Goldman Sachs GS SUSTAIN rates is lower than the potential for plastics, where only 9% of plastics are recycled (Exhibit 17). Mechanically recycled plastics are set to displace over 1.7 mn tonnes of virgin polymer feedstocks by 2030, up 147% from 2020 (according to S&P Platts). Recycled PET can save 60% of GHG emissions for every unit of virgin PET replaced, according to NAPCOR. Regarding steel, academic research suggests that 50% of steel production will still require virgin steel in 2050 to meet demand based on unchanged steel applications and corresponding lifetimes, as the accumulation of usable recycled material 3 lags demand for new uses. But a recycling rate of 62% and residence time of 17 years could lead to 60% of steel demand supported by recycling after 2070, a significant decline for virgin materials which could be further depressed with higher recycling rates. We take note of the recycling rates of a wide variety of materials below, where many are hypothetically 100% recyclable, including steel, aluminium, glass and copper. Other materials can only be downcycled, such as paper, textiles and plastics (mechanical), but are still not reaching their maximum circular potential (Exhibit 18). Exhibit 16: Increasing circularity for four key materials in Exhibit 17: Emissions reduction potential varies across Exhibit 18: Some metals have high recycling rates already, Europe could reduce CO2 emissions 56% vs business as materials, and current recycling rates also influence total while other materials like textiles and plastics have usual emissions reduction potential significant gaps EU Emissions reduction potential from a more circular economy, Emissions intensity of virgin vs. recycled materials in tCO2 per t Estimated global recycling rates for a collection of materials Mt CO2 per year material 600 14 13.5 100% EU: 74% 530 178 Structural steel Nearly 75% of US: 66% 500 2 / t produced in the aluminium Virgin Materials (left China: 47% ear 12 US contains 93% ever side) 80% y -56% t CO recycled steel produced is Recycled (right side) (%) 85% 400 Cement per 56 10 scrap, on still in use Rate 75% cannot be 62 average. today. 60% recycled, but 300 ling ~60% can be dioxide 234 production, 8Current EU steel 79% of plastic c recovered and 200 material production is created is in ecy40% 50% crushed for more than 60% landfills or littered Cement, in general, R reuse as arbon from 6 based on primary into the natural cannot be 40% aggregate c obal l 100 production. environment. Only conventionally G of 4 9% is recycled. recycled, though 20% Mt 0 2.4 some elements can 15% 2050 Baseline Materials Product Materials Circular Business 2050 Circular Emissions 2.3 be reused. 9% <1% 0% Recirculation Efficiency Models Scenario 2 0% 0.4 0.4 0.3 0.7 0.3 Cement Aluminium Plastics Steel 0 Steel Plastic Aluminium Cement Source: Material Economics, Data compiled by Goldman Sachs Global Investment Source: Material Economics, American Institute of Steel Construction, Aluminum Source: International Resource Panel, UN Climate Technology Centre & Network, UN Research Association, Goldman Sachs Global Investment Research Environment Programme, US EPA, Ellen MacArthur Foundation, Glass Packaging Institute, Copper Alliance, Company data, Goldman Sachs Global Investment Research 3 The length of time steel stays in a given use case before being repurposed, recycled, or disposed. 3 May 2022 <4