The number of consumers willing to pay more for sustainable packaging is increasing and so is the opportunity for expansion of the post-consumer recycled (PCR) plastic packaging market. A substantially large number of companies operating in the packaging industry had the foresight of acting to the shifting trends.
Many among them are addressing the demand by improving the sustainability profile of their packaging solutions. One of the ways of achieving this is by increasing the PCR content, especially in rigid packaging that often uses polyethylene terephthalate (PET).
Against this backdrop, Transparency Market Research (TMR) predicts the global market for PCR plastic packaging to reach a valuation of US$ 36.4 Bn by the end of 2024. With leading brands stating their intent to use recycled plastic as an attempt to reducing plastic waste issues, the market has the potential of recording impressive growth between 2024 and 2028.
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Key Findings:
- PET recycled plastic is expected to account for nearly 3/5th of the market in terms of value. Nearly 98% of PET and HDPE bottles were recycled in the U.S. in the last year. The demand witnessed in this category is poised to surge in response to the need for better barrier strength from packaging
- Based on application, bottles are expected to account for the leading percentage of PCR plastic packaging used across industries. The segment is forecast to create an incremental opportunity of US$ 13.5 Bn in 2024-2028
- Among end users, the cosmetics and personal care industry is forecast to emerge as a lucrative segment. It is expected to showcase growth at above 6% CAGR
- Homecare and Toiletries segment as well is forecast to record a gain of 20 bps by the end of 2028
- Regionally, Europe is forecast to account for leading share in the global market. Asia Pacific also will emerge as a lucrative pocket, backed by the abundant availability of raw materials and cost-effectiveness
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Government Initiatives Giving Impetus
The sustainable packaging drive is garnering immense support from various governments across the world. International bodies too are supporting this initiative from the fore. For instance, California lawmakers have very recently approved a legislation requiring beverages companies to use recycled plastic. If the bill is signed, it will be first of its kind recycled-content law for plastic bottles in the U.S.
The Food and Drugs Association as well recommends recycled materials for packaging new food containers. In order to ensure contamination-free packaging, it has developed various safety guidelines and regulations. Likewise, the EU plastics tax, which has been accounted by the European Council as a part of its €750-billion coronavirus recovery fund agreement is intended to encourage the use of recycled plastic.
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Under the new regulation, a tax of €0.80 per kilogram, or €800 per ton will be levied on the use of non-recycled plastic packaging waste and is slated to come into effect from January 1st, 2024. Initiatives such as these are predominantly construing shift from conventional to recycled plastic.
Stronger incentives for improved design of plastic goods to ensure easy recycling and investment in waste collection infrastructure from diverse sources are likely to give significant impetus to the market for PCR plastic packaging.
Consumers Willingly Spending on PCR Plastic
Product packaging is set to play a crucial role in creating a sustainable future for global economy and consumers are more than willing to play their part in this movement. They are showing visible preference for brands that can help them make sustainable choices and recycled or recyclable packaging clearly has an edge.
Rising awareness among consumers about environmental impact of plastic disposal is pushing brands away from the conventional materials. Consumers are keen on following a sustainable lifestyle. They are cautiously choosing products that will help them to attain it. The changing pattern of consumer behavior has been tipping scales in favor of the market.
Post COVID-19 Sluggish Growth Likely
The global market for PCR plastic packaging is projected to go through a temporary phase of sluggish growth. Supply chain disruptions caused due to the unprecedented outbreak has hampered production across multiple industries. Sales in the cosmetics industry, which accounts for the leading share in the market, has taken a nose dive during the pandemic.
Consumers also are likelier to spend on essential items. Discretionary purchase is on the rise, which could hamper the growth of the market to an extent. Drop in revenue flow in the cosmetics sector will have a significant impact on PCR plastic packaging sales.
Due to pandemic, several companies are compelled to shutter their operations temporarily following stringent government orders enforced to contain the spread of the virus. This has had a direct impact on the revenue flow of the market.
On the flip side, increasing sales of consumables such as beverages, convenient food, and pharmaceutical products is paving way for continued growth of the market amidst tumultuous times. The demand for non-contaminated consumable products is surging exponentially. In response to this, the sales of sustainable packaging is expected to gain momentum.
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