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Plastic recycling industry needs more govt support to help Indonesia reach lofty goal

Jakarta Post - December 10, 2020

Nina Loasana, Jakarta – The plastic recycling industry, a key player in the country's ambitious goal to cut waste by 30 percent and marine plastic debris by 70 percent by 2025, faces mounting challenges that hinder its progress to recycle more of the 4.8 million tons of mismanaged plastic produced in the country each year.

Wilson Pandhika, the secretary-general of Indonesian Plastic Recyclers – an association of 120 plastic recycling businesses players – said one of the major challenges for Indonesia's recycling industry was its heavy reliance on the informal sector.

"This causes an absence of reliable data and management systems, which leads to our inability to design a robust supply chain system," Wilson said in a Jakpost Up Close webinar on Wednesday.

The webinar, titled "Establishing Best Practices for Plastic Recycling", is the second part of Jakpost Up Close's Circular Economy webinar series held in collaboration with Coca-Cola Indonesia.

Wilson went on to say that, due to the inefficiencies' of informal waste collectors, the convoluted supply chain and a lot of middlemen involved in the process, recyclers had to pay quite a high price to obtain plastic waste.

As most plastic waste is not separated from the source and contains high levels of contamination, recyclers need to bear high processing costs. "The impurities also make it difficult for us to produce recycled plastic of the same quality as virgin resin," Wilson said.

Furthermore, the public still has an unfavorable perception of products made from recycled plastic, with some regarding them as smelly, of lower quality or otherwise inferior to products made from virgin resin.

"These factors leave limited room for growth for plastic recyclers in Indonesia. Therefore, we do not have too much financial ability to invest in more advanced technology and machinery to produce higher-quality products," Wilson further stated.

He expressed hope that the government would provide better support for the recycling industry through various measures, such as promoting the use of recycled plastic products, increasing recycling rates, improving the recyclability of goods and plastic packaging and making recycled content mandatory in certain plastic products.

Industry Ministry downstream chemical and pharmaceutical industry director Muhammad Taufiq said the government had set up fiscal incentives to support plastic recycling and was currently formulating more regulations to boost the industry's growth.

"For example, the Environment and Forestry Ministry has created a regulation that allows green industries to have easier access to bank loans," Taufiq said.

Taufiq said the ministry was planning to provide help to small and medium recycling businesses in the form of tools and machinery.

The ministry is also proposing to the Finance Ministry to abolish the 10 percent value added tax (PPN) for the plastic recycling industry.

"We are also formulating a regulation to encourage the use of recycled PET in the beverage industry. We hope these measures will create more recycling businesses and have a multiplier effect to increase the number of waste pickers and junk shops as well," Taufiq said.

According to Taufiq, nationwide demand for plastic raw material amounts to 5.6 million tons per year, while the domestic industry can only produce 2.3 million tons of virgin plastic per year.

"To fill the needs of the plastic industry, we import an average 1.6 million tons of virgin resin every year. Meanwhile, the recycling industry contributes 1.1 million tons of recycled plastic per year," he said.

To fill the gaps and increase its utility, the recycling industry imported some 800,000 tons of plastic waste every year. It would be possible to meet the 800,000 tons locally by maximizing the recycling of plastic waste.

Triyono Prijosoesilo, public affairs, communication and sustainability director of Coca-Cola Indonesia and secretary general of the Packaging and Recycling Association for Indonesia's Sustainable Environment (PRAISE), said 48 percent of total plastic waste in the country ended up being openly burned instead of being recycled.

"A 2017 survey [...] showed that only around 10 percent of plastic waste in the country is recycled," he said.

Triyono explained that a large portion of mismanaged plastic waste came from rural and remote areas due to a lack of waste collection infrastructure there, with 61 and 64 percent, respectively, ending up openly burned.

"I think this is the big task for Indonesia: Improving our waste-collection system, especially in rural and remote areas," he said.

Source: https://www.thejakartapost.com/news/2020/12/10/plastic-recycling-industry-needs-more-govt-support-to-help-indonesia-reach-lofty-goal.htm