Rethinking the Future of Plastics in Europe

After 40 years of effort, only 14% of global plastic packaging is collected for recycling. Even in Europe, where collected-for-recycling rates are around 40%, less than 20% of material value is retained for a subsequent use after additional value losses in sorting and reprocessing are factored in. Overwhelmingly single-use, USD 80–120 billion of the material’s value is lost to the global economy each year. Moreover, about a third of all plastic packaging put on the market globally escapes collection systems and leaks into the natural environment – with a significant share ending up in the oceans. The cost of externalities is estimated at USD 40 billion annually — exceeding the plastic packaging industry’s profit pool. In short, plastic packaging represents a significant economic opportunity and is a natural focus of efforts to scale a circular economic model.

Plastics are omnipresent in the global economy. Nearly every European citizen uses dozens of plastic items a day. As could be expected from such widely used materials, plastics bring many benefits: they are lightweight, versatile and cheap; they help protect our food; and make our cars lighter. At the same time, however, plastics – and especially plastic packaging – are one of the most iconic examples of our current linear take-makedispose economy.

In recent years plastics have come to the forefront of international debates, and moved from a fringe to a central issue in policy discussions and corporate boardrooms alike. Regulatory activity on plastics has been increasing in cities and countries across Europe and the rest of the world. NGOs are becoming more active in the field, with for example the recently launched #breakfreefromplastic NGO movement growing its membership from a few dozen to several hundred members in a matter of weeks. In this international context, the timing of the European Commission’s decision to single out plastics as a priority area in its Action Plan for the Circular Economy seems opportune.

In pursuing its mission of accelerating the transition towards a circular economy, the Ellen MacArthur Foundation has also concentrated its efforts on this fast growing material flow, considering its associated benefits as well as its challenges. In January 2016 it published, in partnership with the World Economic Forum and McKinsey & Co. “The New Plastics Economy – Rethinking the Future of Plastics”.
This report provides, for the first time, a comprehensive view of the global plastics value chain and its associated externalities. As well as analysing the current situation, the research outlines a more effective plastics system, based on the principles of the circular economy, and sets out a blueprint for how to achieve it.

In May 2016, the Ellen MacArthur Foundation launched the 3-year New Plastics Economy initiative, to mobilise the report’s recommendations. Applying the circular economy framework, the initiative brings together key stakeholders to re-think and re-design the future of plastics, starting with packaging. Players of People’s Postcode Lottery (GB), the MAVA Foundation and the Oak Foundation are philanthropic funders of the initiative, and Wendy Schmidt, through The Eric and Wendy Schmidt Fund for Strategic Innovation, is its lead philanthropic partner. Amcor, The Coca-Cola Company, MARS, Unilever and Veolia are the initiative’s core partners.