South America Plastic Recycling Market Outlook, 2030

South America’s plastics recycling landscape sits at the intersection of growing industrial demand, entrenched informal collection systems, and accelerating policy interest, and it has evolved from small-scale, fragmented sorting yards and informal ‘catador’ networks into a mixed economy of formal recyclers, municipal programmes and multinational investments, the typical recycling pathway is simple to describe in one line collect, sort, clean, reprocess into flakes or pellets or convert by advanced routes but the reality is complex because most post-consumer flows are captured and graded by informal collectors before reaching formal processors, packaging remains the single largest waste stream, and multilayer flexible films and laminates are the toughest plastics to recycle because they combine dissimilar polymer layers, adhesives and barrier films that defeat mechanical reprocessing and require either sophisticated delamination or chemical/dissolution technologies. South American systems still divert only a minority of waste into recycling, a large share of generated plastic ends up in controlled landfills, informal dumps or is exported, and informal material recovery accounts for a disproportionate share of collected recyclables in countries such as Brazil where community collectors and cooperatives are essential to the value chain. Biodegradable and bio-based plastics are increasingly discussed but their environmental benefits depend on proper end-of-life management, industrial compostable polymers reduce long-term persistence when collected into appropriate composting streams but create contamination issues in mixed recycling if mis-sorted, while bio-based polymers can lower cradle-to-gate greenhouse gas intensity for some products but need lifecycle verification and composting or chemical recycling pathways to realize net climate benefits. Governments across the region have begun adopting extended producer responsibility measures, pilot deposit-return schemes and formalization programmes for waste pickers to improve collection quality and traceability, national and regional associations provide technical guidance and standardization, and certifications around food-grade rPET, ISCC-type mass balance approaches for chemically sourced feedstocks, and quality standards for recyclates are increasingly used to build buyer confidence and unlock brand demand for recycled content.

According to the research report "South America Plastic Recycling Market Outlook, 2030,", the South America Plastic Recycling market is expected to reach a market size of more than USD 6.58 Billion by 2030. Brazil leads in industrial scale and organized initiatives, Argentina and Chile have growing policy frameworks and collection pilots, Colombia and Peru are expanding municipal sorting and partnerships with recyclers, and the common thread is that formal processors, informal collectors, consumer goods companies and local authorities must coordinate to scale circular flows, recent developments include investments by domestic petrochemical and downstream firms to secure feedstock and produce higher-quality rPE and rPET, growth in bottle-to-bottle washing and SSP upgrades for PET, and pilots of advanced recycling and solvent-based dissolution in lab and pre-commercial plants to tackle multilayer packaging. Technology is a major enabler: automated optical sorting, AI-enabled sensor fusion for food-grade stream separation, and better washing and SSP reactors have raised the quality of output in larger facilities, while chemical and enzymatic depolymerization pilots are being watched to handle contaminated or mixed streams. Companies and industry actors are stepping up corporate responsibility: major beverage and consumer brands run collection campaigns and partner with cooperatives to formalize catadores, packaging firms are redesigning for recyclability and committing to minimum recycled content targets, and trade associations provide labelling guidance and procurement specifications to funnel demand toward certified recyclates. Opportunities are tangible: improving municipal collection coverage, expanding clean feedstock for bottle-to-bottle loops, retrofitting small recyclers with washing and extruding lines, and leveraging corporate procurement commitments to pay a premium for food-grade recyclate would strengthen markets, at the same time financing, logistics across vast geographies, and scaling technologies to be economically viable remain the practical hurdles.

Market Drivers

• Strong role of cooperatives and informal workers: In South America, waste picker cooperatives in Brazil, Colombia, and Argentina are the backbone of the recycling ecosystem. They collect and sort post-consumer plastics like PET bottles and HDPE jugs, providing recyclers with a steady feedstock stream. Government and NGO programs that formalize and support these cooperatives are strengthening recycling supply chains, ensuring both social impact and material recovery. This unique social structure is a key driver of recycling growth across the region.
• Export opportunities for recycled plastics: South American recyclers benefit from international demand for rPET, rHDPE, and rPP, particularly from Europe and North America, where recycled content mandates are stricter. Brazil and Mexico export recycled PET flakes and pellets to global beverage and textile markets, generating foreign revenue. This export pull encourages investment in recycling infrastructure and ensures that even if local demand fluctuates, recyclers can tap into international buyers for long-term stability.

Market Challenges

• Weak enforcement of recycling regulations: Although Brazil and other South American countries have extended producer responsibility (EPR) frameworks on paper, enforcement remains inconsistent. Many companies do not fully comply with recycling requirements, and municipal waste systems often lack monitoring capacity. This weak enforcement undermines incentives for businesses to invest in recycling and slows progress toward circular economy goals.
• Infrastructure gaps outside major cities: Recycling activity in South America is highly concentrated in large urban centers like São Paulo, Buenos Aires, and Santiago. Rural and smaller cities often lack collection and processing infrastructure, leaving large volumes of plastic waste uncollected or dumped in open landfills. These infrastructure gaps limit feedstock availability and make it difficult for recyclers to scale operations across the entire region.

Market Trends

• Corporate partnerships with recyclers: Multinational consumer goods companies are partnering with local recyclers to secure feedstock and meet global sustainability targets. Coca-Cola and PepsiCo have launched 100% rPET bottles in South America, sourcing material from regional recyclers. Similarly, packaging firms are working with cooperatives to improve material quality. These partnerships are accelerating investments in recycling and raising quality standards.
• Growing focus on food-grade rPET production: The beverage industry is driving demand for food-grade recycled PET in South America. Companies are expanding extrusion and decontamination capacities to produce pellets suitable for direct use in bottles and trays. New plants in Brazil and Argentina are scaling up bottle-to-bottle recycling, while export-oriented operations supply rPET for textile and packaging industries abroad. This trend reflects the central role of PET in regional recycling strategies.HDPE is significant in South America’s recycling market because of its widespread use in bottles, jugs, and packaging containers that form a large share of the region’s plastic waste stream.

HDPE has become a cornerstone of South America’s recycling market because it is one of the most commonly used polymers in packaging and household products. It is the material of choice for milk jugs, detergent bottles, shampoo containers, and many rigid food packaging applications, which are consumed in high volumes across urban populations in Brazil, Argentina, and Chile. Unlike multilayer or flexible plastics, HDPE bottles are relatively easy to collect, sort, and process, making them attractive for recycling cooperatives and industrial recyclers.

Informal waste pickers in countries like Brazil and Colombia collect large quantities of HDPE bottles from households and streets, selling them to cooperatives that clean and bale the material before it reaches recycling plants. This well-established collection pathway ensures a steady feedstock for recyclers. Companies are also driving demand for recycled HDPE: beverage and consumer goods firms are incorporating it into bottles and containers to meet sustainability commitments, while retailers are introducing packaging lines that highlight recycled content. Coca-Cola and Ambev, for example, are investing in regional recycling programs that include HDPE alongside PET.

In addition, recycled HDPE finds applications in non-food products such as pipes, crates, and construction materials, which are important industries in South America’s developing economies. Because of its durability, versatility, and relatively high recovery rate, HDPE holds a central role in recycling efforts, bridging both consumer packaging and industrial applications.

Post-consumer plastic waste is the fastest in South America’s recycling market because of the region’s high urban consumption and strong role of informal collection networks.

Post-consumer plastic waste is advancing quickly in South America’s recycling sector because it represents the most visible and pressing waste stream generated by households and urban populations. Cities like São Paulo, Rio de Janeiro, and Buenos Aires produce massive volumes of single-use packaging waste, including PET bottles, HDPE jugs, polypropylene containers, and multilayer pouches. Much of this waste is collected not by formal municipal systems but by informal waste pickers, or catadores, who recover bottles and containers from landfills, streets, and households.

These collectors form the backbone of recycling supply chains in Brazil and other countries, providing a steady stream of post-consumer plastics to cooperatives and recycling plants. As demand for recycled materials grows, particularly PET and HDPE, the value of post-consumer waste has increased, encouraging greater collection and recovery efforts. Consumer goods companies are also driving this momentum by launching initiatives that directly rely on post-consumer feedstock.

For instance, Coca-Cola and PepsiCo have introduced bottles made from 100% recycled PET in South American markets, creating demand that can only be met through expanded post-consumer collection. Governments are adding pressure by implementing extended producer responsibility schemes, requiring companies to take back or recycle a portion of their packaging, with Brazil being one of the most active in this area.

Mechanical recycling dominates in South America because it is affordable, widely accessible, and suited to the types of plastics most commonly collected in the region.

Mechanical recycling is the primary method used in South America because it is the most cost-effective and established way to process the plastics available through local collection systems. The region’s recycling networks, which rely heavily on informal waste pickers and cooperatives, focus on plastics like PET, HDPE, and PP, which can be washed, shredded, and re-extruded into new pellets with relatively simple technology. Recycling plants in Brazil, Argentina, and Colombia typically operate on mechanical lines that process baled PET bottles into rPET flakes or convert HDPE and PP containers into pellets for use in packaging, pipes, and industrial products.

This approach is more feasible in South America than chemical recycling, which requires heavy capital investment and advanced infrastructure that is still limited in the region. Companies such as Mohinani and Indorama Ventures have invested in PET recycling plants in Latin America, showing the strength of conventional bottle-to-bottle mechanical recycling. The widespread use of PET in beverages and HDPE in household products aligns well with mechanical processes, creating a reliable supply of feedstock.

Additionally, local governments and international NGOs have supported mechanical recycling projects because they generate jobs and integrate informal workers into cooperatives, reinforcing its social and economic value. While advanced technologies are being explored, mechanical recycling continues to dominate because of its maturity, scalability, and compatibility with the plastics most prevalent in South American waste streams.

Packaging is the largest segment in South America’s plastic recycling market because it accounts for the bulk of plastic consumption and waste generated in households and cities.

Packaging dominates South America’s recycling market because it represents the largest share of plastics produced, consumed, and discarded in the region. With growing urban populations and expanding retail sectors, plastic packaging has become ubiquitous for beverages, food, cleaning products, and household goods. PET bottles, HDPE jugs, polypropylene tubs, and multilayer films are all widely used, making packaging the most common type of plastic waste encountered by both consumers and collectors. This visibility has driven public concern and regulatory focus, prompting governments and municipalities to prioritize packaging waste in recycling policies.

Brazil’s extended producer responsibility requirements explicitly target packaging, pushing companies to invest in collection and recycling systems. Major beverage brands operating in South America, such as Coca-Cola and Ambev, have introduced bottles made from recycled PET, while supermarkets and consumer goods companies are experimenting with recycled HDPE packaging.

Informal waste pickers, who form the backbone of recycling in countries like Brazil and Colombia, focus heavily on packaging materials because of their higher resale value compared to other plastics, ensuring that bottles and containers are consistently recovered and supplied to recyclers. Packaging also provides recyclers with a steady stream of relatively uniform material, especially PET and HDPE, which are easier to process into food-grade or industrial-grade recycled pellets.Strong packaging demand and a large informal recycling sector give Brazil the lead in South America’s plastic recycling.

Brazil leads plastic recycling in South America because of its unique combination of high plastic consumption, particularly in packaging, and an extensive informal recycling network that feeds materials into formal recyclers. Brazil generates some of the highest volumes of plastic waste in the region due to its large population and consumption of bottled beverages, packaged food, and household goods. The presence of a vast network of catadores, or informal waste pickers, who collect plastics from streets, landfills, and households, plays a critical role in gathering feedstock for recycling.

These informal collectors supply material to cooperatives and aggregators, which in turn channel plastics to formal recycling plants, creating a unique grassroots-driven circular economy. Large beverage and packaging companies operating in Brazil, including Coca-Cola and Ambev, have launched recycling initiatives and invested in PET bottle-to-bottle recycling facilities to meet corporate sustainability goals. Multinationals like Mohinani and Indorama are also expanding recycling projects across Latin America, with Brazil being a strategic hub because of its scale.

The Brazilian government has introduced extended producer responsibility schemes for packaging and other products, pushing companies to collect and recycle a portion of what they put on the market. Demand for rPET in particular is strong because Brazil is a major consumer and exporter of textiles, where recycled polyester fiber plays a significant role. Infrastructure is uneven, with urban centers like São Paulo leading in recycling capacity, but overall the country still processes more plastic waste than most of its South American peers.

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