Latin America: Transforming Plastic Waste into an Economic Resource

Latin America, a continent of exceptional natural wealth, faces a rising tide of plastic waste that threatens its natural environments and economies. Faced with recycling rates that struggle to take off, a new approach is gaining ground: the circular economy. This model proposes breaking away from the "throwaway" logic to transform waste into a valuable resource, paving the way for innovation and more sustainable development.

A continent producing 11% of raw materials but recycling only 4% of its plastics

The situation of plastic management in Latin America and the Caribbean is marked by a profound paradox. The region, which represents only 8.3% of the world's population, is the source of more than 11% of the planet's raw materials. However, it lags behind in recycling, with an average rate stagnating around 4%, far from European performance. This delay is explained by a combination of factors: still largely insufficient waste treatment infrastructure, public policies in favor of the circular economy that are only just beginning to be structured, and the strong presence of an informal recovery sector.

This informal sector, composed of millions of "cartoneros" or "catadores," is a key and yet little-known part of the system. It is estimated that these shadow workers are responsible for collecting nearly 50% of all recycled materials in the region. Their contribution is therefore fundamental, but their work is carried out in conditions of great precariousness and without official recognition. A report published jointly by the Inter-American Development Bank (IDB) and the United Nations Environment Programme (UNEP) in 2023 highlights the urgency of integrating these actors into formal value chains. The document, entitled "Unlocking Circular Economy Finance in Latin America and the Caribbean," calls for rapid action to support micro, small, and medium-sized enterprises (MSMEs), including recycler cooperatives, considered essential drivers of the transition.

To achieve this, the report's authors advocate for a overhaul of environmental legislation, the establishment of strong public-private partnerships to finance circular projects, and the establishment of clear classification and measurement systems to guide investments. As Susana Cordeiro Guerra of the IDB points out, it is about identifying opportunities for governments and financial institutions to contribute to the creation of more sustainable and equitable economies.

Four countries, four strategies for circularity

While the region faces common obstacles, the approaches to overcome them vary from country to country. Mexico, Colombia, Chile, and Brazil stand out with notable strategies and advances, illustrating the diversity of possible paths towards a circular plastic economy.

In Mexico, 63% of PET is already recycled

Mexico has established itself as the undisputed leader in PET (polyethylene terephthalate) recycling in Latin America. With a post-consumer recycling rate of 63%, the country largely surpasses the North American average (37.8%) and that of the United States (29%). This performance is based on a solid infrastructure of 27 recycling plants, capable of processing more than 80% of national consumption of PET packaging. The objective is now to reach a rate of 80% by 2030.

However, significant obstacles remain. The design of many plastic packages remains incompatible with existing recycling channels, and markets for post-consumer resin (PCR) lack stability. To address these issues, the Association of Plastic Recyclers (APR) has expanded its activities in Mexico. Its action focuses on standardizing the quality of packaging through design guides, certifying recycled content to align with international standards, and strengthening the supply chain. "We need to stop designing plastic packaging for shelves and start designing it for recycling," insists Martha Ricardi, APR's Director of Strategy for Latin America. Citizen initiatives such as the digital platform Ecolana complement this system by providing an interactive map of recycling points, facilitating citizen engagement.

Colombia bets on an integrated national strategy

Colombia has opted for a global approach by launching its National Circular Economy Strategy in 2020. This action plan aims to reduce waste production at the source, promote eco-design of products, and implement the principle of Extended Producer Responsibility (EPR). Concrete measures have followed, such as the ban on certain single-use plastics and the study of a deposit-refund system for bottles.

The country has also encouraged the creation of circular business incubators to stimulate innovation. The Circular Economy Lab, a collaboration between the Ministry of Environment and UNDP, and Red Cluster Colombia, an initiative of the confederation of chambers of commerce, offer technical and financial support to start-ups. In Medellín, the Circular Valley platform encourages collaboration between entrepreneurs, researchers, and investors to foster new economic models.

Chile adopts a roadmap for 2040

Chile stands out for its long-term planning. The country has not only created a Circular Economy Office within its Ministry of Environment but has also published a "Roadmap for a Circular Chile by 2040." This document sets a clear vision for a regenerative and equitable economy. The Extended Producer Responsibility law, in force since 2016, is the cornerstone of this strategy, obliging manufacturers of six product categories, including packaging, to organize and finance the end-of-life of their products.

The Chilean private sector shows remarkable dynamism. Companies like the brewer CCU and the giant Nestlé have innovated by marketing, respectively, a beer bottle containing 30% recycled PET and a fully recyclable water bottle. The start-up Idea-tec has even developed a paint made from recycled expanded polystyrene, an illustration of the innovation potential of the circular economy.

Brazil integrates its millions of "catadores"

As the continent's largest economy, Brazil has a decisive role to play. The country recently strengthened its regulations with a new decree setting progressive recycling targets and stricter compliance rules for packaging. Brazil also participates in the "Plastic Reboot" program, funded by the Global Environment Facility (GEF), which promotes circular solutions to plastic pollution.

But the Brazilian particularity lies in the central role of its informal recycler cooperatives, the "catadores." These workers form the basis of the country's recycling industry. Innovative initiatives are now seeking to formalize and value their work. The DETRASH platform, for example, has developed a payment system based on blockchain technology. This system offers a public and verifiable certificate for each transaction, thus integrating informal recyclers into the formal value chain. This approach not only improves their income and working conditions but also strengthens the traceability and reliability of the supply of recycled materials.

The invisible architects of the circular economy

The integration of millions of informal recyclers is undoubtedly the most singular and fundamental aspect of the circular transition in Latin America. As mentioned, these workers collect up to 50% of recycled materials, forming the backbone of a system that struggles to recognize them. Organized into cooperatives in many countries, they possess invaluable practical expertise in collection and sorting but still face great precariousness.

An equitable circular economy cannot be built without them. The formalization of their status, the guarantee of fair remuneration, and the improvement of their working conditions are prerequisites. Initiatives like DETRASH in Brazil show that it is possible to use technology to structure the sector and ensure a better distribution of value. Support for cooperatives, through access to training, financing, and their integration into formal supply chains, is a sine qua non for accelerating the transition on a large scale.

A multi-speed transition but a common direction

The circular plastic economy in Latin America is a complex reality, a mosaic of advances and obstacles. The region is progressing, but at different rates. Mexico and Chile are pioneers, with solid regulatory frameworks and proven results on certain material flows. Colombia stands out for its integrated approach and support for innovation, while Brazil highlights the social imperative of integrating the informal sector.

Despite this progress, overall recycling rates remain low, infrastructure is often undersized, and public policies still lack harmonization at the regional level. The financing of this massive transition remains a critical point, requiring strengthened collaboration between governments, financial institutions, and the private sector.

The future of the circular plastic economy in Latin America will depend on the region's ability to transform these obstacles into opportunities, relying on its vital forces: an increasingly committed private sector, a mobilized civil society, and the indispensable know-how of millions of recyclers who, every day, transform waste into resources. The road is still long, but the initiatives springing up across the continent outline the contours of a more sustainable future for Latin America.