GCC needs up to US$25B investment for circular plastics future – KAPSARC

MIDDLE EAST & AFRICA – The Gulf Cooperation Council (GCC) will need to invest between US$12 billion and US$25 billion in recycling infrastructure by 2045 to establish itself as a global hub for circular plastics.

This is according to a new report by the King Abdullah Petroleum Studies and Research Center (KAPSARC) and Strategy& Middle East, part of the PwC network.

The study highlights a looming global shortfall in recycled plastics, with demand projected to outstrip supply by up to 35 million tonnes by 2030.

While global demand for recycled plastics is rising at an 8% annual growth rate, supply lags behind, with less than 70% of global demand currently being met.

At present, the GCC generates about 10 million tonnes of plastic waste each year, of which only 10% is recycled, reused, or recovered, a figure on par with the global average but well below leaders such as China and OECD nations.

With plastics and chemicals contributing 6%–9% of Saudi Arabia’s GDP, the region’s economic exposure to global shifts in plastic demand underscores both the risks and opportunities of transitioning to circularity.

“Unless addressed, this imbalance could delay climate progress and reinforce reliance on virgin plastics,” said Devesh Katiyar, Partner at Strategy& Middle East.

“The GCC is uniquely positioned to bridge this gap by leveraging its petrochemical strengths for circular solutions.”

The report points to chemical recycling, particularly pyrolysis, as a promising pathway. Modeling suggests that plants integrated into GCC petrochemical clusters can achieve breakeven at feedstock prices of US$240–US$280 per tonne and remain profitable even at US$450–US$500 per tonne, provided recycled plastics maintain a premium over virgin materials.

“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,” added Jayanth Mantri, Principal at Strategy& Middle East.

“Unlike traditional petrochemicals, chemical recycling is knowledge-intensive and offers higher multipliers and innovation-driven growth.”

To succeed, the GCC must advance on three fronts: securing feedstock access, implementing regulatory reforms, and driving innovation and consumer awareness.

The report calls for formal trade corridors with Asia, Africa, and Europe, upgraded port and customs systems, and harmonized quality standards.

It also recommends extended producer responsibility (EPR) schemes, recycled content mandates, and government-backed R&D funding, alongside consumer incentives and blockchain-enabled traceability tools.

With sovereign wealth funds and blended financing mechanisms, analysts say the GCC can mobilize the scale of investment needed to build a modern circular plastics ecosystem, positioning the region as a global leader in sustainable industrial development.

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