Ministry of Environment to Publicly Stockpile Waste Plastics... Price Linkage System Applied When Collecting Recyclables

Decrease in Recycled Goods Exports and Price Drop Vicious Cycle Due to COVID-19
Utilizing Transparent PET Bottles to Alleviate Backlog and Increase Added Value
Recycling Market Structural Improvement... Price Linkage System Guidelines Notified on the 22nd

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] The Ministry of Environment will implement public stockpiling of waste plastics and a price linkage system to prevent a 'second recycling crisis.'

On the 22nd, the Ministry of Environment announced that it will begin public stockpiling of waste plastics such as PET bottles and apply a price linkage system when collecting recyclables to stabilize the recycling collection system and reduce market shocks.

This is due to the worsening accumulation of waste plastics caused by a vicious cycle of falling oil prices due to the novel coronavirus disease (COVID-19), decreased exports of recyclables, and price drops.

The Ministry of Environment plans to promote public stockpiling starting with PET bottles and also aims to increase the added value of recycled raw materials by utilizing the transparent PET bottles stocked.

As exports of recycled raw materials from PET bottles to major demand markets such as the United States and Europe have slowed, the amount stored by companies as of this month is about 13,000 tons, reaching 80% of the allowable storage amount (16,000 tons). The Ministry of Environment decided to promote public stockpiling anticipating that the accumulation problem will worsen further.

Since transparent PET bottles can be recycled into high-quality recycled raw materials, the Ministry plans to actively link high value-added recycled raw materials with final demand markets to not only alleviate accumulation but also induce structural improvements in the recycling market.

For recycled raw materials made from other materials such as PE and PP, exports to China, the main demand market, are resuming. Accordingly, the Ministry of Environment plans to continuously and closely monitor and respond to the accumulation situation.

In addition, to stabilize the recycling collection system, the Ministry decided to apply the price linkage system to apartment complexes where recyclables are collected through private collection companies and notified local governments of the guidelines for applying the price linkage system.

The price linkage system was introduced after the 2018 incident where waste vinyl collection was refused in apartment complexes in the metropolitan area. It allows private collection companies to adjust the payment for recyclables sold to apartment complexes when prices of recyclables fluctuate significantly.

The Ministry of Environment calculated adjustment plans for sales payments based on the market price fluctuation rates of major recyclable items, inflation rates, increases in processing costs, and the actual profit reduction rates of collection companies in the distribution structure according to contract timing. For contracts made in the second quarter of last year, it recommended a downward adjustment of 39.2% of the sales payment.

The Ministry is monitoring stock levels, price trends, and export-import patterns of recyclable items to ensure timely implementation of recycling market countermeasures. It has formed a consultative body with stakeholders including collection, sorting, and recycling industries, local governments, and experts to discuss necessary measures.

Lee Young-gi, Director of the Resource Circulation Policy Division at the Ministry of Environment, said, "We will monitor the recycling collection system to prevent increased inconvenience to the public due to COVID-19," adding, "We ask residents and related industries for cooperation to promote coexistence between apartment complexes and collection companies and widely encourage the reduction of unnecessary single-use items."

This content was produced with the assistance of AI translation services.