Financially Sustainable

FIGURE 4.16

Principles for Making Recycling Markets More Financially Sustainable

Create reliable Supply Generate long-term Demand

Develop sustainable national and global Markets

• Increase quality and quantity of recycled material and plastics processing capacity • Establish recycled-design standards for sustainable plastics • Create pathways towards formalization and support microenterprise development programs • Introduce fiscal, market, and regulatory instruments • Implement EPR systems • Expand corporate disclosure and commitment to drive long-term agreements • Create behavioral nudges • Enable credit-trading platforms for recyclables • Increase transparency of pricing mechanisms for recycled plastics

Source: Personal communication with Delphine Arri, World Bank Senior Environment Engineer, and James Michelsen, IFC Senior Industry Specialist. Note: EPR = extended producer responsibility.

Saudi Arabia and the United Arab Emirates are developing eco-parks that will use recycled materials. Saudi Arabia is also finalizing its national strategy for the circular economy. All these are important initiatives taking shape in the region, showing the increased attention to circulareconomy models.

National and sector goals and policy road maps are important to give vision to the sector, create an enabling environment, and outline necessary steps toward making the most of these opportunities. National targets for used recycled materials and plastics that consider current baselines and potential capacities are helpful to incentivize conversations with all industry stakeholders. High-income countries and regions such as the EU have set goals based on industry analysis and potential to be achieved in a relatively short period of time. For example, the EU mandated that, by 2025, at least 55 percent of all plastic packaging in the region must be recycled. As of 2017, this rate was 42 percent. The clear requirements and targets mean that there is less confusion and better enforcement. The best policies that deal with plastics are those that engage with stakeholders across the value chain and have clear targets that enable stakeholders to understand what is required of them.

Develop Inclusive Recycling Systems

Recycling is still in the development phase, and most of it lies in the hands of the informal sector. Dry recyclables such as paper and cardboard, plastics, and metals are collected from the streets, landfills, or open dump sites by individuals and are recycled or sold abroad depending on the options available in the particular country. Egypt, Morocco, and Tunisia have large, informal solid-waste and recycling sectors whose integration is key to modernize SWM (Scheinberg and Savain 2015).

Informal recyclers are increasingly recognized for creating value for their cities. They are usually responsible for most of the recyclable materials, and local authorities have begun to see these benefits. Informal recycling also secures livelihoods for many low- and semiskilled workers and secures waste management services for poor and marginal areas and difficult-to-reach parts of the cities. The objective of several programs and initiatives in the last few years has been to integrate informal recyclers into urban waste management systems and strengthen their access to local and international value chains. The goal is to develop a modern, high-performance, inclusive urban recycling system that relies on cooperation between the informal sector and local SWM authorities (Pew Charitable Trusts and SYSTEMIQ 2018; Scheinberg and Savain 2015).

Recyclers in Morocco. Despite some progress, recycling remains largely informal and operates under precarious conditions. In Morocco, recycling is not clearly defined in the current Law 28-00. Most pretreatment is performed manually, which lowers efficiency. Recyclers sort polymers primarily depending on demand and market value: PET making up 30 percent of all recycled plastics; LDPE and HDPE making up 29 and 27 percent, respectively; and PVC making up 10 percent. Some recyclers are organized or semiorganized and provide some pretreatment of waste (like washing, grinding, and so forth) for producing materials in the recycling industry (powder, granules, flakes, and so forth).

According to the Association de Valorisation du Plastique, in 2019 the plastic-recycling sector in Morocco had 70 plastic-recycling units (co-ops and associations), processes the equivalent of 60,000 tons of waste per year (for a turnover of DH 720 million, which is around US$78 million), and provides approximately 2,000 direct jobs and 5,000 indirect jobs. Although waste pickers are part of the first link of the value chain, they remain socially excluded and exposed to health risks and abuse by intermediaries and wholesalers. Most recyclers have low education levels and are often illiterate (World Bank 2021d).

Crucially, recyclers in Morocco, like elsewhere, face the challenge of providing a material that is often more expensive than virgin plastics. Aside from the subsidized plastic production, this is due to the lack of

investment and capital. In addition, this sector’s place in the value chain suffers from (a) lack of equipment for washing, compressing, and crushing waste to increase the sales price; (b) lack of training and capacities to preserve workers’ health and maintain work equipment and tools; (c) abuse of workers by intermediaries and wholesalers; and (d) lack of awareness by the general population regarding sorting at source, which would dramatically help recovery rates (World Bank 2021d).

Recyclers in Egypt. Similarly, the informal sector in Egypt is complex, with different groups of people recovering materials and selling. The Zabbaleen—a term for many in the informal recycling sector (coined from the Egyptian Arabic word for “garbage people” and hence understandably perceived as derogatory—is estimated to be a community of over 250,000 people. They provide collection, recovery, processing, and recycling services to the Greater Cairo area of approximately 20 million people in 2020. In 1986, the newly established Cairo and Giza Cleansing and Beautification Authorities (CCBA and GCBA) began licensing them (EcoConServ 2010).

Of all the actors in the current waste system, the traditional informal waste pickers recover the largest volume of materials from the city. They do so with a regularity that has granted them an established role in the nation’s waste recovery and recycling. They collect an estimated 65 percent of Cairo’s waste, recycling around 85 percent of that amount (EcoConServ 2010).

Other groups of vulnerable people working with recyclables are the Sarriiha (singular Sarriih) and lae’ita. Sarriiha are those who roam the streets buying, trading, and exchanging recyclable waste items, and lae’ita are those who scavenge and collect the waste by picking through dumps, landfills, and street bins. They roam the country in both rural and urban areas either with pushcarts or on donkey-pulled carts. Unlike the Zabbaleen, the lae’ita do not collect from households or regular commercial and institutional clients. They are not organized into nonprofit organizations, cooperatives, or trade associations and thus have limited support. Basically, they exchange mainly plastics and metal that housewives set aside for them in return for household items of utility. Usually, these groups are linked to a trader (a mo’allem) who owns a depot and supplies their donkey cart and the day’s cash for immediate transactions.

Principles for a more inclusive recycling sector. Although formal integration is increasing its visibility and moving rapidly, the situation in the Middle East and North Africa remains complex and requires more attention. Decision makers’ growing awareness of structural integration of informal workers is developing in a supportive and global environment. More interventions are targeting professionalization of recycling workers, although there is still a need to build better consensus about

how and at what pace. International experiences provide several broad principles for inclusion of informal waste pickers to support the objectives of a circular economy and the recycling of waste:

• Provide pathways to formalization, licensing, and compliance to ensure market transparency for informal waste pickers

• Recognize informal recyclers’ work as an occupation and call them

“recycling workers”

• Facilitate enterprise development programs through cooperatives or associations for informal waste pickers and collectors

• Provide financial support for establishing small, medium, and large recycling units through suitable incentives

• Through community-based organizations, implement awarenessraising programs for waste pickers regarding health, safety, and financial matters

• Implement awareness programs for other stakeholders about informal waste pickers and their mainstreaming into the economy.

With appropriate policies, governments can create more jobs and improve the working conditions of informal waste pickers by building capacity for the delivery of higher-quality products through training and small enterprise or microenterprise development programs. In addition, the informal industry can be provided with a pathway to formalization, licensing, and compliance to ensure a transparent market and level the playing field with formal recyclers that comply with environmental, health, and safety standards and other requirements (as discussed in box 4.11, with examples from Latin America).

More generally, the region’s economies could profit from increased job potential induced by higher rates of recycling. With China banning imports of lower-grade waste in early 2018, the case for developing proper waste management infrastructure in the Middle East and North Africa and developing its domestic recycling capabilities has been strengthened (Al-Sadoun 2018). In the GCC countries alone, an increase of approximately 40 percent in recycling rates would cut CO2 emissions by 10–12 million tons per year and decrease primary energy consumption. Furthermore, the creation and advancement of the recycling industry in these countries could create 50,000 new jobs with a total market potential of around US$6 billion per year, and investors can expect operating margins of above 15 percent in various opportunities across the value chain (Menachery 2020). In Tunisia, the ECOLEF