Report : The New Plastics Economy — Rethinking the future of plastics
World Economic Forum, Ellen MacArthur Foundation and McKinsey & Company,
The New Plastics Economy — Rethinking the future of plastics
Applying circular economy principles to global plastic packaging flows could transform the plastics economy and drastically reduce negative externalities such as leakage into oceans, according to the latest report by the World Economic Forum and Ellen MacArthur Foundation, with analytical support from McKinsey & Company.
The New Plastics Economy: Rethinking the future of plastics provides for the first time a vision of a global economy in which plastics never become waste, and outlines concrete steps towards achieving the systemic shift needed. The report, financially supported by the MAVA Foundation, was produced as part of Project MainStream, a global, multi-industry initiative that aims to accelerate business-driven innovations to help scale the circular economy.
The new report acknowledges that while plastics and plastic packaging are an integral part of the global economy and deliver many benefits, their value chains currently entail significant drawbacks. Assessing global plastic packaging flows comprehensively for the first time, the report finds that most plastic packaging is used only once; 95% of the value of plastic packaging material, worth $80-120 billion annually, is lost to the economy. Additionally, plastic packaging generates negative externalities, valued conservatively by UNEP at $40 billion. Given projected growth in consumption, in a business-as-usual scenario, by 2050 oceans are expected to contain more plastics than fish (by weight), and the entire plastics industry will consume 20% of total oil production, and 15% of the annual carbon budget.
In this context, an opportunity beckons for the plastics value chain to deliver better system-wide economic and environmental outcomes, while continuing to harness the benefits of plastic packaging. The New Plastics Economy, outlined in this report, envisages a new approach based on creating effective after-use pathways for plastics; drastically reducing leakage of plastics into natural systems, in particular oceans; and decoupling plastics from fossil feedstocks.
Achieving such systemic change will require major collaboration efforts between all stakeholders across the global plastics value chain – consumer goods companies, plastic packaging producers and plastics manufacturers, businesses involved in collection, sorting and reprocessing, cities, policymakers and NGOs. The report proposes the creation of an independent coordinating vehicle to set direction, establish common standards and systems, overcome fragmentation, and foster innovation opportunities at scale. In line with the report’s recommendations, the Ellen MacArthur Foundation will establish an initiative to act as a cross-value-chain global dialogue mechanism and drive the shift towards a New Plastics Economy.
The report’s findings are timely: knowledge and understanding of the circular economy among business leaders and policymakers is growing, as demonstrated by the European Commission’s recent circular economy package and associated funding announcements; new technologies are unlocking opportunities in material design, reprocessing and renewable sourcing; developing countries are investing in after-use infrastructure; and governments are increasingly considering – and implementing – policies around plastic packaging. The New Plastics Economy: Rethinking the future of plastics provides a fact-base and a vision to inform the choices that need to be made.
Linear models of production and consumption are increasingly challenged by the context within which they operate - and this is particularly true for high volume, low value materials such as plastic packaging. By demonstrating how circular economy principles can be applied to global plastic flows, this report provides a model for achieving the systemic shift our economy needs to make in order to work in the long term.
- Dame Ellen MacArthur, Ellen MacArthur Foundation
“This report demonstrates the importance of triggering a revolution in the plastics industrial ecosystem and is a first step to showing how to transform the way plastics move through our economy. To move from insight to large scale action, it is clear that no one actor can work on this alone; the public, private sector and civil society all need to mobilize in order to capture the opportunity of the new circular plastics economy.”
- Dominic Waughray, World Economic Forum
“Plastics are the workhorse material of the modern economy – with unbeaten properties. However they are also the ultimate single-use material. Growing volumes of end-of-use plastics are generating costs and destroying value to the industry. After-use plastics could - with circular economy thinking - be turned into valuable feedstock. Our research confirms that applying those circular principles could spark a major wave of innovation with benefits for the entire supply chain.”
- Dr. Martin R. Stuchtey, McKinsey Center for Business and Environment
 United Nations Environment Programme, Valuing Plastic: The Business Case for Measuring, Managing and Disclosing Plastic Use in the Consumer Goods Industry (2014).
 This is the budget that must be adhered to in order to achieve the internationally accepted goal to remain below a 2°C increase in global temperatures
Extract - preface of the report
The circular economy is gaining growing attention as a potential way for our society to increase prosperity, while reducing demands on finite raw materials and minimising negative externalities. Such a transition requires a systemic approach, which entails moving beyond incremental improvements to the existing model as well as developing new collaboration mechanisms.
The report explores the intersection of these two themes, for plastics and plastic packaging in particular: how can collaboration along the extended global plastic packaging production and after-use value chain, as well
as with governments and NGOs, achieve systemic change to overcome stalemates in today’s plastics economy in order to move to a more circular model?
The New Plastics Economy aims to set an initial direction and contribute to the evidence base by synthesising information from across many dispersed sources. It assesses the benefits and drawbacks of plastic packaging today, and makes the case for rethinking the current plastics economy. It lays out the ambitions and benefits of the New Plastics Economy — a system aiming to achieve drastically better economic and environmental outcomes. It proposes a new approach and action plan to get there.
The report’s objective is not to provide final answers or recommendations. Rather, it aims to bring together for the first time a comprehensive global perspective of the broader plastic packaging economy, present a vision and propose a roadmap as well as a vehicle for progressing this roadmap, and providing a much needed global focal point to carry this agenda forward. This report also identifies a number of significant knowledge gaps and open questions that need to be further explored.
This report is the product of Project MainStream, an initiative that leverages the convening power of the World Economic Forum, the circular economy innovation capabilities of the Ellen MacArthur Foundation, and the analytical capabilities of McKinsey & Company. We are grateful to our numerous partners and advisors for their insights and support throughout this project, and the Project MainStream Steering Board for their continued collaboration on the transition towards a circular economy.
For the three institutions that have launched the MainStream initiative, this report is an encouragement to continue to foster cross-industry collaboration as a major avenue to accelerate the transition to the much- needed circular economy. We hope you find this report informative and useful. We invite you to engage with us on this timely opportunity.
Download the full report here: https://www.ellenmacarthurfoundation.org/assets/downloads/EllenMacArthurFoundation_TheNewPlasticsEconomy_Pages.pdf
For more information on the initiative, visit www.newplasticseconomy.org
The New Plastics Economy is an ambitious, three-year initiative to build momentum towards a plastics system that works.