Economic viability requires higher recycling rates for imported plastic waste than expected

Globalisation has fragmented supply chains, complicating life-cycle environmental impact assessments, including for waste management. Plastic waste trade has remained around five million tonnes annually since 2019, typically flowing from high-income to lower-income countries where treatment costs are lower, raising concerns about mismanagement and environmental harm. Global plastic recycling rates are below 10%, and significant mismanagement occurs in countries with underdeveloped waste systems, with evidence that a large share of marine plastic originates from countries in Southeast and South Asia. Policy responses include China’s 2018 ban on plastic waste imports and the EU’s consideration of bans to non-OECD countries to ensure proper treatment. Despite low global recycling rates, traded plastic waste is implicitly assumed to be largely recycled, but reliable measurement of actual recycling in importing countries is difficult. Prior studies often substitute domestic or assumed scenario-based rates for imported waste, which may be inappropriate because imported waste is typically pre-sorted and of higher recyclability, and importers pay for it, implying economic value and a need to recover costs through recycling. This study introduces the Required Recycling Rate (RRR), an economic break-even recycling rate for imported plastic waste, estimated for 22 major importers and four plastic waste types (PE, PS, PVC, Others) from 2013 to 2022 using UN Comtrade trade data and cost factors for mechanical recycling.

Previous analyses of the environmental impacts of plastic waste trade have relied on assumed domestic or scenario-based recycling rates due to a lack of transparent data on imported waste treatment. Examples include Wen et al., who applied assumed domestic recycling rates of 10–40% for Southeast Asian countries, Bourtsalas et al., who used rates ranging from 8.7% to 50% for the USA, and Bishop et al., who assumed 50–90% for European exports. These approaches may misrepresent the fate of imported plastic waste because domestic waste is more heterogeneous and often harder to recycle, whereas imported waste tends to be more uniform and pre-selected. Moreover, because importers pay for waste (as shown by positive import prices in UN Comtrade data), purely disposing of or incinerating imported waste would be financially unsustainable, underscoring the need for a minimum recycling fraction to recover value.

The study defines the Required Recycling Rate (RRR) as the minimum proportion of imported plastic waste that must be mechanically recycled for an importer to break even, where revenues from selling recyclates equal or exceed the combined costs of import and recycling operations. The cost-benefit framework relates, for each country, year (2013–2022), and plastic waste type (PE, PS, PVC, Others), the import costs (price times mass, CIF basis) and operational costs (labour, electricity, rent) to the revenue from selling recycled plastics (using primary plastic export prices as a proxy for recyclate value, FOB basis), adjusted for physical losses in processing. Equations (1)–(3) establish the inequality for break-even and express RRR as a function of per-unit costs, product prices, and physical loss rates. Mapping between waste categories and primary plastics uses country-specific shares: waste PE is mapped to HDPE and LDPE; waste ‘Others’ is mapped to PET and PP; PS and PVC map to their respective primary forms. Unit prices are computed from UN Comtrade bilateral trade values and masses. Data processing includes cleaning 186,861 bilateral trade records (2013–2022) for four waste HS codes (391510, 391520, 391530, 391590) and six primary HS codes (390120, 390110, 390311, 390410, 390760, 390210); detection and removal of outliers using log-normal transformation and a 3-sigma rule; and substitution with mirror trade values where reporter data are missing. Costs are compiled as follows: labour costs per kg from country-specific labour input intensity (derived from company disclosures of annual output, employees, working hours) multiplied by manufacturing hourly earnings (ILO); electricity cost per kg from process-specific electricity use (Ecoinvent, LCA Commons, literature) times industrial electricity tariffs (Eurostat or national sources); rent per kg from land area per unit throughput times industrial rental rates. Physical losses by waste type are drawn from literature. Sensitivity analysis varies six key variables (product price, import cost, physical loss, labour, electricity, rent) between their observed 2013–2022 minima and maxima. Monte Carlo simulations (n=30,000) model uncertainties with distributions: normal for product price; Pert (or modified Pert for import cost) for labour, electricity, rent, and physical loss, with parameters derived from observed ranges and medians. RRRs are calculated annually for 22 importing countries covering 70% of global plastic waste imports, and results are compiled by country and waste type.

- Across 22 major importers and four plastic waste types (2013–2022), the average minimum RRR required to break even is 63%, exceeding the average national domestic plastic recycling rate of 23% by 40 percentage points. - Geographic variation: Asia and Eastern Europe show the lowest RRRs (around 40–50%), reflecting wider margins between recycling costs and product prices. Thailand, Turkey, and the Czech Republic have among the lowest benchmarks (~40–50%). Western Europe and North America require higher RRRs, with the highest averages in France, the UK, Belgium, and Canada (61–82% across waste types). - Waste-type variation: PE and PS waste have the lowest RRRs, on average 10–20% lower than PVC and ‘Others’. PVC exhibits RRRs about 14% higher than PE (2013–2022 average), due to chlorine/contamination challenges and narrower profit margins. ‘Others’ (mixed waste, mapped to PET and PP) shows higher RRRs due to greater variability in costs and primary plastic prices. - Market signal: Countries’ import structures align with economic signals from RRRs. For example, the Netherlands’ higher RRR for PVC (83%) relative to PE (62%) coincides with higher imports of waste PE (3 Mt) versus PVC (0.1 Mt) over 2013–2022; similar patterns appear for Germany, the USA, France, and Belgium. - Cost drivers: Import costs are the largest cost component, but differences in labour costs explain Europe–Asia RRR gaps more than import costs. Average labour cost to recycle 1 kg in Germany is $0.26 (2013–2022), roughly 4× Turkey ($0.067) and 5× Thailand ($0.052). - Implications for recycled volumes: Using domestic national recycling rates yields an estimate of 0.37 Mt/yr of plastics recycled from Global North-to-South waste trade (2018–2022). Using country-specific RRRs increases this to 1.04 Mt/yr, a +0.67 Mt/yr difference (approximately France’s 2022 recycled plastics output). - Sensitivity: RRR is most sensitive to product prices for recycled plastics (−25% to +36% change), followed by import costs (−21% to +29%) and physical losses (−8% to +11%); labour (−4% to +4%), electricity (−1% to +2%), and rent (−0.9% to +1%) have smaller effects. Regional variation in labour-cost sensitivity is pronounced (e.g., Netherlands −11% to +6%; Malaysia −4% to +2%; Indonesia −1% to +1%). - Temporal signal: Many countries show higher RRRs in 2020, coinciding with lower crude oil and virgin/recycled plastic prices, which raised the required recycling fraction to break even.

RRR-based estimates indicate that higher recycling is economically necessary for imported plastic waste than suggested by domestic averages, implying previous studies that used domestic or scenario-based rates likely underestimated recycled volumes and the associated environmental benefits from avoided virgin production. For instance, in Malaysia, assumed rates (e.g., 38% in 2018) are lower than the study’s minimum required ranges (58–64% depending on waste type), which would change impact assessments. Higher RRRs can reduce net greenhouse gas emissions when substituting virgin plastics; in Wen et al., increasing assumed recycling rates by 50% (closer to RRRs) shifted an estimated 2018 net impact from +0.13 Mt CO2-eq to −60 kt CO2-eq. RRR also captures the influence of external shocks: a spike in RRRs in 2020 aligns with oil price declines and lower plastic product prices, necessitating more recycling to cover costs. For policy, RRR provides a transparent, economically grounded benchmark to complement or replace domestic averages when modelling imported waste fate, informing targets that separately address imported versus domestically generated plastic waste.

The study introduces the Required Recycling Rate (RRR) as an economically grounded, country- and waste-type-specific benchmark for the minimum recycling needed to break even when processing imported plastic waste. Using UN Comtrade data and cost factors for mechanical recycling across 22 major importers (2013–2022), the average RRR is 63%, far exceeding the average domestic plastic recycling rate of 23%. This gap suggests that the volume of plastics actually recycled from the global waste trade has been substantially underestimated when using domestic averages, with implications for environmental impact assessments and policy. RRR time series illuminate how market conditions (e.g., oil price shocks) shift required recycling thresholds. Policy-wise, adopting RRR-informed targets for imported waste and improving transparency and tracking (e.g., prior informed consent, OECD control systems) can mitigate mismanagement. Future work should incorporate fuller cost accounting (capital, environmental, operational taxes), capture higher-value outputs from advanced recycling technologies, refine HS classifications, and resolve subnational variations by estimating RRR at regional or city levels.

- Cost scope: The RRR is a minimum benchmark based on primary operational costs (imports, labour, electricity, rent). Excluding capital expenditures, maintenance, transportation beyond imports, environmental costs, and taxes likely underestimates true required rates in many contexts. - Revenue proxy: Using primary plastic export prices as a proxy for recyclate value may misstate revenue, particularly where advanced recycling yields higher-value products not captured in existing HS categories, potentially overestimating RRR in some developed countries. - Classification limits: HS 3915 waste codes may not fully represent quality and diversity of plastic waste, affecting mapping to primary products and price signals. - Spatial granularity: Analyses use country-level averages and do not capture significant regional variations in labour, electricity, and rent costs within countries. - Transit/trade data accuracy: RRR estimates can be biased in transit hubs or where trade reporting is inaccurate (e.g., Hong Kong (China)); mirror trade data help but do not fully resolve discrepancies. - Physical measurement: RRR should not replace empirical recycling measurements (e.g., mass balance) where available; it serves as a proxy for data gaps. - Temporal market volatility: RRRs are sensitive to market prices (notably product prices and import costs), which can change rapidly, affecting applicability over short horizons.