This blog is part four of eight in the scenario analysis series: Circular Economy 2030. To read Mission Circularity from the beginning, please click here.
“Mission Circularity – Turning linear into circular and waste into value” by FutureManagementGroup AG is a fictional piece, written from a futuristic lens. The story is about Riley Holmes, an investigative journalist, looking back on a time in which society committed to building a circular future.
In an attempt to understand how collection and recycling companies have experienced change over the past decade, I spoke with Warren Papilaya, CEO of Go-Waste, the leading waste management company in Indonesia, and Ki Seong-Eon, VP of TG Recycling, one of South Korea’s biggest recyclers. “A lot of progress has been made,” Papilaya began.
“The collection rate in the developed world is close to 100%. In developing countries, where infrastructural problems prevailed, much investment and effort has been put into exactly this deficit, and last year, a collection rate of 50% was achieved across the Global South. Ambitions for the coming 15 years up until 2045 are aiming towards catching up with the developed world and achieving an almost complete collection of plastic household waste.”
It is interesting how the way that collection is being carried out varies greatly between the regions of the world. Throughout the US and the EU, where infrastructure is well in place and thus the separation of waste streams can be addressed, about a third is collected in mixed waste, while almost half of plastic waste is collected in separate bins, and about 20% through deposit systems.
Papilaya pointed out, “A focus on separation of waste streams, at this moment, is rather unrealistic in most of the developing world. The infrastructure is not sophisticated enough for the complexity of the waste problem at hand. That is why in the developing world, about two-thirds of all plastic waste collection is through mixed waste and only about one-third is separated by the end consumer in separate bins or – rarely – in deposit systems.
So, the focus is much more on using advanced sorting technology to separate materials while keeping the convenience high for the end user. This is becoming increasingly important, as the growing wealth across emerging economies reduces the share of the informal sector, leaving the responsibility with collection and sorting businesses.”
Down the stream, in recycling, just so much has changed. Of all the plastic waste being produced across the developed world, more than half is recycled. In the last decade, we made a massive leap forward regarding true circularity.
More than 13% of all materials are recycled in a closed loop, i.e., recycled into products of equal quality but not necessarily the same function. That is almost seven times more than in 2020. However, the majority of materials is still downcycled. In the developing world, where collection rates are lower (50%), out of all plastic packaging waste produced, 12.5% is collected but not recycled and hence, winds up in landfills or incinerators. One-third is downcycled and about 6% is recycled in a closed loop. The varying level of success in collection may give the impression recycling plays a minor role in the developing world. But when accounting for the differences in collection rates, the relative amount is rather similar between the regions. So, the main challenge remains the collection of waste.
Ki, who is also a sustainability advisor to the South Korean government and a leading figure in recycling technology, clarified that the progress made in collection certainly contributed positively to recycling rates. Ki also confirmed what Eskelinen and Ukkonen had shared with me earlier, namely that technological advances and data transparency and accessibility, as well as public-private partnerships, have enabled much of the change that we see today. She explained: “Investors paid more attention to sustainable approaches, and transparency has become an indicator of reassurance. And while waste management companies may have taken a backseat in infrastructure investment, their significance does remain great.”
Ki added, “There are a lot of different polymers. There isn’t one solution. So, what we need now is a healthy balance of driving recycled content and recyclability – particularly towards more closed loop recycling, wherever the increasing recycling rates and great demand for recyclates in packaging justify such undertakings.” I was interested to know how recycling processes and technology developed, particularly with regards to the investments made by chemical companies.
“Mechanical recycling capacity has come a long way and grown substantially. However, its focus lies mostly with ’mainstream plastics’, whereas chemical companies have done well at complementing circular solutions where other processes are insufficient. This is why my personal outlook on the industry’s future is optimistic. With a lot of blood, sweat and tears shared equally among the actors in the value chain, everything will fall into place.”
It appears as if Murray’s initial statement about a more harmonized approach and healthy discourse rings true for the way other stakeholders perceive changes too. Worldviews appear not to differ anymore and a common understanding of how things should work seems to be shared by most actors – a strong focus on recycling as the dominant circularity strategy implies a stronger focus on collection and sorting and on companies that are increasingly delivering on their promises. Much like her industry partners I talked to, Ki Seong-Eon is confident about future developments and shared with me her belief that investments will continue to roll in as opportunities arise and the industry becomes more profitable. “Where it formerly took a long time before one received a return on investment, this is no longer the case – and businesses are starting to see that.”
This blog post concludes the “Mission Circularity – Turning linear into circular and waste into value”. To read more about the future of circularity in both developed and developing markets, download the TOMRA Circular Economy white paper entitled “Resource Recovery Playbook: expectations for the circular economy of 2030 and the steps required to achieve a sustainable future.” The publication features scenarios from FutureManagementGroup AG based on the expertise of stakeholders, diligent research and interviews with representatives from key value chains.
In upcoming blog posts, contributions from the FutureManagmentGroup AG will include alternative scenarios for the circular economy of 2030.
Enno Däneke | Managing Partner, FutureManagementGroup AG
Enno Däneke consults large enterprises and innovative medium-sized companies on future issues and supports them in developing their long-term strategies. In addition, Enno Däneke is keynote speaker at conferences across Europe and lecturer for business model innovation and future management at several universities.