The Indonesian government aims to triple the nation’s capacity to collect plastic waste in this decade to address a key inhibitor to developing the recycling industry and work toward fulfilling its promise to cut waste.
The Ministry of Environment and Forestry on July 7 unveiled a 10-year projection model on 10 per cent annual growth in the nation’s plastic waste collection capacity to reach a target of 4.29 million tonnes by 2030.
Waste management director Novrizal Tahar said the environment ministry would increase the waste collection capacity through means such as creating more waste banks, installing more recycling bins, partnering with waste management technology start-ups and empowering waste pickers who formed the backbone of Indonesia’s waste industry.
“Eighty per cent of the supply chain is still in the informal sector. To increase their capacity, collaboration with [technology] start-ups is needed,” Novrizal told a virtual discussion hosted by Bisnis.com.
Novrizal’s presentation also showed that the government set a 2030 target to end plastic waste imports by increasing the domestic collection of consumer waste as opposed to industrial waste. In line with this aim, the environment ministry aimed to increase domestic consumer waste collection to 1.74 million tonnes by 2023.
He added that the ministry was pushing its finance counterpart to reduce value added tax (VAT) on recycled plastic products from 10 per cent to two per cent to increase their competitiveness.
Indonesia, one of the world’s largest waste producers, has set out a bold vision in Presidential Regulation No 97/2017 to cut waste by 30 per cent and marine plastic debris by 70 per cent by 2025 relative to a business-as-usual scenario.
Recycling companies in Indonesia rely on a network of middlemen and informal waste pickers to gather recyclable plastics and paper. The companies have decried the informal system as unreliable and inefficient, and that it increased production costs and limited growth.
“Our industry is very short on raw materials, and local materials only meet 50 per cent of our capacity,” Christine Halim, who chairs the Indonesian Plastics Recycling Association (Adupi), said on July 7.
If Indonesia maintains its current pace, it is projected to produce 70.8 million tonnes of annual waste by 2025. Under the 2017 presidential regulation, the government aims to reduce 30 per cent of the country’s waste (20.9 million tonnes), which leaves 70 per cent (49.9 million tonnes) to be processed through recycling and other waste treatment methods.
Several consumer giants have built new plastic recycling factories this year. Among them are Danone-AQUA, which inaugurated a new recycling plant last month in Pasuruan, East Java, and Coca-Cola Amatil, which broke ground in April on its recycling plant in Bekasi, West Java.
This month, Bangkok-based Indorama Ventures announced plans to open a new plastic recycling facility by 2023 in Karawang, West Java.
Adupi’s Christine said the entry of global consumer giants to Indonesia’s recycling industry would increase competition for locally sourced waste and thus raise prices.
“With the arrival of these [large multinationals], I expect local plastic waste will become even more expensive than imported ones,” she said.
Imported plastic waste costs between $200 and $300 per tonne, while local waste costs 7,000-7,500 rupiah ($0.48-0.52) per kg, or around $515 per tonne.
Waste management start-ups have also been emerging to address the country’s waste problem, such as the Gringgo Indonesia Foundation, Octopus Waste Management and Waste4Change.
Waste4Change CEO Bijaksana Junerosano said public-private governance and partnership were critical to fuelling the industry’s growth.
The start-up has set a goal of processing 300 tonnes of plastic waste per day but is facing challenges in partnering with regional administrations, which are in charge of executing local waste management policies.
Bijaksana said: “[Regional administrations] need to be aware that partnerships with private entities are crucial to increase capacity in transporting and processing waste.”
THE JAKARTA POST/ASIA NEWS NETWORK