Reuse and refill systems, which are severely underfunded compared to downstream solutions like recycling and recovery, need to be prioritised to end plastic pollution, say experts at a United Nations summit.
Currently, only 4 per cent of global financing to tackle plastic pollution focuses on refill and reuse that are designed to reduce such pollution from source.
With plastic production growing at a faster rate than the recycling industry’s ability to keep up both in terms of technology and capacity, most plastic end up either in the landfill or oceans, said Apoorva Arya, chief executive officer at Danish think tank Circular Innovation Lab, at the Sea of Solutions (SoS) event held in Bangkok in September 2024.
“By not designing plastics [in a way that they] end up in landfills or incinerators, we solve a lot of problems,” said Arya, adding that many countries now still struggle with legacy waste management problems, as collected solid waste piles up in landfills for years with no way for safe and efficient disposal and often gets leaked into the surrounding environment.
Even when plastic packaging is collected from the oceans, it is often of “questionable” quality and mixed with other materials due to the lack of regulatory standards that restrict the industry’s use of specific polymers to those that either maintain or increase the value of plastics when recycled, said Arya. This leads to waste management firms bearing the cost of recycling these plastics, instead of producers, she added.
Apoorva Arya, chief executive officer of Circular Innovation Lab (right), speaking at a plenary session on transforming plastic value chains to a closed-loop system. Image: Sea of Solutions 2024
SoS 2024 is organised by SEA circular, an initiative by the UN Environment Programme (UNEP) and the Coordinating Body on the Seas of East Asia (COBSEA), a regional intergovernmental platform of nine countries, including China, South Korea, Indonesia, Malaysia, the Philippines, Thailand, Cambodia, Vietnam and Singapore. It aims to inspire actions towards ending plastic pollution in Asia and the Pacific.
According to OECD’s Global Plastics Outlook, 22 per cent of plastic waste evades waste management systems and is destined to end up in uncontrolled dumpsites or is burnt in open pits, or end up in terrestrial or aquatic environments. Beyond this, Arya highlights that there is still an “effective case for reuse” which would present a potential investment opportunity.
For example, new models for reuse have emerged in the cleaning and personal care market, where refillable dispensers for soap and detergent have replaced single use packaging. In Indonesia, a local enterprise has been pioneering dissolvable packaging made from seaweed to replace single-use sachets, among other attempts to tackle the problem, shared Arya.
Making upstream solutions financially viable
Llorenç Milà i Canals, who heads the Secretariat of the Life Cycle Initiative in UNEP, said that in order to incentivise reuse models, Extended Producer Responsibility (EPR) laws – which countries in Asia have begun mandating – must be thought of as a “life-cycle approach” and “not just a market mechanism to get the private sector to contribute to the cost of recycling”.
Financing end-of-life plastic recycling is important, acknowledged Milà i Canals, but EPR is also a way to incentivise producers to bring in the right upstream design solutions. “For instance, this can be done by modulating the EPR fees so that the products that are reusable and easy to recycle cost less, while hard-to-recycle products are more expensive,” he said.
EPR, which is considered an upstream solution, requires producers to pay for the management and recycling of packaging waste created from the entire life cycle of their products. In 2022, Vietnam became the first Southeast Asian nation to adopt EPR-related laws, followed by the Philippines and Indonesia. Elsewhere in the region, EPR schemes remain voluntary, though Malaysia and Thailand have plans to introduce them on a mandatory basis by 2026 and 2027 respectively.
Regula Schegg, founding partner and chief financial and operating officer, Circulate Capital, said that raising private financing for upstream solutions will require harmonised global rules on tackling plastic pollution.
“A challenge we see is obviously the regulatory framework. The Global Plastic Treaty can help in harmonising the environment we are operating in, as plastic doesn’t stop at the borders of a country,” said Schegg. “It can also help to create predictability, which is ultimately what institutional investors need.”
To date, 180 financial institutions representing over US$17.2 trillion in combined assets have endorsed a statement calling for the treaty, aimed to be legally binding, to include harmonised targets across the plastics value chain and to ensure that companies disclose plastic-related risks and opportunities.
Asia’s technological readiness
In her speech at SoS 2024, Circular Innovation Lab’s Arya highlighted how waste management becomes even more challenging when downstream solutions like recycling are constrained by the technological readiness of the region. In such an instance, certain circular plastic innovations mooted might not be applicable. Arya cited the example of a project in Bangkok being scrapped for that reason.
In a 2023 report on circular economy strategies, UNEP highlighted that waste management and the recycling market need to become more viable ventures. Recycling is seen as a complement to other solutions, and it argues that it is important to ensure that where plastics are produced, they are designed to be recyclable in the market where they are sold.
At the event, representatives from non-governmental organisations who spoke agreed with the need for upstream design to focus on the reduction of plastic production through refill and reuse systems before incorporating material changes such as using bioplastics as an alternative to petroleum-based plastics or recycling.
Mayang Guerrero Azurin, deputy director for campaigns at environmental coalition Global Alliance for Incinerator Alternatives (GAIA) Asia Pacific, responding to discussions on circular business models by panellists, cautioned against solutions that place too much emphasis on recycling, citing how communities living alongside chemical recycling plants have expressed concerns about adverse environmental and health effects from toxic byproducts that could enter the water and air.
Jet Chang, vice president, public affairs, TOMRA China also cautioned that for its artificial intelligence (AI)-powered machines or other advanced technological solutions – which seek to improve the accuracy and efficiency of waste sorting – to be affordable, countries “need to find a proper use” for them.
“For example, the sorting machine is best used when you have volume, and the input material is very complicated. With the speed, the volume and the accuracy, the automation or AI then plays an important role.”
The need for just transition plans
As Southeast Asia ventures into solutions like refill and reuse, just transition plans that ensure that informal waste pickers – who are often women, elderly or disabled – are still not in place, cautioned experts at the SoS 2024 conference.
Speakers highlighted how financing towards ending plastic pollution often excludes the integration of waste pickers, with most business models displacing these communities.
In Asia, the informal sector plays a huge role in ensuring plastics are recovered for recycling. Waste pickers tend to be paid below market rate and work under hazardous conditions as the sector operates without formal regulatory frameworks.
One major barrier towards financing to ensure that the transition to a circular economy does not neglect marginalised communities is the lack of impact metrics, said Christina Jäger, who co-founded the global business network Yunus Environment Hub with Nobel Peace Prize Laureate Muhammad Yunus.
Christina Jäger (second from the right), co-founder and managing director, Yunus Environmental Hub, said that the lack of impact metrics is a major barrier in financing the just transition of waste pickers and other marginalised communities to a circular economy. Image: Sea of Solutions 2024
Jäger, who said that the group has plans to work on such metrics, stressed that reskilling needs to be part of the investments for upstream innovations so that informal waste workers can access alternative employment opportunities.
Her organisation encourages younger informal waste workers to become entrepreneurs or to move into another job through access to microfinancing schemes, so they can tap into low-cost financing to start their own businesses or get quality education.
Such programmes could be applied to the informal waste sector, by looking at where the gaps for high demand jobs of a specific country are, she said.
In Vietnam, the government has plans to create an association for women waste pickers to help them gain access to financing, said Le Ngoc Tuan, director general of the international cooperation department at the country’s ministry of natural resources and environment.
In response to a question from a Vietnamese NGO on whether the government plans to recognise them in its EPR law, Tuan responded that he is looking to negotiations on the legally binding instrument on plastic pollution as an opportunity for the ministry to propose that.
TOMRA’s Chang is of the view that EPR will improve the livelihoods of informal waste workers. “Right now, we see most of our sorters are in the PET (polyethylene terephthalate) and rigid plastic recycling sectors. That’s because without legislation in many regions, the economics for building infrastructure can’t work, ” he said, adding that EPR will ensure that responsible polluters pay to manage the end-of-life of their products
Jäger emphasised that a formalised waste management system could cut off waste pickers’ access to landfills and dumpsites where they have typically collected materials to sell. EPR laws will need to include and consider informal waste workers, she said.
“We can’t just talk about redesigning specific products. We need to redesign the way the economy works,” said Milà i Canals. “We cannot do it product by product or by making some changes here and there. We really need to transform the way we use plastics in the economy.”
