Capturing the plastic waste opportunity | Lombard Odier

Every year up to USD 120 billion of value is lost to the economy in the form of plastic waste, with millions of tonnes of this potentially valuable resource ending in landfill, being incinerated, or leaking into the environment. The ecological cost of plastic waste, in particular the impact on our marine life, is well understood, but often missed from the conversation are the myriad possibilities plastic waste offers, and how building a circular plastics system could give retail businesses the means to grow their brands and create longer term relationships with consumers.

Finance has a central role to play in making the industry sustainable, and while innovations in plastic production and recycling often grab the headlines, investment must be focussed too on infrastructure. The sums required will be large, but for investors the opportunity is larger still, and it’s this opportunity, estimated to be worth USD 1.2 trillion between now and 2030, that makes the plastic waste problem ideal for market-based solutions.

The search for perfect sorting

Even the world’s most successful recycling nations recycle barely more than half of their plastic waste. Germany, named world recycling champions by the World Economic Forum, recycles 52.6% of its plastic waste, while the EU bloc as a whole, home to some of the most effective recycling schemes, achieves just 32.5%.

Often the problem is in the sorting, a complex and expensive process in which waste is separated into streams according to the plastic grade and use-cases of each item. Numerous sorting technologies have been developed and deployed, but sufficient accuracy and speed of operation have been difficult to achieve. Now the Singapore based Alliance to End Plastic Waste, a global alliance funded by a wide range of corporations, may be nearing a solution. Their system, called Holy Grail 2.0, passes waste along a conveyor belt while cameras above scan for digital watermarks printed onto each item. With the marks containing information on plastic grade and chemical properties, high speed air jets then direct items into their appropriate streams.

The system has been demonstrated to achieve both accuracy and speed – recent semi-industrial testing achieved a 99% detection rate when tested in real-world conditions, working at a higher throughput rate than rival sorting systems. Digital watermarks also allow for more granular sorting which could create new recycling streams not available using current technology, and with the marks visible to smartphones the system even offers potential for finer initial sorting in the home. The commercial case is clear – less wastage in the system means more material available for recycling or reuse, and for outlets looking to get ahead of the regulation curve digital watermarks could provide a rich source of evidence that their waste has been brought into a circular system.

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Taxonomy

• Reuse
• Single-use plastic