Plastics, e-waste, battery recycling industry could be worth $20 bn by 2030: Avendus

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Recycling of plastics, electronic waste (e-waste) and batteries can collectively have a market size worth $20 billion by 2030, investment banking firm Avendus Capital said in a report shared with Moneycontrol.

The report, which is to be unveiled on World Environment Day on June 5, highlights that these three segments of recycling will drive India’s circular economy agenda.

Koushik Bhattacharyya, Managing Director and Head of Industrials Investment Banking, Avendus Capital, said, "We believe that the recycling sector is at an inflexion point owing to the rising focus on sustainability and the regulatory push."

The report sheds light on three segments of this industry while enlisting the benefits of a circular economy for investors and consumers. The term circular economy refers to a system that is restorative and regenerative by design compared to the traditional ‘linear consumption’ system that leads to waste generation and erosion of resources. A circular economy focuses on eradicating the ‘end-of-life’ of any material and redesigning the consumption and manufacturing systems to create a regenerative ecosystem.

Plastic recycling

Currently, plastic recycling occurs in the informal sector. Less than 10 percent of plastic gets recycled in India. However, by FY30, this can see a compounded annual growth rate (CAGR) of 24 percent amounting to a whopping $10.2-billion industry, the report said.

Ashish Ahuja, Vice President of Industrials Investment Banking, Avendus Capital, said this increase will be due to "the rising use of recyclable plastics, exponential demand in e-commerce and quick commerce packaging, and use in the light-weighting of products."

The Extended Producer Responsibility (EPR) policy of the Indian government, along with emerging clean-packaging business models, can ease the collection and segregation process. The use of advanced technologies, such as artificial intelligence (AI), for recycling and repurposing plastic waste is also gaining popularity.

Reusing electronic waste

Due to peer pressure, social status, and ever-evolving technologies, the shelf life of common electronic devices like computers and mobile phones has been reduced by 20-40 percent in the last decade. While more e-waste is being generated, only 18 percent is repurposed globally.

The extraction of materials is energy-efficient, but the process is harmful and tedious. However, with proper infrastructure and permissions, the report gives insights into kickstarting an ‘urban mining’ venture. Precious metals such as gold, silver, and copper are expected to be exhausted within 17, 21, and 33 years, respectively. Producers will then look at reusing metals from junk piles, leading to an increase in urban mining demand. The report predicts that e-waste recycling is most likely to grow at a 23 percent CAGR to touch $7.5 billion by FY30.

Battery recycling

Batteries dominate the electric vehicle (EV) industry. As Li-on batteries have a high energy density, they’re also gaining traction for energy storage. The demand for batteries is only increasing as economies reduce their dependency on fossil fuels. However, social justice issues prevail among miners and workers in the battery-manufacturing industry. Cobalt miners from the Democratic Republic of the Congo, which supplies more than 70 percent of global demand, lack basic human rights. This also causes disruptions in the supply chain. Scarce quantities of metals like nickel, lithium, and cobalt and complex extraction processes make recycling batteries an efficient method of sourcing these metals. This recycling market is expected to grow exponentially to about $2 billion by FY30.

Defining a circular economy

A circular economy is a system in which nothing goes to waste. All resources and goods are reused and circulated back into the system. The simplest example is converting an old t-shirt into a cloth mop. The same principle can be replicated on a nationwide scale. The current predominant trend in the market is different. It's a ‘linear consumption model’ or the ‘take-make-waste’ system. Fresh resources are exploited during the production of goods. It begins with resource extraction and finally becomes waste. The Avendus report details the pros and cons of adopting a circular economy in India with models and analyses. It advises the commercial market to loop in India’s recycling capabilities for corporate growth, legislative support, and consumer sustainability.