Latin America Recycled Plastics Market Opportunity and Size 2022 - 2026

Latin America is grappling with significant challenges related to plastic waste management. With over 300 million tons of plastic consumed worldwide each year, the region faces a pressing need to tackle the environmental impacts of single-use plastics (SUPs). Inefficient waste management practices have led to plastic pollution in landfills, incinerators, and oceans, with an estimated 10-12 million tons of plastic entering the oceans annually. The resultant harm to marine life and ecosystems underscores the urgent need to prioritize investments in the global recycled plastics market.


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The recycled plastics market in Latin America has witnessed substantial growth in recent times, driven by increasing demand from various end-users. The cost-competitiveness of recycled plastics compared to virgin counterparts has unlocked significant market potential. This commoditization of plastic waste streams offers an effective solution to address plastic waste pollution and contribute to the creation of a circular economy for plastics. Plastic recycling enables the recovery and reprocessing of scrap or waste plastic into functional and useful products.

Polyethylene Terephthalate (PET) and High-density Polyethylene (HDPE) Lead the Recycled Plastics Market

The global recycled plastics market was valued at US$19.5 billion in 2019 and is projected to reach US$30.2 billion by 2026, exhibiting a robust growth rate of 8.1% between 2022 and 2026. Rising consumer awareness and the drive for sustainable packaging have compelled brand companies and governments to restrict the use of single-use plastics in packaging applications. This has led consumer packaged goods (CPG) companies to incorporate a high level of recycled PET content in their packaging. Recycled PET, sourced primarily from post-consumer waste such as bottles and trays, is expected to witness a demand growth rate of 7.4% between 2022 and 2026 due to the increasing demand for sustainable packaging materials. PET and HDPE accounted for over three-fourths of the total recycled plastics market in 2019.

Leading consumer brands such as Coca-Cola, PepsiCo, Unilever, and Nestlé have pledged to integrate recycled plastics into their product packaging to achieve sustainable packaging goals. The strong demand from the packaging industry, driven by environmental sustainability commitments and long-term cost savings, is expected to fuel the market for recycled high-density polyethylene (HDPE) and polyethylene (PP). PP and PE waste for the recycled plastics market primarily comes from post-industrial waste streams, with a certain percentage originating from post-consumer waste. The production of engineered plastics recyclate such as ABS, nylon, and polystyrene is expected to grow with the advancement of collection and sorting systems, as well as recycling technologies.

Non-food Packaging and Food Packaging as Key Consumer Segments in the Recycled Plastics Market

The packaging industry generates an estimated 170 million tons of plastic waste annually, making it a significant contributor to plastic waste generation. Non-food packaging accounted for more than 39% of the total recycled plastics market in 2019. Applications such as containers for pharmaceuticals, cleaning chemicals, automotive fluids, and personal care products are expected to drive the demand for recycled plastics in non-food packaging over the coming years. Additionally, the food packaging segment is projected to be the fastest-growing application segment in the recycled plastics market. Many companies in this segment are actively reducing their usage of virgin plastics in packaging and investing in creating circular economies for plastics, which promotes the use of food-grade recycled plastics. In terms of value, the recycled plastics market in food packaging is expected to grow by 8.9% between 2022 and 2026.

The construction sector in Latin America is also recognizing the potential of recycled plastics and adopting more sustainable practices. Recycled plastics can be incorporated into construction materials such as polymeric timbers, flooring tiles, indoor insulation, carpeting, roofing tiles, fences, and bricks. These materials offer advantages such as durability, lighter weight, and high strength, making them suitable for both residential and commercial construction projects. The increasing adoption of recycled plastics in the construction sector will contribute to the growth of the recycled plastics market in Latin America.

Supportive Government Policies and the Pursuit of Resource Sustainability Drive the Recycled Plastics Market in Latin America

Governments in Latin American countries are implementing supportive policies to promote the consumption of recycled plastics and improve recycling rates. These policies aim to boost the domestic recycled plastics market and enhance collection systems through economic incentives. Additionally, regional initiatives and agreements are being developed to encourage collaboration and knowledge sharing among Latin American countries to address plastic waste challenges effectively.

Key Companies in the Recycled Plastics Market Focus on Expansion

The recycled plastics market in Latin America is characterized by a high degree of fragmentation, with small and medium enterprises dominating the regional and domestic landscape. While the COVID-19 pandemic impacted the profit margins of companies in the recycled plastics market, leading packaging companies resorted to using virgin plastics due to the low prices of crude oil in the latter half of 2020. However, many companies remain committed to their sustainability targets and are establishing new production capacities to support a circular economy. Major players in the global recycled plastics market, including Indorama Ventures Public Company Limited, Borealis AG, ALPLA Group, LyondellBasell Industries N.V., and KW Plastics, are investing in vertically integrated systems to ensure a consistent flow of feedstock. These efforts enable better control over feedstock supply and contribute to the resilience of the recycled plastics market.

In conclusion, Latin America is recognizing the significance of the recycled plastics market in addressing plastic waste issues and advancing toward a circular economy for plastics. With supportive government policies and the increasing emphasis on resource sustainability, the region is poised for significant growth in the recycled plastics market. By promoting the adoption of recycled plastics in various industries and fostering collaboration among stakeholders, Latin America can contribute to a more sustainable future.

 

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