Unlocking APAC’s Plastic Sustainability: The Role of EPR in the Circular Economy

Every year, a staggering 8 million tonnes of discarded plastic waste find their way into the world’s oceans. Half of this oceanic burden originates from just five Asian countries: Thailand, Indonesia, China, the Philippines, and Vietnam. For instance, the Philippines alone accounts for up to 35% of global marine plastic pollution annually. The surge in plastic usage, exacerbated by inadequate waste management infrastructure, is at the core of this environmental crisis. 
 
In response to this escalating crisis, Asian countries have initiated the extension of the EPR (Extended Producer Responsibility) program, with a primary focus on packaging and container waste as of now. 
 
Simply stated, the EPR is defined as an “environmental policy approach in which a producer’s responsibility for a product is extended to the waste stage of that product’s life-cycle.” Through the EPR system, producers are now responsible for providing resources – financial and/or otherwise for taking responsibility for its product packaging in the post-consumer stage as well. 
 
Southeast Asian countries have only begun to enact comprehensive EPR policies since 2019, though not all of these are mandatory. In Indonesia, the Ministry of Environment and Forestry has launched the Roadmap to Waste Reduction by Producers, effectively mandating producers in key sectors to submit waste reduction plans. These plans target the production of 100% recyclable plastic products and the adoption of 50% recycled content by 2029. 
 
Similarly, the Philippines implemented the Extended Producer Responsibility Act, requiring companies to meet predetermined annual targets for plastic packaging recovery rates. The goal is to achieve an 80% mandatory recovery rate by the end of 2028. 
 
Challenges in EPR implementation 
 
Many Asian countries face challenges with implementing EPR, including under-developed waste collection infrastructure, fragmented waste management processes and low consumer awareness. 
 
There are key challenges, some specific to the southeast Asian region that need to be addressed in order to truly build a plastic circular economy through EPR implementation. For companies, a key challenge is logistics, as remote areas across the region often lack efficient waste collection and recycling infrastructure, resulting in high transportation costs. Relevant stakeholders need to collaborate to devise strategies that can organize reverse logistics of waste plastics from usage sites to appropriate recycling facilities. 
 
Take Thailand, for example. The country has over 7000 local government organizations working for waste collection and disposal, in addition to the informal sector’s 1.5 million workers engaged in the process of waste collection. This prevents proper collection of plastic waste and ensuring it reaches appropriate recycling centres. Currently, Thailand generates 2 million tonnes of plastic waste annually, of which only 25% is recycled. 
 
A lack of solutions around plastics recycling also remains a major issue. Recycling is only a small part of how waste is disposed of in the APAC region. Instead, methods like incineration or open dumps are used more frequently. Projections suggest that by 2025, the Asia-Pacific region will be accountable for more than 70% of the world’s mismanaged plastic waste. 
 
Singapore’s 3R initiative (Reduce, Reuse, Recycle) by the National Environment Agency is a step in the right direction, but without the right collaborations between all stakeholders, the necessary funding, innovation and scalability remain missing. Government initiatives such as waste-to-energy plants are now being constructed, but private enterprise solutions lag far behind. For example, of the 7,000 digital startups in Southeast Asia, less than 100 are focused on climate tech. 
 
Another challenge remains around demand for recycled plastic products. Establishing a national/industrial standard, such as by the Standard and Industrial Research Institute of Malaysia, can help stimulate demand for recycled materials. Initiatives like Green Public Procurement Programs can further ensure a consistent market for recycled products. For governments with emerging EPR programs, challenges are of a different nature. 
 
For example, not all EPR programs are mandatory. In the case of voluntary EPR initiatives, companies can decide how much and for how long they choose to invest in an EPR project. Therefore, there is no long term guarantee of project continuation. The project can often close once the funding period has lapsed. Additionally, challenges still remain around creating a conducive legal and compliance environment to incentivize companies to adopt EPR initiatives. Monitoring EPR programs is also currently an uphill challenge, especially around voluntary initiatives, as these are mostly self-monitored and reported. 
 
Challenges for EPR implementation can also be localized in nature, requiring custom solutions. In the Philippines, a key challenge remains the ‘sachet economy’, a phenomenon unique to developing economies like the Philippines and one that reflects in the buying behaviour of low-income consumers, most of whom can only afford to buy daily use products, resulting in the rise of sachet usage. The country is also geographically challenged, with half the country situated along shorelines away from bigger economies and recycling facilities. This results in a tremendous amount of plastic waste making its way into marine environments. For larger cities as well, the waste management system can often be overwhelmed by the sheer population load. 
 
Government and Private Sector Collaboration Vital in Combating the Plastic Crisis 
 
Continuous discussion between the various stakeholders of an EPR program is needed to generate progress. A key example is the active collaboration between private enterprise and local governance. Example: the PRO-Thailand network (Producer Responsibility Organization Thailand), is a consortium of seven leading companies in the country. (PepsiCo is one of these companies). The network works with government legislation and the public sector to create a sustainable future for Thailand’s circular economy by leveraging post-consumer packaging, even as Thailand formulates its own EPR policies. 
 
The move has already seen success, with the network collecting over 25,000 plus tons of post-consumer plastic packaging for recycling over a pilot from 2019 to 2022. Indonesia’s PRO network has also achieved similar results.
 
Working together, stakeholders can also create push and pull based initiatives. Pull initiatives are focused on increasing the local recycling infrastructure and developing consumer markets to enhance waste collection at scale. This is something companies can undertake as part of their EPR programs. For local administrations, complementary push initiatives can also incentivize more material being forwarded into recycling structures by organising last mile logistics. 
 
Opportunities for EPR to Influence the Plastic Circular Economy 
 
EPR initiatives have already begun making a mark in southeast Asia, even as the region develops its EPR policies, with both private enterprise and government initiatives setting key progress milestones. 
 
Watsons, a leading health & beauty retailer in south east Asia is a prime example, having collaborated with leading cosmetic brands to launch recycling programmes across Hong Kong, Taiwan, Indonesia and Thailand. The partnerships are ongoing, with over 530,000 bottles collected for recycling in Hong Kong alone.

In Indonesia, many private companies have come together to effect a crucial change in the waste management sector, with Waste4Change serving as an exemplary model of private sector engagement in waste management. The company’s core focus lies in waste collection services and it actively conducts research on waste management in Indonesia. The firm also provides consultations to various companies and government entities, working alongside international organisations like the World Bank on waste management projects. The company, since inception, has already undertaken over 60 community development initiatives and conducted over 300 waste management projects.

Private-led public initiatives such as PepsiCo’s Journey to Zero Waster program in Thailand are also ways to extend collaboration across the stakeholder ecosystem. The program collects post-consumer MLP packaging and recycles it to craft chairs and tables, which are then provided to local schools. The program has worked with 25 communities thus far to collect over three tonnes of plastic waste in a single quarter, aiming to ultimately divert the 2 million tonnes of plastic waste that Thailand generates away from landfills and toward a circular economy. 

 

Along with this program, PepsiCo Greenhouse Accelerator pilot Green2Get also created an initiative built on similar lines. Gamifying social responsibility through lucky draw rewards, the team got consumers to donate MLP (multi-layer packaging as used in snack SKUs), promoting this endeavour through Lay’s social media to over a million followers. The bags collected were also up-cycled to provide chairs, tables etc to community school.

Similarly, PepsiCo’s sponsorship of over 90 Aling Tindera sites in the Philippines have seen an impressive 5 million kgs of plastic waste collected from the country’s beaches toward the waste-for-cash program. 

The Aling Tindera association has also garnered government support in terms of praise from provincial mayors for having increased the income of women entrepreneurs, who form the foundation for this program, by up to 48%.

Companies are also leveraging technology to drive EPR impact. In Indonesia, the mobile app Gringgo enables users to photograph plastic waste. Using image recognition technology, these images are associated with a market price, enabling waste workers to understand the value of different materials, both optimizing operations and helping them maximize income as well.

 

Southeast Asia and the larger APAC region are now both the world’s largest producer as well as consumer of plastic packaging, and consequent waste generation. It is imperative that all stakeholders, including us as individual consumers, play a part in implementing measures to ensure a sustainable and scalable plastic circular economy.

What do you think governments, enterprises and consumers can do to drive further action?


Call to action: Ready to be a part of the sustainability revolution? PepsiCo’s Greenhouse Accelerator program seeks to identify breakthrough startups that will receive funds and partner with PepsiCo experts to help grow their businesses. 


To learn more and join the movement, visit greenhouseaccelerator.com/apac/

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