Techno-economic and policy insights from a cross-country assessment for plastics recycling

The profitability of recycling technologies is affected by several factors, such as capital costs, labor costs, recycling incentive policies, corporate taxes, and population density. The objective of this paper is to examine the profitability of plastics recycling and the best policy instruments to promote them in countries with different economic, policy, and demographic characteristics. To accomplish this, a cluster analysis was performed, and a representative country was selected from each cluster. A techno-economic assessment (TEA) was then conducted for one representative country per cluster: Kenya, Chile, Belgium, Canada, and India, followed by an optimization of the number of recycling plants per country to minimize Extended Producer Responsibility (EPR) fees. Results show that mechanical recycling is generally the least-cost option, except in high-income countries with elevated labor costs and low interest rates, where thermochemical recycling yields higher returns due to its higher-value outputs. Optimizing plant number and location reduces total costs substantially: by 56% for mechanical recycling in Chile, with transport cost reductions reaching 80% in Kenya and 96% in India. Collection, transport, and sorting account for 40-50% of total expenditure across all countries and technologies, indicating that upstream logistics are the primary cost driver. In low-cost countries such as India and Kenya, recycling can achieve positive net present values without policy support, whereas high-income countries require EPR fees to ensure financial viability. A sensitivity analysis identifies recycled product prices as the most influential variable across all clusters. Based on these findings, the study recommends cluster-specific policy instruments: waste quality standards and recycled content mandates are essential in all contexts, EPR schemes are critical in high-cost countries, and waste collection targets are particularly effective in large, sparsely populated nations to capture economies of scale.