September 5, 2024
Growing concerns about the environmental impact of plastic are slowly redefining the plastic supply chain. As a result of pressure from environmental activists, international bodies, and the general public, government bodies have introduced regulations to reduce plastic waste. And, more consumers are now leaning into sustainable plastics.
Already in process, sustainable plastics, a circular economy, and less reliance on single-use plastics have been cited as the key solutions to this predicament that also provide several opportunities.
Here is what organizations in the plastic supply chain need to know:
Despite the concerns leading to change, plastic is integral to the modern economy. Primarily used for packaging, it is relatively more cost-effective, versatile, and lightweight than other materials in various applications. However, its production, use, and disposal often conflict with environmental stewardship, raising concerns among oversight bodies and consumers.
As a result of positive responses by the plastic industry, the current outlook and the foreseeable future of the plastic supply chain remain positive. Companies can make the most of changing consumer preferences and government intervention in various ways.
Below are the risks facing the plastic industry and how those from the manufacturing and throughout the plastic supply chain are responding:
Lobbying by environmental activists, pressure from international organizations, and public outcry resulted in stricter regulations and standards for the use, production, and disposal of plastic products.
One example is the REDUCE Act of 2023, which is awaiting passage. If signed into law, this legislation will impose a 10 cent-per-pound (later rising to 20 cents) excise tax on the sale of virgin resin used to produce single-use plastics. Other regulations include bans on single-use plastics and extended producer responsibility (EPR) schemes.
Companies in the plastic supply chain are directly affected by these and other regulations. Although there have not been any federal laws passed, Indiana, Utah, and Kansas have passed laws for advanced recycling, which will open up new jobs, while other states such as Masssachuesetts have legislation pending banning single-use bottles.
Participation with industry associations such as the Plastics Industry Association creates a unified front for government lobbying to better shape these regulations through collaboration.
Legislation affecting the supply chain is largely from environmental concerns. If certain plastics are found harmful to the environment, NGOs, activists, and popular opinion leads to a push for bans. On the other hand, sustainable plastic products can benefit from support, pushing the government into incentivizing them.
Suppliers and manufacturers who adopt sustainable practices, including sustainable plastic such as bioplastics, and a circular economy(where single-use plastics are reused, repurposed, or recycled) are better able to avoid government sanctions and to benefit from incentives.
The number of environmentally conscious consumers has multiplied with the heightened awareness of plastic pollution. As a result, there is an increased demand for sustainable plastics.
However, this has also created a customer base that is choosing to purchase from socially responsible companies. As such, companies investing in sustainable plastic alternatives and the circular economy have a growing market to tap. Staying connected within the industry keeps the supply united to benefit from these markets.
Conventional oil-based plastics, such as ethylene and propylene, come from petrochemicals the future accessibility of which is forecasted to be finite compared to demand.
Sustainable alternatives aren’t spared from these uncertainties either, especially if they are produced on a large scale. Emerging technologies from nanotechnology products to chemical recycling are entering the field but need the oversight and guidance of the manufacturers and distributors in the plastic supply chain.
By networking, companies can share knowledge and resources to improve their design and production of plastic products. With collaborative efforts, they can also better cope with changes in raw material supply.
The logistics industry is benefiting from the incorporation of sustainable plastic products. Plastic pallets, for instance, promote sustainability and improve hygiene in several ways.
Despite being more costly to produce, compared to wood or metal pallets, plastic pallets excel in the following ways:
Other items finding applications in the supply chain and logistics industry include plastic crates, totes, and containers. These are mostly made from HDPE or PP, hence offering similar benefits.
Public awareness may appear to be high, but it’s still lacking in many areas. For example, many consumers do not understand the idea of sustainable plastics and falsely construe this to mean bioplastics.
Companies with sustainable plastics and those implementing the circular economy will be better served by investing in educating the public through their awareness and their campaigns.
The Plastics Industry Association (PLASTICS) brings together companies from different sectors in the plastic supply chain to collectively advance plastic sustainability. Members gain access to the organization’s vast resources, training programs, initiatives, and networking events, enabling them to remain updated on the latest industry news and developments.
Contact PLASTICS today for more information on how we can help you unlock the growing plastic supply chain opportunities.ith how plastics are transforming the logistics of organizations across an array of industries.
PLASTICS and the Future Leaders in Plastics (FLiP) Committee are devoted to supporting and encouraging the next generation of plastics leaders who will play a crucial role in the innovation, technology and future of the plastics industry. FLiP’s mission is to provide young professionals under the age of 40 the exposure, education and resources they need to build lifelong careers in plastics. Want to join? Want to get your employees involved? Email: [email protected]
