Business philosophy – Recycling plastic is a trap

We see promotional videos or advertisements about plastic waste polluting the environment daily on various television platforms. We are urged to protect ecological environments, defend the Earth from pollution, reduce plastic usage, and recycle. In reality, the Earth’s petroleum resources are limited. The most optimistic estimate suggests that the current known oil reserves will only be sufficient for human use for a few hundred years. Unlike metals, which can be almost entirely recycled after consumption, statistics show that only nine percent or less of plastics are recycled. Therefore, when many friends learn that I work in plastic recycling, they believe this work is meaningful, contributing to environmental protection and the circular economy. Some friends even praise the industry’s limitless prospects. However, they do not realize the challenges faced by our industry, which are known only to insiders and a small portion of people.


At the end of April, I visited a waste appliance recycler in Canada whom I have known for several years. We spoke at different events many years ago, sharing our experiences and insights into the industry. We often met at various events, and to gain a further understanding of the industry, I went to chat with this friend. I am proud of him because, after years of struggle, he is one of the four larger-scale and systematic waste appliance recyclers surviving in North America. During the visit, we also discussed a mutual friend who ventured into plastic recycling solely based on the industry’s perceived prospects. He invested millions of dollars in recycling PE film waste for packaging consumption. However, production has not been normal for three years, mainly due to a lack of operational harmony in machinery, trading, and production capacity. Fortunately, the company has the strength to adjust strategies while operating, hoping the business will improve and bring profits. A factory in California, USA, did not have such good luck. The factory invested $100 million in recycling PET bottle flakes. Due to machine installation delays during the pandemic and high production costs post-pandemic, with selling prices lower than costs, coupled with the market being impacted by cheap imported PET recycled materials from Asia, Central America, South America, the Middle East, and Africa, the factory ultimately had to close without fully operating.


Another fatal factor in the industry is that recycled materials are more or less unstable, and their physical and chemical properties cannot match those of new materials. It is well known in the industry that consistent material quality and achieving specific material properties, such as viscosity and physical performance standards, are necessary when producing products. Ultimately, factories prefer using prime materials, especially when current prime materials are much cheaper than recycled materials and stable quality can ensure production quantity.


Several brand companies recently announced that they were postponing indefinitely their plans to use fifty percent recycled materials in their products by 2025. Other companies will surely follow suit. Without systematic legal requirements, the use of recycled materials is merely a promotional tactic. These are tough times for the recycling industry!


Original by

Dr. Steve Wong

May 23 2024

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