With only 16% of global plastics recycled, society is under pressure to address plastic waste. Our Research analysts believe Polyethylene Terephthalate (PET) bottles are here to stay, though significant investment is required in its waste management. Consumer Deposit Schemes and emerging recycling technology could support the transition to a circular economy for PET.
The plastics industry is undergoing a revolution as it seeks to address the c160mn metric tonnes of plastic waste which leaks into the natural environment or ends up in landfill each year, representing more than 55% of the total plastic waste produced. We view PET plastic packaging — and in particular beverage bottles — as pivotal to this issue: it constitutes more than 10% of plastic waste. However, since PET bottles provide significant advantages (weight, durability and versatility) over alternative materials, it is likely they are here to stay, unlike other single-use plastics which have been subject to widespread bans.
Heightened consumer awareness is forcing companies and governments to set ambitious recycling targets, but PET waste management will have to adapt in order for these targets to be met. To boost low collection rates and poor PET recycling yields, our analysts see a Consumer Deposit Scheme as the policy instrument of choice, further supported by emerging technology.