Understanding the Cost of Responsibly-Sourced Recycled Plastics: Insights from Case Studies in India and Kenya

The plastics recycling sector is undergoing rapid transformation, driven by rising demand for recycled content and tighter regulations. However, current economics do not support the sustained, system-level investments needed to build responsible and inclusive value chains. There is limited clarity on the cost of implementing responsible sourcing and a lack of an evidence-based business case for investment, which are barriers to scaling responsible sourcing practices.

To address this gap, The Circulate Initiative has undertaken research to understand the key cost drivers, estimate investment needs, identify pathways to bridge the financing gap, and assess potential benefits. The research follows a phased approach. In the first phase of this research, we completed an identification and estimation exercise to establish a baseline of responsible sourcing costs through case studies in India and Kenya. For the cost estimation, we used a bottom-up, value-chain-wide approach aligned with the Harmonized Responsible Sourcing Framework for Recycled Materials, the industry standard for responsible sourcing in the recycling sector. Drawing on insights from the selected markets, this report summarizes the findings on the cost of responsible sourcing based on these case studies. 

Key insights from the case studies include:

• The cost of responsibly-sourced recycled plastics ranges from US$ 41 to 49 per tonne, a 9 to 31% increase – specifically for rPET – over current recycled plastics costs. 
• Compliance, traceability, and supplier engagement are the primary cost drivers, accounting for 34 to 47% of total responsible sourcing costs.
• Estimates represent a business-led cost baseline within direct business control and visibility, and do not fully capture systemic costs such as living income, suggesting that actual costs are higher. 
• Market maturity influences both the scale and distribution of investment needs, shaping how costs are shared and where cost visibility remains limited.