Circular Economy

Reducing plastic waste at source is a key part of Indonesia's battle against ocean pollution

Koinpack app allows users to make transactions and bottle returns by scanning the QR code on the bottle.

Innovations in reuse systems: the Koinpack app allows warung (shop) owners to make deposit transactions and register bottle returns by scanning the QR code on the bottle. Image: Koinpack.

Tauhid Pandji
Venture Builder, Enviu
William Handjaja
Associate, SYSTEMIQ
Sri Indrastuti Hadiputranto
Chair, Indonesia National Plastic Action Partnership (NPAP)
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Circular Economy

  • Upstream innovations to reuse and reduce plastic have the greatest potential to transition to a 'circular economy', report finds.
  • Those solutions present a business opportunity worth $4.3 billion.
  • Indonesia plans to eliminate plastic pollution by 2040.

Right now an estimated 150 million tonnes of plastic waste is floating in our marine environments. Every year around 11 million additional tonnes make their way into our oceans.

However, that number doesn’t even come close to the amount of plastic waste we’ll soon have to deal with if we continue down our business-as-usual trajectory. In fact, if things remain the same, the total mass of plastic waste leaking into the ocean is expected to triple over the next two decades.

Fortunately, an increasing number of reuse and reduce solutions are pointing towards a future scenario where that’s not the case.

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Promising solutions on the horizon

A 2020 report, co-authored by SYSTEMIQ and The Pew Charitable Trusts, has shown that upstream interventions with reuse and reduce at their core have huge potential to accelerate our transition towards a zero-leakage, circular economy for plastics. Compared to downstream solutions such as recycling and clean-ups, which take an “end-of-life” approach to tackling plastic pollution, upstream innovations prevent waste from being created by eliminating avoidable packaging through reuse and refill models.

In emerging economies – which are bearing the brunt of our global plastic problem – these upstream solutions are finding fertile ground and show promising potential. Indonesia, the world’s second largest contributor to ocean plastics, is one of these countries.

Last year, it unveiled one of the world’s most ambitious pledges to tackle plastic pollution, with plans to deliver on its goal to cut marine plastic leakage by 70% by 2025, and eliminate plastic pollution completely by 2040. These government targets are being supported in part by the Indonesia National Plastic Action Partnership (NPAP) – a platform seeking to bring together efforts from all echelons of society in a bid to rid the country of its plastic waste problem.

One of the plan’s key strategies is to implement reduction, reuse and alternative delivery models that phase out problematic single-use plastic packaging – a strategy which is estimated to avoid 740,000 tonnes of plastic use in Indonesia by 2025.

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Reuse movement is well under way

Enviu’s Zero Waste Living Lab (ZWLL) is one of the leading innovators in Indonesia developing reuse business models that highlight the potential of upstream solutions. The ZWLL’s ventures tackle some of the most prevalent types of plastic waste and aim to showcase reuse business models in practice.

One of their ventures, Koinpack, is partnering with warungs (local mom-and-pop shops) and waste bank community leaders to test its tech-enabled reusable packaging system. Based on a deposit and reward scheme, Koinpack’s circular system enables consumers to skip single-use plastic sachets by offering everyday products in refillable bottles. Koinpack focuses on single-use sachets as these are one of the most problematic plastic packaging streams, which Indonesia’s Action Plan is also recommending to phase out. The startup began piloting its solution last year and has already attracted the attention of consumer goods brands, with whom it is preparing to pilot new product groups.

Promising solutions targeting one of the largest sources of plastic waste, disposable water bottles, are also on the horizon. Among these is ZWLL’s Econesia, a zero-waste startup providing retailers, the hospitality sector, and individual households with full-service water filtration systems. Within a year since it launched, the venture has already prevented more than two million plastic bottles from ending up as waste.

Benefits of scaling reuse models

While there are clear environmental benefits in scaling reuse models like those of Koinpack and Econesia, there are also huge economic opportunities. In Indonesia alone, upstream solutions to the plastic crisis present a business opportunity worth $4.3 billion (Indonesia NPAP).

Additionally, strategic investments in innovative solutions such as refill and reuse subscription models can increase customer loyalty whilst simultaneously increasing value chain efficiencies, cutting costs, and reducing negative externalities. It’s no surprise that initiatives like Koinpack’s are catching the eye of big consumer goods manufacturers.

Reuse is becoming an opportunity to ensure business continuity within a circular economy. And, as proved by the increasing number of startups and innovators in the reuse scene, there is also a growing zero waste customer base to tap into.

Upstream investment needed

Now if upstream solutions hold so much potential to do away with plastic pollution, what’s stopping them from wider implementation?

One of the biggest hurdles is the lack of funding for upstream solutions. While initiatives that tackle plastic pollution receive major investments, these are overwhelmingly focused on end-of-life solutions like recycling and clean-ups. But, as demonstrated by the Breaking the Plastic Wave report, although such downstream interventions are essential, these solutions alone cannot keep up with the explosive growth of plastic production.

Sufficient funding will allow innovators to transition their upstream solutions from promising social enterprises to readily scalable business models. Today, impact-driven ventures like those built by the ZWLL often struggle to find the capital to make this transition. Patient capital is key to overcoming this financial hurdle, since it takes time to overcome current market barriers, such as adjusting traditional supply chains, changing consumer behaviour and developing supportive regulatory frameworks.

Alongside investment, the development of such frameworks is key to incentivising reuse and reduce models. Similarly, companies need to phase out avoidable single-use and difficult to recycle packaging – a shift that can be facilitated through public-private partnerships like those fostered by Indonesia’s NPAP.

Solutions for a circular plastics economy

If we are to achieve a scenario where plastic pollution is a thing of the past, we need to ensure that upstream initiatives find their place in the sun as soon as possible.

Indonesia’s growing scene of inspiring and successful reuse initiatives should serve as proof of the potential these kinds of innovations have to eliminate plastic waste. If we care about safeguarding a sustainable future – for our natural ecosystems, economy and communities – it is crucial we transition towards a circular economy for plastics. Reuse is key to achieving that.

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