A push for plastics circularity in the Middle East

With the circular economy thinking taking center stage and driving the conversation on sustainability in the chemicals industry, in the Middle East, government agencies and government-affiliated investment arms are spearheading efforts to eliminate the use of landfill.

Given the region's limited progress in the waste management and plastics recycling sectors to date, a rapid acceleration over the rest of this decade will be needed if targets are to be met.

The two biggest economies in the Gulf Cooperation Council, Saudi Arabia and the UAE, have both set ambitious 2030 goals, with the Saudis aiming to divert all solid municipal waste from landfill and Dubai aiming at zero waste to landfill.

Currently, only 5%-7% of plastics are recycled in the region, while the vast majority, about 90%, is sent to landfill, with the small remaining amount being exported, according to the Gulf Petrochemicals & Chemicals Association. To put these figures into context, the European Union together with Norway, Switzerland and the UK recycled some 35% of post-consumer plastic waste in 2020 while another 42% went to energy recovery, and only 23% was landfilled, according to Plastics Europe.

"There is a need to develop critical infrastructure — both soft and physical — to enable plastics recycling in the region. Policies that support the development of the recycling industry must be the starting point, followed by regulations, including technical standards, that help create a market for recyclates," Dr. Abdulwahab Al-Sadoun, secretary-general at GPCA, said.

Feedstocks a key challenge

Similar to other parts of the world where waste collection systems are not very sophisticated, sourcing quality feedstock is a major hurdle to establishing a significant plastics recycling industry in the Gulf region and achieving circularity. Sorting waste plastics at source is a vital element in providing high quality feedstocks to recycling plants.

With this in mind, government policy and investment from the private sector are driving efforts for the collection and sorting of plastics in the region, with several players along the value chain already involved in operating material recovery facilities and recycling plants.

Policy change has been welcomed by the industry as a galvanizing force, with national targets such as those set out by the UAE and Saudi Arabia already laying out the overarching sustainability goals for the next decade. Given this foundation, the actual build-out of waste collection and sorting system in the area has been commonly looked upon as the way forward, with some market participants noting that a complete systematic overhaul was needed, and so was a move to raise the existing capacity of materials recovery facilities.

The Saudi Investment Recycling Company has been active in establishing new MRFs in Riyadh. In 2020, it started a new construction and demolition waste recycling plant north of the city and has since announced its desire to establish public-private partnerships with waste management and recycling companies for new projects, including waste-to-energy.

Within a global context

Aside from the major public-private joint investments happening in the Gulf, the Middle East's unique position as a significant and competitive producer in the global polymer scene may also provide additional context in the region's pursuit of sustainability.

"The Gulf is a major exporter of polymers and producers may consider major industry trends happening in their target markets," said Olivier Maronneaud, global lead of plastic circularity at S&P Global Commodity Insights. He also noted that in addition to some major plant plans mentioned as above, some international companies have a direct or indirect production footprint in the region in the form of joint ventures, which would likely be a force in pushing forward their respective green agendas as well in order to comply with their global pledges.

Sustainability-related projects in the Middle East often have some elements of partnership with the regional governments in the form of joint investments. While this may be praised as an effective way to facilitate sustainability goals, it may also lengthen the discussion process in the investment decision stage.

"[Plastic recycling in the] Middle East to me is slow to develop, because there are so many interests entangled, but you have all the sovereign funds — they are a tremendous help," said Christian-Yves Crepet, a plastics recycling consultant. "To me it would not take much time. From now to the next five years you will see the Middle East will be almost but not up to Europe [in terms of recycling progress], but even in Europe you have terrible discrepancy.

Key enablers in UAE's zero-waste target A

promising project relying on mechanical recycling technology is the 12,000 mt/year recycled polyethylene terephthalate (R-PET) plant to be jointly developed by environmental management group BEEAH, Veolia's Middle East arm RePeeT and food and beverage conglomerate Agthia Group. The MOU was signed in January. While its capacity may not be very remarkable, the project nevertheless will be the first food-grade plastic recycling facility in the UAE, coming with seven-year offtake and feedstock supply agreements for Agthia and BEEAH, respectively.

Some key obstacles stand in the way of recycling becoming more widely adopted in the region. For instance, an R-PET trader said that REACH-certified material availability may still be limited, adding that trade flows for recycled polymers remain quite restricted. REACH is an acronym for Registration, Evaluation, Authorization and Restriction of Chemicals, and is one of the sustainability-related certifications that European market players look for along their supply chain.

Local and international players are also working on bringing in innovative technologies to propel the industry forward, such as blockchain to help traceability and packaging design to enhance recyclability.

Policy drives recycling efforts in Saudi Arabia

Circularity goals set out by Saudi Arabia's government policy as part of its Vision 2030 have helped drive plastic recycling efforts in the country. Vision 2030 targets include the diversion of 100% of municipal solid waste, 60% of construction waste and 85% of industrial waste from landfill, providing a framework for both private and public entities to establish recycling projects in the country.

"Policy change is the single-most important and effective way we can develop circular economies in the region. It can compel the private sector to make the necessary investments, enhance their capabilities and lead to socio-economic benefits," Al-Sadoun said.

Saudi Arabia generates the greatest volume of plastic waste in the GCC due to its large population, rapid urbanization and fast-growing economy. An estimated 1.5 kg to 1.8 kg per person per day of plastic waste is generated in the kingdom.

SIRC was established in 2017 to facilitate the processing of post-industrial and post-consumer waste, including plastic waste, by setting up and partnering with operators of sorting and mechanical recycling centers. In 2021, SIRC signed a memorandum of understanding with SABIC to aid in constructing its first chemical recycling plant, which would convert plastic waste into pyrolysis oil.

SIRC plans to feed its chemical recycling plant with mixed plastic waste streams collected from its MRFs.

Chemical recycling at a fledgling stage

Chemical recycling is still quite nascent in the Middle East. Nevertheless, some encouraging developments could be observed as projects continue to be announced in the region.

Chemical recycler Quantafuel has teamed up with BASF and the government investment arm DUBAL Holding, to create an 80,000 mt/year chemical recycling plant in Dubai. The project would come with a price tag of $200 million-$250 million, according to Quantafuel's latest disclosure.

A feasibility study is underway and the chemical recycler expects that a final investment decision could be made as soon as in Q2 this year. To ensure a ready supply of suitable feedstocks for the plant, it will likely be co-located with a sorting facility, according to Quantafuel's CEO Lars Rosenlov.

Rosenlov also stressed the scope and interest for chemical recycling in the Middle East.

"The reason for them to invest, I think, is showcasing to the Western world that they have a strong commitment to environmentally friendly solutions and CO2 emissions reductions," he said. Chemical recycling of plastics typically employs a pyrolysis process to treat unsorted mixed plastic wastes and is regarded as a solution to help recycle plastic wastes, such as film-based food packaging, that are not commonly tackled by mechanical recycling.

At the end of 2022, Aramco, the parent company of SABIC, announced that it had taken a final investment decision with TotalEnergies for the construction of a petrochemical complex that would process feedstocks derived from plastic waste to produce recycled plastics. The complex will be integrated into the existing SATORP refinery in Jubail and will feature two polyethylene units.

Expecting progress ahead

Balancing rapid urbanization, consumerism and economic growth against the region's sustainability targets will determine the success of these strategies in the decades ahead.

With the activities around circularity of resources, including plastic recycling, progressing at pace and with national waste reduction goals already set out, more pragmatic actions related to waste collection and recycling with both public and private investment involvements could advance the region's journey along the path of sustainability in the coming years.

This article was first published in the May 2023 edition of Commodity Insights Magazine. Click here to download the magazine.