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How a Circular Economy for Plastics Can Help the Gulf Region Realize its Sustainability Potential

Intro: Enhancing the sustainability of plastic products and applications throughout their life-cycle and further integrating the GCC plastic value chain to create and economically sustain a market for recycled material would be another key step forward in fulfilling the circular economy vision in the region. 

The overarching vision of the circular economy for plastics is the reduction in leakage of these valuable materials into natural systems and retaining their value in the economy for as long as possible. The circular economy will be realized by a combination of product design and business model innovation, efficient resource management, collaboration and integration of the plastics value chain, as well as enhanced education and awareness among key stakeholders in the value network.

The plastics industry, by its history, versatility and capacity to innovate, already plays a crucial role in supporting sustainability and the circular economy concept in various sectors. Some of the most important contributions are in the transport, construction and food industries. Light weight vehicles make the transport sector more fuel efficient (every 10% of weight reduced in vehicles enhances lifetime fuel efficiency by 6-8%1) and reduce greenhouse gas emissions by about 30%. At the same time, high performance and long-lasting insulation products help save energy in the construction sector and plastic packaging ensures food safety and reduces food waste (for e.g., bananas wrapped in plastic packaging have a longer life by 21 days2).

Closing the circular economy loop in plastics can boost the industry’s competitiveness and address climate change issues. In the context of plastics production and conversion, this means that plastics never become waste. Therefore, re-entering the system as valuable elements and feedstock for other products. With that, plastic leakage into the natural ecosystem can be controlled and less fossil feedstocks will be utilized in the production process. 
Figure 1: Circular economy in the plastics value chain 

Source: Plastics Europe

Aligning with GCC national visions 
In line with the GCC national visions, adopting a circular economy targets environmental, economic and social objectives. The GCC is recently taking big steps towards making this a reality through championing the efficient use of natural resources by placing this practice at the core of governments’ national visions and economic strategies. 
A good example of GCC initiatives would be the emirate of Dubai, as it has invested in several initiatives to develop its clean energy sector in order to have the world’s lowest carbon footprint by 2050. The circular economy will play a pivotal role in making that happen.
While the circular economy concept is still at a nascent stage, including in many developed economies, significant opportunities exist to adopt a more circular approach in the Arabian Gulf region. Such a move can retain and increase value creation within the economy. It can also reduce our dependence on scarce natural resources and achieve alignment with the GCC national visions of sustainable long-term investments. This will help the region’s drive for economic diversification through the further development of downstream sectors.
It can further play a key role in enabling job creation, while improving the standard and quality of life. This can encourage a positive behavioral change and a sense of responsibility within the community (social). Reduced waste generation, cutting down on greenhouse gas emissions and landfilling, and preventing waste leakage into marine and desert environments are also a part of the environmental objectives the GCC region is targeting in its transformation into a circular economy. 

Sustainability 

To ensure continued business growth in a consumer environment increasingly focused on sustainability, the industry needs to alter its approach to directly address the demands of the modern day consumer. 
To achieve a systemic shift towards a new plastic circular economy, existing players in the FMCG, fashion, retail and automotive industry will need to be guided by a collaborative and concerted initiative that identifies the challenges and opportunities in the road ahead. The industry will need to remain ahead of the game by embracing circularity principles for its products by focusing on design innovation to eliminate waste through the hierarchy of reduce, reuse, repurpose and recycle. Advocating for responsible consumption and improved societal waste behavior towards handling waste is also encouraged. 
Key enablers for an economically viable circular economy in the Arabian Gulf will require collaboration across different value chains. This would need to be accompanied by efficient waste management infrastructure and processes in addition to favorable regulations and standards for environmental benefits and sustainable industry growth. The Gulf Petrochemicals and Chemicals Association has identified the key enablers in the region as the following:
- Innovation in product design for reusability, recyclability, and recovery
- Favorable regulations and standards for environmental benefits and sustainable growth
- Skills upgrade and digitalization
- Efficient waste management and infrastructure 
- Agile and efficient supply chains 
- Establishment and regulation of market for secondary raw materials 
- Collaboration across and integration of value chains 
- Education and awareness among key stakeholders 

Supporting the growth and sustainable development of the industry will help create awareness and showcase the opportunities within the circular economy to extract greater value and maximize the use of products and applications once they reach their end of intended purpose.

Challenges 
Adopting the concept of a circular economy is easier said than done. Businesses, governments, and consumers need to come together and be actively engaged in the journey with innovative ideas, products and business models, and investments. Current and future challenges prevail as the world continues to shift to a more circular business model. 

To make the circular economy a reality we need to unlock our traditional linear business model as plastic production is still very much locked on virgin feedstocks. The World Economic Forum (WEF) reports that material recycling (all materials) recovered only 5% of the original raw material value; whereas 95% of original raw material is lost through various steps in the value chain. 

While awareness about circular economy in the plastics industry is rising, the value chain still faces a lack of technical skills. As the industry matures, it is starting to invest huge amounts into researching, developing and scaling up new technologies that enable renewable feedstocks. It is achieving this through collaboration with value network partners, both upstream and downstream. 
High capital intensity of plastics production creates a major barrier to innovate new materials and technologies. Therefore, high investments are required to establish a circular economy model. Businesses and governments will need to invest in supporting infrastructure, R&D and other compliances to achieve that. However, lack of collaboration between stakeholders will make it challenging to develop a truly collaborative system that can help build products and business models favourable to a circular economy.

Unfavourable regulations, high cost of products, complex international supply chain and an uncompetitive recycled plastics market are also further obstacles that the world will need to tackle in order to adopt a circular business model in the plastics industry. 

Opportunities moving forward
While challenges to make the circular economy a reality in the GCC region hinder its progress, opportunities of adopting it make it even more promising. The Gulf Petrochemical and Chemicals Association has identified three key opportunities of adopting the business model in the Arabian Gulf. As part of the shift to a more circular business model, the industry would need to enhance the sustainability of products and applications throughout their lifecycle. To make the circular economy a reality, we would need to establish a multi-stakeholder approach to plastic waste reduction and management through collaboration, innovation, regulations and standards. Also, further integrating the GCC petrochemicals and chemicals value chain to create and economically sustain a market for recycled materials is also a part of the vision to achieving a circular economy. 

Source GPCA, for more information about GPCA please visit: www.gpca.org.ae