Plastics are a vital part of modern life, but we now produce twice as much plastic waste as we did 20 years ago. Most of this waste ends up in landfills, incinerated, or escaping into the environment.1 Less than 10 percent of plastic waste is successfully recycled.
The chemicals industry has recognized for years the importance of recycling plastics. In 2018, the American Chemistry Council (ACC) announced that members of ACC’s Plastics Division had set the goal to recycle, reuse, or recover 100 percent of plastic packaging by 2040.2 This includes designing new products for greater efficiency, recycling and reuse, developing new technologies and systems for collecting, sorting, recycling and recovering materials, and aligning products with key end markets.
Most plastic recycling is a mechanical process where used plastic is broken up but its molecules remain intact—the recycled pellets are only suitable for certain uses. Chemical or advanced recycling changes the chemical structure of polymeric waste and enables more plastic to be recycled.
Chemicals companies are well positioned to support advanced recycling solutions for waste plastics. In January 2022, Eastman announced a $1 billion investment to accelerate plastics circularity by building the world’s largest molecular plastics recycling facility in France.3 In October 2022, Cyclyx International, ExxonMobil, and LyondellBasell announced an agreement to advance development of a plastic waste sorting and processing facility near Houston.4 The Cyclyx Circularity Center will produce feedstock for both mechanical and advanced recycling.
Driven by environmental concerns, investor pressure, public policy, and business opportunities, plastics circularity will continue to increase in importance for the chemicals industry. According to some analysts, the global post-consumer recycled plastic market is projected to grow at a CAGR of 9.4 percent between 2023 and 2033.5 Companies such as Evonik Industries, Solvay, LANXESS, and Trinseo have emphasized the environmental benefits of their recent portfolio rationalizations.6
In terms of M&A deals, sellers will be encouraged to improve their environmental posture by developing or expanding their in-house capabilities for plastics recycling. Buyers will be attracted to chemicals companies that have shown a strong commitment to reducing plastics waste and supporting the circular economy.