Where and why: financing the trade in plastic waste

In our previous article we gave a broad overview of the scale and importance of the international trade in plastic waste (PW). In this piece we will explain why the trade in plastic waste is such a lucrative sector and what incentives exist to run this business outside of legality. Where does plastic waste end up? In recent years, more and more news media have reported on the plastic sector and how stricter rules for PW shipments are not enough to address the crisis in the sector. The crisis is caused by the recycling industry struggling to compete with new (virgin) materials, and by the high volumes of plastic waste traded from the EU to Turkey and countries in Southeast Asia (which will be banned from 2026) instead of being processed nationally. Newspapers – such as The New York Times – have recently published a series of investigative articles on the high volume of illegal shipments of PW from the US with Malaysia as the final destination. NGOs such as Basel Action Network have managed to intercept some of these shipments. Within the Dutch media, De Groene Amsterdammer published an interesting investigation exposing loopholes in the Dutch trade in PW, particularly Turkey's role as an importer of Dutch and European plastic waste. This month, NL Times published an article revealing the low penalties imposed on criminals guilty of illegal plastic waste trade from the Netherlands to Asia and Africa. In 2022, the OECD [1] published the Global Plastics Outlook report revealing that in 2019, only 9% of all PW was recycled, and nearly a quarter was mismanaged. Mismanagement means that plastic waste is not recycled, incinerated, or stored in sealed landfills. It can therefore be burned in the open air, dumped in open waters, or end up in unsanitary landfills that do not comply with regulations. Furthermore, it was predicted that at the current rate, 83% of PW will still not be recycled in 2060, but rather incinerated, landfilled, or mismanaged. However, as we saw in our previous article, facts and figures in this sector vary drastically depending on the source, due to the lack of transparency of most actors involved. To address this issue, the European Commission will soon introduce a digital system, DIWASS (Digital Waste Shipment System), with the aim of monitoring all cross-border waste shipments by member states. While this is an important step, we must also look at how producers and consumers treat plastic waste, as the best way to reduce plastic waste trade is by limiting the production of plastic products at the source. Figure 1. Dutch plastic waste exports 2019-2060. This figure, compiled by OECD Global Plastics Outlook and reformatted by Statista (2022), shows the predicted distribution of plastic waste across different waste management categories from 2019 to 2060. As can be seen in figure 1, the majority of plastic waste is unfortunately not recycled. Of the non-recycled portion, about a fifth is incinerated, and the rest must be stored somewhere. Considering that the landfilled portion amounts to more than 600 million tonnes of PW, an enormous amount of space will be needed to store this volume. It is then understandable why high-income countries have incentives to outsource that burden to lower-income countries that can process it at a lower price. The trade in bad or non-recyclable PW outside the EU yields high profit margins, but has been illegal for several years. As the ILT stated in a recent NL Times article: “criminal activities take place at every step of the plastic waste chain.” There are many incentives to process waste as cheaply as possible, even if it means skipping essential steps for correct recycling. Despite increasingly strict rules around PW trade and management from the Basel Convention and the European Union, the share exported outside the EU continues to grow. According to ComTrade data, the final destination of Dutch PW exports has changed significantly over the past 5 years. In 2019, more than three quarters of exports remained within the EU. In the following years, this number gradually decreased. The most recent data from 2024 shows that in the past year, about half of the Dutch exported PW remained in the EU, while exports to non-OECD countries tripled. These figures match (with a margin of +/- 4 percentage points) the estimates of Rijkswaterstaat employees (interview with an advisor on circular economy and waste, 2 June 2025). Still, all experts emphasise that registered shipments

In our previous article we gave a broad overview of the scale and importance of the international trade in plastic waste (PW). In this piece we will explain why the trade in plastic waste is such a lucrative sector and what incentives exist to run this business outside of legality.

Where does plastic waste end up?

In recent years, more and more news media have reported on the plastic sector and how stricter rules for PW shipments are not enough to address the crisis in the sector. The crisis is caused by the recycling industry struggling to compete with new (virgin) materials, and by the high volumes of plastic waste traded from the EU to Turkey and countries in Southeast Asia (which will be banned from 2026) instead of being processed nationally.

Newspapers – such as The New York Times – have recently published a series of investigative articles on the high volume of illegal shipments of PW from the US with Malaysia as the final destination. NGOs such as Basel Action Network have managed to intercept some of these shipments. Within the Dutch media, De Groene Amsterdammer published an interesting investigation exposing loopholes in the Dutch trade in PW, particularly Turkey's role as an importer of Dutch and European plastic waste. This month, NL Times published an article revealing the low penalties imposed on criminals guilty of illegal plastic waste trade from the Netherlands to Asia and Africa.

In 2022, the OECD[1] published the Global Plastics Outlook report revealing that in 2019, only 9% of all PW was recycled, and nearly a quarter was mismanaged. Mismanagement means that plastic waste is not recycled, incinerated, or stored in sealed landfills. It can therefore be burned in the open air, dumped in open waters, or end up in unsanitary landfills that do not comply with regulations. Furthermore, it was predicted that at the current rate, 83% of PW will still not be recycled in 2060, but rather incinerated, landfilled, or mismanaged.

However, as we saw in our previous article, facts and figures in this sector vary drastically depending on the source, due to the lack of transparency of most actors involved. To address this issue, the European Commission will soon introduce a digital system, DIWASS (Digital Waste Shipment System), with the aim of monitoring all cross-border waste shipments by member states. While this is an important step, we must also look at how producers and consumers treat plastic waste, as the best way to reduce plastic waste trade is by limiting the production of plastic products at the source.

Figure 1. Dutch plastic waste exports 2019-2060.

This figure, compiled by OECD Global Plastics Outlook and reformatted by Statista (2022), shows the predicted distribution of plastic waste across different waste management categories from 2019 to 2060.

As can be seen in figure 1, the majority of plastic waste is unfortunately not recycled. Of the non-recycled portion, about a fifth is incinerated, and the rest must be stored somewhere. Considering that the landfilled portion amounts to more than 600 million tonnes of PW, an enormous amount of space will be needed to store this volume. It is then understandable why high-income countries have incentives to outsource that burden to lower-income countries that can process it at a lower price. The trade in bad or non-recyclable PW outside the EU yields high profit margins, but has been illegal for several years. As the ILT stated in a recent article by NL Times: “criminal activities take place at every step of the plastic waste chain.” There are many incentives to process waste as cheaply as possible, even if it means skipping essential steps for correct recycling are skipped.

Despite increasingly strict rules around PW trade and management from the Basel Convention and the European Union, the share exported outside the EU continues to grow. According to ComTrade data, the final destination of Dutch PW exports has changed significantly over the past 5 years. In 2019, more than three quarters of exports remained within the EU. In the following years, this number gradually decreased. The most recent data from 2024 shows that in the past year, about half of the Dutch exported PW remained in the EU, while exports to non-OECD countries tripled. These figures match (with a margin of +/- 4 percentage points) the estimates of employees of Rijkswaterstaat (interview with an advisor on circular economy and waste, 2 June 2025). Still, all experts emphasise that registered shipments (which are included in these figures) differ greatly from the total trade volume.

The fluctuations in export destinations are likely due to multiple factors, the primary cause of which remains unclear. A partial explanation is the drastic drop in container transport prices from the Netherlands to East Asia. This is due to the massive influx of fast fashion and other goods from major online retailers such as Temu or Aliexpress. Full containers with these goods constantly arrive in European ports, but after unloading, the empty containers must return to Asia. Since they have to go back anyway, it is advantageous for both PW traders and Asian exporters to fill those containers with plastic waste. According to sources at the ILT, shipping a container from Rotterdam to a country in East Asia currently costs around 150 dollars – much cheaper than transporting a container within the Netherlands. Therefore, shipping PW via this trade flow is cheap and does not arouse suspicion.

Figure 2. Dutch plastic waste exports by destination, from 2019 to 2024.

In this figure, prepared by the Fair Resource Foundation (2025), the share of Dutch exported plastic waste to three main areas is shown: European Union, non-OECD (in this case Indonesia, Malaysia and Vietnam, the largest non-EU importers of Dutch plastic waste), and Turkey.

How does the plastic waste trade work? It all starts with the production of plastic, because everything that is now waste was once made as a product with economic value. After all, you paid for that single-use plastic bottle you bought at the station last week. That single-use bottle was intended to be used briefly and then becomes waste. Waste is usually seen as something with negative economic value. However, the market can sometimes create an economic incentive for processing a waste stream.

In the Netherlands, waste is ultimately collected by a waste management company. Depending on the municipality, it can be separated beforehand by the consumer or sorted afterwards. In post-separation, waste is sorted into recyclable and non-recyclable. The recyclable part is taken to a recycling facility, in the Netherlands or abroad (export outside the OECD is no longer allowed from November 2026). The non-recyclable part is incinerated or landfilled (export of non-recyclable European PW outside the OECD has been illegal since 2021).

Recycling companies buy recyclable PW to process it (e.g. chopping, washing and melting in mechanical recycling) and eventually sell it as recycled plastic for new products. Incineration and landfill companies, on the other hand, are paid to process non-recyclable plastic waste (interview with an employee of a large Dutch waste separation and incineration firm, 3 April 2025).

For countries like the Netherlands, it is usually cheaper to outsource these processes to companies in lower-income countries, especially in Southeast Asia (no country in that region is an OECD member) or Turkey – and even cheaper if the trade is done illegally. Given the increasingly strict regulations in the sector, PW exports to Southeast Asia (which currently receives about half of Dutch exports) will be completely illegal in a year's time.

Figure 3. Price of Dutch plastic waste exports by destination (2019 to 2024)

In this figure, compiled by the Fair Resource Foundation (2025), price differences per region are shown: non-OECD (Indonesia, Malaysia and Vietnam), non-EU (these countries plus Turkey), and European Union.

For years, the lack of supervision and enforcement at the Port of Rotterdam made it relatively easy to export PW, even if it did not comply with regulations. The ILT (Human Environment and Transport Inspectorate) and environmental experts confirm that non-recyclable and contaminated plastic waste is often smuggled from the Netherlands to Southeast Asia and Turkey.

What are the incentives to smuggle plastic waste?

The goal of smugglers is to get rid of plastic waste as cheaply as possible. They do not want their profits reduced by environmental requirements that would lower their income. Therefore, they sometimes send non-recyclable, low-grade or heavily contaminated plastic waste, or simply unsorted waste declared as clean and recyclable. The recipients then discover that the cargo is unusable and end up with mountains of waste that cannot be recycled. This waste then pollutes their environment and threatens public health. Sometimes useless plastic waste is sold as fuel for tofu factories, dumped in rivers, illegally dumped or burned – releasing toxic smoke that makes the local population sick.

”Tofu factories in East Java — The Guardian, May 2025

Although shipment to Southeast Asia or Turkey does not automatically mean mismanagement, environmental organisations such as EIA and BAN have documented numerous incidents. Law enforcement in these countries is often weak and penalties are low. In Thailand, for example, the fine for illegal dumping of waste is lower than the cost of correct processing. Low penalties and lack of controls encourage abuse.

People who resist illegal trade in these countries put themselves in danger. For instance, a Malaysian activist received death threats, her house was splashed with red paint and she was dismissed by authorities as someone who “had nothing better to do” – all because she wanted to protect her hometown of Jenjarom from the toxic consequences of illegal waste trade.

As we have seen, the PW sector lacks fundamental transparency. Figures and processes surrounding Dutch waste management and trade are barely public, and industry representatives were rarely willing to be open. All industry interlocutors denied being involved in illegal trade, while non-industry partners instead confirmed multiple cases. During the writing of this article, another case came to light in the Netherlands: in August, several individuals were indicted for illegal trade in plastic waste from the Netherlands to Southeast Asia, Turkey and Nigeria.

Outlook

After this brief overview of the processes and profits of the plastic waste sector, let's talk about legislation. As we already indicated in our previous article, the EU will introduce a total ban on the export of plastic waste to non-OECD countries in 2026. This could be a challenge for the Netherlands, which in 2024 reportedly exported more than 40% of its plastic waste to Indonesia, Malaysia and Vietnam, none of which are OECD partners. Experts predict that this ban could have similar consequences to China's National Sword policy of 2017, which banned all imports of PW. Following China's ban (which previously imported 72% of the world's PW and 85% of the EU's PW), many of those PW shipments were diverted to other areas (Turkey and Southeast Asia), still outside Western Europe, leading to the same problem. In the current case, Turkey (which is already flooded with foreign waste) has the opportunity to absorb a large part of that EU waste. Other sources within the Dutch Ministry of Transport predict that exporters and traders are likely to play with the definition of waste, as it is widely unstandardised. In this way, a minimal step further after collection could mean that PW can be categorised as (potential) raw material for recycling instead of waste, and thus legally exported outside the OECD area.

Major players within the Dutch PW export sector (and also other players in Europe) have stated that they hope the ban will be delayed (personal communication, April to August 2025). If the legislation comes into force, smuggling is likely to increase, given the upcoming enforcement of the ban and the EU's current inability to manage all the PW it produces. With the introduction of the ban, incentives for waste smuggling and dubious practices will only grow. Further research into this topic and the enforcement of effective measures to tackle illegal PW are of crucial importance. These increasingly restrictive regulations look great on paper, but as we have seen in previous years, they will have little effect if they are not fully implemented. Without further strategies to tackle PW smuggling, dumping and incineration, and with larger incentives than ever given the EU ban and Europe's current inability to manage its own PW, illegal trade is an increasing concern for European institutions and even more so for countries in Southeast Asia and Turkey, which are already flooded with foreign PW.

Disclaimer: Out of respect for the privacy of our sources, the Fair Resource Foundation has chosen not to make the names of interviewees in this study public.

1 The OECD is a supranational economic organisation of 38 countries. Its goal is to promote economic growth and world trade. Its members are mainly European states, plus the United States, Canada, Costa Rica, Colombia, Chile, Turkey, Israel, Japan, South Korea, Australia and New Zealand. ↑

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