The global recycled plastics market will grow at a steady CAGR of more than 4% uptil 2020, as per a report by Technavio. The growing demand for plastics from various industries including healthcare, food and beverage, oil and gas, and construction is expected to propel the growth prospects of the recycled plastics market globally.
For instance, it is estimated that in 2020, India’s consumption of plastics will increase to 20.02 mln tpa from the current 8.01 mln tpa. Moreover, plastic bottles will continue to be the leading source material for recycling and will constitute to more than half of the overall waste plastic consumption for recycling. The significant efforts in increasing the collection of rigid plastic like thermoformed packaging and bulk containers will spur the growth of the recycled plastics market over the forecast period. Factors such as a growing concern for the environment has intensified the focus on recycling plastic. Although plastic has plenty of applications in automotive, healthcare, defense, and energy industries, recycling of plastic materials is critically important from an environmental point of view as it helps keep global warming, ozone layer depletion, and environmental pollution under check. This rising concern for the environment is expected to the bolster the growth of the recycled plastics market until the end of 2020.
In 2015, the PET segment dominated this market and accounted for a market share of nearly 60%. Due to its cheaper cost and easy availability, PET is widely used in the manufacture of bottles and containers. Moreover, products like alcoholic beverages, soft drinks, detergents, and edible oils are also packaged using PET containers. The market for recycled plastics is expanding as recycling not only saves energy and decreases emissions, but also helps in creating jobs. The rising environmental concerns and the recent shift toward PET bottle packaging will aid in the growth of this market segment during the forecast period.
The consumption of recycled plastics in the non-food contact packaging segment is expected to grow at a CAGR of close to 6%. Recycled plastics are used in the packing of industrial processing products. The characteristics of recycled polyethylene terephthalate (PET) makes it the preferred material for producing bottles for packaging water, dairy products, and beverages. “Developing countries are leading the demand growth for carbonated soft drinks owing to the population growth and rise in disposable income,” says Chandrakumar Badala Jaganathan, a lead analyst at Technavio for plastics, polymers, and elastomers research. The annual growth rate of the packaged food industry is about 20% lower in middle-income countries as compared to the developed economies. This growth in the packaged foods segment will drive the demand for recycled plastic in these countries.
The consumption of recycled plastics in the food contact packaging segment is expected to grow at a CAGR of more than 3%. Plastic packing ranges from airtight wraps to containers. Packaging plays a vital role in delivering safer foods from the farm to the consumer. Plastic is also used to freeze foods that are to be stored for long periods. In the US, regulations regarding food packaging have been laid out by the FDA. These regulations are also laid out for plastics that come in contact with food. PS and PE are mostly used in food packing. The innovation in plastic design has also driven the market, for instance, improved air packing helps preserve the food by capturing a small amount of air in a package. These contribute to extending the product's shelf-life by slowing bacterial growth.
The global consumption of recycled plastics in the construction segment is predicted to grow at a CAGR of over 3% during the forecast period. The search for alternative materials has increased the adoption of plastics in the construction segment. Further, product manufacturing has seen a shift toward the manufacturing of sustainable materials. Recycled plastics and virgin plastics have similar mechanical and chemical properties. Therefore, the demand for recycled plastic is increasing in the construction sector.
The global consumption of recycled plastics in the automotive segment is expected to grow at a CAGR of almost 2%. The demand for lightweight materials as alternatives to metals is growing significantly in the automotive industry. Recycled plastics are likely to be sought as potent alternatives as they not only decrease the curb weight of the vehicle, but also reduce the environmental effects of plastic disposal, increase energy efficiency, and decrease the overall carbon footprint of the vehicle considerably. “Further, the increased acceptance of electronic devices is providing opportunities for the use of recycled plastics for producing casings, circuit boards, and other components that are extensively used for manufacturing electronic devices for households and vehicles,” says Chandrakumar.