FocusRoland BergerPlastic recyclates:The new goldLeveraging new dynamics in recyclingregulations and technologies2490RolandBergerMANAGEMENT SUMMARYPlastic recyclates:The new gold /Leveraging newdynamics in recycling regulations and technologiesPlastics are highly versatile materials with unlimited uses.But,as consumption rises,theypresent a sustainability challenge because of their fossil-fuel origin and mismanagementof wasteRecycling of plastic waste is a key lever to reduce virgin plastic production and cutplastic littering,landfilling and incineration,thus also reducing emissionsCurrently,around 10%of global plastic waste and 25%of European Union plastic wasteis recycled.Rates are low due to poor consumer awareness,limited regulation outsideof the EU and poor collection and sorting (infrastructure)However,two key factors are now driving a new momentum in EU plastics recycling:-EU recycling targets are being tightened(for example,55%of plastic packaging to be recycledby 2030,recycled content increased and more collection scheme mandates)and regulation isbeing expanded to cover non-packaging plasticsNew digital technologies and the scaling up of new recycling processes(advanced mechanicaland chemical recycling)are improving yields,quality and the value/price of recyclatesBased on this new momentum,plastic recyclates have the potential to become the"new gold"with strong volume growth and very attractive marginsCompanies along the plastics value chain must act now to take advantage of newopportunities,such as harnessing the sustainability trend and securing upstreamfeedstock and downstream profitsM&A presents significant opportunities for players across the value chain,with many industry players recently moving to consolidate or integrateActions to exploit the opportunities include pushing for improved separate-sourcecollection schemes,investing in advanced technologies(sorting,chemical)and scoutingfor partnerships along the value chain