Recycling in India: A Market in Transition

Informal waste collectors play a big role in India’s recycling market as public institutions and private companies. The recycling rates remain low while the volume of waste is growing. The business prospects for the future are correspondingly high.

India generates an estimated 960 million tonnes of waste a year. On this subject, India is once again a land of contradictions. It has countless illegal dumpsites and waste incineration in the street on the one hand and high-tech solutions on the other.

But one thing is clear: the recycling rate is low for solid waste. The country’s Central Pollution Control Board reports that about 70% of this waste is disposed of in landfills, many of which are illegal and unregulated and subsequently endanger the drinking water. About 62 million tonnes of municipal solid waste is generated in India every year. By 2030, this figure is expected to nearly triple to 165 million tonnes and by 2045 to reach a staggering 450 million tonnes.

At the same time, recycling is confined mostly to large cities, yet the procedures for collection and recycling there are anything but uniform. Municipalities often lack the money to process the collected waste. That is because two-thirds of the expenditure already go towards collection itself according to the Ministry of Housing and Urban Affairs.

Unknown recycling rates

The actual utilization rates, be they thermal or through recycling, remain in any case substantially lower than what could be achieved. The rate for paper is just under 30%; for plastics, about 60%; for metal, between 20% and 25%. As with nearly all data on Indian waste management, the figures here are estimates and their reliability is difficult to judge. “The reason for this is that a large proportion of waste is collected and subsequently recycled in the informal sector,” ex- plains Aditi Ramola, technical director at ISWA. (See the interview on the next page.)

Dharavi is a two-square-kilometre locality with about one million inhabitants. That makes this slum in the middle of Mumbai one of the most densely populated areas anywhere in the world. And yet it differs greatly from many other slums around the globe. Many of the people working at the recycling micro-businesses located there earn much more than the 150 rupees a day that is deemed the minimum wage level in India. Skilful workers easily make ten times that amount. This puts them in a position not only to support their families living elsewhere in the country but also to pay the fees required to live in Mumbai as officially registered city dwellers.

Dharavi has recycling to thank for its striking prosperity compared to other slums. Literally, everything that is recyclable is recycled there: from paper to computers, from metal waste to plastic. About 60% of the plastic waste generated in Mumbai is recycled in Dharavi or processed for final recycling there. For environmental and safety reasons, the only process that does not take place there is the melting of the sorted, washed and shredded plastic waste.

Integrating the waste collectors in India’s waste management system more effectively is therefore still one of the major challenges facing the country today. Without these people, waste disposal and recycling would collapse in many cities. For instance, the Mumbai district of Dharavi, the second-largest slum in Asia, has been able to establish itself as one of India’s key recycling sites. Every year, about 15,000 micro-entrepreneurs recycle waste there valued at about one million dollars. In the process, they create jobs for some 250,000 people, as waste collectors, dealers and day labourers.

India is just now building up industrial collection and recycling systems, although, with companies such as Ramky Enviro Engineers Limited, there are already big players capable of processing substantial quantities of waste. Ramky talks about six million tonnes a year. The company has successively expanded its business, as have several of its rivals.

Huge market

And for good reason. Municipal solid waste is considered a highly promising sector for entrepreneurs. Recycling and thermal utilisation of solid waste open many possible lines of business in this sector because these processes seek to keep especially the dry fraction out of the already overburdened landfills wherever possible. Thus, India is currently planning to construct about 100 new waste incineration plants, which have the potential to produce an estimated 3 GW of energy from waste in 2050. At the same time, work is also underway on legislative measures aimed at increasing the waste utilisation rate. For example, a 100% recycling and recovery rate is planned to be made mandatory for PET by 2025.

PET and other plastics are one of the toughest challenges confronting the Indian waste management sector today. With per capita plastic consumption of 12 kilogrammes, India is below the average of the highly developed countries in the West. However, because of its size, it ranks in the top five countries in the world in the amount of plastic waste generated. According to Vice President M. Venkaiah Naidu, the number of plastic recyclers nationwide totals around 30,000, most of the businesses on a mini or micro scale. Nonetheless, about 40% of this waste still ends up in landfills.

The plastic problem has meanwhile become so virulent that Prime Minister Modi himself recently appealed to his fellow citizens to consume less plastic, for instance by relying on recyclable materials such as wood in the production of handmade Indian toys.

The paper challenge

Besides plastic, a ban on paper and glass in landfills is also expected by 2025. The situation with paper is doubly dramatic: on the one hand, large quantities of it continue to be disposed of in unlawful ways; on the other hand, Indian paper manufacturers complain about a massive shortage of waste- paper – not least because of the drop in consumption during the COVID-19 crisis.

According to information from the Indian Corrugated Case Manufacturers’ Association (ICCMA), wastepaper prices in India have doubled in the meantime from about 150 dollars a tonne prior to COVID-19 to about 300 dollars at present. However, the insufficient quantities collected domestically and the pandemic are only part of the reason for this trend. The situation in China also plays a role.

Since China banned the import of waste paper at the start of 2021, Chinese factories have been purchasing recycled kraft paper in India in a big way and using it as the basis for their own paper production. According to information from ICCMA, about 20% of the Indian kraft paper output will go to China this year. That amounts to about two million tonnes. Thus, the Indian domestic market lacks these same quantities. In 2018 the export rate was still at 0%.

Another outstanding issue is how India will deal with the increasing quantities of waste. Until a few years ago it had not experienced waste in the huge volumes it is seeing nowadays. Electronic waste is one example. A regulation in force since 2018 stipulates that manufacturers should set up systems for taking back discarded electronic devices, but these efforts have not really gained traction. In 2020, there were just 312 businesses in all of India that were authorised to recycle electronic waste.

With their capacities, these businesses manage to handle at most a quarter of the electronic waste generated nationwide. The situation has been improved slightly by the informal sector. According to some estimates, it recycles up to 90% of the electronic waste that is generated. Compared to glass or paper, however, electronic waste poses a much greater risk of informal recyclers not treating the collected material with state-of-the-art approaches and thereby endangering themselves and also the environment.

“The waste volume is growing rapidly”

Aditi Ramola, technical director at ISWA, on the current challenges faced by the Indian waste management sector.

If you had to describe waste management in India in a few words, how would you do so?

India is a rapidly growing country, and the volume of waste is growing accordingly. The population is currently 1.3 billion and is still growing. At the same time, economic output is rising, and with it prosperity. So on the one hand we have more consumption, but on the other, we still have the problem that waste is often not collected and disposed of properly. The construction of waste and resource facilities and landfills that are properly managed and do not endanger the environment is therefore still an important issue. Another challenge is the very high level of construction activity. In terms of volume, construction and demolition waste are the largest fractions at 500 to 700 million tonnes per year. Then comes industrial waste at around 200 million tonnes and municipal solid waste at around 62 million tonnes per year.

And here, the proportion of plastic is also increasing massively

This is a development that we have been experiencing since the early 1990s, ever since India opened up its market. However, the wet fraction still accounts for the largest share of municipal solid waste, at around 60% according to some studies. It is relatively easy to process if it is separated at the source. This means that the most urgent recycling mission at the moment must be to separate this fraction from other fractions. Separating the wet fraction, dry fraction and sanitary waste in every household would be an important step. Unfortunately, despite robust waste management rules and regulations that were mostly updated in 2016, implementation lags behind across most of the country. The situation is better in large cities and worse in smaller towns.

At the same time, however, there are reports that the recycling rate in India is very high. In some cases, there is talk of up to 60%.

The figures on this vary widely. The reason for this is that a large proportion of waste is collected and subsequently recycled in the informal sector. It is therefore difficult to say to what extent the figures are correct. In any case, the informal sector is very important, which is why efforts are being made to integrate it into the municipal waste management system. The collectors then receive ID cards, for example, and work on behalf of the municipalities. The informal sector is particularly important when it comes to collecting and recycling the dry fraction, i.e. paper, glass, plastic and metal.

What will India’s waste management sector have to face in the future?

Plenty. As mentioned at the beginning, we need to continue to increase collection rates, otherwise, we will not be able to control the improper management of waste, which has an impact on human health and the environment. At the same time, India must find ways to respond to the increasing amounts of plastic in the trash. Here, the trend is more towards technical solutions rather than reduction and prevention. And finally, India is not unaffected by new types of waste. Here, too, the proportion of electronic waste and hazardous waste is rising

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