Ministry of Environment and Korea Environment Corporation announced that it would begin to build 10,00 tons of recycling materials for PET in reserves, the recycling goods which were hit hard by economic recession, drop in oil price, and export plunge amid COVID-19.

On May 7th, the first day of public reserves of PET materials, Minister of Environment Cho Myung-rae visited Saerom E&G (President Yoo Young-gi) in Hwasung City, Gyeonggi-do Province for public reserve site inspection.

Amid the plunging oil prices and weakening competitiveness of recycling plastic raw materials, as well as COVID-19 across the world, export have been dropping sharply since April. As a result, the sales of recycling PET raw materials*, which depends on the demand in Europe and the US, fell dramatically**.

* 60~70% of PET recycling raw materials depend on export (10% for raw materials, 50~60% exported after processing)

** Sales volume by PET recycling companies : 16,855 tons on average from January to March → 9,116 tons in April (a 45% decrease)

PET recycling material providers, therefore, see stock continue to pile up*, while serial market instability is feared ranging from sorting to collection (discharge-collection-sorting-recycling-clients) 

* Stock volume changes by 8 major PET recycling companies (accounting for 77% of 23 companies) : 57.8% in the Week 1 of April → 60% in Week 2 → 64.6% in Week 3→ 69.9% in Week 4 → 72.9% in Week 5

In response, Ministry of Environment decided to keep public reserves of PET recycling raw materials on April 22nd. The Ministry conducted site inspection of 23 recycling companies from April 27th to 29th to keep 10,000 tons in public reserves out of the current stock of 18,000 tons.

* About twice the net increase in PET stocks (5,000 tons) in April which rose sharply recently

For this public reserves system, Korea Resources Circulation Service Agency will buy stocks in advance at 50% the market price on the condition of resale. This will help recycling companies secure capital liquidity while contributing to improving circulation of recycled goods.

While implementing the public reserves system, Ministry of Environment will continue to identify new demand and limit import of waste and recycling raw material. The Ministry will also enforce price sliding system from the collection stage to adjust purchasing price of recycling goods.

To identify new demand, Ministry of Environment will support export channel expansion while signing MOUs with recycling material companies and recycling companies so that imported materials can be replaced with domestic materials.

In addition to the pilot project of separated PET bottle collection system introduced in February, Ministry of Environment will provide support so that transparent waste PET bottles can be recycled as quality material used to produce clothes and other goods.

* Ministry of Environment signed MOU with Jeju City, Cheonan City, recycling companies, long fiber producers, and clothes companies in April.

On April 22nd, Ministry of Environment also recommended the cut in selling price of recycled goods from apartment houses by 39.2% (as of the second quarter of 2019) and will work with local governments to make sure price sliding system takes root. 

The Ministry will announce the administrative notification in May to ban import of waste plastic such as replaceable PET bottles in order to promote consumption of local plastic recycling material.

To make sure that the collection system of recycled goods addresses the increasing uncertainty in the recycling market, Ministry of Environment will conduct special inspection* of the market from collection, sorting, recycling, to demand with local governments from May 7th to 13th.

* Visiting inspection and telephone survey of around 1,000 companies 

The Ministry will look into the general market conditions and shift to public collection system. While checking what is necessary to improve the conditions of recycling market, the Ministry will open ‘Call center for recycling market in COVID-19 at 044-201-7390’ within the Ministry to hear the voices from the industry. 

Minister of Environment Cho Myung-rae said “We will thoroughly inspect the general recycling market to address inconvenience for the general public and implement appropriate measures in a timely manner.”

“My ministry will also remain vigilant and have the worst-case scenario in mind due the rising instability from COVID-19 in coming up with measures,” added Minister Cho, asking for citizens to reduce disposable item use and cooperate in separated discharge of recycling waste.