Materials & Packaging

Why Recycled Plastic Won’t Solve the Packaging Pollution Problem

As brands roll back packaging pledges, recycled plastic is taking center stage — but at what cost? Here's why integrating alternative materials into supply chains makes the most business sense.

By Scarlett Buckley | Published 1 month ago | About a 7 minute read

Image: erthos

A few years ago, companies were excited about the potential of sustainable materials. With oceans filling up with plastic, beaches turning into landfills and marine life suffering, the world was eager for change. And clarion calls such as the United Nations’/Ellen MacArthur Foundation’s New Plastics Global Commitment galvanized governments and thousands of consumer goods giants to pledge to drastically reduce virgin plastic packaging by 2025.

Today, many of those goals are being quietly rolled back, with plastic recycling emerging as the dominant solution. But recycled plastic still relies on fossil fuels — with their concerning environmental and health impacts; and recycled plastics still produce microplastics — which have been found in human blood, lungs and even placentas. When brands focus more on plastic reuse over alternative materials, they ignore the broader health risks that plastic creates.

The time to act isn’t when waste reaches landfills and oceans — it’s when materials are selected. So, why are companies rolling back their commitments? The answer lies in a fragmented and underfunded supply chain that is struggling to scale.

Stagnant supply chains

As CEO & co-founder at erthos® — a Toronto-based climate-tech startup that designs alternative, sustainable materials that match the performance of traditional plastics — Nuha Siddiqui has spent the past year meeting with over 40 large CPGs, plastic compounders, converters and material producers to understand why sustainable materials are being deprioritized and what it means for the industry.

“Fundamentally, the supply chain is not set up for success for a lot of these materials,” Siddiqui explains to Sustainable Brands® (SB). “Unlike plastics — which have a well-established, linear value chain — sustainable materials face a fragmented landscape. That makes it difficult for brands to know how to use these materials and how to scale them, leading to a prolonged cycle of trial and error with little meaningful progress.”

She says the sustainability targets that once dominated headlines are now quietly being pushed aside as brands realize the complexity of their supply chains.

"Brands expected their supply chains to solve the problem without committing the necessary time or resources. There was excitement and ambition; but goals were unrealistic, and the scale of the challenge was misunderstood. Now we’ve woken up to the fact that only 2 percent of the 2019 targets have been met.”

The ripple effect

“It only takes one large brand to roll back and influence everyone else in that space,” Siddiqui notes. “When that happens, investments in material innovation and infrastructure start shifting. The message sent to manufacturers, converters and even investors is that sustainable materials are not an immediate priority.”

This shift has already affected industries including food and beverage, personal care and textiles — where alternative materials were once positioned as the future. Today, many brands have pushed these solutions to the back of their roadmaps — delaying their plans for adoption by another 5-10 years. But for material innovators, this timeline is unsustainable; without immediate demand, many may not survive long enough to see widespread adoption.

The catch-22

One of the biggest barriers to sustainable materials adoption is cost. Many brands say they need sustainable materials to reach price parity with plastic before they can commit. However, price parity can’t be achieved without scale and scale isn’t possible without demand.

“Plastic price parity is still the top priority for brands. But we can’t achieve it unless companies commit to investing in scale. The longer they wait, the harder it will be,” exclaims Siddiqui.

There’s also a misalignment in how brands think about sustainable materials. Instead of seeing them as a necessary long-term investment, they are trying to justify them purely as a business case — separate from sustainability.

“More and more, we’re seeing companies focus on building a business case for sustainable materials — often sidelining the sustainability itself. For these solutions to be long-lasting, they need to make strong business sense for the brand. But right now, given the broader macroeconomic climate, it’s a tough time for many brands to make that commitment,” Siddiqui says.

“In addition to cost and performance, end-of-life infrastructure for biomaterials is severely underdeveloped. Recycling systems have benefited from decades of investment and continuous iteration, and even they’re still not fully effective — still sitting at a 9% recycling rate globally. Yet, there’s an expectation that end-of-life solutions for biomaterials should be perfectly operational before these materials even reach meaningful scale in the market.”

Political landscape

The political and regulatory landscape also has an effect. While regions including Europe and Asia are moving forward with bans and incentives, the US has taken a more haphazard approach — leading many brands to hesitate. Collaboratives such as the US Plastics Pact are working toward systemic change; but without clear regulatory standards and industry-wide commitments, there is little urgency for brands to take meaningful action in this space.

“The US isn’t representative of every market using these materials — we’re seeing continued progress and investment in regions like Asia and Europe,” Siddiqui says. “My hope is that we keep advancing and ensure sustainable materials remain the right choice, regardless of political instability.”

But policy alone isn’t enough. Capital allocation plays a powerful role in determining which materials scale; investor behavior and financial backing are emerging as equally critical in enabling long-term adoption of bio-based materials.

“Investors and financial institutions are the gatekeepers of sustainable materials innovation. Their capital, risk appetite and market incentives can either accelerate the transition to bio-based alternatives to fossil-based materials, or stall progress in favor of short-term gains,” Dr Jen Vanderhove, Chief Operating Officer at BBIA (Bio-based and Biodegradable Industries Association), tells SB. “At present, far too much investment still flows into fossil-based [materials] — slowing the shift to more innovative, sustainable bio-solutions. As custodians of the bio-based sector, we must help investors realize that saving the planet isn’t just ethical — it’s profitable. The future of finance lies in funding materials that work with nature, not against it.”

The next five years

Despite these challenges, some brands recognize that waiting another decade isn’t a viable strategy and continue to make strategic investments in alternative materials.

“The targets that were set earlier did not fully take into consideration all the complexities, and what gives me hope is that now we're seeing brands be a lot more strategic with their approach on their roadmaps. They're not trying to just find a one-size-fits-all type of material — they look at their geography, their needs and what's the right application,” Siddiqui says.

At the same time, sustainable material innovation continues pushing the boundaries of what’s possible. Seaweed, for example, is emerging as a viable, biodegradable alternative to oil-based plastic films and packaging materials — which can help advance brands’ circularity goals while they reduce waste.

This shift toward tailored, material-specific solutions is where erthos steps in. The company facilitates adoption of sustainable materials through its proprietary platform, ZYA™ — which combines predictive modeling, material science and bio-based ingredients to streamline sustainable material replacements and enable intelligent, cost-effective optimization.

“We’re actively showing these materials can be viable and scalable — giving them a whole new identity,” Siddiqui asserts. “We’re giving brands the visibility they need in the supply chain to evaluate and accelerate sustainable materials.”

Siddiqui says the next five years will be make-or-break for scaling sustainable materials. Immediate investment is critical; the current trajectory — where brands continue to delay commitments, scale back investments and fall back on recycled plastics — threatens to stall progress for another decade.

“Despite these challenges, we’re seeing bio-based materials scale in ways that once seemed impossible — some are even outperforming plastic.” Siddiqui says. “The past five years of innovation have been remarkable, proving that sustainable materials are not just an alternative — they are the future. With AI, data and strategic collaboration, we now have the tools to accelerate this transition and make real change.”