Redesign biggest opportunity to clean up plastic packaging as sector GHG emissions predicted to rise 75% by 2040

Plastic pollution caught and maintained the world’s attention in the mid-2010s as images of marine environments ravaged by deposits of disposed plastic led global governments and corporations to commit to improving the circular plastic economy.

The packaging industry has embarked on a transformative journey, with a range of initiatives designed to increase the sustainability of the plastics value chain – from virgin plastic to the ongoing recycling of those elements with a longer potential life.

While recycling emerged as a front-runner for effective end-of-life treatment of plastics, a comprehensive solution requires a step-change in how brands and consumers think about the role of packaging in the first place.

Wood Mackenzie's model shows that plastic sector GHG emissions will rise by 75% by 2050. Polymers currently account for  about 4% of energy related emissions. While the value chain will become more carbon efficient, robust demand growth will result in 48 gigatonnes of emissions by the looming deadline of the Paris Agreement.

The packaging sector is beginning to explore new solutions to reduce plastic consumption. In this Circular Plastic Packaging Report, Wood Mackenzie leverages its Material Applications Platform to simulate a scenario in which the industry seeks to redesign its approach towards packaging.

Andrew Brown, Head of Plastic and Recycling research at Wood Mackenzie, said: “This ‘packaging redesigned’ scenario reflects our view of an aggressive approach towards adopting new technologies and business models with three main principles guiding the effort: elimination, substitution and reuse.

“Rigid packaging applications are most impacted by redesign models. In this scenario, bottles, for example, would consume about 16% less plastic each year than otherwise forecast, while other rigid applications may see 14% of annual demand displaced by 2040.”

If the industry fails to pick up the redesign baton, Wood Mackenzie estimates that plastic packaging demand will more than double by 2050 – driven largely by an emerging middle class in developing Asian and African economies.

Olivia Loa, Polymer Sustainability Analyst at Wood Mackenzie, said: “Recycling will play an important role in meeting rising demand while reducing the environmental impacts of the packaging sector. Bottle recycling rates are expected to rise from just below 50% globally in 2020 to 67% in 2040. However, it won’t be sufficient to achieve the gains required, and if the industry is unable to grasp the nettle an increasingly stringent regulatory response to drive change is the most likely outcome.

“Interest is building - 161 countries have made statements endorsing the need - in a binding UN treaty to regulate plastic waste. The issue cuts across borders, while divergent approaches and definitions complicate attempts to make progress in reducing plastic in the environment.

“Partnerships between producers, converters, brands and the waste chain are necessary to ensure that investment flows to where it will have the most beneficial impact.”

The report further emphasises that suppressing demand through packaging redesign, increased recycling and sourcing low carbon power will be absolutely key to mitigating base-case emissions growth – and value chain collaboration is vital to address the challenge systematically.