Keys to understanding recycling in Argentina

The text of this article reproduces the conclusions of Diagnosis and perspectives of recycling in Argentina: economic, social and political factors, Baca Castex, N., and Martingorena, M. del R. (2024)., final work of the Bachelor's degree in Environmental Management at the Raúl Scalabrini Ortiz National University of San Isidro.

In Argentina, more than 50,000 tons of urban solid waste are generated daily. Only a tiny fraction, around 6%, is reinserted into recycling systems. What happens to the rest? Why isn't this potential transformed into results? Who sustains the recycling system today? And what role do the state, the private sector, and society play in this chain?

These questions guided our research, which culminated in the work "Diagnosis and Perspectives of Recycling in Argentina: Economic, Social, and Political Factors." The objective was to unravel the dynamics that shape the recycling of post-consumer waste comparable to household waste in the country. We did so using a qualitative approach, combining a literature review and interviews with stakeholders throughout the chain: urban recyclers, sorting plants, collectors, recycling industries, public officials, technicians, and industry leaders.

The recycling system in Argentina is based on a fragmented structure, supported primarily by urban recyclers and local governments, who are responsible for collecting, sorting, and delivering materials to the recycling circuit. Adding to this situation are factors such as the falling value of recyclable materials, in contrast to the sustained increase in operating, transportation, and energy costs. This scenario highlights the urgent need for structural transformations, including the passage of an Extended Producer Responsibility (EPR) Law that would redistribute responsibilities and ensure financing for the system. Without fundamental reforms, the profitability of recycling will continue to deteriorate, seriously compromising its long-term sustainability.

"These two materials (cardboard and plastics) constitute the main sources of income for sorting plants and urban recyclers, so this situation puts the economic viability of the sector at risk."

Regarding the fall in recyclable material prices, the slowdown in economic activity led to an overstock of both raw materials and finished products in the recycling industry. Added to this was the recent relaxation of import restrictions on recyclable waste, which has led to a drastic drop in cardboard prices, from a peak of USD $300 per ton in December 2023 to USD $152 per ton by the end of 2024. With cumulative inflation of 170% over the same period, this downward trend in prices will continue into 2025. In the case of plastics, in addition to the impact of the economic slowdown, 2024 saw a drop in the price of oil, to which the prices of both virgin and recycled plastics are linked, which also affected their sales value. These two materials (cardboard and plastics) constitute the main sources of income for sorting plants and urban recyclers, so this situation puts the economic viability of the sector at risk. Furthermore, materials such as glass face a strong concentration of demand in a few industries, which often charge prices below the operating costs required for their sorting and packaging. The result is clear: in much of the country's interior, especially in areas far from urban centers where most recycling industries operate, glass recycling becomes economically unviable.

"(…) the responsibility for the comprehensive management of urban solid waste (GIRSU) falls on the municipalities. However, this task requires financial, human, and logistical resources that many local governments either lack or have very limited."

In a country as vast as Argentina, recycling faces significant logistical challenges. The high cost of transportation is one of the main obstacles, especially considering that most recycling industries are concentrated in the center of the country. This situation seriously compromises the viability of recycling in remote regions. This problem, combined with the specific context of each material, poses various complex situations regarding the profitability of the activity. For example, today, a freight shipment from Formosa to Buenos Aires for transporting cardboard costs an average of ARS $2,000,000 + VAT, while the sale of 25 tons of the material (equivalent to the average maximum capacity of a full truck) generates ARS $3,031,000 + VAT. In other words, transportation costs represent more than 65% of the sales value of the material, rendering the operation unprofitable. Similar situations are observed with other materials, where the impact of logistics costs on sales revenue continues to rise. This trend jeopardizes the economic sustainability of the recycling system in the country's interior.

"(…) the need arises to recognize the recyclable sorting and treatment service as a public and remunerated service, since its financing cannot depend exclusively on the market value of the recovered materials."

Through this work, we identified that many sorting plants fail to meet the standards required by the recycling industry for the delivery of recyclable materials. Among the main requirements are minimum bale weight, consolidated delivery volume, the ability to issue invoices, and registration in the corresponding tax regimes. These limitations reinforce the role of collectors as an indispensable link in the recycling chain. By accumulating small volumes from different plants, they achieve the necessary conditions to operate with the recycling industry, thus ensuring the continuity of the recovery cycle.

In this context, waste sorting plants face serious threats to their sustainability and operational continuity. Our analyses of sorting plants in different regions of the country show that, without external financial support—whether municipal, provincial, or national—the operation of these facilities, essential for recycling, is unsustainable. The income generated from the sale of recyclable materials is insufficient to cover operating costs, which include maintenance, rent, personnel, transportation, supplies, and services. This underscores the need to recognize the recyclable sorting and treatment service as a paid public service, since its financing cannot depend exclusively on the market value of the recovered materials.

"(…) the lack of an Extended Producer Responsibility (EPR) Law is notable, given that this could be a strategic tool to alleviate the aforementioned difficulties, driving and incentivizing demand for recycled material."

Not only sorting plants are affected by rising transportation and energy costs; recycling industries are also suffering this impact. These increases are compounded by a drop in sales of finished products, which reduces the sector's revenue and worsens its economic sustainability. This combination of factors puts this key link in the recycling chain at risk. Faced with this scenario, recycling industries, the main consumers of recyclable material sorted by the previous links, have reduced the amount of material they acquire. Many are operating below maximum capacity due to an overstock of finished products, which, in turn, generates stagnant prices for recyclable materials. This situation is exacerbated by the loss of competitiveness compared to virgin material. Another factor threatening the survival of these industries, especially plastics recycling industries, is the smuggling of waste, primarily PET, to neighboring countries such as Brazil and Paraguay. This informal outflow of materials reduces the availability of inputs for local industry, distorts the market, and further weakens the sector's sustainability.

Regarding the regulatory framework, given these situations specific to the Argentine economy, the lack of an Extended Producer Responsibility Law (EPR) is notable, given that this could be a strategic tool to alleviate the aforementioned difficulties, driving and incentivizing demand for recycled material. Furthermore, by redistributing waste management costs among producers, municipalities, and recyclers, it would not only relieve public coffers but would also improve the traceability of materials, promote eco-design, and generate new financing flows for collection and treatment. The increased demand for recycled material would be taken advantage of by the recycling industry, which currently operates with 40% idle capacity, according to Ecoplas, due to a lack of collection systems and properly classified and separated materials at source. This shows that it is not the infrastructure that is lacking, but public policies, interjurisdictional coordination, and a regulatory framework that makes the circuit viable.

Meanwhile, the sector's declining profitability threatens to dismantle a network involving more than a thousand actors across the country—including sorting plants, collectors, and recycling industries—that could grow with the right impetus. Recognizing recycling as an essential service, planning with a federal vision, and promoting real incentives for the circular economy is not only an environmental necessity; it's also a productive and social opportunity that should no longer be postponed. Our comprehensive research offers a detailed diagnosis because to change the system, we must first understand it.

NBC and MRM

The author holds a degree in Environmental Management from the Raúl Scalabrini Ortiz National University of San Isidro and is a member of La Ciudad Posible.

Note published in the Café de las Ciudades magazine, in the May issue: https://cafedelasciudades.com.ar/articulos/claves-para-entender-el-reciclaje-en-argentina/