Unlocking the potential of recycling in Asia

As the global push for a circular economy accelerates, awareness of the need to tackle waste management in Asia is gaining momentum. According to the United Nations Centre for Regional Development (UNCRD), the Asia-Pacific region generated approximately 870 million tonnes of municipal solid waste in 2014. That figure is projected to increase until 2030, when it could reach 1.4 billion tonnes annually, with virgin plastic consumption continuing to grow at a rapid rate.

While demand for recycled plastics is rising in tandem with population growth and industrial development, progress toward a truly circular economy in Asia remains uneven. Despite increased regulation and investment, a critical gap still remains: inadequate waste infrastructure and insufficient collection incentives for both companies and consumers.

Waste management is a fundamental element of the recycling ecosystem, yet in Asia, systems vary widely between formal and informal collection. In informal collection systems, plastic waste is collected as a means of generating income, before being diverted to sorting and recycling facilities.

This system tends to dominate in countries such as Indonesia and the Philippines, which comprise multiple small islands, making it far more complex to standardize waste collection and sorting across municipalities than on a single landmass. Equally this system dominates in India, largely owing to its size and the presence of large, sparsely populated areas. Poverty is also a factor, as scavenging offers an income to poorer parts of the population; but this reinforces rudimentary collection methods and poses a significant challenge to the development of scalable waste management systems.

With informal collection systems, collected waste is sorted and cleaned before being passed through as feedstock for recycling. However, generally there is low formal collection coverage to complement this, and a limited range of end-disposal methods, which leaves an opening for leakage/littering. Plastic waste typically ends up being lost from the recycling chain, which challenges the feasibility of recycling projects in such markets due to the lack of available feedstocks to run a plant, either mechanical or chemical, especially at a large scale.

Under the second system, waste collection is almost entirely formal, systematic and usually managed by governments at a municipal and/or local level, as well as within the private sector. This system applies in relatively advanced economies such as Japan, Taiwan and South Korea. Here, most plastic waste is collected and delivered to an end-disposal method or recycled, minimising environmental pollution relatively efficiently.

However, in countries such as Malaysia, Thailand, Indonesia, Taiwan and Japan, despite the recycling sector being broadly well-established, there are only a handful of large-scale players. Many of these operate across the region, especially in countries such as the Philippines and India, where recycling is not clustered into core sites.

Elsewhere, state/pseudo-state players, or conglomerate-associated units play a significant role in sorting and cleaning, for example in South Korea and Vietnam. In South Korea, large corporations dominate this sector, while Vietnam’s state-owned companies play similar roles. Although this ensures price consistency to some extent, the dearth of competition tends to distort pricing for end-users.

Additionally, in some countries previously dominated by small to mid-sized local sorters, major international waste managers have entered the market, disrupting established dynamics. These larger players have begun charging higher prices for raw materials, or undercutting and squeezing out smaller competitors, raising the risk of monopolies or duopolies. In response, local firms are forced to slash prices, often operating at a loss and creating a market that is unsustainable in the long run.

After sorting and cleaning, recycled plastic is typically baled and sent further down the chain within Asia to be processed into flakes. The market’s fragmentation limits economies of scale and likely increases overall costs. This raises a critical question: is this segment of the waste management chain supporting, or hindering recycling efforts?

Mechanical recycling is well-established throughout Asia, particularly in Northeast Asia and the Indian subcontinent. Current mechanical recycling installed capacity² is over 18 million tonnes per year, with China accounting for 66% of the total and India around 8%. ICIS expects mechanical recycling production to increase from over 14 million tonnes in 2024 to 34 million tonnes by 2040³.

Chemical recycling is a nascent market compared to mechanical. Most of the installed operating capacity is concentrated in Northeast Asia, where the majority of countries have well-structured waste management systems and supporting regulations. Significant investment in chemical recycling capacity has been announced in recent years, but as in other regions, increasing the pace of progress to allow these projects to reach full scale remains challenging.

Chemical producers and refiners are starting to explore collaborations and investments with chemical recycling technologies companies, both as a way to ensure continuity of supply and manage costs, while helping the chemicals industry to work towards its sustainability goals.

Gain a clear view of recycling capacity, plant ownership and overall supply and demand in Asia Pacific with ICIS’ Mechanical and Chemical Recycling Supply Trackers

Unlocking the potential of recycling in Asia will require a coordinated effort across the entire value chain — from governments, producers, recyclers and consumers alike. While challenges around infrastructure, feedstock quality and regulatory enforcement remain significant, the foundations for growth are being laid through investment, policy development and rising consumer demand.

With the right collaboration, technological innovation and long-term commitment, Asia has the opportunity not only to meet its own circular economy goals but also to become a global leader in the supply of high-quality recycled materials. The next decade will be critical in determining whether Asia can turn its recycling ambitions into a sustainable, scalable reality.