Recycling in Mexico, an industry with potential

Mexico is a worldwide success story in PET recycling with a rate of 56% of all PET plastic consumed in the country, only behind the European Union, which has a 57% rate in the recovery and recycling of this material.

This is the result of the creation of an entire infrastructure around this material, which has been built for almost two decades. It began with the creation of Ecoce in 2002, a non-profit environmental civil association sponsored by the food industry, beverages, and consumer products in the country for the proper management of plastic waste produced by these sectors.

Today, the collection and recycling of PET generates more than 2,000 direct jobs and about 35,000 indirect jobs, according to the Mexican Coca-Cola Industry (IMCC), which has two plants in Mexico.

PetStar is one of them and is considered the largest food-grade PET recycling plant in the world. For this company, Mexico represents the most advanced business unit in the world, achieving that 98% of its packaging are recyclable and recycled.

Radiography of the sector

There is currently the potential to replicate this success with other plastic waste in the country, since today the market value is only 20 billion Mexican pesos a year, according to the National Association of Plastics Industries (Anipac).

In the "First Quantitative Study of the Plastics Recycling Industry in Mexico", presented by Anipac last May, it became clear that even with the existing limitations, 1.9 million tons per year have been recycled, which means a recycling rate of 30% of the plastics consumed in the country, three times higher than that of the United States and Canada.

The study also identified that there are at least 4,300 companies of all sizes in the country that are dedicated to any of the processes related to plastic recycling. Most of these are concentrated in the states that generate 70% of the waste: Ciudad de México, Estado de México, Jalisco, Nuevo León, Guanajuato, and Baja California.

On the other hand, according to Carlos Saldate, Anipac's Recyclers Section vice-president, 64% of the companies participating in the study are micro and small, which mainly carry out collection, grinding and densifying activities.

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"The technological requirements in collection, grinding and densifying are of low technological impact, therefore they are of low magnitude in terms of capital assets, so they are not costly, that is why we see that 64% of micro and small companies are in these three operations", explains the specialist.

A total of 32% of the medium and large companies focus on higher value processes such as washing and pelletizing, which require much more advanced machinery, as the quality of the final product depends on this. In fact, 22% of the companies analyzed in the study export recycled material, which implies high quality.

As for the most recycled plastics, in Mexico as in the world, the main one is polyethylene (PE) with 51.2%, followed by PET with 22.1%, and polypropylene (PP) with 18.2%, which together represent 91% of the plastics recycled in the country. This is followed by PVC (2.1%), polystyrene or EPS (1.8%) and the rest (4.6%).

Recycling in Mexico, says Carlos Saldate, has been a way of life for many generations, so there is no doubt that investment in infrastructure and technology will increase to boost this sector, which has a lot of potential to grow.

"We talk about recycling rates of around 65 to 70% in other countries and I think that is the goal to follow, but this has to be a joint work of society, government and companies", he notes.

Growth Challenges

In Mexico, the separation of urban solid waste uses a large amount of labor, as is usually the case in developing countries where the sorting of this waste is an economic activity, for example, for scavengers and small businesses that do not require large investments in technology.

More than 44 million tons of waste are generated annually in Mexico, and this figure could reach 65 million tons by 2030, so that waste sorting currently employs around 35,000 people, according to the article "Viable Disposal of Post-Consumer Polymers in Mexico: A Review", published by Juvenal Rodríguez-Reséndiz and other authors in the journal Frontiers in Environmental Science last September.

The authors indicate that for obtaining high quality end products through mechanical recycling, the key is separation, washing and waste preparation; however, most of the companies engaged in these activities in the country do not have state-of-the-art technology for sorting and separation, and few companies are still engaged in washing.

José Luis Beltrán, manager of Grupo Multiplásticos, a family company that carries out the complete cycle from recycling to the manufacture of packaging and lids with PCR plastics (post-consumer recycled), mentions that one of the biggest challenges they see is that few SMBs have made the leap to more advanced processes.

With 26 years of activity in plastics recycling in the country, the company began with the collection and grinding of PET for export to the United States, but gradually improved its processes and acquired machinery that allowed them to carry out high quality washing and pelletizing, not only of PET, but also of PE and PP.

He also co-founded México Recicla, a platform to promote the transition to a circular economy, believes that another obstacle to boosting the recycling industry is the low demand for recycled plastic in the country.

"We have been wanting to bring in high quality recyclates for four years and the companies here don't pay for it, but in the United States they do. The problem is that everything that is recycled here goes to the United States, when it could stay in Mexico and be transformed here", laments Beltrán.

There is also a persistent belief that recycled plastic is of low quality and that its price is cheaper, even though there is a series of processes behind it that have a significant cost.

Not to mention the problems faced by recyclers in obtaining the material. As collection is an informal activity, a recycler can lose its suppliers if its competitors offer 20 or 30 cents more per kilo of waste. Holiday seasons also affect the availability of materials.

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With the pandemic, they were one of the few industries to benefit because demand for recycled material increased due to the disruption of global supply chains for virgin resins, so during 2020, the company grew its staff by 15%.

Today its installed capacity is 25,000 tons per year, including PET, HDPE in blow and injection grade, and PP in extrusion and injection grade. About 70% of what they process stays in the domestic market and 30% is exported to the U.S. They have also increased their client portfolio in the home care industry, to which they supply packaging and lids made from recycled material through their subsidiary 4B Envases Plásticos.

"We wanted to set ourselves as an example that we make our own packaging and our own lids with recycled material. And they are packaging and lids that are already on the market, which means that it is possible to close the circular economy, and it is not necessary to be a company with millions of dollars behind it to be able to close the cycle, but a family business with its own resources can do it," says José Luis Beltrán, the company's director.

Pending issues

Examples such as Grupo Multiplásticos show that there is a good potential for growth in the recycling industry in Mexico, but as Carlos Saldate of Anipac mentions, a joint effort is required between the authorities, companies, and society itself.

One issue that is pending is to carry out awareness campaigns for the population so that they contribute to the separation of waste to ensure that it is usable and does not end up in sanitary landfills.

But another great opportunity lies in the technological issue and in the capacity of the collection and transfer centers managed by the municipal and state governments.

"There is where it is necessary to have a great technological infrastructure with state-of-the-art equipment for waste identification and separation, to reach the next process, which is the transformation, that is, that governments deliver to the market, to the circular economy, waste with a high degree of valorization and in large volume", emphasizes the specialist of Anipac.

In addition, it is necessary to establish management plans based on the regulations established by the Environment and Natural Resources Secretariat (Semarnat), and to install collection centers near the areas where waste is generated.

According to the specialist, it is also necessary to create tax incentives and incentives for innovation and technology to accelerate the growth of the companies that make up this sector. In addition, schemes are needed to formalize the collection of materials that currently cannot be invoiced because the waste collectors do not have tax registration.

José Luis Beltrán of México Recicla agrees that there is a need for good separation at the source of the waste, and that incentives are needed with non-refundable loans for the purchase of machinery; but he also considers the role of the government to be fundamental in establishing regulations that encourage the use of recycled plastic in packaging, as is already being done in other countries.

"With the Global Plastics Pact, in which there are goals for 2025 and 2030 to integrate 30% of recycled plastic in packaging, companies are already being forced to promote recycling and infrastructure investment in the country because there is not much right now, and these regulations are missing to push the local demand for recycling in the country," says Beltrán.

In addition, he thinks that recyclers have a pending investment in technology to be able to process quality recycled material, which is what the market is demanding.

The potential to detonate the recycling industry in Mexico exists, but it is necessary to advance in the creation of environmental education programs, infrastructure, regulations, and incentives to meet the demand that is expected to reach a value of USD 60 billion in 2027, according to Statista data.