FULL CIRCLE
Accelerating the Circular
Economy for Post-Consumer
PET Bottles in Southeast Asia

Commissioned by© 2019 GA Circular

02

Table of Contents
03

Foreword

12

Executive Summary

18

Preface22

1. Current Realities in Southeast Asia

32

2. Underlying Reasons for the Low Rates of Collection for Recycling42

3. The Road Ahead: Accelerating the Circular Economy

66

Appendices

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Foreword
Plastic waste has fast emerged as one of the biggest
social and environmental issues facing the world today.
All of us at The Coca-Cola Company are determined tostep up and be part of the solution. With that in mind,
we announced last year a commitment called World
Without Waste underpinned by a bold, ambitious goal:
to help collect and recycle a bottle or can for every one
we sell globally by 2030.
Collaboration towards a circular economy is at theheart of this vision. Regardless of where it comes
from, we want every package to have more than
one life. To achieve this, we will continue to focus on
designing our packaging to be 100% recyclable across
our portfolio while partnering with local communities,
NGOs, industry and consumers to collect and recycle
packaging and help ensure it doesn’t end up where it
doesn’t belong.
Working to help create a World Without Waste isn’teasy and involves many moving parts. And, as withany strategy, we have to get clear on the starting point.
Specifically, in this case, we have to understand thebaseline when it comes to collection and recycling rates
for our packaging. In many parts of the world, suchdata doesn’t exist or it is not readily available.
That’s why we commissioned this report from GA
Circular. It focuses on Southeast Asia – a crucially
important focal point for the global ocean plastic
challenge. It focuses on PET – a type of recyclable
plastic commonly used in beverage and other foodgrade packaging and one that offers significant
potential for circular economy solutions.

The report synthesizes GA Circular’s on-the-groundresearch from ASEAN’s six biggest countries anddelivers a first-of-its-kind analysis of collection-forrecycling rates for PET plastic in key ASEAN cities. The
report examines the existing recycling and collection
challenges and opportunities in Southeast Asia andframes up a circular economy roadmap for postconsumer PET plastic packaging specifically tailored
for the region. It concludes with a concrete set ofrecommendations geared towards interventions withthe highest impact.
At Coca-Cola, we are committed to executing theserecommendations with our partners, and we havealready begun to move in earnest. It is our hope that
this report also helps to drive broader understanding,coordination and momentum in our shared efforts totackle marine plastic pollution in Southeast Asia 		and globally.
Imagine if we all – across multiple sectors – put
our combined expertise and resources into solving
this problem. Imagine if we all worked to help keep
packaging out of the places where it doesn’t belong.
There’s so much more we can do together and, clearly,
the time to act is now.

Michael Goltzman
Vice President, Global Policy and Sustainability
The Coca-Cola Company

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In Support of “Full Circle: Accelerating
the Circular Economy for Post-Consumer
PET Bottles in Southeast Asia”
The findings of this report have clear and consequential implications for accelerating
plastic action in Southeast Asia. They underscore the urgent need to scale up theregion’s infrastructure for collecting and recycling PET bottle packaging, a staggering
source of mismanaged plastic waste. And more importantly, they identify highly
valuable opportunities – investments, innovations, and systemic policy changes –that must be leveraged in order to achieve concrete progress.
KRISTIN HUGHES - DIRECTOR OF THE GLOBAL PLASTIC ACTION PARTNERSHIP

To accelerate the Circular Economy in Vietnam and throughout Southeast Asia, it is
crucial to know where we want to go and what we must achieve in order to reach ourgoals. This is exactly what this report by GA Circular lays out. PRO Vietnam, as thefirst industry-led PRO within Southeast Asia, understands the urgency to boost thevalue chain for post-consumer packaging and aims to lead the transition to a Circular
Economy in Vietnam.
FAUSTO TAZZI - CEO OF LA VIE - NESTLE WATERS VIETNAM AS FOUNDING MEMBER AND
VICE-CHAIRMAN OF PRO VIETNAM

I commend GA Circular for this very comprehensive and well written report, andI endorse the roadmap and key action steps outlined out for Southeast Asia andMalaysia specifically. To accelerate the Circular Economy for PET bottles in thisregion, it is crucial to learn from best case practices globally - and especially fromcountries that have similar realities, such as South Africa and Mexico. The industryled Packaging Recovery Organisations in South Africa and Mexico have successfully
boosted the value chains of PET bottles and created robust recycling industries thatare protected from global shocks and import bans. This will be an excellent model for
Malaysia to adopt and implement.
HO DE LEONG - WASTE MANAGEMENT ASSOCIATION OF MALAYSIA (WMAM), CHAIRMAN &SWM ENVIRONMENT SDN BHD, CHIEF EXECUTIVE OFFICER

Heng Hiap Industries are proud to have contributed a small part to this excellent andthorough report on the recycling landscape in Malaysia specifically, and Southeast
Asia in general. We recognise the challenge of obtaining precise statistics relating to
the relatively under-developed industry, however, we feel that the numbers statedin this report are as accurate as they can be, and where their accuracy cannot be
substantiated, they are reasonable assumptions. We fully endorse the content of thisreport and applaud the expertise and professionalism demonstrated by the GA Circularteam that put this report together, as well as the initiative by The Coca-Cola Company
in commissioning the report.
KIAN HOE SEAH - HENG HIAP INDUSTRIES, MANAGING DIRECTOR

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PET is the most recycled plastic in the world. Despite the obvious advantagesof recycling, too much of it is still not recycled and leaks into our environment.
This report details the realities and reasons for the current state, and then details
solutions that should be considered by package designers and manufacturers, beveragecompanies, retailers, recyclers, and national and local governments. The solutions
illuminate a pathway to better recycling and less plastic in our environment.
I congratulate Coca-Cola and the GA Circular team for their contribution to ourunderstanding and potential solutions to this global opportunity to a circular
economy for PET bottles in Asia.
DAVID CLARK - AMCOR, VICE PRESIDENT, SUSTAINABILITY

This is probably one of the most important pieces of research conducted in Southeast
Asia on municipal waste and provides a firm bedrock on which others can build.
RICHARD JONES - INDORAMA VENTURES PCL, SENIOR VICE PRESIDENT

This report makes clear that the informal sector plays a critical role in improving
collection and keeping trash out of the ocean in Southeast Asia. To make this happen,
we need companies to drive safe and effective informal sector collection by providing
the right financial incentives and other forms of support.
CHEVER VOLTMER - OCEAN CONSERVANCY, PLASTICS INITIATIVE DIRECTOR

The report is a serious attempt that summarises the findings of in-depth country
assessments of PET bottles in 6 Southeast Asian countries by GA Circular. Based on theidentified shortcomings, the report also provides a roadmap on how to improve
the situation.
SABINE STRNAD - SUSTAINABLE STEWARDSHIP, SENIOR CONSULTANT

Even as opportunities to introduce “reusable packaging” are explored globally, wemust remember that the recycling industry is the singular opportunity for diversion
away from the environment for PET bottles and packaging of a single-use nature,thus it is critical that we develop a robust recycling industry in Southeast Asia. The
most effective response to the challenges currently facing the post-consumer PET
landscape in Southeast Asia is one that effectively and continually boosts the collection
and recycling operations currently in place. This report highlights a series of priority
actions to transform the post-consumer PET landscape in Southeast Asia in order toachieve upwards of 90% collection-for-recycling rates by 2030.
MARC ALLEN - ENGECO, TECHNICAL DIRECTOR

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GLOSSARY

Glossary
STAGES OF THE POST-CONSUMER VALUE CHAIN IN
SOUTHEAST ASIA, AND KEY STAKEHOLDER GROUPSCONSUMPTION

Consumers
In this report, refers to consumers of bottled
beverages.
Bulk Waste Generators (BWGs)
Buildings such as government offices, schools
and universities, shopping malls, office buildings,
apartment complexes, hotels and hostels, placesof worship and large commercial establishments
which generate a significant amount of waste ascompared to individual households. BWGs are
generally defined country to country based on anaverage waste generation amount (e.g. exceeding
50kg per day).

COLLECTION

INFORMAL SECTOR
Waste Collectors (WCs)
The people that collect waste (mixed or separated) from households, bulk
waste generators or other establishments. They are formally employedby the public or private waste collection sectors and their formal sourceof income is from the collection and transportation of mixed waste. For
this job, they are considered formal workers. Whilst not their job, thesepeople often actively sift through the mixed waste in the carts or trucks topick out recyclable materials to sell for extra personal income. When they
engage in this behaviour, they are considered informal sector workers. As
their picking out and sales of recyclables is the focus of this report, for the
purposes of this report they are considered informal sector workers.
Recyclables Collectors (RCs)
These are self-employed people who use bags, small push-carts or
small motorised vehicles to buy recyclable materials from households,
bulk waste generators or other establishments through the relationships
they have built. They sell the material to junk shops as a primary sourceof income. They may also pick up recyclables from mixed waste or litter.
However, the majority of the material they handle is based on buying fromhouseholds, other establishments and bulk waste generators.
Street Material Pickers (SMPs)
Street material pickers are those who pick up recyclable materials fromthe open environment (in the city) or from a garbage bin. They may also
do some buying, but they are primarily picking, which is why they arecalled street material pickers.
Landfill Material Pickers (LMPs)
Landfill material pickers are those who pick up recyclables from landfills.
These people are often referred to as scavengers. However, landfill
material pickers is the terminology used by GA Circular and within 		
this report.

FORMAL SECTOR
Waste Banks, Material Recovery Facilities, and other 		Formal Collection Centres
Waste Banks are community establishments where people can deposit
segregated recyclable materials in exchange for money or credit similar to a bank account. From here, the materials are sold to junkshops, aggregators or processors/recyclers. Waste Banks are unique
to Indonesia. Material Recovery Facilities (MRFs) are unique to thePhilippines and are set up by some local government units to implement
source separation and separate collection of waste. Other collection
centres include places such as charities or places of worship (e.g.
mosques, temples) which collect recyclables primarily via donation. The
collected recyclables are then sold as a source of income for the non-profit
entity. This group was only surveyed in Greater KL.

FULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIA

GLOSSARY

STAGES OF THE POST-CONSUMER VALUE CHAIN IN
SOUTHEAST ASIA, AND KEY STAKEHOLDER GROUPSAGGREGATIONPROCESSING & RECYCLING

Junk Shops (JSs)Informal or formally registered businesses involved in buying
recyclable materials from informal and formal sectors including
recycling collectors, waste collectors and material pickers. Junk
shops vary in size from small to large, with the smaller ones
often selling to larger junk shops. Junk shops sell recyclable
materials to aggregators.

Processors
Informal or formally registered businesses engaged in theprocess of converting the recovered PET packaging into
flakes. Processors either export this material or sell it to a local
recycler. The recycler will then convert the flakes into usable
applications such as food grade pellets, non-food grade pellets
and polyester fibre.

Aggregators
Informal or formally registered businesses involved in buying
materials from junk shops, aggregating high quantities, andselling to processors and/or recycling factories.

RecyclersInformal or formally registered businesses engaged in theprocess of converting the flakes into food- or non-food gradepellets, fibre or other applications. The finished product iseither exported or sold locally. In many cases the recycler also
has processing capabilities in-house to convert collected PET
packaging into flakes.

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GLOSSARY

Glossary
DEFINITIONS OF KEY TERMS USEDMATERIAL FLOW DEFINITIONS

MATERIALS

PET Bottles
For the purposes of this report, the term PET Bottles is used torefer to PET beverage packaging. The report excludes any nonbeverage applications, such as cooking oil containers and foodpackaging. PET bottles are used primarily for soft drinks andpackaging applications.

PET
PET is an acronym for polyethylene terephthalate. The PET
polymer is clear, strong, lightweight, safe and 100% recyclable.
PET used for packaging accounts for 23% of the global usageof the PET polymer. 54% of all PET production is for fibre, e.g.
for the textiles industry, where it is commonly referred to aspolyester. Other industry uses include the automotive andelectronics industries.

Market Input
The total amount of PET bottles entering the market, notincluding caps and sleeves that are not PET.
Collected-For-Recycling Rate
What: Denotes the tonnes or percentage of PET collected
through the informal and formal waste material collection
sector within the country which is then sold on to Processors
and/or Recyclers within the country or for export, as comparedto the total market input (products sold in the market). The
collected-for-recycling rates already factor in removal ofcontaminants, and caps and labels.
Why: Given imports and exports of material for recycling, thecollected-for-recycling rate denotes local collection which issold to processors/recyclers, not necessarily within the country.
I.e. a country can have a collected-for-recycling rate of 75%,
even though none of the material is recycled locally due tothe lack of a robust local recycling industry. Secondly, given
recycling yield is less and varies, the collected-for-recycling
rate is not equal to the share of after-use plastics that is
actually recycled, which further explains the use of collectedfor-recycling instead of recycling rate.
Environmental Leakage Rate
The proportion of material out of the total market input that
ends up in the environment (such as plastic in the waterways).
Landfill Rate
The proportion of material out of the total market inputthat stays at the landfill after material picking by landfill
material pickers and environmental leakage due to poor
landfill management.

Recycled PET (rPET)
rPET is the acronym for recycled PET. rPET is not to be
confused with RefillablePET which is usually referred to as
REFPET in short form.
Virgin PET (vPET)
vPET is the acronym for virgin PET.
PolyesterFor the purposes of this report, polyester refers to synthetic
fibres made from PET. These are typically used in the textile
industry.
Renewable Plastics
Renewable plastics, or biobased plastics, are made are madewholly or partially from renewable biological resources. For
example, sugar cane is processed to produce ethylene, which
can then be used to manufacture polyethylene, the building
block of PET. Renewable (or biobased) plastics are not to be
confused with biodegradable plastics, as some renewableplastics are made to be biodegradable based on international
standards via composting (such as PLA) and others are notbiodegradable (such as biobased PET).
Polylactic Acid or Polylactide (PLA)
PLA is a renewable (or biobased) plastic. It is createdfrom fermented plant starch, which produces lactic acidand subsequently polylactic acid (PLA). PLA is certified
biodegradable under industrial composting.

FULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIA

GLOSSARYTOOLS TO DRIVE MATERIAL COLLECTION
Packaging Recovery Organisation (PRO)An industry-led packaging recovery organisation (PRO) isa setup in which packaging producers are responsible fororganizing and funding the collection, sorting, and/or recyclingof post-consumer packaging materials.
Voluntary PRO
A voluntary PRO is an industry-led packaging recovery
organisation (PRO) which is voluntarily set up by industry,
as opposed to being set up by industry due to a government
mandate.
Extended Producer Responsibility (EPR)
A combination of tools that places the responsibility of material
collection and recycling on the producer of the material. Thiscan involve both physical and/or financial responsibility to treat
and dispose of post-consumer products.
Deposit Refund System (DRS)DRS is a tool available to implement mandatory EPR
obligations. DRS can also be implemented on a voluntarybasis by industry. DRS either consists of manual take-backand/or it is supported by reverse vending machines. The pointof redemption can be located at a retailer or at redemption
centers and take-back points. The deposit (the incentive)
is usually clearly labeled. The deposit is refunded to theconsumer when the empty package is returned.
Recycling Targets
Recycling Targets are a tool available for mandatory EPR
obligations. Recycling targets require producers to hit annual
recycling targets for specific types of packaging. Targets
are usually set in percentage points. Can also be known as
Product Take-Back requirements. Recycling Targets are often
implemented together with other economic tools such as
Advanced Fees, DRS or Taxation.

Taxation (Packaging Tax)
A tax based on the amount of packaging produced by theindustry (packaging tax) or amount of packaging consumed(product tax). Implemented by the government and run as astate enterprise solution that is not controlled by the industry.
Packaging taxes can be implemented as a punitive measurefor not meeting other EPR obligations such as recycling rate
targets or recycled content usage targets.
Buy-back (Direct Acquisition of Packaging)
Whereby a company or industry invests in creating acollection system for a specific material type to meet its
recycling obligations.

MISCELLANEOUS TERMSSoutheast Asia and ASEAN
Southeast Asia includes 10 countries: Indonesia, Singapore,
Malaysia, the Philippines, Vietnam, Thailand, Myanmar,
Brunei, Cambodia and Laos. Of these, the six most populated
countries are studied in this report: Indonesia, the Philippines,
Vietnam, Thailand, Myanmar and Malaysia. Southeast Asia
is also commonly referred to as ASEAN in public. However,
ASEAN is only used within this report when it refers to theregional organisation (the governing body) for the 10 Member
States - for example, in referring to the ASEAN regional bloc.
Post-Consumer
Post-consumer in this report refers to the item (i.e. packaging)used and disposed of by the end consumer, which, in the caseof PET bottles, is usually a member of the public. Industrial/
factory waste PET is specifically excluded from this definition.
TonnesTonnes in this report refers to metric tonnes (i.e. 1,000kg).

Recycled Content Targets
Recycling Targets are a tool available for mandatory EPR
obligations; however, targets can also be implemented outside
the EPR as part of other government policies. Recycled content
targets require producers to use a specific percentage ofrecycled packaging content (e.g. 30% food-grade rPET in theirpackaging). It can be used alongside other design changes
such as lightweighting.

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Acknowledgements
GA CIRCULAR CORE PROJECT TEAM
Ashwin Subramaniam
Chief Executive Officer

Abishek BalasubramanianHead of Projects

Laura Allen
Chief Operating Officer

Amirul Adli
Project Manager

Sumangali Krishnan
Chief Business Officer

Nitya Sarma
Project Executive

SUPPORTING ORGANISATIONS & PEER REVIEWERS
Special thanks to all participating organisations and peer reviewers for their contributions to GA Circular’s baseline
study for PET bottles in the six Southeast Asian countries and dialogue around interventions for the six countries:
INDONESIATHAILAND• Waste4Change• Bangkok Metropolitan Administration• PT Polindo Utama Recyclers• Haad Thip PCL• Slangum Jaya Recyclers• Indorama Ventures• Association of Plastic Recycling in Indonesia (ADUPI)• PRAISE• Ministry of Natural Resources and Environment,
Phuket Office• Indonesian Waste Platform (IPI)• PJT Technology Co., Ltd

THE PHILIPPINES• CENRO, Parañaque• Can Asia
• Top Lun Recyclers• Leonel Waste Management Corporation• Philippine Alliance for Recycling Materials 		
Sustainability (PARMS)• Phuket City Environmental Protection Community• Phuket Provincial Authority• Plastics Industry Club, Federation of Thai Industries• Plastics Institute of Thailand• Pollution Control Department• Prince of Songkla University, PSU Phuket Campus• SEEK, Phuket - Nick Anthony, Debra Mierczak, Peter Harris• Philippine Plastics Industry Association (PPIA)• Thailand Institute of Packaging and Recycling Management
for Sustainable Environment

VIETNAM• ThaiNamthip Limited• ENDA• Japan International Cooperation Agency (JICA)• Ministry of Natural Resources and Environment• Shun An Recycler, HCMC

MYANMAR• Duck Feather Recycler, Yangon• Pollution Control and Cleaning Department (PCCD), Yangon

FULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIAACKNOWLEDGEMENTS

MALAYSIA

PEER REVIEWERS• Ministry of Urban Wellbeing, Housing and Local
Government (KPKT)• Chris Lee & Eva Luo (FENC)• Department of National Solid Waste Management (JPSPN)• Ian Hayes (GSK)• SWCorp• Sabine Strnad (Sustainable Stewardship)• Waste Management Association of Malaysia (WMAM)• Nicolas Gregoire (Danone)• SWM Environment Sdn Bhd• Casper Durandt (PETCO)• Richard Jones (Indorama Ventures)• Green Concept Technology Sdn Bhd• Glowmore Express Sdn Bhd• Heng Hiap Industries Sdn Bhd• Nebula Waste Management Sdn Bhd• I-CYCLE Sdn Bhd• Malaysian Plastics Manufacturers’ Association (MPMA)• Kampung Darul Ehsan Berhad (KDEB) Waste Management• EPIC• Reef Check Malaysia• EcoKnights

INTERNATIONAL• UN Environment Programme Asia Pacific Office• Interafval, Belgium• ECOCE, Mexico• PETSTAR, Mexico• PETCO, South Africa• The Coca-Cola Company• Coca-Cola bottlers in Mexico (Arca, FEMSA)FULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIA

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12

Executive
Summary

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EXECUTIVE SUMMARY

Executive Summary
In recent years, the global momentum for rethinking
the way plastic packaging is produced, consumed anddisposed of has grown faster than ever. The largely
linear approach to the way plastic packaging entersand exits our lives for fleeting moments has reachedits limits and the challenges have become apparent. In
2016, the Ellen MacArthur Foundation quantified that
US$80 billion to $120 billion worth of plastic packaging
was lost from the global economy each year due tothe packaging not being collected for recycling. A year
earlier, another baseline quantification determined that
8 million to 12 million tonnes of plastic leak into theoceans each year, with eight of the top 10 countries forplastic leakage being in Asia.
Whilst these are global statistics, it has quickly become
apparent that Asia, as the world’s largest consumer ofplastic packaging and the largest contributor to marine
leakage, is where bold vision and effective action isneeded to stem this profound environmental damage
and the loss of this valuable resource. This can only be
addressed when there is a baseline from which to drive
informed action and measure progress.
This report is the first to provide a systematic andcomparative baseline of the flow of plastics packaging
from production to end-states by studying PET bottles(one of the most recyclable forms of plastic packaging)in six countries in Southeast Asia. These six countries
are Indonesia, the Philippines, Vietnam, Thailand,
Myanmar, and Malaysia, which account for a total
population of more than 600 million people, morethan the population of all the European Union’s 28
countries. Five of these six countries are among the top
10 global contributors to ocean plastic leakage. These
six countries in Southeast Asia are, therefore, a focal
point in global efforts to create the narrative for vision
and action on changing the linear economy approach toplastic packaging.
This report is the first to identify the root causes of
the challenging realities concerning post-consumer
plastic packaging in Southeast Asia today and toprovide a roadmap to transform the post-consumer PET
landscape in Southeast Asia.
Detailed baseline data collection, analytical work andfrequent interactions with stakeholders across theplastics value chain and experts throughout Southeast
Asia and globally, revealed five key findings and fiverecommended priority actions to accelerate the circular
economy for PET bottles in Southeast Asia.

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FIVE KEY FINDINGS

1

4

In the six countries studied,the average Collected-for-recycling
rate for PET bottles is 54% at
the city level.

Six underlying reasons accountfor the low Collected-for-recycling
rates for PET bottles.

This baseline research (2018) shows that the averagecollected-for-recycling rate for PET bottles in nine key
cities in Southeast Asia is 54%. The average landfill rateis 36%, and environmental leakage rate is 10%. There isa wide variation in these rates across the cities.
Extrapolating this information to the country level, theestimated average collected-for-recycling rate acrossthe six countries studied is 26%, with another 26%
going to landfills and the remaining 48% leaking into
the environment. Comparing across the six countries,
cities in countries with lower GDP per capita havehigher collected-for-recycling rates than the cities incountries with higher GDP per capita.

There are six underlying reasons for the low collectedfor-recycling rates for PET in Southeast Asia:
1. Prices of post-consumer material are insufficient todrive informal sector collection;
2. Lack of value creation mechanisms and developed
local end markets;
3. Current packaging design hinders value creation;
4. Poor waste collection coverage leads to 		
material leakage;
5. Lack of source separation and separate collection
leads to poor access to recyclable material;
6. Existing collection efforts in Southeast Asia havetypically been short-term.

5

2
The PET bottles that do not 		
get recycled represent a loss 		
in value of US$199 million.
Across the six Southeast Asian countries studied, acumulative US$199 million worth of PET bottles isleaking into the environment or ending up in landfills
each year.

3
The informal sector is responsiblefor 97% of the PET bottles collected
for recycling in the cities studied.
The informal sector is the backbone of collection. The
informal sector’s significance rises out of the limited
success of formal collection and recycling systems
implemented to date in Southeast Asia.

Status quo will result in 			a drop in PET bottle 				Collected-for-recycling rates.
Continued reliance on only the informal sector is
expected to reduce collected-for-recycling rates in the
future. This is because as cities and countries develop,
the average cost of living increases, thus collecting
and selling PET becomes very challenging in the faceof rising standards of living and the informal sector,
therefore, moves onto other trades and jobs.
It is expected that Asia Pacific will be the fastest global
growth market for PET. The consumption of PET bottles
is projected to almost double between 2018 and 2030
in the six Southeast Asian countries studied, from
886,000 tonnes to 1.52 million tonnes. Thus, even if theinformal sector remained the same size and collected
the same quantities per person, the collected-forrecycling rates would almost halve purely due to the
doubling of market input.

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EXECUTIVE SUMMARYRECOMMENDED PRIORITY ACTIONS
The most effective response to the challenges currently facing the post-consumer PET landscape in Southeast Asia
is one that effectively and continually boosts the collection and recycling operations currently in place. For the firsttime, a series of priority actions have been identified to transform the post-consumer PET landscape inSoutheast Asia.
These priority actions and the related key actors are as follows:

ActionKey actors

Industry-led PRO- Packaging and consumer goods
industries as a collective effort- Supported by national governments,
recyclers, investors, and funding institutions

focused on boosting the value chain, coupledwith supporting policies and investments.

Improved packaging design
to improve the economics of recyclability by phasingout coloured PET and PVC labels, and using easierto-remove label formats.

- Packaging and consumer goods industries- Individual company efforts in the shortterm, collective industry effort in the midand long-term

National government and municipal efforts- National governments and municipalities

to impact source separation and separate collection,national recycling targets, and reach 100% waste
collection coverage.

FIGURE 1: ACHIEVING A 100% COLLECTED-FOR-RECYCLING RATE OF PET BOTTLES IN SOUTHEAST ASIA
100%
PET Bottles collected-for-recycling rate

16

Not Collected-for-recycling
National Government and Municipal Efforts:- Source Separation and Separate Collection- 100% Waste Collection Coverage

75%

Improved Packaging Design
Industry-led PRO:
- Focused on boosting the value chain andrecycling industry- Assumes supportive policies and the use ofrecycled content in new packaging- Assumes external investments into recyclers

50%

25%

Status Quo Collection
97% of this collection is by the informal sector

02020

Short-Term

2023

Mid-Term

2026

Long-Term

2030

Source: GA Circular Analysis (see Appendix G for details).

FULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIAEXECUTIVE SUMMARYACTIONS OF EACH KEY STAKEHOLDERBY PACKAGING AND CONSUMER 		GOODS INDUSTRIES
Phase out coloured PET and the phase out of PVC in
PET bottles to improve the economics of PET bottle
recycling and ensure that the PET bottles that arecollected for recycling can be used for a wider varietyof end-use applications. Coloured PET bottles are amajor challenge to the PET recycling value chain as theadded pigments contaminate the recycling process.
Colouring PET bottles reduces its value in the Southeast
Asian recycling market by an average of US$84 per
tonne, with the total price differential ranging between
US$21-$172 per tonne. On average, 15.4% of PET inthe six Southeast Asian countries studied is coloured
PET. A total of 128,161 tonnes per year of coloured PET
bottles entered the market across the six Southeast
Asian countries studied. Usage of PVC sleeves for PET
bottles are also a major contaminant in PET bottle
recycling, particularly in food-grade applications.
Take the best aspects of various tools under
mandatory and voluntary EPR frameworks and run
voluntary Packaging Recovery Organisations (PROs)in each country focused on boosting the value chain
and the domestic recycling industry. The packaging
and consumer goods industries are well placed tolead efforts to build the value chain through pullingmaterial through the value chain and developing local
end-use markets. It is recommended that a coalitionof companies from the packaging and consumer
goods industries set up a non-profit entity in the formof a Packaging Recovery Organisation (PRO) in eachcountry. This research outlines the recommended
industry-led voluntary PRO approach for Southeast
Asian countries. It is informed by knowledge garneredfrom the more than 68 developed and developing
countries and from the in-depth study of PROs in
Mexico (ECOCE), South Africa (PETCO), Belgium (FostPlus) and Japan (JCPRA).
RECYCLERS, INVESTORS AND 			
FUNDING INSTITUTIONS
Accelerate investments in food-grade rPET
production capacity within Southeast Asia to meet
the anticipated 2030 demand. Current food-graderPET production capacity in Southeast Asia is estimatedto be between 10,000 and 30,000 tonnes per year.
Several major multinational consumer goods companies
have committed to using up to 50% rPET content inpackaging by 2030. Assuming a conservatively lower
25% rPET content usage in PET packaging in 2030,
demand of at least 380,000 tonnes of food-grade rPET
across these six Southeast Asia countries is expectedby 2030. Given that 20% of this demand can besupplied by adding post-consumer PET flakes during
the process of making virgin PET, the remaining 80%(304,000 tonnes) will need to be achieved through anincrease in the production capacity of food-grade rPET
pellets. This is equivalent to at least 10 plants with aproduction output of 30,000 tonnes per year of rPET
that need to be added by 2030 - i.e. one additional
plant per year.
BY NATIONAL GOVERNMENTS AND MUNICIPALITIESDevelop and enact enabling legislation and policy
to drive the circular economy. These policies would
include those that assist in building the value chain,such as those governing the use of recycled content
and standards for food-grade applications. This would
also include those that push material through the value
chain by enabling better material access, such as those
enforcing source separation and separate collection.
Before any EPR implementation, governments should
also undertake a detailed study of different EPR
tools, their advantages and disadvantages and theirprojected impact on the local product market, recycling
markets and the informal sector. It is critical that any
chosen EPR tools focus on boosting the value chain.
Review economic and administrative incentives
for the development of a local recycling industry.
Governments could consider provision of economic
incentives to support a circular economy, e.g. tax
incentives for producers which use a minimum of 30%
recycled content in packaging, or levies for producers
that use less than 30% recycled content.
Increase waste collection coverage and efficiency.
Undertake sustained source separation and separate
collection efforts, and increase waste collection
coverage to 100%. Governments and municipalities
need to recognise their critical role in making postconsumer material accessible and of higher value forrecycling, and that any separation efforts will take timeto scale from city level to country level.

Through these actions by key
enablers, an accelerated 		
circular economy for 			post-consumer PET bottles inSoutheast Asia is 100% achievable.

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17

18

Preface19

20

PREFACE

PrefaceThis report is the first to provide a systematic andcomparative baseline of the flow of plastic packaging
from production to end-destination. It focuses on PET
bottles (one of the most recyclable forms of plastic
packaging) in six countries in Southeast Asia. The
report scope does not include other plastic or nonplastic packaging types; however, many of the findings
and solutions can be applied to other packaging
materials throughout Southeast Asia. This report isalso the first attempt to identify the root causes of thechallenging realities concerning post-consumer PET
bottles in Southeast Asia today and to provide solutions
to drive circularity.

While country-specific data sets on municipal solid
waste exist across most Southeast Asian countries,
several challenges remain among these data sets withregard to PET bottles and other packaging:

The six countries studied are Indonesia, Philippines,
Vietnam, Thailand, Myanmar, and Malaysia and theyaccount for a total population of more than 600
million people, more than the population of all the
EU’s 28 countries.

Without these baseline data sets which include theabove consumption and post-consumption information,
it is challenging to create suitable regional and countryspecific strategies to increase collection and recycling
rates for PET bottles. Also, such consistent andcomparable baseline data sets are needed toenable companies to measure progress towards theirglobal commitments.

The countries studied accountfor 3.8% of global PET bottle
consumption, but are the source 		of 29% of global plastic leakage
into the world’s oceans.

• Lack of key rates i.e. collected-for-recycling rates,
landfill rates and environmental leakage rates foreach country;• Lack of a consistent data collection methodology
which is comparable across the countries;• Lack of available data sets on domestic value
chains and material flow of PET across each		
of the countries.

Five of these six countries are among the top 10
global contributors to ocean plastic leakage.1 This isparticularly concerning since the total consumptionof PET bottles across these countries is set to almost
double from 886,000 tonnes in 2018 to 1.52 million
tonnes by 2030.

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PREFACE

FIGURE 2: CITIES AND COUNTRIES STUDIED FOR THIS REPORT

Mandalay

Hanoi

YangonMetro Manila
BangkokPhuketHo Chi
Minh City

Greater
Kuala Lumpur
JakartaThis report therefore seeks to address this data andknowledge gap by providing baseline research for PET
bottles in nine key cities across Southeast Asia: Jakarta
in Indonesia (the DKI Jakarta Region), Parañaque ofMetro Manila in the Philippines, Ho Chi Minh City andHanoi in Vietnam, Bangkok and Phuket in Thailand,
Yangon and Mandalay in Myanmar, and Greater Kuala
Lumpur in Malaysia.

As noted in the glossary, the term PET bottles inthis report refers to PET used primarily for beverageapplications and excludes any non-beverageapplications, such as cooking oil bottles and foodcontainer packaging. See Appendix A for further
information regarding PET bottles, packaging use inSoutheast Asia and recyclability of PET bottles.

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21

22

Current
Realities
I N SOUT H EAST ASIA

23

24

CURRENT REALITIES IN SOUTHEAST ASIA

Current Realities in Southeast Asia
54% of the PET bottles sold in the cities studied are collected for recycling, whilst it
is estimated that the average collected-for-recycling rate across the six countries is26%. The informal sector is responsible for 97% of this collection for recycling. As thesecountries develop, the collected-for-recycling rates are projected to decrease, primarily
due to a reduction in informal sector workers. In the six countries studied, an estimated
US$199 million worth of post-consumer PET bottles are currently lost each year tolandfills and environmental leakage.

1.1 54% OF THE PET BOTTLESSOLD IN THE CITIES STUDIED
ARE COLLECTED-FOR-RECYCLING
At a city level, the average PET collected-for-recycling
rate across the nine key Southeast Asian cities studied
is 54%, while 36% stays in landfills and 10% leaks into
the environment.

FIGURE 3: KEY FLOWS AND END DESTINATION OF POST-CONSUMER PET BOTTLES IN 9 SOUTHEASTASIAN CITIES2

Stays at Landﬁll
36%

Sent to Landﬁll
42%

Waste Collectors
62%
Market Input
100%

With
Collection Coverage
94%

Low Value Stream
32%
Street Material Pickers 8%
High Value Stream
22%

Collected-forrecycling at
Junk Shops
54%

Recyclables Collectors 20%
Formal Sector 2%

Without Collection Coverage 6%

Source: GA Circular analysis - for details please refer to Appendix B

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Environmental Leakage 10%

CURRENT REALITIES IN SOUTHEAST ASIA

PET can either be consumed in areas with waste
collection coverage or no collection coverage. A
minority of households from both the areas with andwithout collection coverage segregate and sell/donate
their recyclables to recyclables collectors or formal
segregation systems. This material is not mixed withother waste, and is therefore classified as a ‘highvalue stream’.
A majority of households dispose of their recyclables
mixed in with their other waste. This mixed waste iscollected by waste collectors who sort through thecollected waste for recyclables to sell to junk shops.
However, since they deal with high volumes of mixed
waste, they are unable to pick out all the recyclables
present. The rest of the recyclables that are not pickedout by formal waste collectors go to landfills.
Street material pickers pick up some recyclables fromopen dumpsites, streets and rivers/canals and sell
these to junk shops. At landfills, landfill material pickers
perform this same role.

As the material sold by waste collectors, street material
pickers, and landfill material pickers has been pulled
out from mixed waste, it is more contaminated andis classified as the ‘low-value stream’. Junk shops
aggregate and sell recyclables to larger aggregators,
who then sell to recycling factories.
Environmental leakage happens through three majorroutes: uncollected waste and littering from areas
without collection coverage, littering by consumers inareas with collection coverage, and leakage from poorly
managed landfill sites.
As seen in figure 4, there is a wide variation incollected-for-recycling, landfill, and environmental
leakage rates across the cities. Mandalay in Myanmar
for example has a much higher collected-for-recycling
rate (82%) compared with Greater Kuala Lumpur in
Malaysia (23%). Whilst these rates depend on global
macroeconomic factors such as oil and virgin plastic
prices, they are largely dependent on local factors inSoutheast Asian countries as discussed in sections 1
and 2 of this report.

FIGURE 4: END DESTINATION OF POST-CONSUMER PET BOTTLES IN 9 SOUTHEAST ASIAN CITIES3

Percentage of PET Bottle Market Input

100%

50%
82%

0%

10%
8%

74%

15%
10%

62%

69%
39%

29%
9%

39%

33%
57%

18%
13%

37%

38%

23%

46%
67%

11%

27%

50%

52%

16%

4%

10%

100%
Mandalay

YangonEnvironmental Leakage (%)

Ho Chi
Minh City
Landfill (%)

Hanoi

Parañaque(Metro Manila)

JakartaBangkokPhuketGreater Kuala
LumpurCollected-for-recycling (%)

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25

26

CURRENT REALITIES IN SOUTHEAST ASIA

1.2 AN ESTIMATED 26% OF THE PET
BOTTLES SOLD IN THE COUNTRIESSTUDIED IS COLLECTED FOR RECYCLING
Using the data gathered from these key cities, the GA
Circular research team estimated the national level
collected-for-recycling rates. The country rates arelower than the city rates because, despite rural areas
typically having lower packaging consumption, theyalso have significantly poorer waste collection coverageand lower informal sector involvement when comparedto urban areas. The estimated average PET collectedfor-recycling rate across the six countries studied is26%, with 26% going to landfills and 48% leaking into
the environment.

The figure below summarises the collected-for-recycling
rates for each of the six countries studied. The national
rates presented have a larger margin of error thanthe city rates as the city rates have been calculated
based on primary data while the national rates havebeen estimated based on data from the cities and therural-urban composition of the country factoring waste
collection coverage, consumption and informal
sector involvement.

FIGURE 5: ESTIMATED NATIONAL COLLECTED-FOR-RECYCLING RATES FOR THE SIX SOUTHEAST ASIANCOUNTRIES STUDIED4

Average collected-for-recycling
rate of PET bottles across the
six countries studied is 26%

Vietnam

27%

Myanmar64%

Philippines

21%

Thailand32%

Malaysia

16%

Indonesia

22%

Average Collected-for-recycling Rate

National Collected-for-recycling Rate

Note: Estimation is based on extrapolation of the city-level rates, accounting for urban-rural consumption differences along with
waste collection coverage and informal sector activity. As they have been arrived at by extrapolation, the country rates have anerror margin of +/- 15%
Source: GA Circular analysis - for further details please refer to Appendix B.

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1.3 THE COLLECTED-FOR-RECYCLINGRATES IN THE COUNTRIESSTUDIED ARE LOWER THAN
THE GLOBAL AVERAGE‘The New Plastics Economy: Rethinking the Futureof Plastics’ report estimated a global PET packaging
collected-for-recycling rate of 55% as of 2012. Based on
various trade and industry data analysed as part of thisresearch, it is expected that in 2020, 53% of the global
PET packaging produced will be collected annually.
Thus, the estimated collected-for-recycling rate of 26%
for the Southeast Asian countries studied is about half
the global average. The collected-for-recycling rate at
the city level of the nine cities studied at 54% is on parwith the global average.

1.4 THE INFORMAL SECTORIS RESPONSIBLE FOR 97% OF
COLLECTION-FOR-RECYCLING
FIGURE 6: BREAKDOWN OF PET COLLECTEDFOR RECYCLING BY THE FORMAL AND 		INFORMAL SECTORS5

2.8%

97.2%

FormalSectorInformal
SectorMaterial
Pickers

Waste
Collectors

Recyclables
Collectors

22.8%

36.7%

37.7%

The informal sector is the backbone of collection for
PET bottles in the six Southeast Asian countries. The
collection of PET bottles and other recyclable materials
is reliant on the informal sector, as shown in the
diagram below, where 97.2% of the PET bottles which
are collected for recycling are handled by the informal
sector. The informal sector plays a significant role inSoutheast Asia due to a low barrier to entry, relatively
high material value for used PET bottles and easy
accessibility of recyclables as the majority of the region
uses push-carts for the first stage of household waste
collection rather than garbage trucks.
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27

28

CURRENT REALITIES IN SOUTHEAST ASIA

Across the countries studied, there are broadly three categories of informal sector workers.

RECYCLABLES COLLECTORSWASTE COLLECTORSMATERIAL PICKERSImage: A recyclables collector in thePhilippines using a cart6

Image: A formal waste collector with apush-cart in Vietnam7

Image: A woman sorting through waste
in Dela Reina, Philippines8

Recyclables Collectors are selfemployed people who use bags,
small push-carts or small motorised
vehicles to buy recyclable materials
from households, bulk waste
generators or other establishments
through the relationships they
have built. They sell the material
to junk shops as a primary sourceof income. They may also pick up
recyclables from mixed waste or
litter. However, the majority of thematerial that they handle is basedon buying from households, otherestablishments and bulk waste
generators.

Waste Collectors are the people
who collect waste (mixed or
separated) from households,
offices or establishments. They
are formally employed by the
public or private waste collection
sectors and their formal source ofincome is from the collection andtransportation of mixed waste.
For this job, they are considered
formal workers. Whilst not theirjob, these people often actively
sift through the mixed waste in
the carts or trucks to pick out
recyclable materials for extra
personal income. When picking
out recyclable materials is not partof their job scope and they sell for
extra personal income, they are
considered informal sector workers.

Material Pickers include bothstreet material pickers and landfill
material pickers who pick up
recyclable materials from theenvironment (e.g. litter on the street,from landfills) and not directlyfrom the source. Material picking
is therefore a very labour intensive
exercise and often dangerous.
Street material pickers are those
who pick up recyclable materials
from the open environment (in thecity), or from a garbage bin. They
may also do some buying directfrom households or bulk waste
generators, but they are primarily
picking, which is why they arecalled street material pickers.
Landfill material pickers are those
who pick up recyclables fromlandfills. Due to health and safetyconcerns of picking recyclablesfrom landfills it is often illegal topick from landfills in countries
in Southeast Asia. However, thepractice still continues due to weak
enforcement. These people areoften referred to as scavengers;
however, material pickers (street or
landfill) is the terminology used by
GA Circular and within this report.

Recyclables Collectors comprise
37.7% of the collection system for
PET bottles in the six Southeast
Asian countries. However,despite an average recyclables
collector selling a greater quantityof recyclables than the average
waste collector (another categoryof informal sector worker - seeright), his/her take-home income
is usually lower. This is because
unlike waste collectors, recyclables
collectors do not have a fixed salary
for mixed waste collection andthey often have to buy recyclablesfrom households or establishments,
whereas waste collectors do havea fixed salary for mixed waste
collection and do not need to buy
the materials.

Waste collectors comprise
36.7% of the collection system
for PET bottles.

Material pickers comprise
22.8% of the collection system
for PET bottles.

FULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIACURRENT REALITIES IN SOUTHEAST ASIA

1.5 AS COUNTRIES DEVELOP, THE COLLECTED-FOR-RECYCLING RATE DECREASESIn a developed region such as the EU, countries with lower GDP per capita tend to have lower collected-for-recycling
rates of PET as compared to those with higher GDP per capita. However, this trend is reversed in the countries
studied. When the collected-for-recycling rates of the largest cities in the six countries studied are compared against
the GDP per capita of each country, it can be observed that the cities in countries with lower GDP per capita havehigher collected-for-recycling rates. For example, Yangon in Myanmar with the lowest GDP per capita of US$1,298of the six countries has the highest PET collected-for-recycling rate of 74% whereas Kuala Lumpur in Malaysia withthe highest GDP per capita of US$11,239 has the lowest collected-for-recycling rate of 23%.

FIGURE 7: COMPARISON OF GDP PER CAPITA VS. VS. PET BOTTLE COLLECTED-FOR-RECYCLING RATES IN
KEY CITIES OF SIX SOUTHEAST ASIAN COUNTRIES STUDIED9$12,500

100%

USD/capita

75%$7,50050%$5,00025%$2,500$0Percentage collected-for-recycling$10,000

0%
YangonHo Chi
Minh CityPET Bottle Collected-for-recycling Rate

Parañaque(Metro Manila)

JakartaBangkokGreater Kuala
LumpurGDP Per Capita of the Country

Note: The largest city has been selected in the situation where more than one city in the country was studied. As countries develop,
maintaining the status quo will result in declining collected-for-recycling rates.

The heavy reliance on the informal sector is one ofthe primary factors causing this trend. The impact
of continued reliance on the informal sector can beeasily observed by comparing cities at different stagesof economic development. The reason behind thisrelationship is that as cities and countries develop, theaverage cost of living increases. Collecting and selling
PET no longer remains sustainable in the face of rising
standards and costs of living and the informal sector
therefore moves onto other trades and jobs. This isvalidated by data, where residents in Greater Kuala
Lumpur have an average income of US$688 / month(country GDP of US$11,239) but only five informal
sector workers for every 10,000 residents, while Ho
Chi Minh City residents have an average income of
US$250 / month (country GDP of US$2,564) and double

the concentration of informal workers (10 for every
10,000 residents).10 In summary, more affluent cities are
typically found to have less informal sector workers in
the recycling value chain.
Bangkok, meanwhile, is currently in a uniquesituation where despite the relatively higher GDP per
capita compared to the other five Southeast Asian
countries, the presence of a stronger recycling industry
demanding post-consumer PET has helped maintain ahigher street price for post-consumer PET, and thus thecollected-for-recycling rate has continued to hold up.
Without intervention, the rising cost of living in the
countries studied will likely lead to a decrease in thenumber of informal sector workers and a subsequent
drop in the collected-for-recycling rates.

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29

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CURRENT REALITIES IN SOUTHEAST ASIA

1.6 US $199 MILLION WORTH OF PET
BOTTLES ARE LOST PER YEAR ACROSS
THE SIX SOUTHEAST ASIAN COUNTRIESAcross the six Southeast Asian countries studied, acumulative US$199 million worth of PET bottles (basedon PET sales price from junk shops to aggregators) areleaking into the environment or ending up in landfills
each year.11 This represents a net economic loss as
PET bottles are leaking into the environment or ending
up in landfills and are no longer available for recycling.
This economic loss of material is compounded bynegative externalities of PET bottles which include
cost of landfilling the packaging, cost of cleaning up

environmental leakage and finally the environmental
impact of plastic packaging in the environment which
can be measured through the potential damage caused
to natural ecosystems and industries dependent onthem such as tourism.
In the absence of interventions, the landfilling andleakage of post-consumer PET bottles will likely
increase due to increasing consumption in each of 		the countries.

TABLE 1: VALUE OF PET BOTTLES THAT ARE COLLECTED FOR RECYCLING, LOST TO LANDFILLS AND LOSTTO ENVIRONMENTAL LEAKAGE

Recycling i.e. GAIN (+)
Millions USD/year

Landfills i.e. LOSS (-)
Millions USD/year

Leakage i.e. LOSS (-)
Millions USD/year

Myanmar

$3

$1

$1

Vietnam

$12

$12

$20

The Philippines

$10

$5

$33

Indonesia

$18

$20

$43

Thailand

$30

$34

$27

Malaysia

$1

$2

$1

TOTAL

$73 GAIN$199 LOSS

Note: The material values are based on average selling prices from junk shops to next buyer (aggregators/processors/recyclers)12
for the tonnage collected for recycling, landfilled and leaked. Thus, values stated exclude the loss in value that occurs for PET
bottles from the pre-consumer to the post-consumer stage.

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1.7 CONSUMPTION OF PET
BOTTLES IS EXPECTED TO GROW
An increase in the level of development for Southeast
Asian countries will lead to an increase in the amountof packaging introduced in the market. The six
Southeast Asian countries consumed 886,000 tonnesof PET packaging in total in 2018. Based on modelling
and analysis from industry data, our research teamestimates the total consumption of PET bottles acrossthese six Southeast Asian countries is set to almost
double from 886,000 tonnes in 2018 to 1.52 million
tonnes by 2030.13

1.8 BOTTLE-TO-BOTTLE PETMUST INCREASE TO SATISFY
PUBLIC COMMITMENTS
While sourcing for specific trade-level data on enduse applications of post-consumer PET processed inSoutheast Asia was out of the scope of this report,interviews with stakeholders from the packaging andrecycling industries indicate that the global demand
for recycled PET (rPET) polymer used for food-grade
bottles has been steadily increasing and is expected
to grow by approximately 20.3% compound annual
growth rate (CAGR) between 2015 and 2030 compared
to a 5.9% CAGR in PET polymer growth globally
between 2015 and 2030.14 Demand for post-consumer
PET for fibre and other non-bottle applications is
expected to grow by 7.7% CAGR during this period.15
Buyers of food-grade rPET in Southeast Asia can
expect to face a few levels of competition for therecycled food-grade rPET. The first level of competition
will be the global demand for rPET vs rPET fibre. Thislevel of competition is expected to be especially fierce
as buyers of rPET fibre in the textile industry have been
observed to pay a higher premium compared to buyersof food-grade rPET. This is because the products of the
textile industry have higher margins per unit compared
to beverage products and have lower additional
processing costs. The second level of competition will
be for global food-grade rPET vs non-food-grade rPET.
The third level of competition will be for food-graderPET globally vs in Southeast Asia. The final and thefourth level of competition will be for food-grade rPET
among each of the Southeast Asian countries.
Sensing this opportunity, recyclers are increasing
their investments in food-grade and non-food-graderPET production capacity within Southeast Asia.
During the course of the research, it was observed
on-ground across the six Southeast Asian countries
that commitments towards increasing the share ofrecycled PET content in packaging are beginning to beturned into action. Publicly announced investments inbottle-to-bottle PET recycling plants in Southeast Asia
have been made by both FENC and Coca-Cola in thePhilippines and by Veolia in Indonesia.

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31

32

Underlying
Reasons
FOR T HE LOW RATES O F
COLLECT IO N FO R RECYCLIN G

33

UNDERLYING REASONS FOR THE LOW RATES OF COLLECTION FOR RECYCLING

Underlying Reasons for the Low
Rates of Collection for Recycling
The six underlying reasons for the low collected-for-recycling rates for PET in Southeast Asia:
1. Price of post-consumer material is insufficient to drive informal sector collection;
2. Lack of value creation mechanisms and developed local end markets;
3. Current packaging design hinders value creation;
4. Poor waste collection coverage leading to material leakage;
5. Lack of source separation and separate collection of waste leading to poor access to material;
6. Existing collection efforts in Southeast Asia have typically been short-term.

2.1 PRICE OF POST-CONSUMER
MATERIAL IS INSUFFICIENT TO
DRIVE HIGH COLLECTION BY
THE INFORMAL SECTOR

Due to the reliance on the informal sector for collection
and the price elasticity of post-consumer PET bottles,
the material price offered by recyclers is one of the
major determinants of increased or decreased collection
via a trickle-down effect to the informal sector.

FIGURE 8: COLLECTED-FOR-RECYCLING RATES AND SELLING PRICE OF PET BOTTLES IN KEY SOUTHEASTASIAN CITIES (ORDERED BY LEVEL OF DEVELOPMENT (GDP))16
$0.60

100%
$0.52

75%

82%

$0.50
74%

69%

$0.40

$0.40
62%

50%

52%

$0.29

$0.31

39%

38%

$0.28
39%

$0.22

23%

$0.20

25%

$0.20

Average Junk Shop
Selling Price of PET (USD/tonne)

Collected-for-recycling (%)

34

$0.12

Countries ordered by increasing GDP per capita
0%$0.0
Mandalay

YangonHo Chi
Minh CityPET Bottles collected-for-recycling %Hanoi

Parañaque Jakarta(Metro Manila)

BangkokPhuket Greater Kuala
LumpurAverage Junk Shop Selling Price of PET (USD/tonne)

Note: The selling price of PET is the price at which junk shops sell to aggregators. The data points in the figure are based on
primary data collected through 2017- 2018 from junk shops across the cities studied. They are reflective of the prices at the time ofthe study in each country.

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UNDERLYING REASONS FOR THE LOW RATES OF COLLECTION FOR RECYCLING

Material prices offered for post-consumer PET acrossthe value chain depend on levels of contamination,
processing costs, logistics costs and transportation
costs to ship the collected material to the aggregatorand then onto the recycler.
Therefore, there is a wide variation in prices dependingon the level of source separation efforts, proximity
to the recycling factory, and the local labour and fuelcosts. Proximity to recyclers and recycling capacity
significantly increases the prices offered through thevalue chain. This is visible in Thailand which, whilst
it has a higher GDP, is estimated to have the highest
installed capacity for post-consumer PET recycling
among all the six Southeast Asian countries and thus
commands higher prices for post-consumer PET on
the street. A junk shop in Bangkok receives US$0.50
per kg of post-consumer PET compared to the averageof US$0.31 per kg received by junk shops for postconsumer PET across the nine cities studied (see Figure9). Thus, despite the relatively higher GDP per capita
compared to the other five Southeast Asian countries,
the presence of a larger recycling industry demanding
post-consumer PET has helped maintain a higher street
price for post-consumer PET and thus the collected-forrecycling rate has continued to hold up.
This is also visible in Myanmar where a junk shop in
Yangon receives the equivalent of US$0.31 per kg of
PET sold, while a junk shop in Mandalay, which is closer
to the border with China (and therefore closer to therecycler), gets the equivalent of US$0.52 per kg of PET.
Note that at the point of this research the impact ofChina’s National Sword policy was not yet being felt
in the post-consumer plastic markets of Myanmar andthus demand in China for post-consumer PET from
Mandalay was high.

In addition to the absolute price of the material, theperceived value and price fluctuations also play a rolein determining the collection behaviour of the informal
sector. The market prices of the end products of PET
recycling are typically volatile, resulting in the recyclers
going through high-profitability, low-profitability, andloss-making phases. This affects the prices of PET
bought and sold by the informal collection sector, whichconsequently affects the tonnage collected. During lossmaking periods, recyclers reduce the amount of PET
they buy or stop buying material entirely. In particularly
challenging periods, recyclers either go bankrupt or
preemptively close their businesses. This causes thevalue-chain to suffer significantly, sometimes reducing
the price of PET to an extent where informal collectors
refuse to buy or sell the material.
Currently, aggregators, processors and/or recyclers
in Southeast Asia are willing to pay the equivalent of
US$0.12 - US$0.52 per kg of PET from junk shops.
These price points are sufficient to incentivise thecollection of PET by a majority of informal sector
workers. Across all the cities studied, 65% to 70%17 of
all informal sector workers on average buy and sell PET
on a daily basis. Despite this, the incentives for PET are
not high enough to incentivise the collection of morethan 54% of the total PET market input in these cities.

In summary, the presence of a stronger recycling
industry demanding post-consumer PET helps maintainhigher street prices for post-consumer PET, and thishelps to hold up collected-for-recycling rates. When
prices are not attractive enough for the informal sector
to collect the material, the collected-for-recycling rates
tend to be lower. This is a hint to the intervention
needed in Southeast Asian countries to increase
collected-for-recycling rates.

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UNDERLYING REASONS FOR THE LOW RATES OF COLLECTION FOR RECYCLING

2.2 LACK OF VALUE CREATION MECHANISMS& DEVELOPED LOCAL END MARKETS
Though a PET recycling industry exists in Southeast
Asia, due to the poor quantity and quality of the postconsumer PET collected locally, these recyclers havetypically been heavily reliant on imports to meet theirfeedstock requirements. Post-consumer imports fromdeveloped countries, such as the G7 countries (Canada,
France, Germany, Italy, Japan, United Kingdom andUnited States) have been accessible in large, cheap andconsistent quantities compared to domestically sourced
feedstock. These imports are lower in contamination
rates and thus higher in quality.

This reliance on imports has meant that local collection
systems are not well developed and, therefore, thepost-consumer PET from the local markets does nothave strong end-use markets. However, this is expected
to change with recent import restrictions and quality
standards placed by several Southeast Asian countries
on post-consumer waste imports in the wake of
China’s National Sword policy which included import
restrictions and tightening of quality standards for postconsumer plastics. See box 1 below for further details of
National Sword policy and its impact on PET recycling
in Southeast Asia.

Box 1: Impact of China’s National Sword Policy on PET recycling 			in SouthEast Asia - the dawning of a new era
BACKGROUND ON NATIONAL SWORD
Until recently, China was the world’s largest importer ofrecyclable materials. In 2016, China imported 45 million
tonnes of recyclable materials from across the world(half the global exports of recyclables). This amounted
to US$18 billion in material value.18 In 2017, China
accounted for 51% of the world’s plastic scrap imports.
Over the past decade, China has undertaken policy
steps to curb the dumping of waste into its borders
together with genuine recyclables. One of the firstimport policy steps was in 2013 when the Chinese
government adopted a policy known as Operation
Green Fence to prohibit the import of unwashedand contaminated recyclable materials and increase
the environmental standard of all the shipments ofrecyclable materials entering China.
On 1st January 2018, China began officially
implementing its National Sword policy to further
crackdown on the illegal smuggling of foreign waste
into China, targeting industrial waste, electronic scrap,
and plastics. Prior to this, China accepted recyclable
materials with purity levels ranging from 90% to95%. The new National Sword policy requires that all
recyclable materials arriving in the country must havepurity levels greater than 99.5%. Due to these stricter
contamination limits, a majority of recyclables that wereshipped into China from developed countries (such as
the G7 countries) were no longer allowed as they did
not meet the contamination standards.

IMPACT ON PLASTICS
As a direct impact of the National Sword policy, by
2018 the import of scrap plastics into China reduced by
99.1% compared to 2017 levels.19 This has resulted ina global glut of recyclable commodities (including PET),
depressed prices and expansion of processing markets
in other lesser-developed countries, with a sizeable
proportion of this diversion going into Southeast Asian
countries - mainly into Malaysia, Thailand, Vietnam andIndonesia.
Following the National Sword policy, exports from theG7 to China, Hong Kong, and Southeast Asia reduced
by 40% overall. However, despite this reduction, thetotal tonnes of scrap plastics exported from the G7
countries to the six countries studied grew from around242,000 tonnes in H1 2017 to around 1,032,000 tonnesin H1 2018.20
In H1 2017, the six countries studied only accounted
for around 11% of the scrap plastic exports fromthe G7 countries. This grew to 83% in H2 2018, with
Malaysia, Thailand, Vietnam, and Indonesia seeing
the biggest increases. These four countries have beenquickly overwhelmed by the volume and have since cutback on imports and announced plans to place severe
restrictions on scrap plastic imports or plans to enforce
a complete import ban in the coming two to five years.

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FIGURE 9: EXPORTS OF SCRAP PLASTICS FROM G7 COUNTRIES TO CHINA AND SOUTHEAST ASIA

The total tonnes of scrap plastics
exported from the G7 countries tothe six countries studied grew from
242,000 tonnes in H1 2017 to
1,032,000 tonnes in H1 2018.

USA 690

China 1,258

Japan 706

China 70
Hong
Kong 142

USA 422

Germany
348

Hong Kong 624

Malaysia
450
Vietnam250
Indonesia
69
Thailand
253
Philippines
8.8
Myanmar
0.8

Japan 390

Malaysia 85
Vietnam 126

UK 226

Indonesia 15

Importer

ExporterPhilippines 1.3

H1 2017

Exporter

Myanmar 0.4

UK 172
France 27
Italy 18
Canada 21

Thailand 14

France 83
Italy 29
Canada 43

Germany 194

H1 2018

Importer

Note: All figures in thousand tonnes per year

OPPORTUNITY FOR PET RECYCLING
As a new normal from the National Sword policy emerges, a combination of steps such as the ones outlined in
section three of this report can enable the PET processing and recycling industry in the six Southeast Asian countries
to take advantage of the National Sword policy.
This will result in:
1

More investments into
solid waste management
infrastructure such assorting, collection andsecondary processing
capabilities to produce
higher quality feedstock
for recyclers with very low
contamination rates

2

More investments into 		domestic processing and 		recycling capacities

3

Increased domesticcollection of post-consumer
PET, higher collected-forrecycling rates and moredeveloped end-use
markets for domestic
post-consumer PET

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UNDERLYING REASONS FOR THE LOW RATES OF COLLECTION FOR RECYCLING

2.3 CURRENT PACKAGING DESIGNHINDERS VALUE CREATION
2.3.1 COLOURED PET
FIGURE 10: VALUE DIFFERENCE BETWEEN CLEAR
AND COLOURED PET24

US$84/
ton

Averagedifferencein value
Clear PET
US$325/ton on average

Coloured PET
US$241/ton on average

Note: The values are based on selling prices of clear andcoloured PET at the junk shop to aggregator transaction stage.

Coloured PET bottles are a major challenge to the
PET recycling value chain as the added pigments
contaminate the recycling process. Choosing to
manufacture a PET bottle coloured instead of clear
reduces its value in the Southeast Asian recycling
market by an average of US$84 per tonne, with thetotal price differential ranging between US$21-$17221
per tonne across the six Southeast Asian countries. 		
On average 15.61% (138,455 tonnes) of PET bottles
sold per year in the six Southeast Asian countries iscoloured PET.22
If all of this PET were instead clear, at current collectedfor-recycling rates, an estimated additional 17,892
tonnes of PET would be collected-for-recycling by
the existing informal sector23 (i.e. with no additional
initiatives apart from the phasing-out of coloured PET).
To put this into perspective, the value of this additionalamount is US$4.8 million per year based on the price ofclear PET bottles sold by junk shops to aggregators. The
tonnage and US dollar value upsides are conservative
when considering the additional benefits of phasingout coloured PET for the collection sector, in terms ofremoving the need for coloured vs clear sorting andthe associated staff and manpower, which will enable
greater efficiency in collection. Many countries globally,such as Japan, have already taken steps to phase out
and ban the usage of coloured PET bottles in order toincrease collection and recycling rates.

FIGURE 11: ADDITIONAL TONS THAT WOULD BE COLLECTED FOR RECYCLING, AND VALUE THAT WOULD
THUS BE UNLOCKED IF COLOURED PET BOTTLES WERE PHASED OUT25

MyanmarVietnamAdditional tons that would becollected for recycling per year

Additional value that would
thus be unlocked per year

~18,000 tonnes~US$4,820,000

The Philippines

Indonesia

Thailand

Malaysia

Note: Based on current estimated collected-for-recycling-rates of clear PET bottles in each country.

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2.3.2 PVC LABELS/SLEEVESUsage of PVC labels/sleeves for PET bottles are also amajor contaminant in PET bottle recycling, particularly
in food-grade applications. All recyclers interviewed inSoutheast Asia stated PVC contamination challenges.
The negative impact of PVC in PET bottle recycling
has been known for many years in the field. As both
PVC and PET have a density higher than water, PVC
impurities that are not taken out in the separation
process in a processing unit will automatically end up
in the PET fraction obtained after flotation and are thus
sent for mechanical recycling together. In addition, themelt temperature of PVC is much lower than that of
PET. This means that at the temperatures applied in
the mechanical recycling of PET in a molten state, PVC
contamination is at temperatures much higher than its
melting point for a prolonged time. In such conditions,
it is typical that degradation starts to occur, leading to
chain scissions and/or the release of functional groups
in the polymer. In the case of PVC, hydrochloric acidis released, chemically breaking the polymer chains.
The decomposed PVC assumes a yellow to brown
discolouration and the occurrence of black spots in theobtained rPET. The resulting rPET is unacceptable andhas inferior material properties.
Even with PVC contamination as low as 0.005% (justone bottle of PVC in 20,000 PET bottles), the obtainedrPET is not usable for most applications, and is
especially unsuitable for food-grade applications.26 		
It often contains vinyl chloride monomers, which are

TABLE 2: DENSITY AND MELTING POINT OF PETAND PVC
Density(kg/m3)

Melting
Point (°C)

Polyethylene
terephthalate (PET)

1,350–1,390

255

Polyvinyl chloride(PVC)

1,100-1,450

210

Plastic Typecarcinogenic to humans, and many additives, including
phthalates which have been the subject of concerns
relating to negative effects on human health and theenvironment.27
Several large multinational consumer goods companies
have already phased out PVC from their manufacturing
processes. However, there are many companies thatstill use PVC for PET bottle sleeve applications and PVC
for other packaging applications, such as detergent
and shampoo bottles. Thus, an industry-wide standard
banning the use of PVC as a sleeve for PET bottles andin other consumer packaging would ensure the PET
bottles that are collected for recycling can be used for awider variety of end-use applications.

2.3.3 LABEL FIXTURES, MULTI-LAYERED BOTTLES,SILICONE AND FUTURE CHALLENGES
Other challenges for the value chain is related to themethods by which the labels are affixed to the bottles,
the use of multi-layered bottles and the use of silicone
material. With regards to label fixtures, value chain
stakeholders interviewed as part of this researchsaid that they would prefer labels that could be easily
removed, such as perforation-based labels, insteadof those that are affixed to the bottle using strong
adhesives/glue.

Renewable plastics and emerging renewable
alternatives to fossil fuel-based PET are also likely toimpact PET recycling processes and economics in the
future. These are discussed further in Appendix C.

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UNDERLYING REASONS FOR THE LOW RATES OF COLLECTION FOR RECYCLING

2.4 POOR COLLECTION COVERAGELEADS TO MATERIAL LEAKAGE
The waste collection coverage in Southeast Asia is low,
ranging from 76%-100% in developed, more urbanised
areas to 10%-55% on average in lower income, rural
areas.28 Whilst the informal section does collect somepackaging materials from households and household
waste which is dumped due to lack of municipal waste
collection coverage, the collection by the informal sector
is low. As highlighted in Section 1, this study estimatesthat in the nine cities, 10% of PET bottles is leaked
into the environment, 40% of which is due to lack ofwaste collection coverage (Figure 12). Meanwhile, at acountry level for the six Southeast Asian countries, theenvironmental leakage of PET bottles is much higher
due to the poorer waste collection coverage rate of
10%-55% in rural areas.

FIGURE 12: ENVIRONMENTAL LEAKAGE DUE TO POOR COLLECTION COVERAGE

Stays at Landﬁll
36%

Sent to Landﬁll
42%

Waste Collectors
62%
Market Input
100%

With
Collection Coverage
94%

Low Value Stream
32%
Street Material Pickers 8%

Recyclables Collectors 20%

High Value Stream
22%

Collected-forrecycling at
Junk Shops
54%

Formal Sector 2%

Environmental Leakage 10%

Without Collection Coverage 6%

2.5 LACK OF SOURCE SEPARATION DECREASESBOTH MATERIAL ACCESS AND VALUE
The significance of the informal sector for collectedfor-recycling rates in Southeast Asian countries rises
out of the limited success of formal collection andrecycling systems implemented in Southeast Asia.
Formal collection and recycling systems typically
include separation at source, separate collection ofrecyclable and non-recyclable streams of waste, andMaterial Recovery Facilities (MRFs) or their equivalent
processing these segregated recyclable materials.
There are some localised examples of such systems
in the countries studied. For example, DKI Jakarta has
an estimated 67429 functioning waste banks and 15
TPS 3Rs (a combination of a transfer station and a
Material Recovery Facility), and 56% of the barangays(sub-districts) in Metro Manila in the Philippines

have functioning MRFs.30 However, a nationwide
implementation of these systems remains elusive.
Of the six countries studied, only Malaysia and thePhilippines have national-level legislation mandating
source separation and separate collection. The
legislation mandating source separation and separate
collection of waste in Malaysia is the Solid Waste andPublic Cleansing Management Act (SWMA) 2007 Act
672. The act also mandates a system where recyclables
are collected on one specific day of the week, separate
from general waste. Similarly, the Philippines’ RA
9003 Ecological Solid Waste Management Act of2000 mandates source separation and separate
collection of waste at the Local Government Unit (LGU)

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UNDERLYING REASONS FOR THE LOW RATES OF COLLECTION FOR RECYCLING

level. This act instructs LGUs to establish solid waste
management programs within their jurisdictions andinclude proper separation of solid waste. See Appendix
D for further information about source separation.
Execution of the legislations, however, have notbeen effective due to the uneven execution andenforcement. Implementation of source separation andseparate collection in Malaysia is only mandatory inselected areas that account for 35% of the national
population.31,32 Only 31%33 of the barangays in thePhilippines are served by an MRF.
Contamination with organic waste is a major reason
for the loss in value of post-consumer PET bottles in
unsegregated or mixed waste. Packaging in mixed
waste also requires an additional step of sorting attransfer stations or collection points which increases
labour costs. As none of the nine cities had wellenforced source separation, it was not possible aspart of this study to directly compare the impact of
separation on post-consumer PET collection. However,based on interviews with formal and informal waste
collectors, it was noted that a minority of households
across each of the cities do segregate their recyclables
and when segregated, the value of PET increases by
about 39%.34 Based on interviews with recyclers in
Thailand, it is clear that recyclers pay a premium on
imported post-consumer PET bottles that have beensource-separated and separately collected (from Japan,
Australia and New Zealand) over domestically available
post-consumer PET bottles.
Whilst source separation and separate collection ofrecyclables have shown to drive higher collection andpremiums for post-consumer PET bottles, large scale
enforcement remains the key barrier to overcome
in order to achieve source separation and separate
collection at scale in Southeast Asia.

2.6 EXISTING COLLECTION EFFORTS
IN SOUTHEAST ASIA HAVE TYPICALLYBEEN SHORT-TERM AND INEFFECTIVE
Multiple short-term and small-scale programs havebeen initiated by the industry in the past to tackle
plastic leakage and to increase collected-for-recycling
rates. However, most of these efforts ceased within one
to three years and/or have not ‘moved the needle’ interms of significant increases in collected-for-recycling
rates or diversion rates from landfill and leakage.
Such efforts include:
School, retail dropoff boxes and officesource separation and collection efforts;
Offering a small financial incentive toconsumers to segregate and return brandspecific packaging (often limited to one or
two brands only and with limited locations
for drop off);
Beach cleanups involving corporate andpublic volunteers;
Video advertisements for source separation
and anti-littering.

Whilst commendable in many cases, these efforts
collect a very small amount of materials whencompared to the actual market inputs of the packaging
materials. The graph below puts into perspective theamount of tonnes of material that could be recovered
through some typical short-term solutions that theindustry has attempted thus far. As can be seen,
these initiatives are a ‘drop in the ocean’ relative to theamount of PET bottles consumed.

FIGURE 13: EXTRAPOLATED AMOUNTS OF PETTHAT COULD BE COLLECTED FOR RECYCLING
THROUGH SHORT-TERM EFFORTS COMPARED 		TO MARKET INPUTS OF PET BOTTLES35

Total market
input ofPET bottles
886,805
tonnes

10,634
tonnes1,386
tonnes110
tonnesThrough School Segregation 				Volunteer Collection of Ocean Plastics
Through Beach Cleanups

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The Road
Ahead:ACCELERATING TH E
CI RCULAR ECO NO MY

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THE ROAD AHEAD: ACCELERATING THE CIRCULAR ECONOMY

The Road Ahead: Circular Economy
Solutions for Southeast Asia
The recycling industry is the singular opportunity to divert PET bottles and single-use
packaging away from the environment. The key findings and insights suggest that thecurrent collected-for-recycling rates and actual processing and recycling of post-consumer
PET are far from optimal and, worse still if left unattended to, they are likely to deteriorate.
Increasing consumption of PET, fragile collection mechanisms, high dependencies on theinformal sector, weak or absent policy support and market volatility in the trade of scrap
plastics are all factors that systematically weaken and challenge the market economicsof the recycling industry. Even as opportunities to introduce “reusable packaging”
are explored, the recycling industry is the singular opportunity to divert PET bottles
and single-use packaging away from the environment. The limited capacity and poor
conditions of landfills coupled with high incidence of leakage into waterways, together
call for an urgent but long-term response to remedy the post-consumer PET landscape inSoutheast Asia. The existence of an unbroken and financially sustainable value chain thatallows for the flow of materials towards recycling gives hope and provides a starting point
to address and counter the challenges facing post-consumer PET.
Small steps don’t take us far. Design changes such as source reduction andlightweighting that reduce the quantity of material being used are some of the industry’s
responses to the challenges presented by rising quantities of post-consumer plastic.
However, these are measures that must be pursued globally irrespective of the state of
the post-consumer PET market. Moreover, some recyclers suggest that lightweighting
reduces the recycling potential of PET beverage containers as the bottles become so lightthat they are worth less per bottle. Even as the consumer goods and packaging industries
explore changes to packaging design, it is also important to ensure that the consumer
product companies start viewing end-of-life challenges posed by packaging material as abusiness liability to be managed. Efforts by individual businesses help to shine light on theurgency for a solution. In testing and pioneering potential solutions, the increasing levelsof leakage and material losses call for more deliberate and wide reaching efforts toimprove recyclability.
Designing for recyclability is a good start. Packaging design initiatives by individualcompanies that improve the recyclability of post-consumer PET, such as phasing out
coloured PET and the exclusion of materials like PVC, positively support the collected-forrecycling rates. These efforts when adopted by the entire industry significantly improve
the recyclability of PET and therefore increase the value commanded by PET recyclate.
However, the most effective solution is one that effectively and continually boosts thecollection and recycling operations currently in place. In order to significantly increase
the collected-for-recycling rates, a more comprehensive solution is called for - one that
not only responds to the global commitments by industry to collect back all packaging put
out in the respective markets but also responds to the current realities in Southeast Asia.
The most effective response to the challenges currently facing the post-consumer PET
landscape in Southeast Asia is one that effectively and continually boosts the collection
and recycling operations currently in place. For the first time, a series of priority actions
have been identified through this report to transform the post-consumer PET landscape inSoutheast Asia.
These priority actions and the related key actors are as follows.

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ActionKey actors

Industry-led PRO- Packaging and consumer goods industries
as a collective effort- Supported by national governments, recyclers,
investors, and funding institutions

focused on boosting the value chain, coupledwith supporting policies and investments.
• Using a price incentive and related measures
to boost the value chain and domestic recycling
industry.

- Packaging and consumer goods industries
as a collective effort• Packaging-specific policy instruments that
support industry efforts and ensure the growth of
local recycling industry.

- National governments• The use of recycled content in the production of new
packaging, therefore creating a demand for recyclate.

- Packaging and consumer goods companies• Investments into improving domestic recycling
capacity and improved recycling technology.

- Recyclers, investors, and funding institutions

Improved packaging design
to improve the economics of recyclability by phasingout coloured PET and PVC labels, and using easierto-remove label formats.

- Packaging and consumer goods industries- Individual company efforts in the shortterm, collective industry effort in the midand long-term

National government and municipal efforts- National governments and municipalities

to impact source separation and separate collection,national recycling targets, and reach 100% waste
collection coverage.

REFER TO FIGURE 1: ACTIONS TO ACHIEVE 100% COLLECTED-FOR-RECYCLING RATEPET Bottles collected-for-recycling rate

100%

Not Collected-for-recycling
National Government and Municipal Efforts:- Source Separation and Separate Collection- 100% Waste Collection Coverage

75%

Improved Packaging Design
Industry-led PRO:
- Focused on boosting the value chain andrecycling industry- Assumes supportive policies and the use ofrecycled content in new packaging- Assumes external investments into recyclers

50%

25%

Status Quo Collection
97% of this collection is by the informal sector

02020

Short-Term

2023

Mid-Term

2026

Long-Term

2030

Source: GA Circular Analysis (see Appendix G for details).

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THE ROAD AHEAD: ACCELERATING THE CIRCULAR ECONOMY

3.1 BOOSTING THE VALUE CHAIN
AND THE RECYCLING INDUSTRY
By stimulating a stable and reliable end market for
post-consumer PET using a collected bottle priceincentive to recyclers tied to volume and end-use
targets, the existing post-consumer recyclables market
can be jolted into increased activity. This increased
activity would then sustainably increase the volumes ofpost-consumer PET being diverted away from landfills
and leakage.
A monetary incentive is provided to recyclers. A
formal agreement is entered into with one or morerecyclers operating within the local market to buy andrecycle a larger quantity of post-consumer PET thancurrently achieved. The monetary incentive is pegged
to achievement of volume targets. In the situation
where recyclers are not operating within the local
market, agreements could be entered into with recyclers
in nearby Southeast Asian markets, provided thatimport and export bans or policies do not prohibit suchagreements. Another option is to enter into agreementswith processors within the local country; however, it ispreferred to enter into agreements with recyclers.
The price incentive stabilises the value-chain.
Seasonal variations and fickle end markets are a causeof considerable market volatility in Southeast Asia
which in turn results in wide fluctuations in collectedfor-recycling rates. By introducing stability to therecyclers, the price incentive cushions the impact of theprice volatility and protects the recycling businesses
from massive business losses and, in some instances,
bankruptcy. The monetary incentive is lower during
times where material prices are much more profitable
for recyclers.

The objective is to increase domestic collection of postconsumer PET. The processor/recycler uses the monetary
incentive to offset the increased buying price paid toaggregators from the target market in order to increase
the volume of material purchased. Higher buying prices
can also be used as an incentive for better quality (single
stream, low contamination) post-consumer material.
This guarantees offtake for aggregators. The
aggregators in turn transmit more stable prices to theinformal sector. By working within the existing value
chain and ensuring that the price incentive has a trickledown effect, this approach will provide price stability
to an otherwise volatile market. By working within themarket structure, this approach aims to build strong,
continuous demand for better and improved quality of
post-consumer PET.
The increase in quality and quantity of feedstock fueledby the monetary incentive then allows for the contracted
recyclers to increase processing capacity and scale,and to expand into more diverse recyclate products(flakes to pellets to resin) by improving and scaling
recycling technology. By doing so, opportunities fordomestic offtake expand, adding stability to the industry
and reducing reliance on the export market. This leads
to more consistent performance by recyclers, enabling
access to banking and finance to further expand theiroperations and geographical coverage.
The approach sets the wheels in motion for a long-term,
sustainable solution that is both inclusive (operates
alongside the informal and formal collection of materials)
and supportive of government efforts towards source
separation and separate collection.

FIGURE 14: FLOW OF MONETARY INCENTIVE THROUGH THE VALUE CHAIN
The price incentive is implemented at the recycler stage to 'pull' increased volume ofmaterial collected. The recycler shares a part of this price incentive down throughthe value-chain in order to hit collection targets.

Consumers

Waste Collectors
Recyclables Collectors
Material Pickers

Junk Shops

Portion of price incentive retained by stakeholder

Aggregators

Pre-Processors

RecyclersPortion of price incentive passed on to the previous stage in the value chain

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FIGURE 15: PUSH VS PULL MECHANISMS

Push

Pull
Consumers

Waste Collectors
Recyclables Collectors
Material Pickers

Junk Shops

HOW IS THE PRICE INCENTIVE IMPLEMENTED?
The monetary incentive agreements with recyclers are
via a tendering process, whereby the tender outlines
the additional tonnage that the industry is targetingfor that year (or another time period). Recyclers must
submit a business plan illustrating how they will collect
new material from both existing and new geographicalareas in order to increase overall collected-for-recycling
rates. The recyclers are also required to meet strict
environmental and social standards.
Tenders shall be awarded to businesses that show
a plan to not only collect increased volumes of postconsumer materials (without simply redirecting fromcurrent sources) but also better and higher quality offeedstock. In doing so, it is ensured that the monetary
incentive drives post-consumer material towards
better and more lucrative end markets. The monetary
incentive is only paid out once recyclers have hit theirmonthly or quarterly targets, but the contracted term
will be for a longer period so as to allow for recyclers toenact necessary changes to drive collection. Domestic
market forces and global prices will be used to adjust
the monetary incentive upwards or downwards toensure stability.

Aggregators

Pre-Processors

Recyclers“PUSH” VS “PULL”
A well-functioning recycling industry ensures that thevolumes of recyclable PET diverted away from landfills
and leakage as a result of consumer behaviour change
and improved segregation at source are actually
captured and put back into use. Attempts to pushpost-consumer PET through forced segregation andone-off campaigns only result in excess material build
up when the existing processing/recycling capacity and/or offtake potential is maxed out, eventually causing aglut. The consequences of not working with the entire
value chain with a “pulling” price incentive approachas recommended are worsened when the value chain
participants decide to stop collecting/buying PET due todepressed prices. Consumers get discouraged and theentire system breaks down.
• Using ‘pull’ as the primary lever is moreadvantageous than using ‘push’.
• Pulling the material with an incentive leads toefficiencies in the value chain.
• Only pushing, on the other hand, leads tobottlenecks in the value chain.
• The PRO will focus the vast majority of its efforts
on pull.

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THE ROAD AHEAD: ACCELERATING THE CIRCULAR ECONOMY

Box 2: South Africa and Mexico are best case practices 					of boosting the value chain and recycling industry
FIGURE 16: NATIONAL COLLECTION-FOR-RECYCLING RATES FOR PET BOTTLES IN MEXICO AND 		SOUTH AFRICA36, 37, 38
75%
National ollected-for-recycling rate

48

68%
58%

60%

58%

57%
52%

50%
38%

25%

21%
9%

11%

2003

2004

24%

28%

42%
45%

32%

48%

49%

50%

2013

2014

2015

55%

60%
58%

56%

31%

16%

24%

16%

18%

18%

2005

2006

2007

15%

15%

2008

2009

0%

PETCO (South Africa)

2010

2011

2012

2016

2017

2018

ECOCE (Mexico)Note: Rates rounded to nearest %.

Since the early 2000s, consumer goods andpackaging industries within Mexico and South Africa
have set up systems that use market forces to pullmaterial through the value chain. Over the past 15+
years, these systems have increased the national PET
bottle collected-for-recycling rate from 16% to 68% in
South Africa and from 9% to 56% in Mexico. While boththese systems have focused primarily on PET, their core
principles are applicable across all packaging types.
In the early 2000s, the local recycling industries
in Mexico and South Africa were limited. This led
to reduced value for PET, and subsequently, lowcollected-for-recycling rates. Since a strong local
recycling industry was not present, most of thematerials collected were exported. Post-consumer
PET was primarily intended for either polyester textile
manufacturing or other low-value applications. The
weak prices of post-consumer PET bottles were notsufficient to achieve a high collection of post-consumer
PET bottles.

To address this situation, independent non-profit
entities were set up by the industries in both thesecountries. In Mexico, the association of carbonatedbeverage companies (ANPRAC) created “Ecology andCorporate Commitment” (known in Mexico as “ECOCE”)
in 2002. At the time of its creation, ECOCE’s sole focus
was on post-consumer PET, but this focus has since
expanded to include other packaging materials suchas aluminium cans and beverage cartons. In 2004, theobliged industry in South Africa, working with the fullvalue chain of PET from PET resin producers, bottlers,brand owners and the retail sector, set up the PET
Recycling Company South Africa (“PETCO”) as anindependent non-profit entity.
In the early years, both ECOCE and PETCO usedmaterial price incentives to drive collection forrecycling. The price incentive was intended to enablea higher price for post-consumer PET bottles than thestatus quo, thus building the market for post-consumer
PET bottles and increasing collection rates. Since large
formal recyclers were largely absent, ECOCE began
by partnering with Avangard, a large PET aggregatorwith connections to an extensive network of informal

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THE ROAD AHEAD: ACCELERATING THE CIRCULAR ECONOMY

collectors. In the following years, ECOCE expanded
to include other aggregators and processors in thissystem. PETCO, on the other hand, did not work withaggregators, and focussed on building relationships
with recyclers from other countries. PETCO used longterm contracts to attract the recyclers to invest in the
setup of local PET recycling plants in South Africa. The
strategy for PETCO was to enter into five-year contracts
with recyclers with ambitious targets for recycling
market growth (8%-10% per year). The price incentive
is paid by PETCO to the recyclers upon the growthtargets being met.
In addition to the price incentive mechanism,
both ECOCE and PETCO implemented secondary,supporting activities. These included social benefit
activities such as education for the children of theinformal sector workers, health and safety training
for the workers and promoted consumer awarenessand behaviour change through a series of campaigns
targeted towards the public.
In the later years, ECOCE focussed on developing
local rPET capacity to strengthen the value chain
and price points of PET and phasing out the priceincentive. PETCO, on the other hand, focussed on
adding more recyclers to the system and continued
their price incentive mechanism. Avangard, ECOCE’s
early partner, received external investment to form
PetStar which is now the world’s largest food-grade
PET recycling plant. The first stage of PetStar openedin 2009, and by 2011 the PET price incentive was
gradually phased out. Similarly, other large recycling
plants were also set up in Mexico. Through the initialefforts of providing a price incentive and then creating
local demand for post-consumer PET, ECOCE has
been instrumental in increasing the overall collectedfor-recycling rate of PET in Mexico from ~9% in 2002
to 56% in 2018. In the initial years of PETCO, therecyclers who were contracted were primarily making
fibre products. This led to the local market becoming
saturated by 2009. PETCO added an additional
incentive to recyclers to export fibre to ease the local
market supply pressure and encouraged the setup ofbottle-to-bottle recycling plants. Due to the stability andfinancial incentives provided by PETCO, South Africa

was the first African country to use recycled PET in
Coca-Cola bottles. PETCO has been able to consistently
increase the collected-for-recycling rate for PET bottles
in South Africa from 16% in 2004 to 68% in 2018,
which is one of the highest rates globally amongst
developing countries. It is also one of the most costeffective systems amongst developed and developing
countries.
Since removing the price incentive, collected-forrecycling rates in Mexico have remained between
50% and 60%. The rates in South Africa during thesame period have increased from 42% to 68%. Basedon interviews with stakeholders on-ground in Mexico,a price incentive may be reintroduced in certain
geographic areas in the country that currently have low
collection for recycling in order to increase the collectedfor-recycling rates by pulling material through thevalue chain.

FIGURE 17: HIGHLIGHTS OF SOUTH AFRICA’SPETCO AND MEXICO’S ECOCE SYSTEMS FOR PET
BOTTLE COLLECTION AND RECYCLING39, 40
South Africa (PETCO)

40%

64,00093,235 tonnes

100%

PET recycled into food grade
bottles in 2017 (i.e.
bottle-to-bottle)

PET collected and recycled
locally in 2017

Income opportunities
created in recycling since
PETCO formation

PET bottles recycled locallyin 2017

Mexico (ECOCE)$5.50

Invested inrecycling infrastructure

$0.30

2002

$339 million

2017

Increase in value of PET
recyclate (granules)

16

PET recycling plants created

312,000 tonnes

Total recycling capacity created

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3.2 WHAT EACH STAKEHOLDER CAN DO:
3.2.1 PACKAGING & CONSUMER GOODS INDUSTRIES
Today, frameworks with mandatory tools or voluntaryindustry-led systems (along similar guiding principles
to EPR) for collection and recycling of packaging exist
in more than 68 developed and developing countries
around the world.41 The packaging and consumer goods
industries (and upstream industries in some cases)
have decades of experience of operating under thesesystems and these efforts have consistently proven toincrease collection and recycling rates of different typesof packaging at scale.
The packaging and consumer goods industries arethus well placed to lead efforts to build the value chain
through pulling material through the value chain anddeveloping local end-use markets. It is recommended

that a coalition of companies from the packaging andconsumer goods industries set up a non-profit entity inthe form of a Packaging Recovery Organisation (PRO)in each country.
The below diagram outlines a voluntary Packaging
Recovery Organisation (PRO) model for Southeast Asia
which is customised to the current context of Southeast
Asia, and additionally informed by insights from dozens
of developed and developing countries around theworld and from the in-depth study of four PROs: ECOCE(Mexico), PETCO (South Africa), Fost Plus (Belgium) and
JCPRA (Japan). See Appendix E for a detailed analysisof these PROs.

FIGURE 18: KEY PILLARS OF SUCCESS FOR THE VOLUNTARY PROS IN SOUTHEAST ASIA42EXPANSION ANDSCALING OF PROSTAKEHOLDER AND
GOVERNMENT RELATIONS

Initiatives that increase collection-for-recycling at scale including
implementation of price incentives at the recycling and/or processor
stage of the value chain, development of local recycling infrastructure,development of local end markets and offtake agreements.

Initiatives thatpush material
through value
chain and giveexternal visibilityof recycling, suchas developmentof commoncollection points,
collection drives,
informal sector
supports
and volunteer
dependant
initiatives.

EDUCATION, AWARENESS
AND BEHAVIOUR CHANGE

PULL
PUSH

Key Pillars/Initiatives

VOLUNTARY
PACKAGING RECOVERY ORGANISATION (PRO)

Budget &Decisions50

MATERIAL SPECIFIC ACTIVITIESCOMMON ACTIVITIES

Budget is allocated per material type,with decisions taken by a subcommitte/working
group for each material.

Pillars are common across all material
types. PRO Board makes decisions onthese pillars relevant to all materials.

Note: The size of each pillar denotes relative focus and impact on collected-for-recycling rates. The focus (i.e. size of pillar) may
adjust for different packaging materials. The focus illustrated here is for PET packaging.

The size of each pillar within the diagram denotes therelative focus and impact of that pillar in increasing thecollected-for-recycling rates. As highlighted earlier, afocus on pulling PET packaging material through thevalue chain is a must, and thus forms more than twothirds of the focus and budget allocation of the PRO.

The PRO could focus only on PET packaging or could
focus on multiple packaging materials. There aresynergies and thus cost effectiveness to be gained by
the PRO focusing on multiple or all packaging materials,
as many of the activities of the PRO (education,awareness and behaviour change; stakeholder
engagement and scaling the PRO efforts) apply to all

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THE ROAD AHEAD: ACCELERATING THE CIRCULAR ECONOMY

the materials. It must be noted that the relative focus
and impact of each PRO pillar may be different for otherpackaging materials. For example, aluminium packaging
has high post-consumer value and less price fluctuations
and thus would likely not require a price incentive to be
implemented along the value chain and instead would
benefit more from efforts to increase recycling capacityand push initiatives which make the material moreaccessible for collection, such as education and source
separation. Packaging with lower post-consumer value
which doesn’t have any or many processors or recyclers
handling the material, such as flexible packaging, would
first need its value chain and processing and recycling
realities and capacities analysed in order to determine
the correct set of actions. One of the early actions would
be to enable recycling technologies to be setup, as
material cannot be pulled through the value chain unlessthere are recyclers in place.
Member companies can assign representatives (typicallycountry General Managers) to be on the board of the PRO

to provide strategic oversight, with the board setting thevision and annual targets that determine the scale ofoperations, geographical scope and budget of the PRO.
Annual strategy and budgets for common activities– such as education and awareness programs,
behaviour-change campaigns, stakeholder andgovernment relations, and scaling of PRO operations
across the country – are set and allocated across all
the packaging types. The setting of annual strategy
and budgets for collection and recovery initiatives
should be under the purview of subcommittees for eachpackaging type. Annual reporting on types and tonnageof packaging market inputs and quarterly reportingof materials recycled through PRO partners enables
tracking of progress towards annual targets. It must
be noted that PRO itself does not own or handle any ofthe post-consumer materials - it only acts as a clearing
house of funds as well as data.
The schematic below shows the proposed mechanismof how the PRO operates.

FIGURE 19: SCHEMATIC OF PRO OPERATION43
PRO MEMBERS
Packagingdata

PACKAGING COMPANIES

PRO
membership fee

NON-PACKAGINGCOMPANIES
Price incentive

PACKAGING RECOVERY
ORGANISATION (PRO)Recycling data

Closed-loop recycling
Open-loop recycling

RECYCLER/PROCESSOR/AGGREGATOR
Sorted, clean
post-consumer packaging

Post-consumer
packaging material value

COLLECTORS/SORTERS

Packaging Material
Funds
Recycled Product
Data

Post-consumer packaging
Packaging in products sold to consumers

Keys to success for the PRO include:• Creation of price incentive agreements and/or pricefloor agreements with recyclers to ensure thatrecyclers can continue to operate during challenging
economic periods (such as during recessions or
significant material price fluctuations) in recognition
that recycling is a commodity business undergoingsignificant cycles;

CONSUMERSThe efforts by industry to boost the value chain will be
more effective when supported by the government. Key
areas of government support include:• Economic incentives for the development of a local
recycling industry;• Off-take agreements with recyclers to ensure highusage of recycled content in packaging throughsustaining constant demand;• Development and enforcement of supportive
legislation and standards for a circular economy,
including recycled content policy and standards
for food-grade applications, source separation andseparate collection and trade policies related toimport and export of packaging materials;• More than 50% of the consumer goods andindustries participating in the PRO. It is ideal toalso have upstream industries such as polymer
production and bottling involved and downstream
industries such as retail involved.

• Provision of economic incentives to support a circular
economy, e.g. tax incentives for producers which use
a minimum of 30% recycled content in packaging,or levies for producers that use less than 30%
recycled content;• Government recognition of voluntary industry efforts(i.e. voluntary PRO) under law.

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3.2 WHAT EACH STAKEHOLDER CAN DO:
3.2.2 NATIONAL GOVERNMENTS & MUNICIPALITIESNational governments can accelerate the circular
economy for post-consumer PET and other postconsumer packaging through enabling policies, which
include both packaging-specific and general recycling
policies. For example, a recycled content policy with
its associated targets is a packaging-specific policy
which assists to pull material through the value
chain. It is a more immediate and shorter-term policy.
Meanwhile, source separation and separate collection
is not packaging specific and is instead related to allmunicipal solid waste. It is a push strategy whereby
it makes packaging material more accessible andof better quality for the value chain, but it doesn’t
ensure that the material makes its way through thevalue chain to recyclers and end-use products. It isalso a longer-term plan in that it requires more timeto achieve successful enforcement of the policy. With
regards to source separation and separate collection,municipalities have a key role to play with regards toimplementing source separation and separate collection
and achieving 100% waste collection coverage.

recommendations for Southeast Asian countries, pleasesee ‘The Role of Packaging Regulations & Standards inDriving the Circular Economy’ by GA Circular or otherrelevant policy reports.

National governments additionally have an importantrole to play with regards to other key levers, such as
education and awareness to drive behaviour change.
All the levers and actions which should be taken bynational governments and municipalities have not been
the focus of this report, but merit further investigation ina subsequent report. 		

a. Food application recycled content restrictions.
Given the widespread use of packaging in the foodindustry, incorporation of recycled content back into
food packaging would require: (i) food safety andreligious standards (such as Halal standards) tobe met; and (ii) removal of blanket regulations that
limit usage of all recycled material in food-grade
applications.

Relevant policies to be enacted andenforced by national governments
The most pertinent policies to support the postconsumer packaging value chain in Southeast Asia andwhich enable a circular economy are highlighted below.
These are policies which increase the ability of theindustry to collect, process and recycle post-consumer
packaging and support increased added value tothe material. Such policies can bring major economic
benefits, contributing to innovation, growth and job
creation.44 It must be noted that as with any policy,
enforcement of the above policies by government is
critical to achieve the objective of boosting thevalue chain.

PACKAGING-SPECIFIC POLICIES
1. Recycled Content Policy and Targets
Policies and standards governing the use andapplication of recycled content positively support theend-use market for packaging. Enabling and requiring
recycled content usage helps to pull material throughthe value chain. There are global efforts to create
policies requiring or supporting the use of recycledcontent. For example, under the EU’s Single-Use
Plastics Directive, there will be a binding target of atleast 25% of recycled plastic for PET beveragebottles from 2025 onwards, and by 2030 all plastic
bottles will be required to comprise of at least 30%
recycled content.
The two key recycled content policies which will support
the value chain in Southeast Asian countries are:b. Recycled content targets. By requiring a minimum
amount of recycled content to be included inpackaging, a regulation can require producers to rely
more heavily on the recycled materials and promote
the development of the recycling market.

A full discussion of all policies, their nuances andsuitability to Southeast Asia is out of the scope of thisreport. For a detailed analysis of packaging policy
interventions, benchmarking, and gap analysis andFULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIA

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The main challenges that have been observed withthe use of recycled content in the six Southeast Asian
countries are: (I) the quality of the recycled content
given the high contamination rates of post-consumer
PET packaging; (II) whether the recycling technologies
used are adequately sound for producing food-graderPET; and (III) meeting religious certifications such as
Halal standards. As yet, none of the six countries within
Southeast Asia have any minimum recycled content
targets for packaging or for PET in food- or non-foodgrade applications. Food application recycled content
restrictions vary significantly across the six countries
and across the whole Southeast Asian region. 		
For example:• Thailand’s Notification of the Ministry of Public
Health (No. 295) B.E. 2548 (2005)45 prohibits the useof plastic containers made from reused plastic except
for packing fruits with a peel.
• In Malaysia, the use of recycled packaging for
certain foods such as sugar, flour, and edible oil is
prohibited. In addition, packaging used for a productof swine origin is not allowed to be recycled andused for food of non-swine origin and any bottle
that has previously been used for alcoholic beverageor shandy is not allowed to be recycled and used
for any foods or beverages, other than alcoholic
beverages.
• Vietnam’s food plastic packaging requirements do
not specifically limit the use of recycled content
in food-contact packaging as long as the criteria
covered in the food packaging regulation QCVN 121:2011/BYT are met.
Numerous PET recyclers interviewed as part of thisstudy shared their desire to develop food-grade PET
recycling lines in order to add further value to thematerial and thus their businesses. However, most ofthese recyclers are concerned by the lack of clarity withregards to food application recycled content standards.
Given the demand for food-grade recycled content by
packaging and FMCG companies, increased intrinsic
value in the material once processed into food-grade
flakes or pellets and their role in enabling circularity, it isimportant for governments in Southeast Asia to provide
supportive and clear policies and standards withregards to recycled content for food applications.

2. Extended Producer Responsibility
An extended producer responsibility (EPR) policy
assigns the cost and sometimes the responsibilities ofmanaging post-consumer packaging on the producersof such packaging. An EPR scheme essentially attempts
to shift direct financial responsibility fully or partiallyaway from the municipality and taxpayer to accomplish
two primary goals:
a. Offset/manage the increased costs of waste
management due to packaging waste; andb. Incentivise the producer to manage these costs
by improving the design and marketing of theirproducts.
Obligations on the producer could include (I) acollection (“take-back”) of product packaging or (II) afinancial responsibility for the costs of proper waste
management of the packaging collected/ managed or(III) rules or targets governing the methods of waste
management of recovered packaging, for example
specifying minimum required rates of reuse or recycling.
Various EPR tools can be used either on a stand-alone
basis or in combination with other such tools. They
are more successfully implemented when backed bymandatory reporting on the amount and nature of
packaging introduced by a producer into the market toenable tracking of progress on an annual basis. Please
see Appendix F for a detailed description of some of therelevant EPR tools.
EPR schemes implemented in individual countries vary
widely across packaging types covered (plastics vs.
other materials), the nature of responsibilities placed on
producers and the context within which these schemes
operate. EPR has been a key mechanism for enabling
member states within the European Union as well asJapan to increase collection and recycling rates for
packaging.
Still relatively new to the Southeast Asian context, EPR
policies are being increasingly contemplated by national
governments in an attempt to increase industry
engagement with respect to the proper managementof packaging waste. Only two of the six Southeast
Asian countries (Indonesia and Malaysia) includedin this study have in place the legislative frameworkthat allows for the enactment of EPR policies. Evenso, neither of these countries has specified the actions
required by producers to ensure the proper collection
and treatment of the packaging put into the market.

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The challenges anticipated with respect to EPR in Southeast Asia are
multifold. First, the absence of cost structures for collection and recycling
to inform what would, if any, be the cost or financial obligation that
could be assigned to producers. The absence of collection and recycling
infrastructure could imply that the governments would require producers tobear the cost of developing the infrastructure, which could be a significant
financial challenge. The obligations imposed by a government could be
unevenly applied, exempting local/domestic companies and creating unfair
market conditions. Along the same vein, some packaging types may be
unfairly targeted over others via an EPR regulation, e.g. an EPR policy that
imposes requirements on PET packaging in particular may inadvertently
exempt other less recyclable packaging types.
When governments consider mandatory EPR regulations and tools in eachof the Southeast Asian countries, and/or when companies and industries
explore industry-led efforts, it is recommended that the tool(s):Encourages participation of the entirety of the packaging
and consumer goods industries. The tool(s) should enable
participation of all types of packaging providers and users i.e.
if a tool only involves rigid packaging companies and users,
then another tool should be used to involve flexible packaging
companies and users.
Supports the existing informal sector and enables transition
towards more formal sectors. As the collection-for-recycling
rates in Southeast Asia are heavily reliant on the informalindustry and the informal sector is dependent on post-consumer
packaging materials for their livelihoods, it is important thatsolutions are inclusive. Solutions should support informal sector
workers to have better safety, working conditions and incomes.
Solutions which exclude the informal sector are both less likely
to succeed and will have adverse effects on the informal sector.
Directly supports the growth of a domestic recycling industry.
As highlighted in this report, it is important to develop a local
recycling industry to limit the effect of events such as importbans, global material price fluctuations and economic crises.
Considers the recyclability of the materials considered. Bytaking into account the available recycling technology for eachof the packaging types, a well thought out EPR scheme will
incentivise recovery for recycling, investment in developing a
recycling solution or reduction in the amount of unrecyclable
material introduced into the market.
Limits fraud and has high governance standards. The tool
should have low potential for double counting and fraud, andhigh levels of transparency and reporting. Some EPR tools usedthroughout the world have been particularly susceptible tofraud, such as deposit refund systems.
Increases consumer education and awareness on packaging
source separation and anti-littering. The tool should drive
consumer education and awareness on separation andanti-littering behaviours through complementing existing
government or community programs, or if needed, throughrunning more targeted programs.

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A well-considered EPR policy would take into accountthe local realities and identify how best to ensure that
post-consumer packaging is not only recovered but also
recycled, without challenging the product market nor
the recycling industry. In the absence of regulations,producers of packaging (including companies frompackaging, consumer goods and retail industries) canchoose to make voluntary commitments and implement
initiatives to collect and recycle packaging either as anindividual company or as an industry group. These tools
may be applied either as an individual obligation or asa collective obligation. Typically, the latter approachrequires some form of collective organisation to beestablished. This could, for example, be a separate
company, as contemplated in section related to the
PRO above.
Given the above considerations, EPR tools that arerecommended for Southeast Asian countries include
recycling targets (take-back requirements) and recycledcontent targets. EPR tools that we believe have limited
application in the context of the six Southeast Asian
countries are Deposit Refund Systems (DRS) andtaxation. The limitations of DRS and taxation will be
discussed in the next section (section 3.3). Please
see Appendix F for a detailed description of different
mandatory and voluntary tools, together with theiradvantages and challenges.
3. Export and Import Policies
Export and import policies have been in the spotlightwith the recent China National Sword policy andsubsequent import bans by many Southeast Asian
countries. As highlighted in section 2, the China
National Sword policy led to a sharp increase in postconsumer plastics imported to many Southeast Asian
countries, particularly Malaysia, Thailand and Vietnam.
This then caused the governments of many Southeast
Asian countries to start curtailing the import of plastic
waste through the halting of import licences of plastic
waste and outright bans of plastic waste imports.
Import bans and restrictions can raise some challenges.
The banning of imports into a country where thedomestic supply of post-consumer packaging islimited in terms of quantity and/or quality can cripple
or significantly impede the financial sustainability
and operations of the existing recycling industry. It
can also impede their future growth. This is because
most processors and recyclers within Southeast Asian
countries have been reliant on imports. It is thus anecessity that import bans be phased in over timein parallel with the local recycling industry sourcing
greater proportions of feedstock locally - i.e. the timingof import bans is critical.

Export restrictions can be implemented to ensure thatdomestic post-consumer material is not exported and isinstead provided to local industry, thus promoting local
recycling industry growth.
MUNICIPAL SOLID WASTE MANAGEMENT POLICIES(I.E. GENERAL POLICIES THAT IMPACT POSTCONSUMER PACKAGING)
1. Source Separation and Separate Collection
Source separation and separate collection enable more
post-consumer packaging to be available for recycling
and at a higher quality. Whilst source separationand separate collection are separate policies, they
will be discussed together, as one policy cannot exist
successfully without the other. Source separation
regulations and guidelines require the waste generators(households and other bulk waste generators) tosegregate their waste at source into two streams(recyclables and others), three streams (organics,
recyclables and others/reject) or a larger number of
streams. Separate collection regulations require private
or public waste collection companies to collect eachwaste stream separately and make adherence tothese regulations conditional for contract renewal orparticipation in public tenders.
Enforcement of source separation and separate
collection of waste would lead to high rates of clean
separately collected packaging materials, thusincreasing the value of the material as highlighted
in section 2 and expanding the possible end-use
applications. Assuming a success rate of 80% source
separation and separate collection across only the ninecities studied in this research, approximately 49,493
tonnes of additional PET bottles will be collected forrecycling per year. This would also benefit the existing
informal sector workers who would then have easieraccess to the separated recyclable materials instead of
having to manually separate them from mixed waste.
2. National Targets
National targets assist to: provide a future vision/
direction for action; coordinate actions amongst various
value chain stakeholders; encourage the establishmentof industries (for example, recycling rate goals
encourage the establishment of recycling infrastructure
among other things); and provide a metric of successwith which progress can be measured.
Targets need to have clear definitions to enable soundactions, reporting and tracking. For example, a recycling
target must define recycling, i.e. what is and is notincluded in recycling, as in some countries, recycling
includes waste to energy whilst in most it does not.

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Municipalities: Strategies to increase
waste collection coverage and efficiency
As highlighted in section 2.4, the waste collection
coverage throughout Southeast Asia is low, ranging
from 76% to 100% in developed, more urbanised areas
to 10% to 55% on average in lower-income, rural
areas.46 With overall municipal waste generation rates
forecast to increase on average by 31%47 across thesesix Southeast Asian countries from 2016 to 2030, theexisting waste collection systems are not equipped todeal with either the increase in waste generation or theneed to increase the collection coverage.
The key reason for poor waste collection coverage
is a lack of funding available for municipal waste
management budgets. The World Bank estimates thatcurrently only 40% of operations and maintenancecosts of waste management in Indonesian cities arerecovered.48 Key challenges to municipalities thatprevent sustainable financing for waste collection
are: (I) low waste management service fees for waste
generators such as households; (II) heavily subsidised
or often free landfill fees for waste collectors; (III)collection models that are locked into long-term linear
economy approaches which do not prioritise recycling
over energy recovery or landfilling; and (IV) heavy
dependence on national budget allocation to overcome
funding gaps.
Municipalities recognize that waste management
can be the single highest budget item for a local
administration and that investments and better
operations will involve much higher service fees
for waste generators compared with present
arrangements. However, local governments areconcerned about the unpopularity of raising fees
before the improved quality of the service has been
demonstrated. At the same time, it is not sustainable
to continue the current situation of heavy subsidies,increasing land acquisition costs, lack of suitable
investment capital, poor revenue generation and expect
improved performance in the future.
Given these issues, the following strategies formunicipalities to increase waste collection coverage
and efficiency are discussed:
1. Mandating Source Separation and Separate Collection
2. Supporting the Informal Sector in Municipalities
3. Modulated Service Fees for Waste Generators

1. Mandating Source Separation & Separate Collection
The merits of source separation and separate collection
policies in making material more accessible and of
higher value have been discussed in earlier sections.
Determining the economics of setting up city-wide
source separation and separate collection of municipal
solid waste is out of the scope of this study. However,based on interviews with the officials in the city of
Depok, Indonesia, and additional analysis conductedby GA Circular, it is apparent that implementing source
separation and separate collection does not burden themunicipality with extra costs. Source separation andseparate collection would actually provide the city withsavings if the true cost of landfilling was accounted
for via an accurate tipping fee.49 Thus, in this case,source separation and separate collection provide an
opportunity for both increased recycling rates andcost efficiencies.
The example of Depok in Box 3 highlights the key
enablers of success for source separation andseparate collection.
2. Supporting the Informal Sector in Municipalities
Considering Southeast Asia’s heavy reliance on
the informal sector for collection of recyclables,
municipal-level policies recognising the enormousrole of the informal sector in the waste value chain
will be important and necessary. Depending on themunicipality, the informal sector can include employees
working in private or public formal waste collection
companies, street material pickers, junk shops and/or
scrap traders.
In India, the National Action Plan for Climate Change(2000) and the National Environment Policy (2006)
both recognize the informal sector’s contribution to theenvironment and carbon reduction and extend to them
the right to collect and recycle waste. At the local level
in Indian cities like Pune and Bengaluru, efforts havebeen made to provide informal sector workers withidentity cards that not only allow access for door-todoor collection, but also help them access bank loans,health and education opportunities.
Supporting the informal sector in the six Southeast
Asian countries can be in the form of recognition of
their role and efforts, health and safety training andeducation programs, financial inclusion programs andincentives to encourage micro-entrepreneurship inrecyclables collection and sorting.

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Box 3: Case study of source separation and 					separate collection in Depok, Indonesia
In 2012, the Depok city administration launched aconcerted effort to achieve source separation andseparate collection to combat its overflowing landfill,landslides over recent years, and leachate leaking into
waterways. The effort covers 100,000 households(25% of the city) out of the approximately 400,000
households in Depok. Achieving success has leveraged
on key enablers including: city-level regulations
requiring household separation, enforcement of
separation, reallocation of police to catch and fine any
littering, and a new collection schedule and different
vehicles for the different material collection.50

Households were mandated to segregate their waste
into organic (to be sent to compost), inorganic (to besent for recycling), and residue (sent to landfill). The
city administration refused to transport waste that was
not separated and took measures to start prosecuting
people who dumped waste illegally. This has led to
between 140-160 tonnes of material diverted fromthe landfill per day. The effort in Depok is continuingamongst the 100,000 households as of August 2019.
Efforts to expand the coverage of households from 25%
to 30%-40% of the city are being explored.51

3. Modulated Service Fees for Waste Generators
The waste management service fee schemes across the
six Southeast Asian countries are traditional schemes
where services (waste collection, sorting, landfilling) arefinanced via general taxes or via a fixed recurring fee
in utility bills of waste generators together with othersupply services as electricity, regardless of the produced
waste amount. The cost is usually calculated basedon living or work space or the number of household
members.

PAYT systems require significant investment in bothtime and money to setup infrastructure for weighing
and administration. In comparison, volume-based PAYT
systems, often implemented by using pre-paid garbage
bags, bins of different sizes or differentiating the fee
based on the collection frequency are relatively easierand less expensive to implement.

Modulated service fees for waste management on theother hand incentivise recycling and penalise residual ormixed waste generation and therefore are an importanteconomic strategy to increasing source separation andrecycling, and reducing overall waste generation. One
application of the modulated service fees is the PayAs-You-Throw (PAYT) system which is based on the“polluter pays” principle. In the EU, PAYT systems are
typically within the mandate of municipalities. Thesesystems work by charging citizens a fee based on theweight or volume of mixed waste they produce, thus
imposing costs on wasteful behaviour. Weight-based

A detailed comparison of different PAYT systems inseven municipalities from seven European countries
shows that PAYT has the potential to adapt well to local
conditions, to encourage (residual) waste reductions, toincrease considerable recycling and home composting,and to be well-received by stakeholders.52
A blanket increase in the waste management service
fee for waste generators is likely to be both unpopularand unlikely to achieve the desired target of waste
reduction in the six Southeast Asian countries.
Therefore more innovative approaches which use
modulated service fee systems such as PAYT could beconsidered by municipalities.

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3.2 WHAT EACH STAKEHOLDER CAN DO:
3.2.3 RECYCLERS, INVESTORS AND FUNDING INSTITUTIONS:ENABLING INCREASED RECYCLING CAPACITY
Whilst a detailed analysis of recycling capacity inSoutheast Asia was outside the scope of this research,based on interviews and research conducted, a highlevel analysis has been completed as to the increased
capacity required within Southeast Asia with regards
to food-grade rPET. A more detailed analysis of foodgrade and non-food-grade rPET recycling capacity is
recommended as a separate study.
FOOD-GRADE rPET RECYCLING CAPACITY
Based on estimates by this research team, the current
food-grade rPET production capacity in Southeast
Asia is expected to be anywhere between 10,000 and
30,000 tonnes per year. The majority of this food-graderPET is being produced in Thailand and Indonesia. In
comparison, individual countries in Asia Pacific such as
Australia, Japan and Taiwan have installed food-graderPET production capacity of 17,000 tonnes, 75,000
tonnes and 90,000 tonnes per year, respectively.

For food-grade rPET production, thus far Veolia hasannounced a 25,000 tonnes per year capacity plantin Indonesia and Coca-Cola has announced a 16,000
tonnes per year capacity plant in the Philippines.
Both plants are expected to be operational by theend of 2020. This still leaves a very large gap of atleast 309,000 tonnes of food-grade rPET production
capacity that is needed to achieve 25% food-graderPET content in PET bottles across the six Southeast
Asian countries if all the rPET were to be sourced
locally. While processors and recyclers are increasing
their investments in food-grade rPET production
capacity within Southeast Asia, this process needs tobe accelerated to be able to meet the anticipated 2030
demand and to accelerate the circular economy forpost-consumer PET bottles in Southeast Asia.

As highlighted in an earlier section, PET bottle usage inthe six Southeast Asia countries is expected to reach
1.52 million tonnes by 2030. Several major multinational
consumer goods companies have committed to using
up to 50% recycled PET content in packaging by thatyear. However, not all companies using PET bottles
are expected to have such ambitious commitments.
Therefore, conservatively assuming a lower 25% rPET
content usage in all PET bottles in 2030, a demand of atleast 380,000 tonnes of food-grade rPET across thesesix Southeast Asia countries is to be expected by 2030.
Industry experts advise that 20% of this demand canbe achieved through introducing flakes from postconsumer bottles during the process of making virgin
PET (i.e. the PET bottles produced through this process
will be based on 20% rPET content and 80% virgin PET
content). The other 80% of this demand will need to beachieved through an increase in production capacity offood-grade rPET pellets in the region. This represents
an increase in rPET pellet production capacity of
304,000 tonnes, or 10.1 times from 2019 to 2030. Thisis equivalent to at least 10 plants with a production
output of 30,000 tonnes per year of rPET that need tobe added by 2030 - i.e. one additional plant per year.

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THE ROAD AHEAD: ACCELERATING THE CIRCULAR ECONOMYTABLE 3: PRODUCTION CAPACITY REQUIRED FOR FOOD-GRADE rPET IN SIX SOUTHEAST ASIANCOUNTRIES FOR PET BOTTLE
As of 2018
PET Usage (Tonnes)

886,000

rPET Production Capacity (Pellets)

Up to 30,000

Maximum possible rPET content usage % in six Southeast
Asian countries based on local supply *3.4%
At conservative rPET
content usage of 25%

At 50% rPET content
usage

PET Usage (Tonnes)

1,520,000

1,520,000

Equivalent rPET tonnage to be used in packaging

380,000

760,000

Flakes from collected bottles introduced during the process ofmaking virgin PET (Up to 20% of the rPET content)

76,000152,000

rPET Production Capacity (Pellets) Required (Remaining 80%)

304,000

608,000

10.1

20.3

2030 Projections & Goals

INCREASE IN rPET PRODUCTION CAPACITY (PELLETS)REQUIRED FROM 2018 TO 2030

Note: * Local supply is used to provide an indicative % recycled content range. In reality, some purchase of rPET pellets is occurringfrom outside the six Southeast Asian countries for usage within the six countries.

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3.3 LIMITATIONS OF OTHER APPROACHES
In order to solve the growing challenge of packaging waste, the focus needs to be on implementing the mosteffective and efficient systems/tools in terms of achieving collection, recycling and recycled content goals. The
systems/tools also need to be suitable for the local realities in each of the Southeast Asian countries.

3.3.1 MUNICIPAL SOURCE SEPARATION
AND SEPARATE COLLECTION, AND 100%
WASTE COLLECTION COVERAGE ARE
LONG-TERM SOLUTIONS
A sustainable long-term solution to the challengeof packaging recycling is for governments andmunicipalities in Southeast Asia to enforce source
separation and separate collection of municipal solid
waste. In addition to this, waste collection coveragealso needs to be expanded to reach 100% of the
population.
However, implementation of these practices typicallyinvolves a longer time frame and significant politicalwill. As such, there are only a few examples of thisbeing enforced at scale in cities in Asia. Some cities
within India are relevant case studies for municipalities
to learn from, particularly Bengaluru which has thus
far achieved source separation and separate collection
for 60% of households53 since segregation laws werediscussed in 2012, and compulsory segregation was
implemented in February 2017.54 As seen from thisexample, the process to effectively change the status
quo took seven years for one city.
When looking at a country-wide program, Act
672 in Malaysia mandated source separation andseparate collection. It became law in 2011; however,
implementation and enforcement only began in 20142015. Currently, only eight out of the 13 states and twoout of three federal territories in Malaysia are enforcing
this policy. As of 2018, 18% of household respondents
who live in the Federal Territory of KL (where the law is
mandated) carry out source separation.55
As seen from these examples, while Integrated Solid
Waste Management is a key pillar in the long-term
success of the circular economy, it does not lend itself toan effective short-term solution.

3.3.2 DEPOSIT REFUND SYSTEMSIN DEVELOPING COUNTRIESREQUIRE CAREFUL EVALUATION
Deposit Refund Systems (DRS), sometimes also
known as Container Deposit Systems (CDS), were
designed in the 1970s to tackle the growing problemof packaging litter in the environment. Due to thisbackground, DRS have typically focussed on beverage
product packaging for products consumed out of home,including PET bottles, aluminium cans, glass bottles,
and, in rare cases, beverage cartons. Under DRS,
manufacturers add a deposit amount to the sale priceof the product. This deposit is refunded to the consumer
once they return the beverage container. Usually, a
non-profit organisation is set up to be in charge of

DRS implementation. In some cases, the government
decides to run the DRS directly. A consumer canreturn the empty containers at collection points suchas supermarkets or dedicated drop-off points. Fromthese locations, the DRS organisation collects andaggregates the empty containers before selling them tothe recycler. DRS has been very successful in increasing
the collected-for-recycling rates of PET in developed
countries. For example, the return rates of PET bottles in2016 through the DRS in Norway and the Netherlands
were 96% and 95%, respectively.

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DRS is extremely effective in increasing the actualand perceived value of the material (e.g. a PET bottle);
however, multiple factors need to be evaluated before
an implementation of DRS in developing Southeast
Asian markets can be considered. These include:• DRS typically relies on supermarkets or other large
establishments to function as the collection points.
However, the sale of most consumer goods indeveloping Southeast Asia happens through small
and medium businesses that may not be suitable orcapable to function as collection points. The points
of sale are also far more numerous in developing
countries. Therefore, DRS would need to carefully
evaluate both the physical infrastructure needed forthe collection points and the geographical spreadand density required to ensure sufficient coverage.
With these additional considerations, the economicsof the system would need to be further analysed toensure that it is cost effective.
• DRS requires sound auditing processes to be set inplace to minimise fraud, something that has been achallenge in developed markets. Given the informal
and unregulated nature of many Southeast Asian
countries, and the likelihood of DRS requiring a larger
number of collection points due to the nature of
product sales in these markets, fraud is likely to be alarger challenge.
• DRS typically does not cover all material types.
Common material types not usually coveredin traditional DRS include flexibles, HDPE, PP,
and PS. As noted in the EPR section above, it isrecommended that EPR tools/policies cover all
packaging types. A tool or policy that imposes

requirements only on PET packaging may
inadvertently exempt other less recyclable packaging
types. The market response to such an added coston PET packaging but not on other packaging could
lead to other less recyclable types of packaging
becoming more prominent. Thus, if a DRS islaunched, it is recommended that it be launched inparallel with other tools/policies which cover the full
packaging spectrum.
• The material types covered by DRS are typically theones that are already most collected by the existing
informal sector in Southeast Asia. Thus a DRS has
the potential to adversely affect the informal sector inSoutheast Asia by reducing the amount of materials
available for them to collect. This could lead to lower
incomes for the informal sector and thus workers
leaving the informal sector in search of other jobs,
which could in turn lead to lower collected-forrecycling rates, especially for the material types notcovered under DRS.
It must be noted that the principle of DRS (in termsof increasing the actual and perceived value of the
packaging material) has been incorporated into
the recommended approach and actions of section
3 ‘boosting the value chain’; however, it has been
done in a method that considers the local realitiesof the six developing Southeast Asian countries.
The recommended approach of ‘boosting the value
chain’ increases the actual and perceived value of the
packaging material by injecting additional value at therecycler stage which then flows down the value chain,
and incorporates and benefits the informal sector
workers rather than excluding them.

3.3.3 PACKAGING TAXES MAY NOTLEAD TO INCREASED COLLECTION
FOR RECYCLING IF POORLY DESIGNEDAs highlighted in sections 3 and 3.1, the bestinterventions will focus on boosting the value chain.
A packaging tax, which is a tax based on the amountof packaging produced by the industry, is usually
implemented by the government and run as a state
enterprise solution that is not controlled by the industry.
Any funds collected from a packaging tax typically do
not need to be dedicated to solutions which increase
collected-for-recycling rates and/or which boost therecycling industry. In these cases, a packaging tax isineffective because it does not solve the issue.

If the packaging tax were to only be applied to certain
types of packaging and not others (particularly if it were
to be applied to more recyclable packaging and not beapplied to less recyclable forms of packaging), it could
adversely impact the existing value chain. The market
response to such taxes would also lead to certain typesof packaging becoming more prominent than others.
If the existing infrastructure is not equipped to handle
these material types, it could lead to lower collectedfor-recycling rates and/or higher environmental leakage.
See appendix F for a more detailed description andanalysis of packaging taxes and other tools within EPR.

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3.4 THE ROAD AHEAD:
KEY PRIORITY ACTIONS AND ROADMAP
A circular economy for PET packaging is 100% possible. The key priority actions and enablers to accelerate thecircular economy for post-consumer PET bottles in Southeast Asia are summarised here.

FIGURE 20: KEY PRIORITY ACTIONS AND ENABLERS TO ACCELERATE THE CIRCULAR ECONOMY FOR
POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIA

NATIONAL GOVERNMENTS
AND MUNICIPALITIESINDUSTRY

RECYCLERS, INVESTORSAND FUNDING INSTITUTIONS

 Immediately implement design changes

 Develop and enact enabling legislation

 Accelerate investments in food-grade

to PET bottles, including the phase out

and policy for a circular economy,rPET production capacity withinof coloured PET bottle packaging andparticularly:

Southeast Asia to meet the anticipated

Policies which assist to build the value

2030 demand. This demand is equivalentbanning of PVC labels, and PVC used inprimary packaging. Additionally, label-

chain - e.g. recycling content policy andformats must be easier for the value
chain to remove e.g. roll-on instead ofself-adhesive and sleeves must have a
perforation strip.

standards for food-grade applications.
-

Policies which push material through thevalue chain by enabling better material

to at least 10 plants with a production
output of 30,000 tonnes per year of rPET
that need to be added by 2030 - i.e. one
additional plant per year.

access - e.g. source separation andseparate collection.

 Lead efforts to build the value chain

 Review economic and administrative

 Conduct a detailed study of the recycling

through pulling material through the

incentives for the development of a local

capacity required in each of the markets

value chain. This can be achieved asrecycling industry. Consider provision

to achieve bottle grade rPET content

an industry via a voluntary Packagingof economic incentives to support agoals and overall PET collection for

Recovery Organisation (PRO).

circular economy, e.g. tax incentives forrecycling goals.

producers which use a minimum of 30%
recycled content in packaging, or levies
for producers that use less than 30%
recycled content.
 Boost demand for recycled PET through Undertake sustained source separation

offtake agreements and use of recycled

and separate collection efforts,

content in packaging.

recognising: their critical role in making
material accessible and of higher value
for recycling; and that efforts will taketime to scale from city level to country
level.

 Support with ancillary push efforts such

 Undertake a detailed study of different

as increasing collection/drop-off points,

EPR tools, their advantages anddonate balers, scales, trolleys and otherdisadvantages and their projected impact‘tools of the trade’. Support the informal

on the local product market and recycling

sector with training on sorting andmarkets before implementing any

business skills. Do public awareness andtools. It is critical that any chosen EPR

behaviour change campaigns particularly

tool(s) boost the value chain and do not

related to educating the public about

adversely impact the livelihoods of thethe value of the material, need for

informal sector.

source separation and to not litter. The
effectiveness of these ancillary efforts islimited if done on their own without value
chain pull efforts.

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THE ROAD AHEAD: ACCELERATING THE CIRCULAR ECONOMY

The key priority actions and enablers to accelerate the circular economy for post-consumer PET bottles in Southeast Asia
are broken down into key actions for the short-term (2020-2023), mid-term (2024-2026) and long-term (2027-2030).

FIGURE 21: ROADMAP ACTIONS TO ACCELERATE THE CIRCULAR ECONOMY FOR POST-CONSUMER PET
BOTTLES IN SOUTHEAST ASIA, ENABLING ACHIEVEMENT OF 100% COLLECTED-FOR-RECYCLING RATE
100%
PET Bottles collected-for-recycling rate

64

I

75%

G

50%

F
D

H

C

E

B

25%
A

2020

SHORT-TERM

Not Collected-for-recycling
Industry-led PRO

A

2023

MID-TERM

National Government and Municipal Efforts

2026

LONG-TERM

2030

Improved Packaging Design

Status Quo Collection

As highlighted throughout this report, without intervention, the status quo collection by the informal sector is likely
to gradually decline in the coming years. This is primarily due to the increasing cost of living leading to informal
sector workers being unable to sustain themselves by trading in recyclables and therefore moving to other jobs. It is
compounded by the doubling of total PET bottle market input to the six countries.

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THE ROAD AHEAD: ACCELERATING THE CIRCULAR ECONOMY

Short-term actions (2020-2023):
B

Voluntary, industry-led PROs are implemented
in each of the six countries, along with 		supportive policies.
• In the short-term, these PROs focus onestablishing relationships with local recyclers
and implementation of a price incentive for PET
bottles with potentially multiple recyclers ineach country. In the absence of local recyclers
within the country, regional recyclers could beconsidered. Supporting this price incentive, PROsalso implement push initiatives such as increasingcollection/drop-off points, donating balers, scales,
trolleys and other ‘tools of the trade’, social
benefit programmes for the informal sector, andconsumer behaviour change campaigns.
• The PRO’s contracts with existing recyclers
enable and require the recyclers to expand theircapacity. The PRO’s efforts within each country
encourages and enables other PET recyclers tosetup operations within the country.
• The industry-led PRO is supported by changes
in key packaging policies and incentives tobetter enable a circular economy for PET bottle
packaging, such as:- Policies and standards to allow food-grade
recycled content.

Mid-term actions (2024-2026):
E

F

G

PROs focus on expansion of the price incentive
implementation to other cities within the countries.
This leads to a faster rate of increase in the tons of
PET collected-for-recycling.
Smaller and medium-sized consumer goods
companies also align with the improved design
standards and practices.
National government and municipal efforts have
led to the successful enforcement of source
separation and separate collection in multiple cities
in each country. Waste collection infrastructure isalso improved with the target of reaching 100%coverage by 2030.

Long-term actions (2027-2030):
H

I

The industry-led PRO within each country expands
implementation of the price incentive to cover
all regions within the six countries. This leads tosignificant quantities of PET being collected forrecycling.
National government and municipal efforts leadto source separation and separate collection
being enforced across most regions within the six
countries and waste collection coverage reaches
100%.

- Economic and administrative incentives for thedevelopment of a local recycling industry.
- Recycled content targets and incentives anddisincentives e.g. tax incentives for producers
which use a minimum of 30% recycled content inpackaging, or levies for producers that use lessthan 30% recycled content as of a specific date in
the future (e.g. 2025).
C

D

Gains in PET collected-for-recycling rate are
driven by the large consumer goods companies
implementing improved packaging design
standards, such as the phase out of coloured PET,
phase out of PVC sleeves, and adding perforation
on bottle sleeves to become easily removable.
In the short-term, national government andmunicipal efforts focus on passing laws thatmandate source separation and separate collectionof waste, in addition to establishing implementationand enforcement mechanisms in key cities within
the country as a proof of concept.

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Appendices

67

68

APPENDICESAPPENDIX A: PET PACKAGING - GLOBAL RECYCLING
AND STATUS QUO IN SOUTHEAST ASIA
PET PACKAGING
PET is an acronym for polyethylene terephthalate. PET
used for packaging accounts for 23% of the global
usage of the PET polymer. 54% of all PET production
is for fibre e.g. for the textiles industry, where it iscommonly referred to as polyester. Other industry uses
include the automotive and electronics industries. PET
polymer used in packaging accounted for 17.1 million
tonnes (4.2%) out of the 407 million tonnes of primary
plastics produced globally in 2015. Driven mainly
by increasing demand in emerging and transitional
economies, the market for PET packaging will grow
3.8% annually during the period 2016–21 to reach 21.1
million tonnes by 2021.
For the purposes of this report, the term ‘PET bottles’is used to refer to PET used for beverage packaging.
The report excludes any non-beverage applications,such as cooking oil containers and food packaging. PET
beverage packaging is used primarily for soft drinks andwater applications.
RECYCLABILITY OF PET PACKAGING
The PET polymer is clear, strong, lightweight, safeand 100% recyclable. PET packaging is unique froma sustainability point of view for several reasons: it isrecyclable; it has an existing recycling industry anda variety of end uses once recycled; it is supported
by global recycling and recycled content usage
commitments by the packaging and consumer
goods industries.
Recycled PET is known as rPET. As with virgin PET, rPET
can be used to make many new products, including
polyester staple fibre or filament used for apparel,home textiles (carpets, pillows, sheets), automotive
parts (carpets, sound insulation, boot linings, seatcovers), industrial end-use items (geotextiles and roof
insulation) and new PET packaging and bottles for bothfood and non-food products. It is generally blended in aratio of virgin to recycled, depending on the functionalor esthetic tolerance required.
Recyclate derived from PET packaging (also known
as recycled PET or rPET) accounts for 12.1% of the
global polyester production. Technology developments
over the past decade have led to numerous companies
around the world using 100% recycled PET content
in bottles. This neatly closes the recycling loop andenables ‘cradle to cradle’ packaging solutions. Recent
research has also shown that carbon dioxide emissions
in the making of rPET were found to be 79% lower
than for new virgin PET material.56 When recycled, a

PET bottle also incurs lower carbon dioxide emissions
per liter of product delivered than a lightweight glass
container with high recycled content.57
GROWING ENVIRONMENTAL CONCERNSThe New Plastics Economy: Rethinking the Futureof Plastics report estimated a global PET packaging
collected-for-recycling rate of 55%, as of 2012, which
after assuming a ~20% yield loss would lead to a global
recycling rate of 44%. It is expected that in 2020, thisglobal recycling rate would increase to 53%. However,
only 5% will be recycled in a closed loop back into
recycled PET (rPET) for food-grade PET packaging
PET packaging collected-for-recycling rates are notnecessarily dependent on the level of developmentof the countries. Even within developed nations, PET
collected-for-recycling rates vary widely. For example,
the PET packaging collected-for-recycling rate in the
US is 29.9% (based on latest available data which is for2015)58, while in Germany it is 93.5% (2016).59
GLOBAL COMMITMENTS BY PET PACKAGING
MANUFACTURERS & USERS
Several global consumer goods companies havein recent years announced commitments towards
sustainable packaging, including the usage of recycledcontent in PET bottles. For example, Danone’s 2025
global commitment includes reaching 50% recycledmaterial in water and beverage bottles and 100% forevian bottles. As of 2017, Danone used 14% recycled
PET in water and beverage bottles.60 Similarly,
Coca-Cola’s World Without Waste global strategy
includes a commitment to reach at least 50% recycledcontent in its packaging by 2030. As of 2018, thepercentage of recycled material used by Coca-Cola in
PET packaging globally stood at 9%.61
The New Plastics Economy Global Commitment wasannounced in 2018 and endorsed by more than 150
businesses from across the plastic packaging value
chain. Consumer packaged goods companies andretailers that are part of this Global Commitment,
including Danone and Coca-Cola, have committed
to an average of 25% recycled content in all plastic
packaging by 2025, roughly tenfold the estimatedcurrent global average.
PACKAGING CONSUMPTION TRENDS
IN SOUTHEAST ASIA
Six of the top Southeast Asian countries by population(Indonesia, Philippines, Vietnam, Thailand, Myanmar
and Malaysia) consumed 886,000 tonnes of PET

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packaging in total in 2018.62 Based on modelingand analysis from industry data, our research teamestimates the total consumption of PET bottles acrossthese six Southeast Asian countries is set to almost
double from 886,000 tonnes in 2018 to 1.52 million
tonnes by 2030.
In five of the six Southeast Asian countries studied(i.e. Indonesia, Philippines, Vietnam, Thailand andMalaysia63), PET packaging (at 23.3%) is still less thanhalf the share of flexible packaging (at 59.7%) in theoverall plastic packaging market in terms of packaging
units sold. More flexible packaging units are consumed
than PET packaging units in four of these five countries
with the exception of Thailand.

FIGURE 22: PET BOTTLE MARKET INPUTS ACROSS
THE SIX LARGEST SOUTHEAST ASIAN COUNTRIES(FORECAST)

Market Input (tonnes/year)

2,000,000

SOUTHEAST ASIA’S CONTRIBUTION TO OCEAN
PLASTIC LEAKAGE
Five Southeast Asian countries (Indonesia, thePhilippines, Vietnam, Thailand and Malaysia) havebeen identified as among the top 10 countries globallycontributing to plastic waste entering waterways andthus the oceans.64 Together with Myanmar, these six
countries contribute to 29% of the total mismanaged
plastic waste globally.

FIGURE 23: CONSUMPTION OF PLASTIC PACKAGING
AS PERCENTAGE OF TOTAL UNITS SOLD WITHINFIVE SOUTHEAST ASIAN COUNTRIES (INDONESIA,THE PHILIPPINES, VIETNAM, THAILAND AND
MALAYSIA) IN 201765

1,517,812

1,500,000
1,000,000

Flexibles
59.7%

1,212,839
969,683PET
23.2%

886,805

500,000

HDPE
3.8%

0

Others
13.3%

2018 2020 2022 2024 2026 2028 2030
MyanmarVietnam

The Philippines

Thailand

Malaysia

Total

Indonesia
Flexibles

PET

HDPE

OthersFIGURE 24: MISMANAGED PLASTIC WASTE IN THE SIX SOUTHEAST ASIAN COUNTRIES CONTRIBUTES TO
29% OF TOTAL MISMANAGED PLASTIC WASTE GLOBALLY66

MyanmarVietnamSix ASEAN
countries

Ocean-bound plastic waste
2010, in million tons

Thailandcontribute to29%

Philippines

Malaysia

10
5of the total mismanaged
plastic waste globallyIndonesia

1

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70

APPENDICESAPPENDIX B: METHODOLOGY
The standardised methodology developed by GA Circular to collect and analyse primary data has enabled, for the
first time, a systematic and comparable baseline for the key outputs of collected-for-recycling, landfill and leakage
rates across the nine cities and six countries for PET bottles. The rates have been calculated based on primary datacollected on-ground across the nine cities and the six countries from the full spectrum of stakeholders across thevalue chain.

FIGURE 25: DEFINITIONS FOR PET BOTTLE MATERIAL FLOWS IN EACH OF THE SIX SOUTHEAST 		ASIAN COUNTRIES67
Waste
Collector
CollectedFor-Recycling

Recyclables
Collector

Market Input

Street/Landfill
Material Picker
Landfill

Leakage

Market Input
The total amount of PET bottles
entering the market, not including
caps and sleeves that are not PET.
Waste Collector
The people that collectwaste (mixed or separated)from households, offices, or
establishments. These people
may also sift through rubbish fromtheir waste trucks and pick out
recyclables. They may be employedby the government or private waste
collection companies.
Recyclables Collector
The people that buy recyclablesfrom households or otherestablishments and sell this toJunk Shops as a primary sourceof income. They may also pickrecyclables out from mixed waste
or litter.

Street/Landfill Material Picker
Street Material Pickers are those
who pick up recyclable materials
from the open environment (in thecity), or from a garbage bin. This
Street Material Picker may also dosome buying, but they are primarily
picking, which is why they arecalled a Street Material Picker.
Landfill Material Pickers are those
who pick up recyclables fromlandfills. These people are often
referred to as scavengers, however
Landfill Material Pickers is theterminology used by GA Circularand within this report.

Landfill
This refers to PET that iscollected from households andestablishments and sent to landfill
by waste collectors.
Leakage
This refers to PET that is leaked into
the environment, including streets,
and waterways.
This is also referred to asenvironmental leakage. This canhappen as a result of littering or
open dumping of waste.

Collected-for-recycling
This refers to the total amount of
PET collected for recycling by Junk
Shops. This includes PET sold toJunk Shops by Waste Collectors,
Recyclables Collectors, and Material
Pickers.
The collected-for-recycling rates
already factor in removal ofcontaminants (eg dirt and water)
and caps and labels.

FULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIAAPPENDICES

This report defines the collected-for-recycling rate as
the ratio of the total tonnes of material collected forrecycling from a particular area over the course of ayear over the total market input of the material into
the area over the same time period. This rate excludes
the weight of caps and labels that are not made outof PET. Variables that have been factored into thesecalculations include contamination rates in the collected
PET and seasonal fluctuations in the tonnage handled
by the informal sector. The figure below summarises the
key rates across the nine cities studied. The collectedfor-recycling rates at the city level have an error marginof ± 5%.

FIGURE 26: END DESTINATION OF POST-CONSUMER PET BOTTLES IN NINE CITIES ACROSS
SOUTHEAST ASIA

Percentage of PET Bottle Market Input

100%

50%
82%

0%

10%
8%

74%

15%
10%

62%

69%
39%

29%
9%

39%

33%
57%

18%
13%

37%

38%

23%

46%
67%

11%

27%

50%

52%

16%

4%

10%

100%
Mandalay

YangonEnvironmental Leakage (%)

Ho Chi
Minh City
Landfill (%)

Hanoi

Parañaque(Metro Manila)

Collected-for-recycling (%)

JakartaBangkokPhuketGreater Kuala
LumpurError margin

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72

APPENDICESThe cumulative collected-for-recycling, landfill, and leakage rates for the nine cities studied are presented in the table below.

TABLE 4: CALCULATIONS TO DETERMINE THE COLLECTED-FOR-RECYCLING RATE OF PET BOTTLES IN THE
SIX SOUTHEAST ASIAN COUNTRIES STUDIED
Cumulative across 6
countries studied
Stage

Market Input

Consumption
Location

Collection andTransport toLandfill

Collected-forRecycling

Sale to Junk
Shops

Key Rates

Source/Comments

Tonnes/year%

Market Input of PET Bottles

167,787

100.00%Derived based on industry data

PET Bottles Consumed in areas
with waste collection coverage

157,768

94.03%PET Bottles Consumed in areas
without waste collection coverage

10,018

5.97%

Derived based on data on
waste collection coverage fromnational/local governments andlocal NGOs or universities

Collected with Mixed Waste byWaste Collectors intended fortransport to landfill

104,20962.11%

Sent to landfill by Waste
Collectors (some amount is pulled
out and sold for recycling)

70,92742.27%

Leaked into the environment
due to lack of waste collection
coverage

6,714

Calculated based on primarydata collected from Waste
Collectors in the nine cities by
the research team

4.00%

10.05%

Leakage
Rate

Calculated based on values
for PET bottle consumption
in areas without collection
coverage and the portions of
this picked out or bought by
Recyclables Collectors, Street
Material Pickers, and theFormal Sector.

Littered into the environment due
to consumer behaviour

6,749

4.02%

Assumption for each city basedon stakeholder interviews

Leaked into the environment frompoorly managed landfills andopen dumpsites

3,400

2.03%

Calculated using data on
landfills from the ‘Stemming
the Tide’ report by Ocean
Conservancy

Stays at Landfill after leakage
and collection by Landfill Material
Pickers

60,11935.83%

Collected-for-Recycling from
Landfills by Landfill Material
Pickers

7,408

4.41%

Collected-for-Recycling from thecities by Recyclables Collectors

34,24620.41%

Collected-for-Recycling from thecities by Street Material Pickers

13,288

7.92%

Collected-for-Recycling from thecities by Waste Collectors (i.e.
what they pull out from the PET
collected with mixed waste)

33,28219.84%

Collected-for-Recycling from thecities by Formal Sector

2,581

1.54%

Total low-value stream PET
Bottles sold to Junk Shops

53,97732.17%

Total high-value stream PET
Bottles sold to Junk Shops

35.83%

21.95%

Calculated based on the above
valuesCalculated based on primarydata collected by the researchteam from Landfill Material
Pickers, Recyclables Collectors,
Street Material Pickers, Waste
Collectors, and Formal Sector
Collection (eg. Waste Banks in
Jakarta, MRFs in Metro Manila)

54.12%
36,827

Landfill
Rate

CollectedforRecycling
Rate

Calculated based on the above
valuesCalculated based on the above
valuesFULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIAAPPENDICES

Using the data gathered from these key cities, theGA Circular research team estimated national level
collected-for-recycling rates by accounting for thedifferent urban-rural composition68 of areas outside
the key cities studied, the relative waste collection
coverages between different areas, and the presenceof the informal sector. The collected-for-recycling rates

at the country level have an error margin of ± 15%.
The country rates are lower than the corresponding
city rates due to lower waste collection coverage andsmaller presence of the informal sector in non-urban
areas.

FIGURE 27: END DESTINATION OF POST-CONSUMER PET BOTTLES IN SIX COUNTRIES ACROSS
SOUTHEAST ASIA

Percentage of PET Bottle Market Input

100%

50%
64%
27%

0%

12%

28%

22%

21%
10%

25%

25%
46%

50%

32%

16%

38%
63%

69%

53%

30%
21%

100%
MyanmarEnvironmental Leakage (%)

Vietnam

The Philippines

Indonesia

Landfill (%)

Collected-for-recycling (%)

Thailand

Malaysia

Error margin

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74

APPENDICESAPPENDIX C: IMPACT OF RENEWABLE PLASTICS ON PET RECYCLING
AND EMERGING RENEWABLE ALTERNATIVES TO PET
Renewable plastics are made in whole or partially fromrenewable biological resources. For example, sugar
cane is processed to produce ethylene, which can thenbe used to manufacture polyethylene, the building blockof PET. Starch can be processed to produce lactic acidand subsequently polylactic acid (PLA), another widelyused renewable plastic. The properties of renewableplastics can vary considerably from material to material.
IMPACT OF RENEWABLE PLASTICS ON PETRECYCLING VALUE CHAINS69
PLA, is a versatile renewable plastic that featuresbarrier properties and is available in high-performance
grades that are a replacement for plastics used inpackaging applications such as PS (polystyrene) and PP(polypropylene). European Bioplastics, the associationof the bioplastics industry in Europe, estimates global
production capacities of PLA to grow by 60% by 2023
compared to 2018.70
Since PLA bottles look and feel similar to PET bottles,
recyclers often consider material identification between
the two difficult. So, both at the level of consumers
and of manual sorting, separation is not possible
unless an extra element is introduced, for example via
labelling. PLA is denser than water so in the flotation
tank any PLA fragments will eventually follow the PET

stream towards mechanical recycling. Because of this,the possibility of mixing PLA bottles and PET bottles
together exists. As a result, there is concern in therecycling community that PLA bottles, at high enoughlevels, would contaminate the PET recycling stream due
to chemical and thermal property differences. These
differences could affect downstream processing andfinal product properties. The inclusion of PLA bottles
is therefore considered to take away value in the PET
recycle stream by creating problems with sortation
efficiency, accuracy, and potential yield loss.71
Recent research in Europe is a helpful benchmark tounderstand the potential impact of PLA in PET streams
in Southeast Asia. European countries on average havesignificantly higher levels of source separation and thecollection infrastructure in more developed countries
is supported by optical recognition technologies. For
example, near-infrared (NIR) spectroscopy scanners
in sorting facilities can separate PET from PLA at
an efficiency of 86%-99.6%. Starting from the latest
available European consumption data on PLA (from2015) and a forecast consumption of PLA (in 2021),
the level of PLA estimated to occur in the bottle and themixed plastics fractions from household waste havebeen calculated as per the below table.

TABLE 5: PRODUCTION OF PET VERSUS PLA FROM 2015 TO 202172, 73
Application

PET (tonnes)

PLA (tonnes)

PLA/PET Ratio

Year

2015

2021

2016

2021

2015/ 20162021

Bottles

3,300,000

3,900,000

2,900*

4,200*

0.09%*

0.1%*

Note: * Lower end estimates

The overall numbers in the table reflect the fact that
production of both PET and PLA is expected to increase
towards 2021, with the increase of PLA relatively higher
than that of PET. This is reflected in the expected slightincrease of the concentrations of PLA in PET.
Issues with respect to transparency and discolorationof rPET in the presence of PLA are evident from PLA
contamination of 0.1% or even lower. By 2021, the
PLA / PET ratio in the bottle and mixed plastics fraction
is expected to hit this 0.1% threshold and begin tonegatively impact rPET quality. Therefore, further

removal of PLA through separate streams may be very
well required in the recycling chain in order to assurehigh-quality rPET.
Thus questions still remain on whether PLA bottles
can be sorted effectively in the current infrastructureeven in developed EU countries where sorting is
mandatory and supported by using optical recognition
technologies. If the status quo on collection and sortingof PET continues, PLA bottles can therefore be expected
to become a contaminant in PET streams in Southeast
Asia in the future.

FULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIAAPPENDICESAN UPCOMING RENEWABLE ALTERNATIVE TO PET74
Renewable plastics, including renewable PET bottles
have begun to enter commercial production and are
expected to establish significant market share over the
next five years in Asia Pacific. Intentions to increase
global production capacities for renewable PET,
however, have not been realised at the rate predicted
in previous years. Instead, the focus has shifted to thedevelopment of PEF (polyethylene furanoate), a newpolymer that is expected to enter the market in 2023.
PEF is comparable to PET in terms of functionality
and unlike fossil fuel-based PET, PEF is 100% fromrenewable sources. The most particular feature of
PEF is its enhanced barrier properties, for instance, forcarbon dioxide and oxygen, making the material ideal
for soft drink bottles and food packaging. Currently, PEF
is not available on the global market, but is expected to
be available imminently given the announced startup
of Synvina in Antwerp, a joint venture of BASF and
Avantium.

The impact of PEF on the mechanical recyclingof PET has been investigated: one source statesthat contamination of up to at least 2% has been
demonstrated not to lead to any negative impact onrPET quality, e.g., no negative impact on haze, colour
and other properties. In this context, it is relevant tolearn that Synvina has proactively approached the
EPBP (European PET Bottle Platform, a voluntaryindustry initiative comprising of technical experts in thefield of PET production, design and recycling), to assess
the impact of PEF on the existing recycling chain of PET
bottles, and has obtained a conditional ‘approval’ formarket entrance from this entity. Based on dedicatedstudies, the EPBP concluded that until a market
penetration of 2% is reached there will be no issues
with PEF ending up in PET streams. For larger market
penetrations, either additional tests or the developmentof a separate collection and recycling system for PEF
bottles will need to be in place in order to further
anticipate any negative impact on rPET quality.

TABLE 6: MELTING POINT OF PET, PLA AND PEF75

Density (kg/m3)

Melting Point(°C)

Polyethylene terephthalate(PET)

1,350–1,390

255

Polylactic acid (PLA)

1,200-1,450

155-165

Polyethylene furanoate(PEF)

1,400-1,550

225

Plastic Type

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76

APPENDICESAPPENDIX D: SOURCE SEPARATION AND SEPARATE COLLECTION
SOURCE SEPARATION
Source separation is the separation of the waste into its
recyclable and non-recyclable components, as opposed
to a mixed stream comprising of all municipal waste.
A source separation policy calls for the separationof waste at the point of disposal or collection toallow for improved recovery of material and reduced
contamination. This is especially favourable in thecase of packaging materials where clean and sorted
packaging could be recovered for reuse, recycling or
energy recovery in a more efficient manner. A source
separation policy must go hand in hand with some formof a separate collection policy.
SEPARATE COLLECTION
Separate collection is the collection of separated waste,
as separate streams, without commingling them, forfurther separation and allocation to different recovery
solutions. Separate collection of packaging waste not
only channels such waste into the appropriate recovery

streams, it also allows for the collector (formal orinformal) to recover the value retained in the discarded
packaging material.
EFFECTIVE IMPLEMENTATION
Convenience and incentive to consumers/waste
separators along with awareness play a big role inensuring that the above two policies are effective.
The level of convenience is determined by existing
infrastructure such as door-to-door collection, curbside
collection and collection centres. Incentives provided
to the consumers/waste separators include reduced
cost of collection for separated waste, deposit refund,compensation for recyclable materials. Awarenesscampaigns include providing information regarding theavailable infrastructure, how to best use it, as well as
the building appreciation for the intrinsic value retainedin packaging materials.

APPENDIX E: PERFORMANCE OF INDUSTRY-LED, VOLUNTARY, 			
AND MANDATORY PROSFIGURE 28: NATIONAL COLLECTION-FOR-RECYCLINGRATES FOR PET BEVERAGE BOTTLES IN MEXICO,SOUTH AFRICA, JAPAN, AND BELGIUM76, 77, 78, 79, 80, 81
100%

90%
83%

75%

69%

71%

70%

76%

74%

The four PROs are: Fost Plus (Belgium), JCPRA (Japan),
PETCO (South Africa) and ECOCE (Mexico). While
FostPlus and JCPRA have achieved high collectedfor-recycling rates through a government-mandated
system, ECOCE and PETCO rely on a voluntary,industry-led model.

57%

50%

25%

16%
9%

16%
4%

0%
~ Year 1
ECOCE (Mexico)
JCPRA (Japan)~ Year 15

Four PROs were chosen for benchmarking and toobtain knowledge and insights for Southeast Asia. The
benchmarking criteria were: (I) successful track record
in increasing packaging recycling rates (including for
PET); (II) ability to include other packaging types orwork successfully alongside PROs focusing on otherpackaging types in the country; (III) maturity in terms ofyears; (IV) level of government recognition.

~ Year 20

PETCO (South Africa)

The chart on the left shows the increase in the rate 		of collected-for-recycling of PET bottles for these 		
four PROs.

FostPlus (Belgium)

Note: Rates are rounded to nearest % for ease of reading.
Where data for the year was not available, the nearest year ofavailable data has been used. Year 20 for ECOCE (Mexico) andPETCO (South Africa) are based on targets for 2022 and 2024
respectively. All other years are actuals.

FULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIAAPPENDICES

The table below summarises the key features and key information gathered from the 4 PROs:

TABLE 7: SUMMARY OF MANDATORY & VOLUNTARY INDUSTRY-LED PRO SYSTEMS82, 83, 84, 85, 86
MexicoSouth Africa

Japan

Belgium

ECOCE

PETCO

JCPRA

FOSTPLUS

2002

2004

1995

1994

Voluntary or Mandatory

Voluntary, industry-led

Voluntary, industry-led

Legislation mandated

Legislation mandated

PET Market Input (Tonnes in 2017)

768,000 (450,000 bymember companies)

167,000

587,350

44,00087 (42,500 bymember companies)

PET Collected-for-recycling (2017)445,000

96,650541,250

70,500PET Collected-for-recycling (2017)58% nationwide

65% nationwide

92.2% nationwide

82.9% nationwide

US$0.02/kg

US$0.03-0.05/kg

US$0.01/kg

US$0.24/kg~ US$6-7 million~ US$6 million

US$6.4 million

US$10.4 million

Yes

Yes

No

No

Revenue

Companies pay an annual
fee based on material type
and tonnage.

Companies pay a quarterly
fee for PET based on
tonnage.

Companies pay an annual
fee based on material type
and tonnage.

Companies pay an annual
fee based on material type
and tonnage. Material sales
also provides revenue

Cost Model

Price incentive to recyclers
based on actual annual
costs required to achieve
profitable collection andrecycling.

Price incentive to recyclers
negotiated and thencontracted - with the option
to review in conditionsof flux.

Price incentive to recyclers
based on estimatedcosts. Surplus amounts
go partially back tocompanies and partially tomunicipalities to incentivise
higher quality separation.

Operational costs of waste
collection are covered
through the system.
Revenue from material
sales is used to partially
offset these costs.

Partners

Aggregators, Recyclers,Informal Collectors

Recyclers, Informal
Collectors

Municipalities, Recyclers

Municipalities, Recyclers

Material Streams

PET, HDPE, Flexible
Plastics, Glass, Metal,
Beverage Cartons

PET. Other materials
are currently coveredby other PROs

All post-consumer
packaging materials

All post-consumer
packaging materials

PRO

Date Established

PRO membership fee per kilogram for
PET bottles (2017)
Budget available to PRO throughparticipation fee only (2017)
Informal Sector Participation•

Key Learnings••

Pulling the material
through priceincentive at therecycling stage ofthe value chain,and developing
local recycling
infrastructure andofftake agreements.

•

Having morethan 50% of the
PET industry
represented under
the ECOCE.

•

Getting ECOCE
member andfee contribution
recognised bygovernment asfulfilling producer
responsibility.

Pulling the material
through priceincentive at therecycling stage ofthe value chain,and developing
local recycling
infrastructure andofftake agreements.
Having morethan 50% of the
PET industry
represented under
the PETCO.

•

Designharmonisation
among producers(for e.g. phasing out
coloured PET)•

Municipalities
support JCPRA
efforts by enforcing
source separation.
In return,municipalities
are incentivised
economically tohave high-quality
separation of
packaging waste.

•

Municipalities
support Fost Plusby enforcing source
separation which
lowers the overall
cost of sorting
recyclables frommixed waste andtherefore makes
recycling more
profitable.

•

Having single PRO
which oversees
EPR obligations
for all packaging
types makes it costeffective comparedto having multiple
PROs.

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78

APPENDICESAPPENDIX F: ANALYSIS OF TOOLS UNDER MANDATORYEPR AND VOLUNTARY INDUSTRY-LED EFFORTS
The tables below list multiple tools available under mandatory EPR systems and voluntary industry-led efforts andelaborates on their respective advantages and challenges.

TABLE 8: TOOLS AVAILABLE FOR MANDATORY EPR OBLIGATIONS88
Tools
Advanced Fees

Description

Advantages

Challenges

Under Advanced Fees, fees are leviedon products at purchase based on
the estimated costs of collection andtreatment. Compliance schemes in theform of an organisation is setup where
packaging producers are responsible
for organizing and funding (partially or
fully) the collection, sorting, recycling andrecovery of used packaging materials.

Industry has control over the
implementation of the recycling strategy.

Competition between multiple recovery
organizations can lead to inefficiencies
resulting in lower recovery rates. So it isimportant to have ideally only one recovery
organisation operating at a national level
which covers all major packaging types.

Business focus (particularly in not-for-profit
systems) can lead to more efficiency thanstate-run systems.
Recycling targets are typically met reliably,
if the system is set up well.

Collection targets towards 90% require
highly educated and motivated consumers
with highly developed and consumerfriendly infrastructure.

Direct consumer incentive to return
packaging and addresses littering ofbeverage packaging.

Typically does not include all material
types.

Compliance schemes are typicallyestablished by a group of obliged industry
companies that own and operate themon a not-for-profit basis under a recovery
organisation.
Deposit Refund System(DRS)

DRS either consists of manual take-backand/or it is supported by reverse vending
machines. The point of redemption canbe located at a retailer or at redemption
centers and take-back points. The deposit(the incentive) is usually clearly labeled.
The deposit is refunded to the consumer
when the empty package is returned.

Leads to high collection and recycling ofbeverage containers within a short time.

Detailed auditing of the system could be achallenge in ASEAN countries.
Could adversely affect informal sector leading to reduced recycling.
Any implementation is recommended to be
in tandem with other tools/policies which
cover the full packaging spectrum.

Recycling Targets (alsoknown as Product TakeBack Requirements)

Recycling targets require producers to hit
annual recycling targets for specific typesof packaging. Targets are usually set inpercentage points.
Often implemented together with othereconomic tools such as Advanced Fees,DRS or Taxation.

Recycled Content Targets

Certificate Trading

Taxation

Provides a clear, objective measure of
success.
Incentivises the industry to ensure theentire value chain is working collectively tomeet the targets.

It is important to know what a certain
percentage means in weight collected andthe collection rate required to achieve therecycling rate target. Recycling targets
will fail in the absence of independent,
auditable reporting.

Does not necessarily lead to an increaseof domestic recycling rates as recycledcontent can be sourced from international
markets.

Recycled content targets require producers
to use a specific percentage of recycled
packaging content (for e.g. 30% foodgrade rPET in their packaging. It can beused alongside other design changes suchas lightweighting. Often combined withother economic tools such as Advanced
Fees or Taxation.

Encourages the entire industry to adopt thetargets thus preventing free riders.

The recycling industry offers packaging
material providers, fillers and packers withguaranteed recycling capacities. Any filler,
packer or importer can buy the certificatesneeded to ensure that the equivalent of the
packaging material placed in the market
will have a recycling facility where it canbe recycled.

If this system is properly implemented andenforced, it may ensure recycling facilities
and sufficient recycling infrastructure.

It may produce false reporting andfraudulent behavior.

A tax based on the amount of packaging
produced by the industry (packagingtax) or amount of packaging consumed(product tax). Implemented by thegovernment and run as a state enterprisesolution that is not controlled by theindustry.

No separate schemes needed to be setup
and run by industry.

The tax collected might not be spent
towards improving waste collection andrecycling infrastructure.

If implemented well, can improve domesticcollection and recycling industry.

Taxes charged directly to consumers may
create awareness on the recycling issue.

Expected to be challenging for countries
with low collection rates to jump straightto high collection rates for food-grade
recycled plastic.

Does not support collection.

Packaging taxes can be implemented asa punitive measure for not meeting other
EPR obligations such as recycling rate
targets or recycled content usage targets.

FULL CIRCLE: ACCELERATING THE CIRCULAR ECONOMY FOR POST-CONSUMER PET BOTTLES IN SOUTHEAST ASIAAPPENDICESTABLE 9: TOOLS AVAILABLE FOR VOLUNTARY MEASURES BY INDUSTRY89
Tools

Description

Buy-back (directacquisition of packaging)

A company voluntarily invests in creatinga collection system for a specific material
type to meet its recycling obligations.

Advantages
Single company initiative - can movefaster.
Works when the company has a significant
market share which justifies the large
investment in recycling.

Challenges
Not an industry-led system thus has
limitations on the increase in recycling ratethat can be achieved.
Government may decide to impose ablanket plastic tax since other plastic
streams are not covered.
Only works for certain materials. No ability
to address overall plastics challenge.

Voluntary industry-led
Packaging Recovery
Organisation (PRO)

Deposit Refund System(DRS)

A voluntary, industry-led initiative where
major consumer goods companies
contribute to a pool of funds which arethen used to implement effective andtargeted recycling initiatives.

Works with existing informal sector.

An industry-led packaging recovery
organisation (PRO) is setup where
packaging producers are responsible fororganizing and funding the collection,sorting, recycling and recovery of used
packaging materials.

Industry can set targets proactively without
government intervention.

As mentioned in the main section of thereport, DRS can also be implemented on a
voluntary basis by industry.

Direct consumer incentive to return
packaging and addresses littering ofbeverage packaging.

DRS either consists of manual take-backand/or it is supported by reverse vending
machines. The point of redemption canbe located at a retailer or at redemption
centers and take-back points. The deposit(the incentive) is usually clearly labeled.
The deposit is refunded to the consumer
when the empty package is returned.

Leads to high collection and recycling ofbeverage containers within a short time.

Allows industry flexibility to create its own
initiatives across all packaging / material
streams.

Voluntary nature means that somecompanies will be able to freeload off thework of the participating companies.

Typically does not include all material
types.
Detailed auditing of the system could be achallenge in ASEAN countries.
Could adversely affect informal sector leading to reduced recycling.

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APPENDICESAPPENDIX G: KEY ANALYTICAL ASSUMPTIONS FOR RECOMMENDED ROADMAPThe recommended roadmap described in this reportto achieve 100% collected-for-recycling rates of PET
bottles in Southeast Asia is the result of detailed
research, analysis and stakeholder interviews. By itsvery nature, the roadmap requires assumptions which
are laid out below. The time periods are short-term(2020-2023), mid-term (2024-2026) and long-term(2027-2030) as highlighted in sections 3.0 and 3.4.
The industry-led PRO, coupled with supportive
policies and investments, contributes directly to 50%of the collected-for-recycling rate by 2030:
The 50% contribution is based on the success stories
and growth trajectories of PROs in comparable
developing countries such as Mexico and South Africa.
Mexico’s PRO (ECOCE) increased the country-widecollected-for-recycling rate for PET bottles from 9% to60% (i.e. 51 percentage points) in the first 10 years ofoperation, while South Africa increased it from 16% to52% (i.e. 36 percentage points) over the first 10 years.
However, both Mexico and South Africa did not havea strong local recycling industry for PET prior to theestablishment of the PROs.
It must be noted that the modelling assumes
supportive policies and external investments as per
the recommendations in this pillar. In both Mexico andSouth Africa, beyond the price incentive and related
measures to boost the value chain and domestic
recycling industry, all the supporting policies andinvestments recommended as part of this pillar haveexisted. This includes:• Investments in domestic recycling capacity, e.g.
US$339 million has been invested into PET recyclers
in Mexico, per section 3.1 of this report.
• Supportive policies and the use of recycled content
in the production of new packaging, therefore
creating a demand for recyclate. South Africa
and Mexico use recycled content in both food andnon-food applications. If use of recycled content
in packaging were not possible, the collected-forrecycling rates due to PRO efforts would be reduced
as there would be less demand for recyclate. As partof this, member companies of the PRO sign offtakeagreements with recyclers that partner with thePROs. These offtake agreements help companies
meet their commitments to use recycled content
in their packaging and, as above, contribute to theincrease in the collection-for-recycling rate due tothe PRO.

Southeast Asia has three advantages over Mexicoand South Africa:
1. A higher status quo collection-for-recycling rate
for PET bottles (26% in Southeast Asia comparedto Mexico’s 9% and South Africa’s 16% before thePROs began operations) meaning that there is 		
less inertia;
2. A more developed local PET recycling industry, whichenables stronger pull efforts to boost the value chain;
3. A stronger demand for recycled content in Southeast
Asia is projected until 2030 compared to South
Africa and Mexico in the early 2000s.
It has thus been determined that the actions of thePROs between 2020 and 2030 in the six Southeast
Asian countries can directly contribute to 50% of thecollected-for-recycling rate in 2030.
National government and municipal efforts contributeto 25% of the collection-for-recycling rate in 2030,
with the majority of these gains in the long-term:
As illustrated throughout this report in sections 2.4,
2.5 and 3.2.2, the key challenge faced by national
governments and municipalities is a funding
gap for waste management. This challenges theachievement of 100% waste collection coverageand many municipalities perceive that it affects theimplementation of source separation and separate
collection programs. As highlighted in section 3.3.1,
source separation and separate collection have taken
between two and seven years to achieve success inmany Southeast Asia and Indian cities.
Thus, in the short- and mid-term, implementationand enforcement of source separation and separate
collection begin in tier 1 cities in each country over the
first years from 2020 to 2026, whereby the focus isa proof of concept and proven roll out levers for eachcountry. As the funding gap will require time to beclosed, waste collection coverage is gradually increased
from the status quo in these cities in tandem with thesource separation and separate collection programmes.
As the funding gap will require time to be closed, thescale up of waste collection to achieve 100% waste
collection coverage along with some supporting source
separation and separate collection programs areprojected to have the greatest gains in the long-term(between 2027 and 2030).

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Improved packaging design contributes more in the
short- and mid-term:
As illustrated in section 2.3 of this report, across the six
countries studied, an estimated 15% of PET bottles arecoloured. Currently, these bottles are valued US$84/
tonne less on average than clear PET. This leads tolower collection rates for coloured PET than clear PET
and other challenges as listed in section 2.3. If all thisPET were to become clear PET, this would lead toincreased collection by the existing informal sector, even
without any other supporting initiatives.
Other design challenges that limit the current collectedfor-recycling rates are PVC sleeves that contaminate
the recycling process due to the difficulty of separating
PVC from PET after the flaking stage and poorly
designed labels that are difficult to remove manually
by informal sector workers. If these elements were
to be redesigned, it would lead to better operational
efficiencies, and consequently, better prices for postconsumer PET and higher collected-for-recycling rates.
It is projected that fast short-term gains in thecollected-for-recycling rate can be achieved based onlarge companies implementing improved packaging
design (both phase out of coloured PET and phaseout of PVC sleeves and any PVC in other packaging
applications). This enables the existing informal
sector workers to collect and sell more PET bottles
than the status quo. In the mid-term, the small andmedium-sized companies should also implement thesestandards, making it easier for the collection, sorting,and processing of PET bottles. In the long-term, since
the improved design practices become status quo,
further gains do not come from design alone. Key
roles will be played by the industry-led PROs andnational governments/municipalities as described in
the previous sections.
The long-term role of packaging design is to ensurethat packaging materials and design are consistently
updated to match new developments in collection andrecycling technologies, and thus minor further gains areprojected for the long term (2027-2030).

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Disclaimer
The facts set out in this report are obtained fromsources which we believe to be reliable. However, we
accept no legal liability of any kind for the publicationof content, nor any information contained therein nor
conclusions drawn by any party from it.
GA Circular acknowledges product, service andcompany names referred to in this report, many ofwhich are trade names, service marks, trademarks orregistered trademarks. All photos featured in this reportare originally taken by GA Circular unless otherwise
stated.
The information contained in this report is madeavailable for non-commercial use with attribution to GA
Circular. This report should not be reproduced in whole
or in part for any commercial use without the priorwritten consent of the authors.

To quote this report, use the following reference:
GA Circular, ‘Full Circle: Accelerating the Circular
Economy for Post-Consumer PET Bottles in Southeast
Asia’ (2019, www.gacircular.com/full-circle).

For queries or requests please contact the researchteam via email at reports@gacircular.com

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ENDNOTES

Endnotes
1

Jambeck, J.R., Andrady, A., Geyer, R., Narayan, R.,
Perryman, M., Siegler, T., Wilcox, C., Lavender Law, K. ,(2015). Plastic waste inputs from land into the ocean,
Science, 347

2

Based on GA Circular On-ground Research and Analysis(2017-2019)3

Based on GA Circular On-ground Research and Analysis(2017-2019)4

Based on GA Circular On-ground Research and Analysis(2017-2019)5

Based on GA Circular On-ground Research and Analysis(2017-2019)6

Credit: GA Circular7

Credit: GA Circular8

Credit: GA Circular

9

Based on GA Circular On-ground Research and Analysis(2017-2019)

10 Based on GA Circular On-ground Research andAnalysis (2017-2019). Average Incomes sourced fromtradingeconomics.com/
11 Based on GA Circular Research and Analysis (2017-2019)
12 Based on GA Circular Research and Analysis (2017-2019)
13 Based on GA Circular Research and Analysis (2017-2019)
14 Based on GA Circular Research and Analysis 2017-2019from several industry and trade data sources
15 Based on GA Circular Research and Analysis 2017-2019from several industry and trade data sources
16 Based on GA Circular On-ground Research and Analysis(2017-2019)17 Based on GA Circular On-ground Research and Analysis(2017-2019)18 China’s National Sword Policy: Impacts and Opportunities
for U.S. Local Governments and Industry Stakeholders.
(2019).
19 Staub, C. (2019). China: Plastic imports down 99 percent,paper down a third - Resource Recycling. [online]
Resource Recycling. Available at: resource-recycling.com/
recycling/2019/01/29/china-plastic-imports-down-99percent-paper-down-a-third/ [Accessed 3 Sep. 2019].

23 For example, Malaysia’s PET collected-for-recycling rateof 15% was applied to the amount of coloured PET in
Malaysia, and subtracted from the current 5% collectedfor-recycling rate of coloured PET in the country to arrive at
the additional amount of PET that would be recycled if all
this PET was clear instead.
24 Based on GA Circular On-ground Research and Analysis(2017-2019)
25 Based on GA Circular On-ground Research and Analysis(2017-2019)26 Alaerts, L., Augustinus, M., & Van Acker, K. (2018). Impact
of Bio-Based Plastics on Current Recycling of Plastics.
Sustainability, 10(5), 1487. doi: 10.3390/su10051487
27 Ellen MacArthur Foundation, SCP/RAC. (2017). The New
Plastics Economy: Rethinking the Future of Plastics &Catalysing Action. Ellen MacArthur Foundation. Retrieved
from www.ellenmacarthurfoundation.org/publications/thenew-plastics-economy-rethinking-the-future-of-plasticscatalysing-action
28 The World Bank. (2018). What a Waste 2.0: A Global
Snapshot of Solid Waste Management to 2050
[Image]. Retrieved from www.worldbank.org/en/news/
infographic/2018/09/20/what-a-waste-20-a-globalsnapshot-of-solid-waste-management-to-2050
29 Based on interview with Waste4Change on September
2018
30 DENR eyes more recycling facilities in Metro Manila.
(2019). Retrieved 30 August 2019, from www.pna.gov.ph/articles/1048865
31 SWCorp: Waste separation delayed at high-rises. (2019).
Retrieved 30 August 2019, from www.thestar.com.my/
metro/metro-news/2018/01/29/swcorp-waste-separationdelayed-at-highrises/
32 Waste segregation enforcement starts today | Malay Mail.
(2019). Retrieved 30 August 2019, from www.malaymail.
com/news/malaysia/2016/06/01/waste-segregationenforcement-starts-today/1131527
33 Philippines Solid Waste - At A Glance. (2017). [Ebook].
Retrieved from www.senate.gov.ph/publications/SEPO/AAG_Philippine%20Solid%20Wastes_Nov2017.pdf
34 Based on GA Circular On-ground Research and Analysis(2017-2019)20 Data extracted from UN Comtrade (comtrade.un.org/data)[Accessed 3 Sep. 2019].

35 Based on GA Circular On-ground Research and Analysis(2017-2019)

21 Based on GA Circular On-ground Research and Analysis(2017-2019)36 Petco (2017). A New Way of Thinking - Review of Petco
Activities 2017. [online] Petco. Available at: petco.co.za/
wp-content/uploads/2018/06/PETCO-2017-AnnualReview_FINAL_webview.pdf [Accessed 30 Sep. 2018]

22 Based on GA Circular On-ground Research and Analysis(2017-2019)

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ENDNOTES

37 Petco (2018). PET Industry Waste Management
Plan Shared-Cost Plan rev00. [online] petco.
Available at: static1.squarespace.com/
static/54b408b1e4b03957d1610441/t/5ba4cef
1f9619a23ee295c46/1537527545092/201809_
PETCO+IndWMP+Shared+Cost+Plan+rev00.pdf [Accessed
30 Sep. 2018]
38 Interviews and presentations shared by ECOCE andFEMSA during 2018-2019
39 Interviews with and presentations shared by ECOCE andFEMSA during 2018-2019
40 Petco (2017). A New Way of Thinking - Review of Petco
Activities 2017. [online] Petco. Available at: petco.co.za/
wp-content/uploads/2018/06/PETCO-2017-AnnualReview_FINAL_webview.pdf [Accessed 15 Jun. 2019].
41 OECD (2016), Extended Producer Responsibility: Updated
Guidance for Efficient Waste Management, OECD
Publishing, Paris. dx.doi.org/10.1787/9789264256385-en
42 Developed by GA Circular based on GA Circular On-groundResearch, Analysis and interviews of EPR experts (20172019)43 Developed by GA Circular
44 European Commission. (2019). Circular economy - InternalMarket, Industry, Entrepreneurship and SMEs - European
Commission. [online] Available at: ec.europa.eu/growth/industry/sustainability/circular-economy_en [Accessed 2
Sep. 2019].
45 Ministry of Public Health. (2006). Notification of the
Ministry of Public Health (No. 295) B.E. 2548 RE: Qualities
or standard for container made from plastic. Retrieved
from food.fda.moph.go.th/law/data/announ_moph/V.
English/No.295-48%20Qualities%20or%20standard%20
for%20container%20made%20from%20plastic.pdf
46 The World Bank. (2018). What a Waste 2.0: A Global
Snapshot of Solid Waste Management to 2050
[Image]. Retrieved from www.worldbank.org/en/news/
infographic/2018/09/20/what-a-waste-20-a-globalsnapshot-of-solid-waste-management-to-2050
47 The World Bank. (2018). What a Waste 2.0: A Global
Snapshot of Solid Waste Management to 2050
[Image]. Retrieved from www.worldbank.org/en/news/
infographic/2018/09/20/what-a-waste-20-a-globalsnapshot-of-solid-waste-management-to-2050
48 World Bank (2018). Improvement of Solid Waste
Management to Support Regional and Metropolitan Cities.
49 Based on interviews with Pak Isanarto of Depok and Pak
Gubilar, Head of Sanitation Department of Depok, August
2019.
50 GA Circular (2017). Driving Solutions for Post-Consumer
Flexible Packaging in Asia. [online] GA Circular. Available
at: www.gacircular.com/publications/ [Accessed 30 June.
2019].

51 Based on interviews with Pak Isanarto of Depok and Pak
Gubilar, Head of Sanitation Department of Depok, August
2019.
52 Acrplus.org. (2019). New cross-analysis of “Pay-AsYou-Throw” schemes in 7 European municipalities:
potential and benefits under study. [online] Available
at: www.acrplus.org/en/online-resources/media/pressreleases/1351-new-cross-analysis-of-pay-as-you-throwschemes-in-7-european-municipalities-potential-andbenefits-under-study [Accessed 30 June. 2019]53 Based on interviews with Hasiru Dala, September 2019.
54 Henam, S. and Agarwal, R. (2019). Bengaluru orders
compulsory waste segregation by households, butchallenges remain. [online] Downtoearth.org.in. Available
at: www.downtoearth.org.in/news/waste/bengaluruorders-compulsory-waste-segregation-by-householdsbut-challenges-remain-57150 [Accessed Sep. 2019].
55 Based on GA Circular interviews with households in theFederal Territory of KL throughout 2018.
56 Crain Communications, I. (2019). CO2 emissions recycled
PET ‘significantly’ lower than previously assumed.
Retrieved 1 June 2019, from www.plasticsnewseurope.
com/article/20170809/PNE/170809890/co2-emissionsrecycled-pet-significantly-lower-than-previously-assumed
57 WRAP (2008). The carbon impact of bottling Australianwine in the UK: PET and glass bottles.
58 US EPA. (2018). Advancing Sustainable Materials
Management: Facts and Figures Report | US EPA. [online]
Available at: www.epa.gov/facts-and-figures-aboutmaterials-waste-and-recycling/advancing-sustainablematerials-management [Accessed 4 Sep. 2019].
59 Newsroom.Kunststoffverpackungen. (2019). Recycling inGermany: PET bottles setting the trend. [online] Available
at: newsroom.kunststoffverpackungen.de/2018/02/14/
recycling-in-germany-pet-bottles-setting-the-trend/[Accessed 4 Sep. 2019].
60 Danone. (2019). Danone Sustainability Report 2018.
61 The Coca-Cola Company. (2019). The Coca-Cola Company
2018 Business & Sustainability Report. Retrieved fromwww.coca-colacompany.com/content/dam/journey/us/
en/private/fileassets/pdf/2019/Coca-Cola-Business-andSustainability-Report.pdf
62 Based on GA Circular Research and Analysis (2017-2019)
63 Myanmar was not included as packaging unit level data for
Myanmar was not available
64 Based on GA Circular Research and Analysis (2017-2019)from industry and trade data sources
65 Jambeck, J.R., Andrady, A., Geyer, R., Narayan, R.,
Perryman, M., Siegler, T., Wilcox, C., Lavender Law, K. ,(2015). Plastic waste inputs from land into the ocean,
Science, 347

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ENDNOTES

66 Jambeck, J.R., Andrady, A., Geyer, R., Narayan, R.,
Perryman, M., Siegler, T., Wilcox, C., Lavender Law, K. ,(2015). Plastic waste inputs from land into the ocean,
Science, 347

78 Fostplus (2017). Annual Report 2017. [online] Fostplus.
Available at: www.fostplus.be/sites/default/files/Files/
Publicaties/fostplus_jaarverslag2017_en_low.pdf[Accessed 30 Sep. 2018]

67 Based on GA Circular Research and Analysis 2017-2019from several industry and trade data sources

79 Petco (2017). A New Way of Thinking - Review of Petco
Activities 2017. [online] Petco. Available at: petco.co.za/
wp-content/uploads/2018/06/PETCO-2017-AnnualReview_FINAL_webview.pdf [Accessed 30 Sep. 2018]

68 Rural areas tend to have lower consumption, poorer waste
collection coverage and lower informal sector involvement
as opposed to urban areas which make up the majority of
the nine cities studied.
69 Alaerts, L., Augustinus, M., & Van Acker, K. (2018). Impact
of Bio-Based Plastics on Current Recycling of Plastics.
Sustainability, 10(5), 1487. doi: 10.3390/su10051487
70 Bioplastics Market Data. Retrieved 19 September 2019,from www.european-bioplastics.org/market/
71 Using Near-Infrared Sorting to Recycle PLA Bottles.
(n.d.). [ebook] NatureWorks LLC. Available at: www.
natureworksllc.com/~/media/The_Ingeo_Journey/EndofLife_
Options/mech_recycling/20090708_NatureWorks_
UsingNIRSortingtoRecyclePLABottles_pdf.pdf [Accessed
10 Jul. 2019].
72 GA Circular Analysis (2017 - 2019) based on: Alaerts,
L., Augustinus, M., & Van Acker, K. (2018). Impact of
Bio-Based Plastics on Current Recycling of Plastics.
Sustainability, 10(5), 1487. doi: 10.3390/su10051487
73 Using Near-Infrared Sorting to Recycle PLA Bottles.
(n.d.). [ebook] NatureWorks LLC. Available at: www.
natureworksllc.com/~/media/The_Ingeo_Journey/EndofLife_
Options/mech_recycling/20090708_NatureWorks_
UsingNIRSortingtoRecyclePLABottles_pdf.pdf [Accessed
10 Jul. 2019].
74 Alaerts, L., Augustinus, M., & Van Acker, K. (2018). Impact
of Bio-Based Plastics on Current Recycling of Plastics.
Sustainability, 10(5), 1487. doi: 10.3390/su10051487
75 A Circular Analysis based on: Alaerts, L., Augustinus, M.,& Van Acker, K. (2018). Impact of Bio-Based Plastics on
Current Recycling of Plastics. Sustainability, 10(5), 1487.
doi: 10.3390/su10051487
76 The Japan Containers and Packing Recycling Association
Recycling Unit Cost and Coefficient table for 2017. (2017).
[ebook] The Japan Containers and Packaging Recycling
Association. Available at: www.jcpra.or.jp/Portals/0/
resource/eng/for2017.pdf [Accessed 30 Sep. 2018]
77 The Council for PET Bottle Recycling. (n.d.). Actual Volume
of Collected PET Bottles and Collection Rate/Uses of
Recycled PET Flakes | The Council for PET Bottle Recycling.
[online] Available at: www.petbottle-rec.gr.jp/english/
actual.html [Accessed 3 Sep. 2019]80 Petco (2018). PET Industry Waste Management
Plan Shared-Cost Plan rev00. [online] petco.
Available at: static1.squarespace.com/
static/54b408b1e4b03957d1610441/t/5ba4cef
1f9619a23ee295c46/1537527545092/201809_
PETCO+IndWMP+Shared+Cost+Plan+rev00.pdf [Accessed
30 Sep. 2018]
81 Interviews and presentations shared by ECOCE andFEMSA during 2018-2019
82 The Japan Containers and Packing Recycling Association
Recycling Unit Cost and Coefficient table for 2017. (2017).
[ebook] The Japan Containers and Packaging Recycling
Association. Available at: www.jcpra.or.jp/Portals/0/
resource/eng/for2017.pdf [Accessed 30 Sep. 2018]
83 The Council for PET Bottle Recycling. (n.d.). Actual Volume
of Collected PET Bottles and Collection Rate/Uses of
Recycled PET Flakes | The Council for PET Bottle Recycling.
[online] Available at: www.petbottle-rec.gr.jp/english/
actual.html [Accessed 10 Sep. 2018].
84 Fostplus (2017). Annual Report 2017. [online] Fostplus.
Available at: www.fostplus.be/sites/default/files/Files/
Publicaties/fostplus_jaarverslag2017_en_low.pdf[Accessed 30 Sep. 2018]85 Petco (2017). A New Way of Thinking - Review of Petco
Activities 2017. [online] Petco. Available at: petco.co.za/
wp-content/uploads/2018/06/PETCO-2017-AnnualReview_FINAL_webview.pdf [Accessed 30 Sep. 2018].
86 Petco (2018). PET Industry Waste Management
Plan Shared-Cost Plan rev00. [online] petco.
Available at: static1.squarespace.com/
static/54b408b1e4b03957d1610441/t/5ba4cef
1f9619a23ee295c46/1537527545092/201809_
PETCO+IndWMP+Shared+Cost+Plan+rev00.pdf [Accessed
30 Sep. 2018]87 Assuming 50% of all plastic bottles and flasks declared
by Fost Plus in 2017 is PET bottles and flasks. Rest is
assumed to be HDPE bottles and flasks.
88 Based on GA Circular Analysis (2017-2019)89 GA Circular Analysis (2017-2019)

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86

About GA Circular

Established in 2011, GA Circular is a researchand strategy advisory firm specialising in waste
management and recycling. We envision a world
without waste. We are based in Singapore andoperate across Asia, specifically in Southeast Asia andSouthwest Asia.

VALUE PROPOSITION
Proven Track Record
Our team has delivered projects throughout Asia andhas more than 25 years of collective experience in thefields of waste management and recycling.
Research and Strategy Expertise
Our expertise lies in determining baseline material flow
and value chain studies, policy evaluations, extended
producer responsibility guidance, source separation
pilots, waste audits, informal sector research, recycling
technology feasibility, behaviour change campaigns
and technical advisory for packaging recovery
organisations (PROs).
Extensive Networks and Relationships Across Asia
Our networks and relationships extend across Asia,
especially in Southeast Asia, with key stakeholders
including: national and local government, packaging,consumer goods, petrochemical and recycling
industries, industry coalitions, informal sector, recyclers,NGOs, multilateral institutions and academia.
Strong and Diverse Team
Our team’s technical expertise in environmental
engineering, economics, business and policy together
with on-ground expertise in Asia make GA Circular avaluable partner in tackling the global challenges of
packaging and food waste.

FIVE INTERLINKING SERVICES
Research and Data Analytics
Research and data analytics services include
regional and local waste management
landscape research, stakeholder mapping,material flow analysis, identifying existingvalue chain analysis, reviewing relevant local
government regulations and global trends.
Strategy and Policy Advisory
Strategy and policy advisory services include
development of business strategies andgovernment policy frameworks for intervention
and risk reduction plans in alignment withmaterial flow analysis, waste composition
studies, local requirements and regulations.
Specific strategies or policies include packaging
and food waste reduction, packaging and foodrecyclability, waste collection and recycling
targets and key performance indicators,
technology recommendations for recycling andfinancial investments required
Technical AssistanceTechnical assistance services includes
feasibility analysis, business model design
and implementation of six months to a multiyear deployments for waste management
and recycling infrastructure investments andextended producer responsibility (EPR) systems
Packaging Recovery Organisations
Packaging Recovery Organisation (PRO)services include workshops and strategy
development (business model, roadmap
and economics) for the formation of PROs
in Southeast Asian countries and technicalassistance in implementing value creation
mechanisms for the value chain.
Stakeholder Engagement
Stakeholder engagement services includes
designing stakeholder engagement andcommunications strategy for collection,
recycling and other circular economy initiatives.

www.gacircular.com

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gacircular.com