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Introduction
far.rabobank.com As the Chinese government gradually embarks on promoting the concepts of the ‘zero-waste
city’ and circular economy, plastic recycling ushers in a new windfall in China. In this article, we
Stacie Wan
identify the opportunities in recycled PET (rPET) in the Chinese market and also point out the
Analyst – Supply Chains
challenges in the development process.
In recent years, the Chinese government and local associations have jointly made efforts to speed
up the development of a circular economy for plastics, introducing a number of policies, proposals,
regulations, and guidelines for plastics recycling and reclamation. These efforts, coupled with the
plastic waste import ban of 2017, have further strengthened domestic plastic recycling. As a
consequence, the volume of imported recycled plastic pallets has skyrocketed in order to fill the
feedstock shortage. In addition, growing consumer awareness of sustainability issues is leading to
increased public pressure on manufacturers and brands. This is pushing the recycled plastics
market forward on the right track, with both opportunities and challenges emerging.
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In another example, e-commerce giants are cooperating with consumer brands to establish PET
bottle recycling systems. JD.com has teamed up with Coca-Cola China, while Alibaba has
partnered with Unilever in China. These initiatives aim to bring high-grade PET bottles back into a
closed-loop recycling system.
Stakeholders are taking on the responsibility of creating an innovative recycling system and
network and involving consumers on a large scale. The effectiveness and impact of these recycling
systems will gradually be established, which will, in turn, benefit each stakeholder in the near
future. In fact, the implications for the industry go deeper than that. The involvement of large,
financially sound companies may help accelerate industry consolidation and eliminate smaller,
less risk-resistant, inefficient, and unprofitable players.
Technology-Driven Investments
The advanced technologies that can provide safe, efficient, and scalable solutions to plastic
recycling will bring investable opportunities along the supply chain. With 5G and the Internet of
Things (IoT) entering the waste management industry, the future of plastic recycling looks
promising. In China, there has been a growing number of domestic companies using IoT
technology to engage in innovative and traceable management solutions for PET recycling and
regeneration. INCOM Recycle, an IoT-based reverse-vending machine provider, utilizes IoT
technology to make raw material recycling transparent and traceable. It achieves a complete
closed loop, ensuring the whole chain is clean, safe, and environmentally friendly. Meanwhile, the
application of artificial intelligence (AI) in the plastic waste chain presents plenty of opportunities
to improve efficiency, reduce costs, and enhance quality. This has motivated industry leaders to
invest in this sector to raise a competitive barrier. For example, Jiangsu LVHE Environmental
Technology Co has introduced a robotic waste-sorting system from ZenRobotics of Finland to
enhance their operating efficiency. The growing demand has also triggered an investment boom
in AI applications for plastic recycling, with a number of startups emerging in China, such as Data
Beyond and Jinlu Technology.
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Imprint
RaboResearch
Food & Agribusiness
far.rabobank.com
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