recycling rate. The government’s initial solution was to create a massive incineration program, which was met with opposition and concern over the toxic emissions released through this process. Prompted by activists, the country’s government adopted a zero-waste framework, including policies that supported a “4-in-1 system.” This approach holds all participants in the waste lifecycle accountable — from manufacturers to consumers — for recycling, reusing and disposing of waste properly. It also offers profits and rewards as incentives. Through successful education and communication, Taiwan has cultivated a recycling-focused society in which sorting trash is less of a burden to citizens and the environment. Today, Taiwan boasts an impressive 55% recycling rate — recycling 73% of its plastic and generating only half as much waste per person as the U.S.

Wales: How the Smallest Country in Great Britain Became its Top Recycler

This year, the Welsh government reconfirmed its commitment to making the country a zero-waste, net-zero economy by 2050. This ambitious initiative is far from unrealistic given that Wales has gone from a 5% recycling rate to more than 60% over the last two decades. Part of Wales’ recycling success has to do with a referendum that increased its self-governing powers in 1998, allowing Welsh policies to differ from those implemented by Scotland, Northern Ireland and England. This autonomy enabled Wales to create a strategic and unified recycling system. The Welsh government also passed comprehensive measures to promote a circular economy, including reducing single-use products, requiring extensive waste separation and implementing a responsibility program for industrial manufacturers. As the nation continues its sustainability journey, the government has proposed developing recycling plants for products that are not traditionally considered recyclable, such as mattresses and diapers.

South Korea: A Shift in Waste and Recycling Strategy

After importing nearly half of the world’s recyclable plastic for three decades, China banned the import of virtually all residential recyclables in 2017. While the ban was part of China’s broader sustainability initiative, it caused other Asian countries to see a dramatic influx of plastic waste. In South Korea, 48 of the country’s recycling firms halted collection services as they could no longer profit from exporting to China. After two weeks of trash piling up throughout the country, the South Korean government granted recycling companies financial assistance and set out to rethink its waste collection strategy. Since 2018, in a shift from relying on exporting plastic waste, the government has implemented regulations to reduce public waste and increase the domestic recycling rate from 34% to 70% by 2030.

Switzerland: Breaking Waste Management and Recycling Down to a Science

It should come as no surprise that the country known for its efficiency has also developed one of the most effective waste management and recycling systems in the world. Switzerland was the first European country to introduce waste management regulations in the 1960s and has continued this sustainability legacy since. In addition to a more than 50% recycling rate, the country’s recovery of various materials is even more impressive — collecting 94% percent of cans and glass bottles and 82% of PET plastic bottles in 2018. One of the key drivers of Switzerland’s recycling success stems from its “polluter pays” principle, which stipulates that whoever creates nonrecyclable waste must also pay for its disposal. This rule applies to businesses and households alike, incentivizing everyone to minimize waste and select recyclable materials whenever possible.

Of these success stories, we can identify common themes, including the establishment of strong government policies; government funding for recycling; financial incentives for businesses, communities and/or citizens; along with explicit and measurable recycling goals. The U.S. can focus on each of these areas to make greater strides toward creating a global circular plastics economy.

Challenges and Opportunities for U.S. Recycling

In the U.S., less than half of recyclable products are recycled. To make this figure more tangible, consider that if all 37.4 million tons of single-family recyclables were recycled and reused instead of disposed of, it would achieve the environmental equivalent of removing more than 20 million cars from U.S. highways. The country’s recycling rate for plastics is particularly low compared with other developed countries. We currently capture just slightly more than 8% of plastic waste, the remainder of which is buried in landfills or converted into energy, which releases carbon emissions. The U.S. rate of recycling plastic bottles is somewhat higher at 30% because bottles are easier to separate and recycle than more complex plastic products. This is still well below the recycling rate in other developed countries. Simply stated, our recycling infrastructure cannot manage the complexity of today’s plastics products, in part because the U.S. offloaded much of its plastic waste to China for so many years. That country’s import ban on plastic waste has revealed the weaknesses in the U.S. recycling infrastructure.

One major contributing factor to the country’s recycling challenges is the lack of a unified governmental policy. There are nearly 20,000 municipalities in the U.S., each making different decisions and enacting disparate policies on how and what can be recycled. With so many stakeholders and interests intersecting, it isn’t easy to establish clear, universally beneficial standards and goals. Progress toward a modern, functioning U.S. recycling infrastructure will require the collaboration of companies, communities, interest groups, manufacturers and consumers moving toward common goals.

Confusion surrounding what can and can’t be recycled also adds to the sustainability challenges in the U.S. In the 1980s, the Resin Identification Code (RIC) system was established to help identify how plastics products should be separated for recycling. However, the system is far too simplistic to drive effective recycling and lures consumers into a false sense that all plastics bearing the symbol are recyclable. This is not always the case. Increasing consumer awareness and understanding of what materials can be recycled is critical to minimizing the contamination of recyclables and decreasing the amount of waste in landfills. Governments need to prioritize recycling education at the federal, state and local levels and make collection and separation easier and more convenient. 

On a positive note, environmental awareness is increasing in North America, and more consumers are demanding sustainable products. Major brand owners and manufacturers are responding by publishing their sustainability goals, revamping their products and packaging, and demanding sustainable solutions from their supply chains. That includes M. Holland.

Positioned at the nexus between plastic resin producers and end-product manufacturers, we have unrivaled visibility to market and technological trends as well as the sustainability needs of both our suppliers and clients. We play a vital role in promoting a circular economy with a holistic approach to the challenge, offering consulting assistance, technical support, and a comprehensive line card of sustainable products and services. Our mission is to advance a circular economy by helping suppliers and clients achieve their sustainability goals along with their growth and profitability objectives.

Moving Forward, Sustainably

The U.S. can and must catch up to other developed countries in the pursuit of a circular economy. It will require continued consumer demand for environmentally friendly products and services. It will require governmental solutions to encourage recycling as well as infrastructure investment. And it will require awareness and a commitment by every citizen to protect the planet and drive toward a circular economy. On this Earth Day, we ask you to take a moment and reflect on the once-in-a-generation opportunity we have to modernize our approach to recycling and determine the role plastics will play in helping create a more sustainable future.

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