8 out of 10 Companies "Burdened by Circular Economy Goals... Urgent Need for Regulatory Rationalization"

Survey of 304 Apparel Manufacturers
73% Find Circular Economy Policy Goals Somewhat Burdensome, 13% Find Them Very Burdensome

Source: Korea Chamber of Commerce and Industry

[Asia Economy Reporter Jeong Dong-hoon] "We have succeeded in developing technology to recycle by-products of petrochemical processes as concrete additives. However, these additives are classified as waste under current laws, so they cannot be sold. Both the selling and purchasing companies must be registered as waste disposal businesses to trade waste. Registering as a waste disposal business takes on average more than a year." (Representative of Petrochemical Company A)

"To recover metals from waste batteries, transportation vehicles and recycling facilities must be operated redundantly. Electric vehicle waste batteries are classified as 'general waste,' while household waste batteries other than electric vehicles are 'designated waste,' so separate operation of vehicles and facilities is required. Although the waste batteries have different uses but the same raw materials, we are operating twice the facilities due to different waste classifications." (Representative of Waste Battery Recycling Company B)

As the government’s circular economy policies are being promoted, including the expansion of reducing single-use products, 8 out of 10 manufacturing companies feel burdened by achieving circular economy policy goals.

According to a survey conducted by the Korea Chamber of Commerce and Industry (KCCI) on June 1 targeting 304 domestic manufacturing companies about ‘Current Status and Policy Tasks of Corporate Circular Economy Promotion,’ 86.2% of respondents felt burdened by achieving circular economy policy goals. 73.4% answered 'somewhat burdened,' 12.8% 'very burdened,' while only 13.8% said 'not burdened.'

'Circular economy' is an eco-friendly economic model that maximizes the value of resource use through saving and recycling resources. It is emerging as a new alternative to solve environmental problems in the UN Sustainable Development Goals and the World Economic Forum. The government has set a goal of 'over 90% waste recycling rate' to establish a circular economy for achieving carbon neutrality by 2050, with detailed targets such as 'phasing out plastics' (2050), 'mandatory use of recycled plastic raw materials' (30% by 2030), and 'zero direct landfill of household waste' (2027).

Companies said, "We agree with the purpose of circular economy policies, but the policy goals are ahead of current technological levels," and pointed out, "To achieve detailed policy goals such as 'mandatory use of recycled plastic raw materials,' 'phasing out plastics,' and 'expanding plastic pyrolysis treatment ratio,' new technologies must be introduced to change existing raw materials and processes, which is a heavy burden."

Differences in Policy Perception... 'Companies Must Actively Participate in Circular Economy' (60%) VS. 'Government and Citizens’ Roles First · Includes Excessive Regulations' (40%)

Perceptions of circular economy policies among companies were divided. Positive perceptions were higher with 59.9% responding that 'corporate participation is necessary for environmental protection' (51.0%) and 'opportunities for new business and competitiveness enhancement' (8.9%). However, negative responses also reached 40.1%, with 20.7% saying 'government and citizens’ roles should take priority over companies' and 19.4% concerned that 'excessive regulations may hinder corporate activities.'

93.4% of respondent companies are pursuing circular economy-related projects. Only 2.6% have plans to pursue such projects, and 4.0% have no plans.

The types of circular economy projects were led by ‘workplace management’ such as waste reduction and recycling system establishment at 67.5%, followed by ‘reuse’ such as product lifespan extension and used parts regeneration (24.3%), ‘recycling’ of waste resources (16.4%), ‘eco-friendly product development’ such as alternative material use (15.4%), and ‘product sharing and services’ (2.4%).

KCCI explained, "Competition for resource acquisition due to supply chain risks is intensifying, and the value of waste resources is increasing. Companies recognize discarded waste such as waste batteries and waste plastics as resources and are focusing investments on circular economy from workplace management to productization."

Companies pursuing circular economy projects cited ‘difficulty in securing high-quality waste resources’ (29.3%) as the biggest challenge. This was followed by ‘lack of recycling, alternative materials, and technology’ (27.0%), ‘insufficient recycling standards’ (17.1%), ‘unreasonable regulations and systems’ (14.8%), ‘lack of sales and demand channels for recycled products’ (7.2%), and ‘lack of incentives’ (4.3%).

Companies pointed out that it is difficult to procure high-quality waste resources domestically, so improvement of collection and sorting infrastructure is urgent. A representative of waste battery recycling company D said, "While separate return, separation, and storage regulations are established for electric vehicle waste batteries, there are no related regulations for household secondary batteries embedded in laptops and phones, so batteries containing recoverable metals such as lithium, nickel, and cobalt are often discarded. Regulations for separate collection of household secondary batteries should be established, and local promotion and municipal management strengthened to increase recycling rates."

A representative of company E, which manufactures raw yarn from waste plastics, said, "Although recycling policies such as manufacturing label-free PET bottles are being promoted domestically, contamination levels remain high during collection and sorting processes, making it difficult to procure high-quality waste plastics domestically. As a result, most waste plastics are imported from China in chip form."

Policy Tasks... ‘Regulatory Rationalization’ (27%), ‘Government-led Technology R&D’ (20%), ‘Collection Infrastructure Improvement’ (19%)

Companies identified 'regulatory rationalization' (27.0%) as the top policy task to activate the circular economy. This was followed by 'government-led promotion of recycling alternative technology R&D' (20.4%), 'improvement of waste collection and sorting infrastructure' (18.7%), 'expansion of incentives for recycling' (17.8%), and 'establishment of recycling standards' (15.5%).

Companies selected 'material recycling technologies' such as metal recovery from waste batteries and waste plastic pyrolysis (36.3%) as the technologies most in need of R&D support. This was followed by 'reuse technologies' (23.4%), 'automation technology for waste resource sorting' (18.2%), 'post-processing technology for impurity removal' (15.8%), and 'eco-design/alternative material technologies' (6.0%).

According to the technology level evaluation report published by the Korea Institute of S&T Evaluation and Planning (KISTEP), if the EU’s recycling technology level is 100, Korea’s is 80, which is lower than Japan (95) and the US and China (85). KCCI explained this is because recycling companies are small-scale and lack the capacity for technology investment, resulting in slow technology development.

Woo Tae-hee, Executive Vice Chairman of KCCI, said, "To boldly invest in the recycling market expected to grow to $500 billion within the next 10 years, regulatory rationalization, technology development, and infrastructure for securing waste resources are urgent. Although companies have a strong willingness to participate in the government’s circular economy policies, they feel burdened by achieving the goals, so it is necessary to establish measures to measure environmental performance of circular economy projects and provide incentives."

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