Recycling Business Potentially A $20 Bn Opportunity: Report
India has the potential to seize a USD 20 billion opportunity by 2030 through the recycling of plastics, electronic waste and batteries, according to a report by investment banking firm Avendus Capital.
The report titled 'Circular Economy: Recycling Waste to Wealth' said that the increasing global pressure to adopt sustainable practices emphasises the urgent need for policies that promote resource conservation, waste reduction, and decreased reliance on fossil fuels to mitigate climate change.
Avendus Capital, Managing Director and Head of Industrials Investment Banking, Koushik Bhattacharyya asserted that the recycling sector is currently at a turning point due to the growing emphasis on sustainability and regulatory support. Businesses are recognising the benefits of sustainability, not only in terms of ethical responsibility but also in terms of enhanced brand value. Customers are increasingly favouring environmentally conscious brands, while investors are placing greater emphasis on environmental, social, and corporate governance (ESG) criteria.
Bhattacharyya predicted that the recycling sector will witness a transition towards organisation and efficiency, with new companies emerging to address bottlenecks throughout the value chain and promote India's circular ecosystem.
Despite the rising awareness surrounding circular economy practices, the adoption of these practices has encountered challenges. India still heavily relies on materials from primary sources, rather than recycled or secondary sources.
In 2023, it is estimated that only 7 per cent of material inputs worldwide will come from recycled sources. This indicates a gradual decline in circularity globally over the past five years, as the figure stood at 9 per cent in 2018, according to the report.
The recycling sector in India is expected to benefit from several favourable factors, including the new waste management rules, which enforce the principle of "polluter pays" and place obligations on brand owners for waste collection and the use of recycled materials in manufacturing.
Ashish Ahuja, Vice President of Industrials Investment Banking, Avendus Capital, projects that India's plastic waste recycling industry will grow at a compound annual growth rate (CAGR) of 24 per cent, reaching USD 10.2 billion by FY30. This growth will be driven by the increased utilisation of recyclable plastics, the surge in demand for packaging related to e-commerce and quick-commerce, and the application of lightweight materials in product manufacturing.
Furthermore, with the implementation of e-waste management rules and advancements in recycling techniques that enhance the recovery of precious elements, e-waste recycling is expected to experience a CAGR of 23 per cent and reach USD 7.5 billion by FY30, as stated by Ahuja.
