GCC Can Lead Circular Plastics Push, Amid Global Supply Shortfall Of Up To 35 Million Tonnes

The Gulf Cooperation Council (GCC) could play a critical role in closing the global gap in recycled plastics - with demand projected to outstrip supply by up to 35 million tonnes by 2030, a study showed.

To seize this opportunity and position itself as a circular plastics hub, the GCC will need to invest an estimated $12 billion to $25 billion in recycling infrastructure by 2045, according to industry assessments, says a new report from KAPSARC and Strategy& Middle East, part of the PwC network.

Although demand for recycled plastics is rising by 8 per cent annually - outpacing the 2 per cent annual growth in virgin plastics - supply continues to lag behind. Despite growing momentum, less than 70 per cent of global demand for recycled materials is being met. The shortfall is expected to reach 35 million tonnes by 2030.

Today, GCC countries generate around 10 million tonnes of plastic waste annually but only 10 per cent is recycled, reused or recovered. This ratio is on par with the global average, yet behind leaders like China and other OECD countries. In Saudi Arabia, the plastics and chemical sectors contribute 6–9 per cent of GDP - underscoring the region's economic exposure to global shifts in plastics demand and the opportunity to lead in circularity.

Devesh Katiyar, Partner at Strategy& Middle East, said:“With global mechanical recycling still under 10 per cent and pressure mounting from ESG mandates, carbon regulations, and shifting consumer preferences, there's a growing mismatch between supply and demand. Unless addressed, this imbalance could delay climate progress and reinforce reliance on virgin plastics. The GCC is uniquely positioned to bridge this gap by leveraging its petrochemical strengths for circular solutions.”

Globally, chemical recycling - especially pyrolysis - is gaining momentum, but its commercial viability depends on feedstock availability, energy prices, and plant efficiency. Modelling by KAPSARC and Strategy& shows that chemical recycling plants in the GCC that are embedded in petrochemical clusters can break even at plastic waste feedstock prices of $240 to $280 per metric tonne. Even at higher prices of $450 to $500 per tonne, profitability is still achievable, provided recycled plastics continue to command a market premium over virgin materials.

Jayanth Mantri, Principal at Strategy& Middle East, said:“The economics of chemical recycling are compelling for the GCC, especially when integrated into existing systems and supported by the region's competitive energy costs. Unlike traditional petrochemicals, chemical recycling is knowledge-intensive and offers potentially higher economic multipliers and innovation-driven growth.”

Investment, trade, regulation and innovation

Low-cost energy and existing infrastructure make the GCC well-positioned to lead. According to the report, success requires progress on three fronts: feedstock access, regulatory certainty, as well as innovation and consumer awareness.

To ensure stable feedstock supply and global market access, the GCC must establish formal plastic waste trade corridors with Asia, Africa, and Europe. This includes upgrading ports, customs systems, and cross-border traceability infrastructure in line with international standards - securing inbound waste streams and enabling outbound exports of certified recycled resins.

To reduce reliance on foreign policy shifts, the region must also accelerate domestic regulatory reform. Key priorities include extended producer responsibility (EPR) schemes, recycled content mandates, pricing reform for virgin polymers, and harmonized quality and safety standards across the GCC.

Scaling circularity will also depend on investment in chemical recycling, smart sorting systems, and blockchain traceability tools. Government co-funding can support R&D in partnership with industry, while consumer incentives and awareness campaigns will help drive demand and improve waste segregation. The report also calls for blended financing to help build a modern circular plastics ecosystem, noting that GCC nations should leverage sovereign wealth funds, PPPs, and de-risking mechanisms - to mobilize capital and attract global players.

“The new plastics economy offers a powerful opportunity for GCC nations, building on its core strengths in petrochemicals, access to capital, and ability to scale technologies. With the right vision and coordination, the region can lead the shift toward a more circular industrial future,” Katiyar said.

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