The Google-AFARA Plastic Circularity report on which I wrote a few months back has now been released in full. One of the key findings from the report is that investment is crucial to creating a circular economy for plastics and that there are significant opportunities for investors, particularly at the nexus of climate and plastics. With a recycling value chain that is under pressure like never before, the need for investor engagement has never been greater. But thanks in part to this study, one thing is now clearer than ever – the current challenges facing the value chain present to investors with a really unique opportunity to use their capital to steer the recycling industry back towards growth. The time to act and invest in solutions is now.
I recently sat down with Mike Werner, Google’s Lead for Circular Economy, and Dan Zilnik, AFARA’s President, to discuss their collaboration, insights, and recommendations to accelerate a circular economy for plastics and maximize investment opportunity. Below is an excerpt from our conversation.
RK: Mike, Google is known for being a data-driven organization. Why did you partner with AFARA to collect data on the plastic circularity gap, and what was the biggest surprise for you?
MW: At Google, we believe that realizing a sustainable world means that we all must accelerate the transition to a safe, equitable, and circular economy where people, the planet, and businesses thrive. However, reaching a circular economy for any resource, especially plastics, is a large and complex global challenge. Before conducting this study, what I saw in the public dialogue were data and reports on the 50 or 100 different things we all ought to do to end plastic waste, but there lacked a clear list of prioritized interventions that would have the greatest impact on creating a circular economy of plastics. Dan and his team at AFARA helped us dig into the economics and develop an intervention model that established a clear set of low-risk and no-risk interventions that would be economic under multiple future scenarios toward creating a circular economy for plastics. AFARA has been an ideal partner because of their deep expertise in the economics of oil, gas, and plastics value chains and the myriad of sustainability issues surrounding those resources.
Two big things stand out to me about the data. First, the data suggest that the circularity gap is likely going to grow significantly over the next two decades. Under a business as usual scenario, it is projected that 7.7 billion metric tons of plastics will be mismanaged-landfilled, incinerated or leaked into the environment-between now and 2040. That volume of plastic is equivalent to roughly 16x the weight of the entire human population on earth today! Second, while there needs to be a portfolio approach that includes plastic reduction efforts, the biggest intervention we need to capitalize on is building better recycling infrastructure. As the world transitions from linear to circular, supply chains need to be rewired and the requisite infrastructure needs to be put in place to ensure these resources are kept in the economy and out of the environment.
RK: This work takes on a big question that not many folks are paying attention to: “How can we create irreversible momentum towards a circular economy for plastics and simultaneously end our reliance on fossil fuel feedstocks?” Dan, how far did you get in answering this question and what solutions did the analysis reveal?