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Challenges of Sustainable Procurement in the Plastics Industry

Climate chaos and marine pollution are constantly threatening the survival of the human race. Plastics are a main contributor to greenhouse gas emissions. However, modern society is overly reliant on plastics because of their myriad applications, from plastic bags to medical devices. Currently, society cannot function without plastics. One possible solution is to achieve sustainability in the plastics industry, and plastic raw materials need to deviate from fossil fuels. Bioplastics or recycled plastics are considered as two possible options. Hence, the supply chain must evolve from linear to circular, ensuring a continuous supply of raw materials. However, various challenges impeding this change must first be addressed. This article highlights the constraints of supply, economic, technical, quality and environment that the plastics industry faced when moving to sustainable procurement.

Plastic

Image taken from SIPMM: https://publication.sipmm.edu.sg/reverse-logistics-plastic-materials/

Importance of Sustainability

In the plastic industry, sustainability is commonly used to describe the balance between cost, environment and human health. Controlling waste generation is vital to ensuring sustainability. The lifecycle analysis of plastic products plays a key role in it. Back in 2016, countries came together to sign the Paris Agreement. Since then, there has been a regular push for a collaborative legal agreement targeted to end plastics pollution by the end of 2024. This will alter the supply chain framework from linearity to circularity. The recent regulatory changes highlighted the importance of sustainability in the plastics industry. It is no longer an issue of corporate responsibility but rather a tactical obligation for business continuity and survivability. This shift will also yield economic and environmental benefits such as reduced operating costs, minimal carbon footprint, etc.

trash bin

Image taken from https://unsplash.com/photos/red-yellow-and-green-trash-bins-FoG7PKNYjpM

Supply Constraints

Most single-use plastics originate from fossil fuels. These plastics have two main drawbacks: their production requires higher energy consumption, and their wastes tend to pollute the environment. A possible alternative to these plastics is bioplastics because they are biodegradable. However, feedstock for such bio-based plastics is derived from diverse food sources. With the ongoing food crisis in developing countries, it remains a concern for supply continuity. The introduction of legislation on plastic packaging back at the end of 2022 encompasses the whole of the European Union. This pushed for more incorporation of recycled content in single-use plastics applications. This legislative shift increased the demand for recycled materials. Unfortunately, material quality may not meet the required standards for its intended applications, reducing available supply. Supply is further restricted due to lacking collection infrastructure and technologies; these will be covered later. One of the possible solutions would be to share the supply burden between bioplastics and have proper recycling infrastructure to maintain quality recyclables.

Economic Constraints

Unlike traditional manufacturing facilities, sustainable raw materials require a separate set of processing equipment to maintain production. This equipment requires a lump sum of investment during the startup. Continual improvement in the choice of machinery is required to maintain competitiveness in the current technological evolution, demanding regular financial upkeep. Additionally, the collection and sorting of plastics, which are essential for higher recycling efficiency, also give rise to higher logistic operating capital. Should segregation of waste fail during collection, additional processes will be required to eliminate contaminants prior to waste recycling. This will also result in the possibility that the collected waste is deemed unsuitable for recycling. The above factors need to be resolved to ensure quality recyclables. However, all these costs will need to be amortised into the raw material price. Pricing for recyclables were pushed even higher from regulatory compliance requirements for certain niche applications. Compliance requirements like the Global Recycling Standard (GRS), UL 746D added premiums on the pricing of the recyclables, stretching the cost higher than prime materials. To mitigate this economic factor, there is a need for procurement to have strong supplier relationships to arrange competitive economic agreements.

Coin

Image taken from https://www.freepik.com/free-photo/plant-growing-coins-glass-jar-money-green-grass_8970262.htm

Technical Constraints

In recent years, plastic pollution has been rampaging the environment. Wildlife ecosystem, climate changes and the environment have all been affected due to improper waste management. Additionally, current recycling technology (mechanical, chemical and pyrolysis) has limitations in producing recyclates from all available plastics waste. Current technologies only allow for recycling of well sorted waste, free from cross-contamination and hazardous substances. Also, insufficient machine makers and the weak tooling sectors hinder recycling efforts because they are unable to process certain waste. Unfortunately, another concern is that post-consumer recyclates tend to have poorer mechanical properties when it is compared to the virgin plastics resins. Hence more additives need to be added to enhance its properties. The quality of these recyclates can be ensured through substantial investment in research and development to advance the technology and tooling sector. An effective supplier relationship to establish credibility remains one of the few options.


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Tan Leng Kiat Kenny
Tan Leng Kiat Kenny
Kenny Tan Leng Kiat has substantive experience in the thermoplastics industry and has recently undertaken the specialised role of procurement and supply. He holds a Master’s degree in Chemistry from the National University of Singapore (NUS). Kenny is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM), and he completed the Diploma in Procurement and Supply Management (DPSM) in December 2024 at SIPMM Institute.
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