Middle East faces big potential for (international) plastics recycling

31 May 2023 Consultancy-me.com 2 min. read

MENA countries have the potential to capture significant market share in the plastics recycling industry. Chemical recycling is an emerging technology that can far surpass the current mechanical recycling processes.

Plastics are becoming increasingly important in global conversations about sustainability. In the near future, the plastics economy will be more focused on circularity, digitization, and reducing carbon emissions. According to a report from management consulting firm Strategy&, the countries in the MENA region have the potential to play a significant role in this transformed plastics economy.

Chemical plastics recycling is energy intensive, with the overall energy costs in the process hovering around 60% of total costs. Given that energy is cheap and abundant in much of the MENA region, these countries have a substantial cost advantage due to the lower overhead costs.

Cash cost of chemical plastic recycling

The report calculates that in order to create a plastics recycling industry capable of processing 100,000 tons of material per year, investments worth around $300 million would be needed. The report estimates that for every 1 million tons of recycled plastics, GCC countries could create around 1,500 jobs and add $650 million of direct GDP impact.

The opportunity up for grabs is driven by a shortfall in plastics recycling capacity. With demand for recycled plastic accelerating, and supply struggling to keep up, by 2023 a global shortage of up to 25 million tons of recycled plastic is expected.

To capitalize on the opportunity, chemicals companies working in partnership with MENA governments need to invest between $30 billion and $40 billion over the next two decades to build world-class recycling infrastructure at scale, while exploring opportunities for synergies through integration with existing infrastructure.

Recycled plastics supply/ demand

“MENA countries need to increase their access to plastic waste and increase their plastic recycling capacity. MENA countries need to move quickly to close the gap and position themselves as leaders in plastics recycling, as other regions are already building their recycling industry,” said Yahya Anouti, partner at Strategy& in the Middle East.

In other parts of the world, the plastic recycling industry is also still at a developmental stage. For example, the European Union is still well below established targets for plastics recycling and much further investment is needed to reach climate goals.