Insights: Leveraging recycled plastics in the construction sector

Plastic has a bad rap in many places because it is widely perceived as a principal cause of pollution. Across the world, campaigns are underway to ban plastic bags, bottles, and other plastic products to prevent them clogging up landfills and oceans.

Yet in one critical respect, plastics can be a powerful force for sustainability. We’re talking here about recycled plastics and their potential use in building materials, as substitutes for other, high-emissions materials. This is a trend that is just picking up worldwide. GCC countries have a major opportunity to become world leaders—and reap significant benefits from doing so, both for the economy and the environment.

A sustainable substitute for high-emissions construction materials
Traditional building materials such as steel, cement, and brick come with a hefty environmental footprint: manufacturing, transporting, and installing them in construction projects are highly carbon intensive. Indeed, according to United Nations Environment Programme and the Global Alliance for Buildings and Construction, the building materials sector accounted for about 10 per cent share of all greenhouse gas (GHG) emissions globally in 2019.

Recycled plastics are a viable and low-emissions alternative to these materials in a wide range of applications. For example, plastic waste can be used as an ingredient to make “green” concrete. And recycled plastics can substitute for steel and brick. Their use in construction is gaining acceptance worldwide, particularly in Europe, where, according to Plastics Europe, just under half of post-consumer recycled plastic is now used in building and construction, including for bricks and fences.

GCC countries have an opportunity to take the lead in this area, given the huge construction boom now taking place across the region. This high-volume building activity includes Saudi Arabia’s NEOM city and the Red Sea project. According to Mordor Intelligence and internal Strategy& analysis, the GCC market for construction materials is expected to almost double in size to $101 billion in 2030 from $55bn in 2019.

Using recycled plastics at scale as part of this construction boom will lead to a significant reduction in carbon emissions, helping the region achieve net-zero emissions targets and giving a new, powerful focus to research and innovation in the GCC.

Three key benefits: Cutting emissions, boosting the economy, and spurring innovation
In our latest research, we modelled the benefits by analysing nine specific applications of recycled plastics use in building materials in the region. Based on our findings, we estimate that GCC countries alone could cut CO₂ emissions by about 2 to 2.5 per cent of the expected emissions from buildings materials sector by 2040. As well as the positive environmental impact, substituting recycled plastics would spur innovation, create up to 13,000 jobs, and boost GDP by an estimated $2 billion to $3bn by 2040.

These are ambitious goals, and all key stakeholders will need to take action to achieve them.

First, regulatory standards and targets will need to be established. For now, there is no comprehensive legislative framework in GCC countries that applies specifically to the use of recycled materials in building and construction. Indeed, guidelines and standards are lacking for the use of recycled plastics more generally. Manufacturers also lack incentives to use recyclables in building materials. Governments will need to ramp up state funding and incentives to promote the use of recycled plastics in construction and implement guidelines to lift and sustain demand. Regulators can help by setting appropriate targets and standards for the sector.

Second, the recycling ecosystem in GCC is underdeveloped. Greater investment is needed to develop and commercialise recycling technologies such as chemical recycling for mixed polymers feedstock conversion; for now, private-sector participation across the plastic recycling value chain is relatively limited. National champions in the GCC countries should play a lead role in developing the ecosystem through partnerships and strategic alliances with global players, as Saudi Aramco did recently in signing a memorandum of understanding with Armorock, a leading US-based technology company, to validate the feasibility of using non-metallic polymer concrete applications in building.

Third, research efforts will need to be stepped up, through the establishment of dedicated innovation hubs across the GCC countries. The use of recycled plastics in the building and construction sector for now remains marginal – it makes up less than 1 per cent of the total material used in building worldwide. From an R&D perspective, many of the key applications are still in the research phase or under development. Thus, prioritising efforts to use recycled plastics in construction in the GCC would create a focus for the growing R&D initiatives in the region as well as an investment opportunity for burgeoning technology funds.

A big step on the road to achieving net-zero emissions
While the changes required are not negligible, the benefits that the greater use of recycled plastics in construction can generate would validate the effort.

Along with the economic upside, a key benefit would be the boost that recycled plastics could give to the GCC’s ability to meet sustainability goals.

Most countries in the region have now made firm – and often ambitious – commitments to reduce net GHG emissions to zero in the next 30 to 40 years, as part of the global effort to limit global warming to 1.5 degree Celsius above pre-industrial levels.

GCC countries are focusing on heavy investment in renewable energy sources as their key to achieving these goals. But given the surging building activity and economic diversification plans, they will need to find additional ways to bring their net emissions down to zero – and enhanced use of recycled plastics could contribute in a powerful way.

For GCC countries, embracing recycled plastics in building materials thus creates three major upsides. First, this would generate significant opportunities to become a worldwide leader in a high-potential but nascent sector and to further the region’s innovation capabilities and profile. If done adroitly, the GCC could be in a position to help define and set global standards for recycled plastics in construction.

Second, it would provide an economic boost, both in GDP growth and job creation. And third, at a time when all countries are looking for ways to reduce GHG emissions, the large-scale deployment of recycled plastics will help GCC move faster to net-zero emissions – and, quite literally, build a better future for their economies and the planet. And all that, perhaps surprisingly, with plastic.

Devesh Katiyar is a principal, and Ankit Gupta is a manager, at Strategy& Middle East, which is part of the PwC network