Understanding the Circular Economy Shifts for the PET Sector Using a System Dynamics Model

ABSTRACT The global PET (polyethylene terephthalate) sector is transitioning towards potentially sustainable options, such as rPET (recycled PET), bPET (bio‐based PET), and PLA (Polylactic Acid). This work develops a system dynamics model to examine adoption pathways and evaluate policy interventions for the PET sector. The Multinomial LOGIT model allocates market share from a vendor's perspective based on price and GHG emissions. The model is applied to India, considering a horizon of 2020 to 2045. Five scenarios are simulated, including business‐as‐usual (BAU) and circular economy intervention. The results showed that PLA, bPET, and rPET significantly decreased reliance on virgin PET (vPET) in the future. Compared with the BAU scenario, aggressive CE implementation reduced the vPET share to 30% by 2045, down from 60%, reducing sectoral GHG emissions by 5.8%. Overall, the results recommend that policies should incentivize the adoption of rPET by enhancing recycling infrastructure to foster a sustainable plastic industry.