By Hasan

Pakistan can significantly scale up its recycling industry by adopting structured policy support, fiscal incentives, and formalisation measures inspired by China’s model, experts say, stressing that reform must proceed in phases to unlock investment and export potential.

Industry stakeholders believe China’s recycling framework offers a practical roadmap for Pakistan, particularly in areas such as export rebates, systematic waste segregation, extended producer responsibility (EPR), green financing, and centralized recycling infrastructure.

Speaking with Wealth Pakistan, Muhammad Raza Khemji, Founder of Sustainable Solutions Pakistan, highlighted the importance of export competitiveness. He pointed out that Chinese recyclers receive government rebates that offset international tax disparities, enabling them to compete in global markets. Referring to Pakistan’s position, he noted that exporters face duties such as 23% on shipments to the United States, which reduces competitiveness. He suggested that targeted export rebates for post-consumer waste could help Pakistani firms compete more effectively in international markets.

Experts say China’s structured waste segregation policies also provide a useful template. Abdul Samad, Founder and CEO of EcoNexus Solutions Pakistan, said the most urgent step in scaling the sector is proper segregation at source. He explained that without organized collection and sorting systems supported by local governments, recycling businesses struggle to secure a consistent supply of materials.

Samad added that China’s implementation of extended producer responsibility has strengthened its recycling ecosystem. Under EPR frameworks, producers are required to assume financial or physical responsibility for products at the end of their lifecycle. He suggested that Pakistan could introduce similar regulations through public awareness campaigns, municipal partnerships, and clearly defined producer responsibility rules.

Muhammad Zaid Masood Khan, Research Fellow at the University of Science and Technology of China, emphasized that recycling alone is rarely economically viable without policy backing. He said Pakistan’s recycling economy remains largely informal, dominated by small-scale junkyard operations that lack the technology needed to safely process complex waste streams such as photovoltaic (PV) modules and lithium-ion batteries.

Khan stressed the need to transition from an unregulated waste economy to a formal industrial sector. He urged the effective implementation of the National Hazardous Waste Management Policy 2022, alongside fiscal instruments such as low-interest green loans to enable investment in specialized machinery and standardized quality certification systems.

He also proposed linking import licenses for solar panels and electronics to “take-back” bonds or certified recycling partnerships to ensure end-of-life responsibility. Additionally, under the China–Pakistan Economic Corridor (CPEC) framework, he suggested designating Circular Special Economic Zones offering tax holidays and subsidized utilities for e-waste and PV recycling facilities, similar to China’s centralized recycling hubs that help reduce logistics costs.

Experts noted that Pakistan does not need to replicate China’s system in its entirety at once. Instead, a phased approach beginning with waste segregation and organized collection, followed by clearer incentives and export facilitation, and culminating in formalisation through financial support and specialized zones, could enable technology-driven recycling companies to scale sustainably.

They believe that with structured reforms and targeted incentives, Pakistan’s recycling sector can evolve from an informal waste-handling system into a competitive, export-oriented circular economy industry.

Credit: INP-WealthPk