Only 7% of Global Resources Are Recycled... Resource Circulation Must Be Developed as a Growth Engine for Companies

KIAF Holds the 56th Industrial Development Forum
Two-Track Approach of Regulation and Promotion... Request for Tax Support

As only 7% of global resource usage is being recycled, the industry has called for policy support to foster resource circulation as a growth engine for companies. They emphasized the need to help companies utilize resource recycling not as a cost but as a new business opportunity through tax incentives and other measures.

On June 4, a day before Environment Day, plastic recycling waste was piled up at the Suwon City Resource Circulation Center in Gyeonggi Province.
[Photo by Yonhap News]

The Korea Industrial Federation Forum announced on the 28th that it held the 56th Industrial Development Forum online under the theme "Circular Regulations Are Coming for the Circular Economy."

Jeong Manki, chairman of the forum, said, "According to the Circularity Gap Report published by the Dutch non-profit research organization Circle Economy, only 7.2% of the world's used resources are recycled as circular resources," adding, "Countries are pursuing a dual strategy of introducing regulations while fostering the resource circulation sector as a future growth engine."

Chairman Jeong stated, "Efforts should be made to nurture global companies in the resource circulation sector," and argued, "The government needs to boldly introduce various support measures such as tax incentives to help startups and existing companies in this sector grow into large corporations."

Baek Chun-yeol, National Standard Coordinator at the Korea Agency for Technology and Standards, informed in his keynote presentation that the European Union (EU) Commission has announced the introduction of extensive regulations such as eco-design and battery regulation revisions through the 'Second Circular Economy Action Plan.'

Coordinator Baek emphasized, "To effectively respond to the global circular economy and carbon neutrality markets, standards must be established for the Emissions Trading System (ETS), Digital Product Passport (DPP), and Carbon Border Adjustment Mechanism."

He continued, "The government should establish a policy foundation to respond to regulations such as carbon footprint, recycled material information, resource efficiency evaluation, and supply chain due diligence," adding, "The industry should focus on pioneering new markets such as supply chain data management, supply chain data verification, and markets for recycled and low-carbon materials."

Jeong Gwang-ha, head of research and investigation at the Korea Petrochemical Industry Association, said, "According to McKinsey, the waste plastic market is expected to grow at an average annual rate of 7.4% until 2050," and noted, "Regulations such as 'restrictions on large corporations entering and expanding into household plastic sorting and raw material recycling businesses' act as obstacles to revitalizing the circular economy."

Yoon Kyung-sun, executive director of the Korea Automobile Mobility Industry Association, said, "Automobile companies that fail to secure recycled materials due to European End-of-Life Vehicle Recycling Regulation (ELVR) and battery regulations may face disruptions in exports to Europe."

According to ELVR, 25% of plastics used in new cars must be made from recycled materials. Of the recycled materials, 25% must be recycled plastics generated from end-of-life vehicles.

Executive Director Yoon stated, "It is necessary to build recycling infrastructure for cost-effective collection and securing of recycled materials, advance recycling technologies, establish certification systems, and provide facility investment and R&D funding."

Yoon Young-chang, executive director at Samil PwC, pointed out that detailed classification by component is necessary for utilizing circular resources, but Korea lacks related technology and investment companies.

Executive Director Yoon said, "A smooth establishment of the supply ecosystem for circular resource raw materials is essential so that parts and finished product companies do not fall behind in the global circular economy race," adding, "This is a crucial time to secure core technologies and accumulate production experience."

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