AMONG the trends in a circular economy are untapped opportunities in the plastic recycling sector, says Joseph Poh, head of United Overseas Bank (UOB) group wholesale banking oil, gas and chemicals.
During his session at the Circular Economy Conference (CEC) 2021, which started off by looking at the extent of plastic pollution globally, Poh’s key message was that recycling of plastic was a promising niche that businesses could look into that would meld sustainability with consumer behaviour.
With UOB Malaysia Bhd as the platinum sponsor, CEC 2021 is part of Star Media Group’s 50th anniversary knowledge-sharing and educational initiative.
A June 2020 study, titled “Percep-tions on Plastic Waste: Insights, Interventions and Incentives to Action from Businesses and Consumers in Southeast Asia”, revealed a significant shift in consumer awareness on plastic pollution and recycling.
A majority of respondents were extremely concerned about the extent of plastic waste issues, with a large number saying that they were actively tackling plastic waste issues.
While 80% agreed that the government was actively tackling plastic waste through policies and regulations, only 40% believed that businesses were doing enough to tackle the issue.
Based on Wood Mackenzie’s September 2020 estimates, current global plastic recycling rates stand at 10% to 12% in 2020, and is expected to increase to 40% by 2040.
“This is a potential opportunity for businesses to act on plastic waste and sustainability,” Poh highlighted.
Not only are Europe and the United States already banning single-use plastics in many localities on their home turf and implementing other proactive measures to move towards a circular economy, global players – in the home and personal care, textile, construction and food and beverage segments – are heeding the call of adopting more sustainable practices.
In Malaysia, there is still a long way to go as the World Bank reports only 24% of key plastics resins were recycled in 2019, with about 1.07 million tonnes of plastic discarded entirely.
Poh noted, “Plastic recyclers here face various challenges, including a lack of local demand for recycled resins that is further exacerbated by the low oil price environment, resulting in virgin resin being comparatively cheaper.
“There is also reliance on overseas plastics that are of higher quality compared to locally collected plastics, as well as a lack of market data on pricing and volume to help the recyclers with planning.
“The recyclers lack working capital too and are sometimes unable to cope with the payment terms of the collectors, suppliers and buyers.”
The government has taken the initiative to develop the “Roadmap Towards Zero Single-Use Plastics 2018-2030” for a sustainable future, which goes beyond banning single-use plastics.
It increases use of biobags to replace plastic bags by 2022 and expanding the scope of biodegradable and compostable products in cutlery, plastic films, cotton buds and slow-release fertilisers.
To encourage the move towards more sustainable business practices, there are also government incentive schemes such as Green Income Tax Exemption, Green Investment Tax Allowance and MyHijau Mark for Green labelling under the purview of the Malaysian Green Technology Corporation and the Malaysian Investment Development Authority.
To add to this, UOB has the UOB Plastics Recyclers Ecosystem Financing Solution, which offers plastic recyclers and converters as well as integrated collectors a full suite of products that cover working capital and equipment financing, while improving cash collection within the plastic ecosystem.