APIC ’24: Policy fragmentation stalls Asia’s plastics circularity drive

SEOUL (ICIS)–Asia’s journey towards a circular plastic economy is gaining momentum, but the region’s diverse waste management practices and fragmented regulations present challenges to realizing this vision.

• Harmonizing policies crucial for circularity
• Demand for recyclates driven by regulations
• Regional disparities impact global sustainability

With a steady rise of plastic consumption in Asia, countries in the region have taken steps to promote the circular economy, including implementation of the Extended Producer Responsibility (EPR) policy, waste separation requirements and bans of single-use plastics, said Bala Ramani, director of sustainability consulting and Asia strategy advisor at ICIS.

EPR shifts the financial and/or operational burden of post-consumer product management from governments to producers. Japan, South Korea, Taiwan, India, the Philippines, and Singapore have adopted the policy.

However, the scope and depth of circularity strategies, which require legislation, currently vary widely across Asian countries because the region does not have an overarching administrative body like the EU in Europe to unify countries around sustainability goals.

“As the economic and supply chain integration amongst the countries in Asia deepens, there is also a need for regional integration of circular economy policies,” Ramani said.

Plastic circularity will be a core topic of the Asia Petrochemical Industry Conference (APIC) in Seoul, South Korea on 30-31 May, whose theme is “Trailblazing the path in a sustainable era.”

REGIONAL DISPARITY
While Japan, Taiwan and South Korea have been at the forefront of efficient waste resource management, countries in south and southeast Asia are still working toward setting up a well-managed waste management and recycling infrastructure, Ramani noted.

While the “informal sector” plays a significant role in solid waste management in southeast Asia and parts of the Indian subcontinent, northeast Asian countries have established robust systems, reducing their need for such informal contributions, according to ICIS Asia Pacific plastic recycling analyst Joshua Tan.

Nine out of the top 20 countries globally with the highest percentages of mismanaged plastic waste are in Asia, Tan noted, and this is particularly evident in coastal populations residing within 50 kilometres of the coast.

The same nine countries are identified as major contributors to marine plastics pollution through rivers.

Tan said that these countries generate some 844,000 tonnes of plastic waste annually, which is more than 20 times the capacity of a typical recycled polyethylene terephthalate (R-PET) recycling plant.

“For Asia to achieve plastic circularity as a region, it will be imperative for the countries to harmonize policies, develop regional standards (design for recycling, industrial standards for recyclates, mandatory recycled content, trade restrictions etc) and facilitate regional cooperation,” Ramani said.

CIRCULAR PLASTICS OFFER COMPETITIVE ADVANTAGE  
Plastics are essential to sustainability across various sectors, from packaging and automotive to agriculture and construction, making effective plastic waste management and recycling crucial for their future viability, Ramani said.

“As the chemical sector goes through this period of demand uncertainty and overcapacity especially for fossil-derived products such as virgin plastics, plastic recycling and circularity offers a means of competitive advantage and higher value-addition in the future to ultimately distinguish winners from losers.”

While mechanical recycling is expected to play a significant role in addressing plastic waste in the region, chemical recycling will be necessary to complement these efforts, particularly due to the diverse waste management systems across different countries in the region, Ramani said.

Mechanical recycling dominates the Asia-Pacific market with more than 18 million tonnes/year of installed capacity, dwarfing chemical recycling’s nascent 700,000 tonne/year capacity, according to Tan.

And while plastic recyclates have become a global commodity, their trade is marked by a stark contrast with virgin plastic material, Ramani said, noting that while demand for recyclates is driven by regulations and brand commitments in certain regions, supply of consistent, high-quality material struggles to keep pace.

Recyclates are secondary raw materials derived from either post-consumer household waste (PCR) or post-industrial waste (PIR), with PIR being easier to recycle due to less contamination.

“This results in regional imbalances across the value chain from plastic waste collection and sorting to recovery/recycling and ultimately the end-use of recyclates, leading to supply-demand imbalances with prices ultimately driving movement of materials from one region to another.”

These regional disparities in the plastics recycling value chain have not gone unnoticed, with significant implications for global sustainability efforts.

In response to this challenge, Europe’s Antwerp Declaration, launched in February this year, sets ambitious goals for the chemical industry to adapt to rapid expansion of renewable energy, strengthen local supply chains, and shift towards sustainable products.

The declaration – now signed by close to 1,200 organizations across 25 sectors – calls for urgent action from European governments to boost industry competitiveness and sustainability, requiring a massive increase in electricity production and a sixfold increase in industrial investments to achieve climate neutrality by 2050.

“The recent launch of the Antwerp Declaration by the European chemicals and other industries is a further sign of the more local-for-local world we are moving towards,” said ICIS senior consultant John Richardson.

“Local-for-local” supply chains involve chemicals as they are the building blocks for all the manufacturing and service supply chains, he noted.

“Europe must prioritize new renewable energy projects and make it easy to install the necessary infrastructure… ‘Local-for-local’ domestic supply chains are critical for [supply] security,” Richardson said.

“Governments need to lead in boosting demand for low carbon and circular products as Europe needs a strong single market for bio feedstocks, plastic waste, recycled materials and electricity,” he added.

Focus article by Nurluqman Suratman

Click here to view the ICIS Recycled Plastics Focus topic page.

Thumbnail image: Plastic bottles made from polyethylene terephthalate (PET) are widely used for soft drinks and bottled water. PET can be fully recycled. (Source: Helmut Meyer Zur Capellen/imageBROKER/Shutterstock)