Original by Dr. Steve Wong
October 14, 2024
The recycling industry is often considered a promising and meaningful sector contributing to society and environmental protection. However, few people know the numerous challenges the waste plastic recycling industry has faced in the past decade. Many businesses in the industry have been struggling, with only a fortunate few managing to barely sustain themselves, while others are on the brink of closure. Over 80% of plastic recycling factories in mainland China have either shut down voluntarily or been liquidated since 2013. The main reason is that various countries have continuously introduced new laws and regulations restricting the import and export of recyclable waste plastics; there are also economic and geopolitical factors, and the overcapacity in virgin materials leads to lower prices than recycled materials.
During my recent participation in a United Nations Basel Convention meeting, while engaging with Southeast Asian officials, I inquired about their national policies regarding importing recycled plastic. I learned that countries will likely impose even stricter regulations or outright bans. For instance, in recent months, many manufacturers in Thailand and Vietnam have faced challenges in renewing their import permits. Thai industrial department officials indicated plans to completely ban the import of waste plastics next year, including recycling plants in free trade zones, with only a tiny percentage of factories producing goods exempted from this restriction. Vietnam has also imposed various restrictions on the import of waste plastics, tracking the imported plastics from processing plants to their final application as granules. Consequently, many recycling plants in Vietnam and Thailand are considering relocating to Malaysia. Additionally, starting next year, EU governments will gradually prohibit the export of waste materials to non-OECD countries, with only a few developed countries such as the United States, the United Kingdom, Canada, Japan, and South Korea having the opportunity to export. As easily recyclable plastics are being processed and utilized within local circular systems, the exportable waste plastics are of lower quality, often ending up unprofitable due to high processing costs and expensive shipping fees. The dwindling profitable recyclable waste plastics are left with few options, leading to their disposal through landfilling, incineration, or littering, causing an environmental catastrophe.
One of the reasons recycled materials are not widely utilized is their inferior performance compared to virgin materials. Furthermore, with the surplus supply of virgin materials, which will not change in the next six years, prices will remain low and affect recycled materials significantly. Economically, many brands remain lip-servicing and may not opt for recycled materials. Some companies practice a double standard—advocating for the circular economy in their marketing while using recycled materials sparingly, citing performance and color compatibility issues. While some countries have laws mandating the use of recycled materials, the lack of enforcement mechanisms has led many factories to conceal their actions. Currently, only clear PET bottles and natural milk bottles command higher prices as recycled materials than virgin materials, supporting the recycling of these two types of waste plastics. This is reflected in the high average recycling rate of clear PET bottles at 55% compared to the overall plastics recycling rate of 9%.
The global recycling industry must leverage its strengths to enhance the recycling rate of waste plastics, with non-OECD countries like Southeast Asia playing a pivotal role as recycling hubs. Effective policies and global cooperation are essential for environmental sustainability, and every region and country must collaborate rather than act in isolation.