Ep 218: Can paper fix the flexibles problem?

[00:00:00.190] - Laura Smith

We're looking at 20 trillion items of flexible packaging ending up in the ocean by 2040.

[00:00:05.230] - Jonathan Gill

Unilever is part of that problem, and we're very committed to being part of that solution.

[00:00:09.970] - Valerie Langer

What we don't want to do is go from the plastics frying pan into the forest fire, so to speak.

[00:00:17.120] - Pippa

25,000 pieces of flexible plastic packaging, things like sachets and wrappers, leak into our oceans every second. That's a huge problem and there isn't one solution that's going to fix it all. A new paper from the Ellen MacArthur Foundation explores the role that paper can play in making sure that we don't swap one problem for another. To help me dive into that more, I'm joined by one of the paper's authors, Laura Smith, alongside Jonathan Gill from Unilever, one of over 45 organisations to endorse the paper, and Valerie Langer from NGO Canopy. Welcome to The Circular Economy Show. I'm Pippa. Laura, why are we talking about flexible plastic packaging?

[00:00:59.650] - Laura Smith

In so many ways, flexible plastic packaging has been seen as a bit of a wonder material. It's great in so many ways. It's really lightweight, it's cheap, its performance, functionality is amazing. That means that it's the fastest growing category of plastic packaging that there is, especially in places like Southeast Asia. It's been seen as a way of selling products to low-income consumers. That's been really important.

[00:01:31.250] - Laura Smith

It's kind of been seen as this thing that's almost too good to be true. Unfortunately, it kind of is, because it's also one of the hardest materials to manage once it's been used. It's really, really expensive and tricky to recycle. It's also really low value. That's a problem everywhere, but it's particularly a problem in markets that are reliant on informal waste collection. Because there's just no business case for an informal waste picker to pick up that item.

[00:02:03.820] - Pippa

What do you mean by low waste value there?

[00:02:06.470] - Laura Smith

If you're imagining how many... If you're an informal waste picker, and you're picking one PET bottle of waste, and you're selling it to a recycler, and you're getting some money from that, in order to get the same amount of money from small format plastic flexibles, you'd have to pick around 60 sachets of plastic flexibles. We're talking here about noodle sachets, snack sachets, little shampoo pouches, things like that.

[00:02:35.140] - Laura Smith

There's not an incentive to do that. That's meaning that it's ending up not being collected, and it's leaking into the environments at really high rates. If we don't do anything about that, we're looking at 20 trillion items of flexible packaging ending up in the ocean by 2040. It's really clear that's a problem. The question has been, "What can we do about that?" That's something we're really focusing on.

[00:02:59.150] - Pippa

That was literally what I was about to ask you. That's the problem. You're leading the Ellen MacArthur Foundation's work around flexibles with some of our colleagues. What have you discovered?

[00:03:10.960] - Laura Smith

It's been really important to us at the Ellen MacArthur Foundation to crack this. It's one of our three systemic barriers to realising a circular economy. We know that wherever possible, we need to be moving away from this packaging category altogether to reuse, to more widely recycled formats. But we also know that in some cases, that's not immediately feasible and that's really, really tricky. The question has been, "What do we do in those cases?"

[00:03:42.130] - Laura Smith

This is where paper-based packaging can come into this. We need to look at, within the flexible packaging that we are using, how can we design that to make sure that it really reduces the impact as far as possible? Paper is really, really interesting here because it has the potential, if it's designed in the right way, to be recyclable in paper streams. Also, in the worst case that it does leak into the environment, recognising that, if we look at the world as it is today, it is going to happen in some cases. If it's biodegradable, then that can also really reduce the impact in the case of leakage.

[00:04:19.280] - Laura Smith

That's really exciting, that's really promising. It's not a silver bullet. Material substitution is not going to solve the collection challenge. We also need to really be looking at how we scaling collection and sourcing infrastructure. It does bring new risks as well that we need to be really careful to mitigate. But that's a really exciting opportunity, and we really need more tools in the toolbox to tackle the challenge of plastic pollution.

[00:04:44.530] - Pippa

We're going to hear a bit more about those challenges from Valerie later. I also think it's great that you've said it's no silver bullet. I think if we were making t-shirts for this podcast, I would probably put there's no silver bullet on the front of them. Jonathan, welcome.

[00:04:57.800] - Jonathan Gill

Thank you.

[00:04:58.370] - Pippa

Unilever have been involved in the Ellen MacArthur Foundation's plastic work for a while. Why is flexibles in particular important to the organisation, and what have you committed around that?

[00:05:08.920] - Jonathan Gill

Sure, so first, can I have one of those t-shirts as well? If you take a step back for a moment, if you go back to 2017, 2018, the Blue Planet moment where EMF really stepped up and sort of led the industry to really kind of address and tackle this problem. Huge kudos to the organisation, and it's been a great partnership over those years. We, along with many other peers, made external commitments on what we wanted to do around plastics, and we're quite clear, and similar to Laura, that the flexibles part of our portfolio is challenging.

[00:05:42.990] - Jonathan Gill

We are part of the problem that Laura described, but for many, many years, we have been committed to being part of the solution. Over the last 5 years or so, we've invested a significant amount in R&D on how to address this problem of flexibles ending up in the environment. The big solution that we've identified is paper-based flexibles. That's a broad umbrella. We use that as a very simple term for many, many different technologies.

[00:06:10.340] - Jonathan Gill

For us, we really see them as an opportunity for a large part of our portfolio to transition to, but not entirely. In some parts of the world, there is a pathway for flexible plastics to be recycled. The regulatory environment is pushing in that direction. Other parts of the portfolio in other parts of the world, reuse and refill should be the path. Other parts, more to move more to rigids where they would be collected and recycled whilst continually thinking about an absolute reduction of... About reducing the amount of plastic overall and whether there are other systems.

[00:06:43.130] - Pippa

Unilever is a massive company. I think you operate in something like 190 countries. It's quite a challenge to adapt to all of those different needs. Could you take us on a bit of a journey about how you make these? Because as Laura said, flexible plastic packaging is really useful, it serves a function, so replacing that is a challenge. You have to make sure that whatever you replace it with is viable, and how do you do that in different places?

[00:07:10.370] - Jonathan Gill

I wish I'd brought our R&D team along as well because I'm massively impressed by the work that they are doing, and also just to call out many other R&D teams in FMCGs as well. This isn't just a Unilever thing, as the report shows. There's many companies that are looking at this opportunity. I think first off, there's over 5 years, you start kind of early stages and you slowly, you review many different technologies and I think there's around 3,000 been looked at.

[00:07:37.300] - Jonathan Gill

But as you go down the funnel, you slowly realise, "Okay, what are the sort of the chassis that could work for this?" Ultimately all of them need to design to get to that end state where they are either recyclable or compostable. Dual end of life. But for us, you're right, we're a big complex company, and you've got things from dry foods all the way down to shampoo sachets. You've also got small sachets, you've got bigger bags as well. Finding the right technology solutions for that vast drive portfolio isn't easy, but actually it's really interesting.

[00:08:08.350] - Jonathan Gill

We're all here to talk about sustainability because this is what the show is about. But actually there's a great business opportunity as well to simplify our portfolio. Simplifying things means you can move quicker. Over the next 3 years, we're really keen to get a significant number out to market. Big challenge, big opportunity and good pathway.

[00:08:26.840] - Pippa

What about, just to go into some of those geographies a bit more, I think we see in certain geographies that the sachets are used more. Could you tell us a little bit about Unilever's work there?

[00:08:36.960] - Jonathan Gill

Southeast Asia, India, we sell a huge amount of sachets there along with other rigids and other material, other types of packaging. It's really interesting because even in those sort of countries, you've got very different regulatory environments encouraging very different pathways. In Indonesia, it looks like there's going to be a requirement to have above a certain size. Our R&D efforts are focusing on, how do we make these things work above a certain size? In India, the regulations are encouraging us to go towards more compostable models. How does that work?

[00:09:10.600] - Jonathan Gill

All of these different pieces of the puzzle, and by the way, can't forget the consumer here, and also making sure these products are safe and effective. Just, sorry, just pause one second. What I really like about the report is the six critical criteria, which we've translated internally into what we call the responsible transition to make sure we're doing this in the right way. But as you say, each country is very nuanced in terms of the type of packaging, what the regulation's encouraging, but also, everyone's got a different environment.

[00:09:39.210] - Jonathan Gill

Plastic is very good at dealing with wet, humid conditions. Paper on its own, no. Obviously we're looking at how these things come together to make sure that we can create something that performs well, is safe, is sustainable, and also affordable. Because the reason why these sachets are so popular is because they meet a price point that many people can access. That means that they can access many products that they wouldn't normally be able to do if we just sold them in big rigid bottles like we do in the West.

[00:10:13.660] - Pippa

Along with that regulation, and of course, the reason why customers are buying that at the moment. What other barriers are you seeing on this journey?

[00:10:21.550] - Jonathan Gill

There's some technical. We've got lots of solutions. We don't have all the solutions. There is some certainly affordability piece. Shifting materials, plastic's been optimised for 60, 70, 80 years. Moving to a new material obviously comes with its challenges. Just an interesting proof point, you put paper into our machines, paper and plastic laminates, they slow down. Probably like worst case scenario, probably like 10-15%. But that's a massive efficiency hit on a corporate. You need to think about how to address that. It's one we're working with, and that's probably an overestimation, but it's good to see.

[00:10:58.750] - Jonathan Gill

Elsewhere, it's also making sure we do embrace all these critical criteria. Working with our suppliers to make sure we have sustained, continue our commitment on sustainability sourced paper and wood. That's something we are fully committed to. Secondly, on the recyclability piece, and this will take an all-industry effort because we know that paper is more likely to be recycled. But what we also know is that they often won't be collected. That's the same for plastic.

[00:11:27.600] - Jonathan Gill

How do we overcome that boundary? Laura was entirely right to say that. Hopefully we'll be working together on addressing that. Just a few of the challenges, but there's also a huge opportunity to really transform this type of material packaging.

[00:11:42.460] - Pippa

It's exciting, that opportunity, and also hearing what you say about the business case for it as well. I'm sure that makes it a lot easier to get this going.

[00:11:50.950] - Jonathan Gill

At times, in some places, yes, in some places, no. It's highly variable. There's this innovation gap between where we are and where we want to get to. For us, it's not a straight line. It's going to be up, down, left, right, forwards, backwards. We know that, we're okay with that. It's going to be an interesting journey.

[00:12:08.850] - Pippa

Absolutely. You also talked there about the need to be responsible with these alternatives you're finding. Before I bring Valerie in, Laura, could you tell us a little bit about what you found in your work researching this paper?

[00:12:22.480] - Laura Smith

This is really important. It's not just a case that paper is better than plastic. There's so much nuance here, and I think it's really important in the paper that we really dug into that, and we're really transparent and use that to actually say, "Okay, this is what good paper looks like, and it does bring risks, and we need to really proactively mitigate those risks and channel investment and innovation towards paper-based flexibles." It really does avoid those risks and bring the potential benefits.

[00:12:59.550] - Laura Smith

Really big focus of our work over the last year has been to really look at what are those risks and to what extent and how can they be mitigated. That led us to set out these six critical criteria that Jonathan was mentioning that really look across the whole value chain and the whole life cycle of paper-based packaging. How can you make sure that, that really is good paper-based packaging, and it's not swapping one problem for another?

[00:13:32.760] - Laura Smith

We're really pleased that we've got to a point where we could lay out those six critical conditions, and they have been endorsed by 48 organisations across the value chain, NGOs and academics alike, to say, "Okay, yes, we agree that this is what needs to be in place for paper to really bring these benefits and really be part of the solution."

[00:13:53.260] - Laura Smith

Kind of briefly, a couple of those. One part of that is at the beginning... At the beginning of the life cycle, how are you sourcing that paper? I wish that we had unlimited trees in the world, but we don't. At a systems level, actually, the supply of sustainably sourced wood is not keeping up with demand for that. We really do need to look at how can a shift towards paper actually come with this system-wide perspective of making sure that we're limiting overall fibre use and that we're expanding other sources of non-wood fibre use that's responsibly sourced. That's a really important part.

[00:14:31.670] - Laura Smith

We've mentioned biodegradability a few times. That doesn't just happen. Most paper is not biodegradable. We really need to look at that because to not have that, you're not actually really addressing this problem of persistent plastic pollution that we're trying to address. That's really, really important. It means that now we do have this vision for what paper-based packaging does need to look like. We have this kind of agreement that this is where we're heading. This is where we need to channel investment and innovation.

[00:15:02.930] - Laura Smith

It doesn't exist right now at the level that we need it to. A lot does need to happen, but we have a direction for that. We have an agreement around the kind of guardrails that need to be in place to get there.

[00:15:12.950] - Pippa

Great. This is where I want to bring Valerie in, because Canopy work with forestry and around paper. Can you tell us a little bit about Canopy's role in this story?

[00:15:23.680] - Valerie Langer

Canopy is a group of tree huggers who are working with hundreds of brands who use a lot of paper in their packaging and wood-based textiles like rayon, viscose, and lyocell, and we help companies to identify whether they've got ancient or endangered forest fibre in their supply chain and then identify ways to exit the endangered, so move away from the bad and move towards the good.

[00:15:56.490] - Valerie Langer

The good alternatives are a range: recycled fibre for paper, agricultural residues as an alternative are an example of some of the options that exist for making paper and textile-to-textile alternatives for rayon and lyocell, for example. We've worked with Ellen MacArthur Foundation a couple of times on this flexible plastics issue because obviously packaging consists of paper and plastic. We have collaborated previously on the first round of thinking about how to utilise paper as an alternative. This report went much deeper and further to creating a set of principles on how that could be done.

[00:16:46.230] - Pippa

When you hear that we're talking about replacing some flexible plastic packaging with paper, what are the limitations there, and what are the challenges of that?

[00:16:57.030] - Valerie Langer

This is where the report looked at the use of paper as an alternative, which at an individual level might seem, "Sure, substitute one material that's gone past a sustainability threshold for another one." But what we don't want to do is go from the plastics frying pan into the forest fire, so to speak. We really need to look at these thresholds where paper might actually work at a certain level is... If it's functional, so if it meets all of those criteria, the performance criteria you're looking for. Can it withstand humidity or water? Does it prevent grease from leaking through?

[00:17:49.180] - Valerie Langer

All of those things that you said plastic have been good for, not all paper is good for, but in some situations it makes sense. There are two ways to think about this. One is from a material substitution point of view. Instead of using cellulose from trees to make paper, you could use cellulose that's in another type of plant. All plants are made of cellulose. Everything, including seaweed to grass to flowers, everything has cellulose.

[00:18:22.070] - Valerie Langer

Certain plants have cellulose that can be utilised for paper. Wheat straw. Hundreds of millions of tonnes of agricultural residues are burned every year around the world. Rather than burning them, Can we divert them into the papermaking supply chain and substitute some of the virgin wood fibre that's being used for cellulose?

[00:18:45.440] - Pippa

We could get really nerdy here and say, "What even is paper?" I suppose, is that what you're saying?

[00:18:50.360] - Valerie Langer

Basically, paper is made of cellulose fibres. Cellulose fibres are everywhere that you look, like in the plants behind us in this podcast. We've got cellulose in the screen. Brilliant technology innovators that have been working on this. It's also the oldest way of making paper. Wood has only been in paper for about 150 years. Before that, it was papyrus at the start and wheat straw and sugarcane bagasse. There's a lot of, a lot of options. But-

[00:19:24.200] - Jonathan Gill

Just on that.

[00:19:24.810] - Valerie Langer

Yeah.

[00:19:25.150] - Jonathan Gill

A lot of packaging used to be paper, not plastic.

[00:19:27.230] - Valerie Langer

Yeah. Plastic's the newest kid on the block, right? We've been making packaging with paper and with cloth and all manner. Basically it's an imagination problem. We don't have an environmental crisis, we have a crisis of human behaviour and how that plays out on the environment. The imagination can actually help us exit our crisis. This is one way is to look at alternative materials. As long as there within the threshold of sustainability.

[00:20:02.590] - Pippa

This is what I want to talk about next, is what do we do next? Laura, what would you like to see happen next?

[00:20:09.910] - Laura Smith

We've mentioned a few times this kind of packaging that we're describing, a lot of innovation needs to happen to make sure that it really is responsible, that it really does meet all these critical criteria to make sure-

[00:20:22.250] - Pippa

[inaudible 00:20:22] what Valerie was just saying.

[00:20:23.310] - Laura Smith

We're not swapping one problem for another, exactly. One part is there's a lot of innovation that needs to happen. A really important part of getting the innovation to happen really comes down to collaboration, and making sure that we can really kind of realise the economies of scale, reduce the risk and the cost of innovating. That's really exciting. We also need to put that in the context of the system, look at how, at a systems level, are we moving away from our reliance on wood-based fibre? That's really, really important.

[00:20:55.250] - Laura Smith

We also need to be looking at how we're investing in collection and sorting infrastructure. We've mentioned swapping the material is not going to solve that problem. We still need to look at that really hard. Then we also need to prioritise moving away from small format flexibles in the first place.

[00:21:13.850] - Pippa

They're all great challenges.

[00:21:16.240] - Valerie Langer

I just wanted to point out that we can substitute materials, but there's also a way within companies of being more efficient and looking at the portfolio. Everybody uses packaging for shipping boxes, for paperboard for cereal boxes, for example, is utilised. If you are more efficient and reduce the use of paper in one part of a company's portfolio and look at it, it's like, "If I'm going to shift to paper on this one aspect, I can reduce within my corporate portfolio and use lighter weight shipping boxes and substitute tree fibre with agricultural residue in this simpler to utilise format of packaging like paperboard and corrugate."

[00:22:07.430] - Valerie Langer

Then take the fibres that you would need, like longer, more stronger fibres from agricultural residues or even some sustainably harvested trees and put that into what currently is going into plastic. There's a way to even manage it within a corporate portfolio so that overall you're not increasing the pressure externally and going to, "We'll just use more of something that there's already too much used of." There's a couple of ways. It's like within the companies making decisions and externally by substituting materials.

[00:22:48.670] - Pippa

Jonathan, we've seen quite a lot of pushback around things like companies working on plastic pollution and the like. Why is it still important for Unilever to be involved in this, and what are you going to do next?

[00:22:59.810] - Jonathan Gill

Plastic pollution problem isn't going away. It's forecasted to double almost by 2040. Unilever is part of that problem, and we're very committed to being part of that solution. We do get a lot of criticism for the plastic that we put out there and that's why we are fully committed to really working towards solve it. Ourselves, if I start ourselves and then talk about collaboration for a second. As I said, we've spent 5 years really investing heavily in R&D in these solutions, alternatives for plastic flexibles. We've got to a point now where we feel like we're ready to deploy at scale.

[00:23:40.340] - Jonathan Gill

We've made a commitment, an internal incentive to deploy around 10 to 15 kilotons of paper-based flexibles by the end of 2028. We did that because we're at this point of the innovation journey where now we need to get things out. Partly because some of them are really ready, partly because we actually need to learn a bit more about how they interact across the value chain at scale.

[00:24:04.410] - Jonathan Gill

That's our big thing that we're going after next. It will contribute to our virgin plastic reduction commitments. It will contribute to our goal around recyclability. Fundamentally, it will hopefully be a trigger for the transition from plastic to paper in the right places, in line with the criteria. Far beyond Unilever.

[00:24:26.330] - Jonathan Gill

If I talk about collaboration, we know a lot of companies are looking at this space. We've seen lots of launches, and they're part of working groups, et cetera, et cetera. But I think now's the time that we really need to move to deployment at scale to really address the... And really tackle that, 2x by 2040. We want to pull that down as an industry and far beyond our industry as well.

[00:24:47.520] - Jonathan Gill

For us, that's our big focus and the big mindset shift for us as well to kind of move from going, "This is a problem, and we're doing lots of R&D to this is a problem, we've done a lot of R&D we need to now deploy and carry on the R&D," because we know that this is an iterative journey to get to that dual end-of-life solution that we're looking for.

[00:25:06.370] - Pippa

Then you were talking about how it's not just Unilever. I mean, it's been great to have you all in the room and also working on the paper. Where does Unilever fit in, in the wider ecosystem of this project?

[00:25:19.300] - Jonathan Gill

Obviously suppliers are key and other innovators are key, and that's all specific companies, that's manufacturers, peers, many of whom are part of Ellen MacArthur Foundation. Then as we move more to deployment at scale, it's really about this kind of, "Okay, how do we make sure these things are collected and are recycled?" Working with paper mills to understand what's the right balance of materials to make sure that they can handle them, and we're not disrupting the recycling processes that they have in place. Of course, the collection, which is the biggest challenge, which we'll be collaborating on with EMF and others on. Collaboration is key. I think it's the six criteria, the collaboration-

[00:26:02.410] - Pippa

That could also go on a t-shirt, I think, collaboration. Great, well, thank you so much for your time today, Valerie, Jonathan, and Laura, and I'm really excited to see what happens next with this because it sounds like the momentum is there, and we're going places.

[00:26:15.970] - Valerie Langer

Thank you.

[00:26:16.450] - Jonathan Gill

Thank you.

[00:26:17.030] - Laura Smith

Thank you.

[00:26:18.880] - Pippa

I hope you enjoyed this episode, and if you want to find out more about the report we've been discussing, the link is in the show notes. If you enjoyed this conversation, please share it with your colleagues or friends. It really helps to get the message out there. Thanks for listening to this episode of The Circular Economy Show. We'll see you next time.