How much more does "responsibly sourced" recycled plastic cost? New research from India and Kenya puts a number on it

The global plastics recycling industry faces a paradox: consumers and brands increasingly demand recycled plastic that is “clean” both environmentally and ethically, yet the price currently paid for recycled plastic is not enough for businesses to invest in building a genuinely responsible supply chain — one that protects the rights of millions of informal waste collectors.

A new study released in June 2026 by The Circulate Initiative, in collaboration with the Responsible Sourcing Initiative, is the first to quantify this cost gap through two field-based case studies in India and Kenya.

The headline figure: USD 40-50 per tonne

According to the study, shifting to a responsibly sourced recycled plastic supply chain requires additional investment of roughly USD 40-50 per tonne compared with conventional recycled plastic — equivalent to a cost increase of 9-31%, depending on the resin type and the market (for rPET specifically).

This is a bottom-up estimate that tracks the entire value chain, built on the Harmonized Responsible Sourcing Framework — the industry standard for responsible sourcing in the recycling sector. The study identifies 18 cost factors, validated through field surveys with recyclers and suppliers.

Three key findings

1. Compliance, traceability and supplier engagement make up the largest cost group, accounting for 34-47% of total responsibility costs. Notably, these are mostly recurring annual operating costs rather than one-off investments — showing that meeting responsibility standards demands a long-term financial commitment, not a “do it once and be done” effort.

2. This is only a floor; actual costs may be higher. The figures above reflect the costs that businesses can control and see directly. More systemic expenditures — such as ensuring a living income, and remedy and grievance mechanisms for informal workers — are not fully captured, as they require multi-stakeholder coordination. Cost visibility also fades at the lower tiers of the supply chain, particularly within the informal sector.

3. Market maturity determines the scale and nature of the investment. Comparing India (a medium-maturity market) with Kenya (a low-maturity market) reveals clear differences in how costs are distributed, who bears them, and how much cost remains “invisible” to businesses.

Insights from the two case studies

India: The study draws on a tier-1 recycler processing about 48,000 tonnes a year (PET, PP, HDPE), connected to 60 tier-2 suppliers, 300 tier-3 aggregators and roughly 6,600 informal waste collectors. Additional costs are estimated at USD 49 per tonne, or 9-11% (for rPET). Upfront investment concentrates on vertical supply chain integration (28%) and worker welfare mechanisms; over the longer term, compliance and documentation account for the bulk of costs (66% are recurring).

Kenya: The tier-1 recycler surveyed processes about 10,000 tonnes a year, working with 146 tier-2 suppliers, 725 tier-3 aggregators and roughly 2,500 informal workers — reflecting a supply ecosystem far more fragmented and informal than India’s. Additional costs are estimated at USD 41 per tonne, equivalent to an increase of 17-24% for polyolefins and 26-31% for PET. Around 81% of costs here are recurring, and the share of indirect costs (co-funded by external parties) is markedly higher than in India (11.8% versus 3%) — mostly tied to helping workers access social protection, banking and insurance.

Why this matters

The study highlights a simple reality: without a clear cost baseline, players across the value chain — from recyclers to the brands using recycled plastic to investors — will struggle to build a convincing business case for putting capital into responsible sourcing. The USD 40-50 per tonne range is seen as a realistic, conservative starting point that helps businesses plan investments and negotiate with buyers.

This is only the first phase of a multi-phase research programme by The Circulate Initiative. Later phases will look in depth at financing mechanisms to close this cost gap, as well as assess the concrete benefits of investing in responsible sourcing.

Read the full original report (PDF, in English): Understanding the Cost of Responsibly-Sourced Recycled Plastics: Insights from Case Studies in India and Kenya — The Circulate Initiative, June 2026.