Everything you need to know about starting a plastic recycling business

Today more than ever, people are becoming more and more environmentally conscious, which is one of the reasons why new business opportunities are becoming available in the world of recycling. But if you want to start your own recycling business, where do you start? Luckily for you, we’ve put together this guide to help you out and tell you everything you need to know about starting a plastic recycling business. 

How do I start a plastic recycling business?

The first thing you need to do before starting your plastic recycling business is to research the rules and regulations on waste management and recycling in your area. There are often multiple regulatory requirements surrounding recycling and waste management, and these vary depending on where in the world you are. 

If you don’t follow the law on waste management, the repercussions can be severe, so it’s worth getting in touch with industry bodies and the relevant environmental authorities for their advice. If you make sure you keep in line with all the regulations, plastic recycling can be extremely lucrative. Some initial steps in setting up a recycling business include applying for planning consent for any premises you plan to use and organising licencing for your business and for any vehicles you’ll be using.

Is a plastic recycling business profitable?

Plastic recycling has long been touted as a profitable business, and it can be very lucrative. However, as the kinds of recyclable materials (or recyclates) has become more diverse, and households and businesses alike have become increasingly used to recycling, the process of sorting through recyclates has become increasingly difficult. 

More often than not, the most profitable way to recycle plastic is by ensuring you have clean plastics to recycle. However, most post-consumer plastic is not clean and is often mixed with other debris and different materials that aren’t recyclable. To make the most profit, you have to put time, effort and investment into the sorting process, which, for most smaller recycling businesses, is done manually. 

Which recycling business is most profitable?

Recycling has become a vast market, offering different kinds of returns. There are a multitude of different types of recycling businesses, and each of them has different levels of profitability, but the most profitable recycling businesses are waste paper recycling companies. 

As all kinds of waste paper can be de-inked (a chemical process removing any inks and glosses from the paper), shredded and pulped for future manufacturing, waste paper recycling requires very little processing or sorting. That also means there’s very little initial outlay when starting a waste paper business. As recycled paper pulp can be used for a variety of purposes, waste paper recycling has the highest yield of any recycling business. 

A close second is electronic waste recycling, but for the opposite reasons as waste paper. As electronics like televisions, mobile phones and household appliances often contain small amounts of precious metals, including gold, silver, platinum, rhodium and palladium, in addition to scrap metals. If recycled in bulk, electronic waste recycling can yield some very lucrative profits. However, recovering precious metals from electronics can be a lengthy and complicated process, often requiring a lot of initial investment. 

Two of the biggest recycling companies in the world are Advanced Disposal and Biffa Group. Both companies offer integrated waste management services that cover a variety of waste disposal, collection and recycling services for residential, commercial, industrial and construction customers.

How do recycling companies make money?

How a recycling company makes its money can often depend on what kind of material it’s recycling, but almost all recycling companies make their money in the same two ways, from recycling collection fees and the resale profits of processed recyclates. 

The simplest way a recycling company can make money is through collections. A company can arrange contracts with business or local authorities to manage the removal of business or household recycling for an agreed price, ensuring the material is safely removed from the premises to be recycled elsewhere.

Making money through the sale of processed recyclates is similarly straightforward. As the price of raw, or “virgin”, materials can fluctuate – the price of plastic, for example, is often tied to the price of oil – manufacturers often look to recycled materials as a more sustainable, and usually cheaper, alternative. This, in turn, drives up the costs of recycled materials, making recycling businesses more profitable. 

Can you make money from recycling plastic?

You can make money from recycling plastic in lots of different ways. There are many recycling centres and schemes that offer credit or cash for recyclable materials, including household plastic, paper and cardboard, as well as larger industrial and commercial recyclable waste.

Many supermarkets run recycling schemes for their shoppers to responsibly recycle their household waste. However, the majority of these are “money-off” propositions and do not exchange recycled materials for cash. 

However, certain recycling centres do offer cash for recyclable plastics, but they are often particular in their requirements, and usually only pay substantial amounts for large-scale commercial plastics, such as wheelie bins, utility pipe scrap and industrial haulage crates. That being said, it is always worth researching your local recycling centres to see if they will buy any recyclable materials you have to sell. 

How do I start a small recycling business?

To start your own recycling business, you first need to register your business with the relevant authorities. Once you have all the tax and legal documentation, you can apply for all the correct permits and licences you may need to operate a recycling business in your area. 

Once you have met all the regulatory requirements, you can begin to look into acquiring premises and vehicles for your business – whether that be storage and sorting facilities, or a small lock-up for smaller-scale recycling. Business premises and vehicles will come with their own set of regulations, too, so be sure to research these when deciding on what kind of facilities you might need. 

Once you have your documentation, premises and vehicles, you should be ready to start operating your very own recycling business. Good luck! 

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Your complete business toolkit

Rovva puts everything you need for your business in one place. From an accountancy helpline to a drop-in business lounge - we've got everything covered.