Packaging is not always thought of as a technologically advanced sector. As it shifts to a more circular, lower-carbon and lower-waste model, new innovations will be a vital part of that transformation. In the final part of our three-part interview with the leaders of our new sustainable packaging fund, Neil Cameron and Fredric Petit discuss the hardest technical challenges in the space and whether they expect regulation to drive positive change.
In your view, what are some of the hardest “deep tech” challenges in packaging that need to be overcome?
Neil: The solution to technical issues in packaging today is often, “let’s just throw more stuff at it”. If we think about what packaging’s core functions should be, and start with the first—“contain”—the way you solve a problem there is, you either have more packaging or more different types of packaging, so-called multi-laminate solutions. With “protect”, the next function, that often means you have to have barrier properties that will, for instance, stop oxygen or gas or water from getting in or out. Historically, the solution to that is to add extra layers of coatings. With “inform”, the solution is always simple: put a label on it and put some words on the label.
The deep tech solutions involve being clever about the material sets that we use so that we can design packaging that not only delivers its primary function, but also helps the package be ready for recircularization and end of use. If we’re going to talk about the circularization of packaging, then the packaging consumed has to be amenable to being a raw material again, and that is impossible with many of the structures that are used today. What we’re looking forward to, however, is deep tech helping to deliver solutions such that traditional packaging can become a raw material for another trip around the value circle.
Another challenge is the “inform” piece. The deep tech solutions that are coming online are doing considerably more than just printing words on a label and slapping the label on the package. They’re giving the consumer traceable insight on where the product came from and access to ancillary and supporting information on the use of whatever it is they just bought. They can also give the producer, the packager or the seller of the good insight into how the consumer is consuming the product, so they can improve their product and create more value. We can also use technology to achieve greater traceability of the package itself, so everyone can be sure that the material is indeed the material that’s stated on the package. When we see a label that says, for example, “25% of this package is made of recycled material”, we can actually trace that material back to its source and verify that claim.
Fredric: The biggest challenge that I see is that virgin raw materials are too cheap. That will change—not just because of recent spikes in oil and gas prices, but also due to rising costs of carbon dioxide and penalties for its use. Today, recycling is possible, but it’s too expensive. If you look at polyester, recycled polyester is more expensive than the virgin variety. This needs to change in order to drive the development of a circular economy. I expect that’s going to happen, but this burden shouldn’t rest only on the shoulders of industry and startups—for sure, they all need to come up with new solutions—but regulation is also needed in order to drive systemic change.
That brings us to the final point, which is about regulation. What would you like to see from a well-functioning regulatory regime that incentivizes this shift to circularity?
Fredric: First of all, the lack of uniformity in regulations is a big challenge. Acting with best intentions, states, countries and regions have developed regulations on producer responsibility, deposit schemes, recyclability, compostability, import and export of (largely plastic) waste, use of recycle content and more. Suppliers of packaging raw materials, packaging producers and brand owners operating on a global scale, are having trouble keeping up with all these new regulations, while at the same time devising uniform solutions on an extensive and cost-competitive basis.
Secondly, there should be more incentives for end users to recycle their packaging waste. This could be done via deposits or other means. You see a lot of interesting new startups looking into this, especially in Asia, but it should become a global trend.
Putting things simply, in Europe a lot of packaging waste is collected, sorted and recycled, although a large fraction is recycled via incineration—“thermal recycling” or “energy recovery”, in the jargon. That’s of course not ideal. In the United States, a lot of waste is collected but landfilled, while in emerging economies, it’s often not even collected on a regular basis. Those are the largest and most obvious steps that need to be done and where regulation can play the biggest role in setting up that capacity.
Neil: Historically, regulation has been considered a scary enabler for technology adoption. I think back to the solar boom, which was very difficult to navigate for venture capitalists, because Italy, say, would have a massive solar incentive program, and everyone would flock to Italy to deploy solar, and then the policy would end and the market would dry up.
Regulatory drivers are unpredictable and difficult to use as a guiding light for where we should invest and when, unless they can have global impact, like with China’s waste import ban I described earlier. In this instance, a massive percentage of all packaging waste was going to one place. China could thus unilaterally make regulatory changes that had global impact and are quasi-permanent.
Overall, though, it’s hard to say what the “right” regulation is, as this often depends on where you are. We see regulations banning single-use plastics, single-use plastic carrier bags and straws, regulations requiring the use of recycled content in packaging, and so on. These are all positive drivers that help speed up the adoption of circularization, and being aware of which regulations are coming in and which ones are fading out is important. The newly announced UN treaty on plastic pollution will further help jurisdictions develop guidelines in this area.