From waste to wealth: How plastic circular economy grows despite policy lags

A new circular economy centred around used plastic is gradually taking shape in Bangladesh.

Under this model, discarded plastic is being transformed into raw materials for new products, creating jobs, reducing dependence on imports and saving foreign currency.

According to industry insiders, around 1,000 enterprises are currently engaged in plastic recycling in Bangladesh, processing nearly 4 lakh tonnes of waste annually.

A large part of Bangladesh's plastic recycling sector still depends on the informal market, alongside some major players in a sector estimated at Tk5,000-6,000 crore, they said.

However, entrepreneurs and experts say although the industry is expanding, policy support – including tax incentives, subsidies and green finance – remains inadequate, while recycled plastic products are also subject to a 15% VAT, discouraging large-scale investment.

Infographics: TBS

They believe that with effective policy support, modern waste management systems, improved collection networks, and an investment-friendly environment, the plastic recycling industry could become one of Bangladesh's most promising green sectors.

They added that plastic waste – one of the country's major sources of pollution – could open new opportunities for economic growth, employment and industrial development.

Import dependence

According to industry sources, Bangladesh imports around 20 lakh tonnes of plastic raw materials every year, including polypropylene, polyethylene, PVC, PET, polystyrene, and ABS.

As the country does not have large-scale petrochemical or polymer production facilities, manufacturers remain almost entirely dependent on imports. The domestic market for household plastic products alone is currently estimated at around Tk5,500-6,000 crore.

Business leaders said a large portion of used plastic can be recycled 10 to 50 times. But due to weak collection, and processing, huge volumes of waste leak into the environment.

According to World Bank data, daily plastic waste generation in Dhaka increased from 178 tonnes in 2005 to 646 tonnes in 2020, more than tripling in 15 years. Currently, a Dhaka resident generates around 22.5kg of plastic waste annually.

Stakeholders said the recovery rate of recyclable material from plastic waste depends on the type of plastic, level of contamination, washing quality, sorting efficiency, and technology. In the current system, 0.7-0.9kg of usable material is recovered from every 1kg of plastic waste.

PRAN saves Tk400cr foreign currency by recycling

PRAN-RFL Group, the country's largest plastic manufacturer, is also a leading recycler. It began recycling in 2012 and now processes around 69,000 tonnes annually.

According to the company, PRAN-RFL uses about 3.5-3.7 lakh tonnes of plastic every year, of which nearly 15% comes from recycled raw materials. Importing this volume of raw materials would have required more than Tk400 crore in foreign exchange annually.

In its industrial park in Shayestaganj, Habiganj, on around 1,100 bigha of land, the company operates one of the country's largest modern plastic recycling plants.

TEL Plastics, a subsidiary of the group, has developed a full circular economy model. It manages the entire chain – from production and marketing of plastic products to post-use waste collection, recycling, and production of new goods.

Md Kamrul Hasan, managing director of TEL Plastics, said plastic can no longer be viewed only as waste. With proper management, it can become a valuable resource.

He added, "Removing VAT, ensuring a transparent supply chain and implementing a national circular economy framework would significantly accelerate the industry. Through recycling, we have already been able to reduce around 15% of our dependence on imported plastic."

PRAN-RFL officials said its recycling operations directly employ around 1,200 people, while around 10,000 others earn their livelihoods indirectly. The company currently operates 12 plastic waste collection centres across the country, with plans to expand to 100 by 2030.

BPCL recycles 10,000 tonnes annually

Bangladesh Petrochemical Company Limited (BPCL), certified by the European Food Safety Authority and the Global Recycled Standard, processes around 10,000 tonnes of PET plastic annually.

Managing Director and CEO Khadem Mahmud Yusuf told The Business Standard that while incentives exist for exporting recycled plastic raw materials from Bangladesh, there are no comparable benefits for using the same materials domestically in value-added industries. 

He added that there is also no scope for importing raw materials for recycling, forcing the industry to rely entirely on local sources, which are insufficient to meet demand. "Government support and policy reforms could expand PET recycling in Bangladesh."

Incentives needed for industry to flourish

According to data from the Plastic Product Business Promotion Council (PPBPC) and the Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA), Bangladesh's plastic product market is currently worth around Tk40,000 crore. 

The sector provides direct employment to over 20 people across more than 5,500 factories, while also generating about $1.2 billion in annual exports.

Shamim Ahmed, president of BPGMEA and managing director of Jalalabad Polymer, said that around 1,000 enterprises are currently engaged in plastic recycling in Bangladesh, a number that is steadily increasing, with nearly 400,000 tonnes of plastic being recycled annually. 

He added that the plastic recycling industry is estimated at around Tk5,000-6,000 crore

He said the sector would expand much faster with government support and incentives. "Bangladesh should introduce special incentives for the recycling industry to ensure environmental protection, foreign exchange savings and new job creation."

Informal recycling must be discouraged: Expert

A large part of recycling still relies on informal labour, with waste collectors, van operators, informal workers and small traders playing a key role in returning plastic to the value chain.

However, Shahriar Hossain, secretary general of Environment and Social Development Organization (ESDO), said informal recycling should not be allowed in any form, as it can be even more harmful than plastic pollution itself.

He added that formal recyclers should ensure proper management of nanofibres, microplastics, and chemical by-products as crushing plastic can release harmful substances into the environment, affecting human health and biodiversity.