SINGAPORE (ICIS)–Asia’s nascent embrace of the circular economy needs to overcome major challenges posed by the coronavirus pandemic, which continues to wreak economic havoc and is causing the region’s plastic waste to pile up.
The reform requires heavy investments that some may not be able to afford, particularly at this time.
Belt-tightening is the order of the day for most people and small- and medium -sized (SMEs) enterprises alike, except for governments, which must step up spending to spur economic activity, risking high levels of indebtedness to fund stimulus measures.
Priorities change during times of crisis.
In the era of the pandemic, which seems to be a long dark tunnel with no exit, survival tops that list, dislodging environmental concerns, particularly for countries under extreme financial difficulty.
“Don’t be in any doubt that the R&D [research and development] and reinvestment funds to create new energy and plastic waste systems will be huge,” ICIS senior Asia analyst John Richardson said.
The economic damage has been enormous as countries repeatedly go into paralyzing lockdowns in various forms to stem the tide of the pandemic.
“This [pandemic] has economically set the developing world back several years,” Richardson said.
The pandemic has ushered in an earnest pre-occupation with hygiene as the main line of defense, which entailed intensive use of plastics that go into masks and other personal protection equipment (PPE).
Accumulation of pandemic-related plastic wastes could not be quantified at this time but is certain to be huge, with the raging COVID-19 battle far from over.
“The pandemic has certainly slowed Asia’s progress into a circular economy,” ICIS analyst Joshua Tan said, citing a sharp increase in plastic consumption and the manpower and logistical issues that ensued in both the informal and formal collection of recyclables.
Regulations and policies on circular economy vary widely across countries in the region, with the industrialised economies of Japan and South Korea in the northeast at a more advanced stage of embracing the reform, while those in the southeast are lagging behind.
Sustainability may have been temporarily cast aside as some companies mobilise resources to ensure survival.
But this should not lull people into thinking that things could go back to the way they were. They must not.
A crisis provides an opportunity for change, with governments setting the right tone. This meant introduction of regulations.
“I believe legislations should serve to support the implementation of the targets and not a tool to enforce rules that leads to the targets; one supplements and directs, the other forces the hand,” Tan said.
CHINA TAKES LEAD IN ASIA EMERGING ECONOMIES
“China has a good blueprint for the rest of Asia to follow, less Japan and South Korea because they are already quite advance in their efforts,” Tan said.
Asia’s largest and the world’s second-biggest economy and an industrial powerhouse, China has been actively pursuing the reform in recent years.
Underscoring its seriousness is the inclusion of policies toward this effect in its 14th Five-Year Plan (2021-2025).
In July, China released its circular economy blueprint, which would entail improving recycling, resource utilisation, enhancing efficiency and bringing clean production in key industries including petrochemicals by 2025.
Among the goals set under the plan, energy consumption and water consumption per unit GDP will be reduced by 13.5% and 16%, respectively.
By 2025, the use of wastepaper and scrap steel will hit 60m tonnes and 320m tonnes, respectively, and the output of recycled non-ferrous metals will reach 20m tonnes. The value of resources recycling industry is projected to hit CNY5tr.
More than four years ago, China banned imports of 24 scrap materials, which displaced more than 100m tonnes of plastic wastes, according to ICIS data.
Consequently, southeast Asia came at the receiving end of massive plastic wastes from around the world during that year, prompting a review of regulations on these imports, as well are increased recycling efforts.
INDIA MAKES LITTLE HEADWAY
In India, bans on single-use plastics over the years and a planned eventual phase-out making little headway.
Implementation is uneven across various states.
Since 2018, around 19 of the south Asian country’s 28 states have imposed bans on single-use plastics, but implementation has had varying degrees of success.
Maharashtra, India’s second-populous state and and industrial hub, was one of the firsts to impose the ban in March 2018.
Previous attempts to impose a national ban on single-use plastics in October 2019 were unsuccessful following strong opposition from the plastics industry.
SE ASIA BARELY SCRATCHING THE SURFACE
Six of the 10-member ASEAN generate more than 31m tonnes of plastic wastes annually, according to the group.
“The sudden increase in single-use plastics and personal protective equipment during the COVID-19 crisis has put additional stress on countries working to tackle marine plastic debris,” ASEAN stated in May, upon the launch of the five-year ASEAN Regional Action Plan for Combating Marine Debris (2021-2025).
Contained in the plan are guidelines for countries to phase out single-use plastics, harmonize regional policies on recycling and plastics packaging standards, and strengthen regional measurement and monitoring of marine debris.
In Malaysia, the Philippines and Thailand, 75% or an equivalent of $6bn of the material value of plastics is being lost on an annual basis, according to the World Bank, which has commissioned a series of studies released in March this year on the untapped economic potential of plastics circularity in the region.
“Less than 1/4 of the total amount of key plastics resins available for recycling in Thailand, Malaysia and the Philippines are being recycled into valuable materials,” the multinational institution said.
Despite barriers to plastic recycling unique to each country, some general recommendations could be pursued such as increasing sorting efficiency of post-consumer collection of plastics and setting of recycled content targets across all major end-use applications, the World Bank said.
Mandating “design for recycling” standards for plastics, especially for packaging, encouraging increase in both mechanical and chemical recycling capacities and implementing of industry-specific requirements to increase waste collection rates were also recommended.
Restricting disposal of waste plastics in landfills and phase-out non-essential plastic items would also help, according to the World Bank.
Some countries, however, have yet to come up with their own circular economy blueprint.
The Philippines currently has “no integrated circular economy strategy or policy framework” but “general waste management laws and policies directly and/or indirectly relate to circular economy concepts and approaches”, said Gregorio Rafael Bueta, law school professor at the Ateneo de Manila and Asian Development Bank (ADB) consultant in a recent presentation.
Bueta made the presentation at the the ADB’s virtual conference on circular economy in emerging markets on 2 June.
On providing the legal framework for the reform in the Philippines, “there is a lack of follow-through on proposals on the part of legislators, government, and even civil society”, he said.
“Save for recent proposals on EPR [Extended Producer Responsibility] and circular economy, no serious push for circular economy law and policy [were made] in the past decade,” Bueta noted.
Bueta cited among the critical issues in this pursuit is the question of who will should the circular economy cost and its impact on consumer prices.
Reforms that hinge on legislation typically take years, belying the urgency of the undertaking.
Asia is unlikely to come up with the same strategy as Europe in embracing the reform.
“The focus should not be on a single uniform policy across the region, but rather the gradual buildup of strong local policies that will drive localized recycling industries,” ICIS’ Tan said.
“Given the diverse culture of each of these countries, it is likely that a unifying policy is not feasible soon,” he added.
THE BIG PICTURE
The need to pursue the circular economy reform just turned more urgent as human activity is accelerating the warming of the planet close to dangerous levels, as contained in the August report of the United Nations’ Intergovernmental Panel on Climate Change (IPCC)
“COVID-19 recovery spending must be aligned with the goals of the Paris Agreement [on Climate Change]. And the decade-old promise to mobilise $100 billion annually to support mitigation and adaptation in developing countries must be met,” UN secretary general Antonio Gutteres had said.
Nonetheless, there is a big divide in realistic emissions compliance between industrialised and developing economies, under which category most of Asia falls.
“Disappointingly, far too little of the thinking and planning over climate change considered the needs of the developing world,” ICIS consultant Richardson said.
“Even before the pandemic, developing economies faced the much more immediate challenges of providing basic needs – decent healthcare, road and other infrastructure, sufficient power supply, potable water and food etc. These were always going to be bigger priorities than cutting back on carbon emissions,” he said.
Plastic consumption is projected to spike in the developing world over the next 10 years.
“Making enough, say, PE [polyethylene] to meet developing world demand was therefore already – before the pandemic – a bigger priority than carbon emissions (this circles back to the number one priority of better satisfying basic needs such as sanitation and water pipes),” he said.
“The region [Asia] is still in its infancy when it comes to solid waste management,” ICIS analyst Tan said.
It is possible that an entirely different system would emerge in the region compared with those in the EU, which is in a more advanced stage.
“I believe the culture here in Asia is different and therefore the plastic recycling system that it will eventually develop will be different as well,” Tan said.
Whatever form it might take, it is imperative that the process begin in earnest following the UN’s alarming report on climate change.
Asia is stepping in the right direction, but much of the region has yet to work on enriching the soil on which the reform is planted, but there’s a pest gnawing at the roots.
Packaging 360 is a comprehensive knowledge sharing ecosystem for the Indian packaging industry. Our services include an online content platform to deliver news, insights and case studies; organising conferences seminars and customised training; Providing Bespoke Project Consulting, Market Research and Intelligence.