Plastics Recycling in the Middle East: opportunities for growth

Recycling industry experts examine some of the major issues facing the plastics recycling industry and the present scenario particularly in the Middle East including issues such as recycling rates, infrastructure facilities, raw material availability and other challenges as well as the remarkable opportunities this sector presents. Swaliha Shanavas writes.

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Plastic Recycling
April 9 2017
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Plastics recycling in the Middle East is still in a nascent stage, but there is tremendous scope for growth. Recycling industry experts who gathered in Dubai recently for two recycling conferences discussed the status of the plastics recycling sector and the viable business opportunities in the Middle East. Given that the recycling rates are still quite low in many parts of the world, plastics recycling is a promising business with plenty of scope for further development, said Surendra Borad Patawari, Chairman, Gemini Corporation & Chairman Plastics Committee, BIR, in his address at the Recycling Confex Middle East recently held in Dubai.


The governments, particularly in the developed countries and manufacturers are supporting plastics recycling, and the regulations are framed to support sustainable solutions. On the other hand, developing countries such as the Middle East and India still consider plastics scrap as “waste”, but if the authorities begin to understand that it is a resource, “there is tremendous potential for the business in this part of the world,” he pointed out. For this, “we have to change the mindset,” he said. “That is the most difficult part and we have to start at the grassroots level, the public.”

Scrap import policy issues

Borad emphasised the need for a change in approach with regard to scrap imports, particularly in the Middle East as the region is losing out on the opportunity of receiving the raw material that is essential for sustaining the recycling industry initiatives. He was addressing the delegates at the BMR conference held in Dubai this March. The list of recycling opportunities in the Middle East “is endless”, he noted, citing various examples in segments such as plastics, tyres, metals and used cooking oil.

“How do we tap into these opportunities in the scrap industry? To enter this business you need raw materials, i.e., scrap. Would you believe that you cannot import a single ton of plastic scrap, metal scrap or recovered paper from Europe? Since August 2012, Europe cannot export a single ton of any kind of ‘waste’ to the United Arab Emirates (UAE),” he underlined. In line with the requirements set by Article 37 of the European Waste Regulations, the non-OECD countries are asked to indicate which of the following four options for import control procedures they have chosen for each type of non-hazardous waste or mixture of waste concerned: prohibition of imports; imports allowed subject to a procedure of prior written notification of the importing countries; imports allowed without any control in the country of destination; and imports allowed subject to other control procedures as per the national law.

“In 2012, in response to this questionnaire, the UAE wrote back “no import from Europe”, which is a complete ban. Some countries do not respond to the questionnaire, for instance Saudi Arabia did not respond. In such cases, it is generally assumed that it is allowed, but there has to be an advance approval,” he explained. Most of the Middle East countries did not respond and the application procedure to export the material to these countries is also a “long-drawn process”, which makes it practically very difficult to get the necessary approvals and “it is not a business-friendly atmosphere”, he elucidated.

Certain segments in Europe were happy with the scrap remaining in Europe as they believe that if everything is recycled within Europe, it would help create more jobs with better utilisation of their resources, said Borad. “For instance, they believe that 50,000 additional jobs would be created if they don’t export plastic scrap and if everything is recycled within Europe. And this legal framework fits in with their mentality. I believe that since scrap is freely available, it is not in the interest of the UAE to place a complete ban on scrap imports.”

Opportunities galore

Having travelled extensively in the Middle East region, he said that in this area particularly there is not enough raw material such as plastic scrap “to make optimum use of the resources”. The local recycling units need to have modern machinery and know-how, a sound system and an optimum level of production, which is not possible at present as the region does not have the necessary quantity of raw materials and the free flow is restricted, stated Borad. “What you need to do is to convince the authorities to study the situation, before responding to these questionnaires, look at the availability of scrap. They have given permission to set up recycling plants, but these facilities don’t have the materials.

And there are many countries who do not respond mainly due to lack of awareness. You need to convince them to respond; otherwise you are losing resources, employment, revenue and prosperity.” Fortunately, he said, the developed world has started realising that overregulation is not in their interest. National Association of Manufacturers in America said in 2012 that the regulation was costing them two trillion dollars. “In Europe, our new European Commissioner is screening every regulation before it is implemented. I am hoping that Article 37 of EU waste regulation would be scrapped, and then you would have a chance to get any kind of scrap from Europe into the Middle East. And I believe, considering the situation in and around the region, it provides a wonderful opportunity to the Middle East’s operations.” On a different note, Borad said that despite the best efforts of Metal Recycling Association of India (MRAI), the Indian scenario is not very promising, at least in the short term.

“The country should steer away from the short term approach. You would not invest millions of dollars in new technology if you are not sure of the long term regulatory framework,” he said, adding that the situation in China was not very conducive and the situation at the ports was not very encouraging either, the condition being particularly severe in Hong Kong. “Considering the overall scenario, I believe the Middle East has a very good chance of making use of this opportunity. If this region can provide a long-term predictable regulatory legal framework, I think there will be enormous investment from Europe, US, etc. Belgium is a very small country, yet they recycle 100% of the glass scrap; 97% of paper and cardboard; and 90% of metal scrap. If Belgium can do it, why not Dubai? The UAE has tremendous opportunities,” Borad commented.

Recycling critical to deliver on Paris Agreement

Highlighting a significant development regarding the Paris Agreement on climate change related to the reduction of carbon emissions, he said “UAE and KSA have signed and enforced this agreement earlier than England.” This will have a serious implications on the recycling industry with 197 countries having signed the accord and “I think at the moment, the Middle Eastern countries are not fully aware that they need to turn to recycling. To achieve the agreed target of carbon emissions, they have to put plastic recycling, metal recycling, etc. on their radar,” said Borad. “An earlier study found that if you concentrate on waste and material management, there would be a reduction of CO2 emissions by 15% straight away. I think BMR can play a very important role in impressing upon the authorities the significance of recycling in the scheme of things.”


Technology key for effective recycling

In the Middle East region, despite efforts to recycle plastic, most of the plastic scrap still ends up in the landfills or mixed plastics are sold together at a very low price, noted Anastasios Bereketidis, Regional Director Middle East & Africa, Tomra Sorting Solutions. “The problem is that plastic must not only be clean, but must also be sorted into their various types,” he said. PET beverage bottles – one of the most important valuable recyclables, have become one of the most commonly recycled types of plastic scrap globally, and “maybe there is a potential for what has happened with PET in the last five years” to be emulated with other types of plastic scrap, he said. Looking at the greater picture, one can see that PET is only responsible for around 7% of all plastics that are being utilised.

The major share with a lot of untapped potential can be traced back to PP (19%), LDPE (18%), HDPE (12%) and PS (7%), said Bereketidis. The value of these polymers have not yet been realised. Companies that are involved in the collection of these polymers are mostly selling them to Asia as a shredded mixture for low prices and in the Middle East, local companies are still in the starting phase of developing large scale projects, he highlighted. The feasibility of implementing such projects strongly depends on the ability to separate the materials from one another in an efficient and economically viable manner. Providing an overview of mixed plastics recovery and sensor based sorting technologies, Bereketidis said optical units that can sort with 99% accuracy are being designed and built to operate at increasingly larger capacities.

Markets like India, where labour costs are low are now developing high end plants “where it is possible to work with quantities that were unthinkable before optical sorting systems came in,” he said. In the Middle East, “we all need to contribute to the reduction of plastics sent to the landfills. I think there is big potential for us,” he stated.


A view from Saudi Arabia

Sridhar Rao, Plant Manager at the Saudi Arabia-based Creative Recycling World Company said plastic recycling is still evolving in the Middle East and currently most of the scrap collected is still being sent to countries like China and India for recycling. Lack of source segregation and low awareness levels are key issues, along with huge investments required to set up recycling facilities as well as limited participation and cooperation from government/non-government entities, he said. Awareness of plastic recycling in the Gulf Cooperation Council (GCC) region “has to start at the school level,” and the formation of a plastic recycling association would help “increase awareness and solve the problems of the industry,” he said during his presentation at Recycling Confex Middle East.

At present, plastic currently makes up from 12% to 16% of the municipal solid waste (MSW) stream in the Middle East and the MENA region is responsible for about 8% to 10% of the global plastic production, and the average plastic consumption is one of the highest in the world. There is an excellent opportunity to set up recycling facilities (1000 MT and above capacity) across the Middle East to consume post-consumer bottles for processing in the medium and long term, Rao noted. He estimated that Saudi Arabia recycles about 10% of its PET bottles and there is huge potential to increase the recycling rates to 20% by 2020. The government is poised to invest in infrastructure and create employment, he said adding that the average plastic consumption is one of the highest in the world and is estimated to be 40 kg/person in one year.

Rao also pointed out that recycling and recovery rate in Egypt is one of the highest in MENA region, with estimated consumption of 180,000 MT of PET, with nearly 40% recovery. Average per capita consumption of plastic is 25kg. Recycling and recovery in Morocco is estimated below 10% of the consumption and World Bank is helping the Moroccan government to set up waste management sites, with an expected recovery of 22% plastic by 2020, he stated. 


Plastics recycling in focus at World Economic Forum

A noteworthy development Borad shared was regarding the annual World Economic Forum in Switzerland, which he said was “attended by businessmen doing billion dollar businesses and they were talking about plastics recycling.” Over 2500 top business people attended the forum this year. “I have been advised that one of the targets they have prepared is that businesses have to increase the recycling rate of plastics worldwide from 14% to 70%. I think that is a huge business opportunity.”

Forty major companies such as Unilever, Walmart, Ikea participated in the forum. Ikea has set aside 3 billion euros just for these projects, and recently invested in a Dutch plastic recycling company, said the Gemini Chairman. Ikea has made a commitment that by 2020 all plastic products from the company, “be it a brush or a garden chair, will be made from recycled plastics.” he noted. “I hope I’ve been able to convey to you the wonderful opportunities which prevail in the region. There are opportunities galore and the list is endless,” Borad remarked.