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Asia Recycling – Prospects for a developing market
8 June 2021
Tan Jia Hui
Analyst, Plastics Recycling, APAC
The recycling value chain
2
Plastic Waste generated in
areas without collection
coverage
PRODUCTION AND
CONSUMPTION
OPEN BURNING COMPOST INCINERATION
Plastic Waste generated in
areas with collection
coverage
ENVIRONMENTAL
LEAKAGE
FORMAL
COLLECTION
MATERIAL
RECOVERY/ SORTING
MECHANICAL
RECYCLING
ENGINEERED
LANDFILLS
LITTERING
DUMPSITES
SOLID WASTE MANAGEMENT
INFORMAL
COLLECTION /
SORTING
MIXED WASTE
CHEMICAL
RECYCLING
RECYCLED
RESINS
The recycling value chain may differ between countries in Asia Pacific
Asia’s recycling value chain
Source: ICIS 3
Formal collection and management
Informal collection / unmanaged
4
Jan 2018
National Sword Policy:
China banned the import of
24 scrap materials Estimated 111 million tones of
plastic waste displaced
Early 2018
Exporting markets frenzied – shifted exports to
elsewhere in Asia, especially countries in SEA Malaysia the new top destination for the world’s plastic in 2018.
Indonesia saw a 250% increase in plastic waste imports. In Vietnam, inbound shipments surged 200%.
Mid 2018
SEA countries imposed tighter waste
import restrictions Malaysia repatriated 150 containers of illegal plastic
waste. In September, Indonesia said it was returning
ontainers of contaminated waste to Australia.
End 2018
Countries like Vietnam & Thailand explore total
waste ban. Australia and South Korea announced
a phased ban on waste exports.
2020
Countries to
manage own waste Australia announced
Recycling Modernisation
Fund
What led to increased recycling in Asia?
Increased focus in sustainability
5
Key drivers of circularity
Financial Institutions 04 ● Investments
● Divestments
● CSR related performance
Associations 03 ● Green lobby
● Community initiatives
● Perception of plastics
● Consumer awareness
Government &
Regulations 01 ● National Action Plans
● Bans and fines
● Public pressure
● Waste management or Circular Economy strategy
Brand owners 02 ● Brand targets / reputation
● New lines of products
● Public pressure
● Green washing
6
7
Regional efforts
ANZPAC 2025 joint targets:
• Eliminate unnecessary plastic packaging through redesign,
innovation and alternative (reuse) delivery models
• 100% of plastic packaging to be reusable, recyclable or compostable
• Increase plastic packaging collected and effectively recycled by 25%
for each geography within the ANZPAC region
• Average of 25% recycled content in plastic packaging across
the region
The ‘Policy Support and Planning’ component of the action plan
aims to conceive a Guidebook – including guidelines for countries
to phase out single-use plastics, harmonise regional policies on
recycling and plastics packaging standards, and strengthen
regional measurement and monitoring of marine debris.
FMCGs and their progress
Source: Ellen MacArthur Foundation, Financial Times, 2019 8
Recycle capacity holds marginal share in virgin markets
<10% Average estimated recycle share of global polymer capacity in 2020
PP 7% Lowest recycle capacity and output
compared to virgin capacity
-
60
120
180
PET PP PE
Mill
ion T
PY
Global Capacities
Virgin Capacity Recycling Capacity Recycling Output
Source: ICIS, Supply and Demand Database, Recycling Supply Tracker – Mechanical, 2020 9
0
6
12
18
24
Mill
ion T
PY
Global Mechanical Recycling Growth Rate Data shown is representative.
Asia Pacific Europe North America Sourth America Middle East Africa Former USSR
OTHERS
Mechanical recycling capacity
2018 National Sword Policy implemented, sending waste exporting countries into frenzy
+8% Year on year growth in Asia Pacific’s mechanical recycling capacity
EUROPE
ASIA
PACIFIC
NORTH
AMERIC
A (US)
Source: ICIS, Recycling Supply Tracker – Mechanical, 2020 10
Supply by feedstock source and regions
55% Of global recycled plastic supply comes from post consumer waste
R-PET Is the largest recycle market for Asia Pacific
0 6
Asia Pacific
Europe
US
Asia Pacific
Europe
US
Asia Pacific
Europe
US
R-P
ET
R-P
ER
-PP
Million TPY
Feedstock Resource Split
PCR PIR Others
Source: ICIS, Recycling Supply Tracker – Mechanical, 2020 11
Required recycle volumes to achieve industry targets
82% Annual growth rate for RPET to achieve 50% recycle content rate in 2025
68% Annual growth rate for RPP to achieve 25% recycle content rate in 2025
0
60
120
180
PET PP PE PET PP PE
2025 2030
Mill
ion T
PY
Global capacities
Virgin Consumption Recycle Output
Source: ICIS, Supply and Demand Database, Recycling Supply Tracker – Mechanical, 2020
2025 2030
12
Japan • PET REFINE TECHNOLOGY., Ltd,
• R Plus Japan & Anellotech • JEPLAN
Australia • Licella & IQRenew
• BlockTexx
India • APChemi
• Polycycl • PerPETual Global Technologies
Singapore • Environmental
Solutions Asia
Indonesia • West Java government
& Plastic Energy
China • Mura Technology & KBR
• Anhui Oursun Resource Technology
Source: ICIS, 2020
Taiwan • FENC
Thailand • SCG
Current chemical projects
13
14
Is chemical recycling a game changer?
Mechanical recycling
Chemical recycling
Collection Sorting Processing Output
•Might compete with mechanical
feedstock
•Ability to process mixed
plastics
• Theoretically infinitely
recyclable
• Yield dependent
on process
• Products created from
virgin-like equivalent
• Existing systems in place
•Waste needs to be sorted and
cleaned
• Substantial process losses
• Polymers have
recycling limits
•Becoming more circular
Opportunities and barriers to overcome in Asia
Increase collection rate
Build infrastructure and implementing more collect-back schemes
Co-invest and joint ventures with technology providers will allow
access to developing recycling technologies
• Collaboration will facilitate plastics circularity when
stakeholders along the whole value chain
contributes
• Identify margins for all stakeholders in recycling chain,
to ensure financial attractivity of chem recycling
• Dependent on geography
• Harmonised regulations, definitions and best practices
Secure
steady
feedstock
source How
chemical
recycling
can scale
Scale with
collaboration
Economies
of scale
15
Enter market
via
investment
Clearer
regulations
16
Status of chemical recycling
Industrial scale in 5 to
10 years:
Chemical recycling
Address uncertainties:
- Environmental impact
- Cost
- Yield
- Legal status
- Leading technology
Now:
Mechanical recycling
‘Disruptions’ facilitating sustainability in packaging
Multilateral governance
- ANZPAC, Ellen MacArthur Foundation
- ASEAN Framework of Action on Marine Debris
Biobased and biodegradable plastics
e.g. In 2018, the Japanese Ministry of Environment made an announcement
for the inclusion of USD 45.0 million in the FY2019 budget for developing
products manufactured from bio-plastics.
From “build to export” to self sufficiency domestically / regionally
Countries taking steps to develop end of life waste
management capacity on shore
e.g. Australia (Recycling Modernisation Fund) &
Singapore (Integrated Waste Management Facility, NewOil)
Chemical recycling
Over 200 chemical recycling projects identified and recorded. Including
lab, pilot, demo and commercial plants.
17
ICIS Recycling & Sustainability Contacts
Editorial:
Senior Editors, Recycling:
Mark Victory – R-PP R-PE
Europe
Matt Tudball – R-PET
Europe
Hazel Goh – R-PET Asia
Analytics:
Senior Analyst, Plastic Recycling, & Global Analyst Team Lead
Helen McGeough
Global Recycling Analyst Team:
Daria Grossi (Europe)
Carolina Perujo Holland (Europe)
Paula Leardini (Americas)
Jia Hui Tan (Asia)
Joshua Tan (Asia)
18
