High Costs Limit Plastic Recycling in South-east Asia

Plastic Recycling in South-east Asia: Challenges and Opportunities

[SINGAPORE] Plastic recycling in South-east Asia is limited by high collection and sorting costs, which can be 1.5 to two times the raw waste price, said global consultancy Bain & Company.

Challenges

Major markets like Indonesia, Thailand, and Vietnam capture just 8 to 25 per cent of plastic waste for recycling in major urban areas, indicating significant headroom to boost recycling rates. However, there are three key challenges.

Firstly, the value chain for plastics recycling is fragmented, with a heavy reliance on informal players, such as individual collectors who sell plastic waste to support their families. While such work can be a lifeline, "the lack of formalisation and coordination leads to inefficiencies and missed opportunities," said the consultancy.

Secondly, different types of plastics face "varying fortunes" in their recycling journeys, with the recycling of flexible materials – such as plastic bags and films – lagging significantly. "These materials pose unique challenges; they are lighter and voluminous, prone to contamination, and more costly to process, making their recycling less economically attractive without significant technological and process innovations," said Bain.

Finally, South-east Asia is facing tighter international regulation on the import of plastic waste. Many countries in the region have long depended on imported waste to supplement their local recycling feedstock. However, the European Union plans to ban plastic waste exports to countries that are not members of the Organisation for Economic Cooperation and Development by 2026.

Growing Demand

Despite the challenges, Bain expects demand for recycled plastics in the region to see double-digit growth through 2030. The consultancy noted that many South-east Asian countries are starting to promote less plastic usage, such as by banning single-use plastics. They are also encouraging higher recycling rates and use of recycled plastic content.

Incentives for Recycling

To improve plastic recycling, Bain called for more education on plastic circularity and consumers’ role in the process. There needs to be more awareness on flexible materials, which are less likely to be recycled due to contamination and economic factors, as well as the steps required to make their collection effective.

Incentives for recycling are another possible solution. Bain noted that several countries have introduced "reverse" recycling machines, where consumers can earn rewards by returning containers. Other incentives could include subsidies for businesses that invest in recycling technologies.

"By making the economics of recycling more attractive, stakeholders can encourage greater participation from both businesses and individuals," said the consultancy.

Conclusion

Bain noted that as technology improves, recyclers can process plastic waste of different qualities "more efficiently and at lower costs, making recycled plastics more competitive with virgin materials and, thus, more attractive for broader use." On the part of brands, centrally managed coordination of plastic waste disposal from operation sites could improve efficiency and reduce waste. Bain also called on governments to acknowledge the crucial role of informal workers and to consider the safety and economic viability of these workers and uplift them.

FAQs

Q: What are the challenges in plastic recycling in South-east Asia?
A: High collection and sorting costs, fragmented value chain, and varying fortunes in recycling journeys of different plastic types.

Q: What is the expected growth rate of demand for recycled plastics in the region?
A: Double-digit growth through 2030.

Q: How can plastic recycling be improved?
A: Through education on plastic circularity, incentives for recycling, and technological innovations in processing and collection.

Q: What is the role of informal workers in plastic recycling?
A: Informal workers play a crucial role in plastic recycling, but their safety and economic viability need to be considered.