Argus has recently begun covering the Asia-Pacific recycling market, with price assessments for rPET and rPE in northeast and southeast Asia, and market commentary, news and analysis from across the region.
The market is evolving quickly, and Argus Recycled Polymers experts have identified five key developments to watch out for in the coming years.
China: Recyclers looking outwards
Chinese PET recycler Zhenjiang Ceville recently became the first mainland Chinese company to receive a European Food Safety Authority (EFSA) certificate, allowing it to sell post-consumer rPET into Europe for food contact material production. Three other major recycled plastic producers — Tianjin Incom Resources, Wuzhou Guolong and Zhejiang Veolia Huafei — are in the process of obtaining EFSA certification.
Informal waste collection practices in a number of Asian markets mean that collection rates for plastic packaging can be relatively high — China’s recycling rate is 30pc, which is a significant amount of product considering its population size of 1.3bn people. Recycling costs in Asia are often well below that of the US and Europe, where more organised collection systems are typically used. Legislation demanding recycled content in PET bottles is more developed in Europe than in many other parts of the world, with all bottles in the EU required to contain 25pc rPET by 2025. rPET remains banned for use in food or beverage packaging in China. This combination of factors makes Europe an attractive opportunity for Chinese recyclers, particularly if they can purchase established technologies from firms such as recycling technology supplier Erema, in order to comply with local European regulations.
Informal waste collection practices in a number of Asian markets mean that collection rates for plastic packaging can be relatively high — China’s recycling rate is 30pc, which is a significant amount of product considering its population size of 1.3bn people. Recycling costs in Asia are often well below that of the US and Europe, where more organised collection systems are typically used. Legislation demanding recycled content in PET bottles is more developed in Europe than in many other parts of the world, with all bottles in the EU required to contain 25pc rPET by 2025. rPET remains banned for use in food or beverage packaging in China. This combination of factors makes Europe an attractive opportunity for Chinese recyclers, particularly if they can purchase established technologies from firms such as recycling technology supplier Erema, in order to comply with local European regulations.
There are still hurdles to overcome, not least the European Commission’s initiation of an anti-dumping investigation concerning imports of Chinese-origin PET. This could potentially lead to restrictions on the trade of rPET — which travels under the same HS code as virgin PET. European buyers will need time to test and verify new suppliers, considering general concerns about quality in the recycled plastic market.
But on paper, exports to western markets remain a big opportunity for Asian recyclers. Argus’ calculated net-forwards for northeast Asian rPET food grade pellet are around €100/t ($108/t) cheaper than the price of local European supply, when adjusted for duties and inland logistics.
South Korea: Pyrolysis progress
South Korea is arguably one of the region’s most progressive countries in developing a circular economy, and it is going big into pyrolysis.
Several projects are under way, including global chemical producer LG Chem’s planned 310bn Korean won ($230mn) investment in a new 20,000t/yr hydrothermal treatment plant in Dangjin, expected to be completed by 2024. Fellow petrochemical producer SK Geo Centric (SKGC) is planning to start constructing a 66,000t/yr pyrolysis plant this year at its new recycling hub in Ulsan. And technology provider Honeywell and waste management firm GE Technology have announced plans for a 30,000t/yr pyrolysis plant in the country by 2025. These are listed in the Argus Chemical Recycling Project Tracker.
Pyrolysis and hydrothermal treatment are being developed as ways to process difficult-to-recycle plastic waste. They work by breaking the waste down into pyrolysis oil, which can then be fed back into the petrochemical industry to produce new plastics and other products.
These three projects put South Korea at the forefront of pyrolysis development in the region. Outside of South Korea, European pyrolysis technology firm Plastic Energy — which is providing the technology for SKGC’s Ulsan unit — is also involved in plans for units in Indonesia and Malaysia. Shell is involved in southeast Asia’s first pyrolysis oil upgrading plan in Pulau Bukom, Singapore, which will support the chemical recycling industry. But the proliferation of pyrolysis projects in Asia has been less than in Europe and the US.
Taiwan: rPET approved for food contact applications
The Taiwanese Food and Drug Administration (FDA) has recently opened a door for closed-loop recycling of PET bottles to begin in the country, by permitting rPET from approved processes to be used in food-contact applications.
The FDA began an investigation in June 2022 and awarded its first letter of non-objection to major PET producer Far Eastern New Century Corporation (FENC) in December. It is expected that this pave the way for other companies to follow suit.
The FDA’s non-objection letter used the guidelines and principles applied by the US’ Food and Drug Administration and the EU’s Food Safety Authority. The move enables fast-moving consumer goods companies to use FENC’s rPET for food-contact packaging.
Taiwan introduced a deposit return scheme for PET bottles in 1997, and boasts one of the highest global recycling rates for PET bottles, at 95pc. By enabling the use of rPET in bottles on the domestic market, the FDA has moved the country closer to a circular economy — although this could also reduce the quantity of rPET food grade pellets that Taiwan is able to export.
Singapore: Zero- Waste masterplan under way
Singapore — a real estate country with limited land — sees a long-term threat in piling waste. Most of its waste is incinerated, with the ashes that are produced ending up in Semakau Landfill. But this 3.5km² island south of Singapore’s coastline is expected to run out of space by 2035.
Significant quantities of its recyclable waste are exported to neighbouring countries. But Singapore’s neighbours, such as Indonesia and the Philippines, are tightening their regulations on waste imports, and so exporting waste may not always be possible. The country is also aware of the opportunity that recycling its own waste presents, and is putting more legislative drivers in place to support the recycling industry.The country will start a mandatory charge for disposable carrier bags in July. A minimum of 0.05 Singapore dollars ($0.04) will be charged to shoppers across 400 outlets in Singapore, amounting to nearly 70pc of the country’s supermarkets. And it will introduce a deposit return scheme, with a refundable S$0.10 added to the cost of all canned and bottled drinks sold in the country from 2025.
These policies form part of the zero-waste masterplan, under which the island nation is targeting an overall recycling rate of 70pc by 2030. This is an ambitious undertaking considering that recycling rates are currently 12pc, but a necessary step towards easing two potential long-term issues — having its neighbours reject its recyclables exports and being required to dedicate more valuable land to landfill. The country may therefore be in a position to make a greater contribution to the southeast Asian recycling market in the not-too-distant future.