Strategy&: GCC positioning itself as a global hub for recycled plastics
The global demand for recycled plastics could exceed supply by up to 35 million tons by 2030, according to new study from Strategy& in collaboration with Saudi think tank KAPSARC.
The global plastics industry is undergoing a significant transformation, driven by tightening sustainability regulations and a push for circular economies. There is now a major opportunity for Middle Eastern countries, particularly in the GCC, to become world leaders in this evolving market.
By connecting a surplus of plastic waste from Asia with a growing demand for recycled materials in the West, the GCC may be able to leverage its capital and expertise to build a new, high-value industry.
Plastics are a fundamental component of the modern economy, with usage growing faster than that of many other materials. However, only a small fraction of plastic (less than 10% globally) ends up being mechanically recycled globally.
As more countries aim for ambitious sustainability goals, the demand for recycled plastic is expected to exceed supply by 25 to 35 million tons by 2030. This creates a lot of space for opportunities in the plastics recycling industry.
The growth in demand and production of recycled plastics, at an annual rate of about 8%, has increased much faster than the growth of virgin plastics, which is expanding at only 2% percent annually on average.
As climate concerns grow, the future of the plastics economy is quickly becoming more sustainable and circular. That shift is being driven by more government regulations, increasing consumer demands for sustainability, and corporate ESG initiatives.
Many countries have been introducing policies to reduce pollution across the entire plastics value chain. Upstream policies affect manufacturers, midstream measures influence retailers and consumers, and downstream efforts target waste management. Coordinated policy approaches are proving essential for boosting the commercial viability of circular plastics and improving waste systems.
GCC could take the lead
In the medium to long term, the GCC countries may be in a prime position to address this imbalance. Working in their favor is significant capital, world-class infrastructure, and extensive experience in the petrochemical sector, which provides a natural foundation for chemical recycling. Saudi Arabia, for instance, produces around 7% of the global supply of petrochemicals.
Unlike traditional mechanical recycling, chemical processes can handle mixed or contaminated plastic waste and convert it into high-quality feedstocks. Some companies in the GCC are already developing commercial-scale chemical recycling projects.
Developing a circular plastics economy aligns with the national goals of economic diversification, offering a path to new value chains beyond hydrocarbons. Chemical recycling is a knowledge-intensive field that offers the potential for greater economic growth and innovation than petrochemical production, especially as the GCC makes a dramatic pivot away from fossil fuels.
To realize this potential, GCC countries must implement several key changes, the report notes. These include securing stable demand for recycled polymers and establishing trade corridors for plastic waste with regions such as India and Southeast Asia.
They must also invest in integrated waste management infrastructure and create policies that incentivize end-of-life plastic management. Setting clear standards for product design, labeling, and food-grade recycled plastics will further attract private investment and global technology partners.
With these strategic actions, the GCC can provide regulatory certainty and stimulate local markets. This will position the region as an influential leader in the global circular plastics economy, bridging a critical gap between waste supply and recycled material demand.
“Plastics are essential to modern life, with plastics usage growing faster than usage of alternative materials. Today, the plastics market is shifting as sustainability regulations tighten, and circular economy initiatives expand,” said Devesh Katiyar, partner at Strategy& and lead author of the report.
“Developing a circular plastics economy aligns with national diversification goals, creating new value chains beyond hydrocarbons. To realize this potential, GCC countries would need to put in place several foundational elements, which can offer regulatory certainty, stimulate local markets, and attract global technology providers, positioning itself as a leader in the circular plastics economy.”
