Recycling Industry Must Strengthen Data Infrastructure to Boost Circular Economy
Strengthening the recycling industry in Indonesia is considered insufficient if it only focuses on increasing the volume of material collected and processed. The industry also needs to build a data system capable of ensuring that the origin of materials, processing, and environmental impact can be traced and verified. This need is one of the challenges in advancing the government’s target of achieving 100 percent managed waste by 2029. Strengthening digital infrastructure is deemed important so that recycling activities, which are currently scattered across communities, waste banks, collectors, recycling companies, and industries using recycled materials, can be integrated into a single data ecosystem.
The Indonesian Plastic Recycling Association (ADUPI), the Indonesia Carbon Trade Association (IDCTA), and PT ESGIN Global Partners (ESGIN) responded to this need by signing a memorandum of understanding (MoU) to strengthen the digitalisation of Indonesia’s plastic recycling industry. The collaboration includes the development of a material traceability system, Digital Monitoring, Reporting and Verification (Digital MRV), and improving industry readiness to face developments in the environmental and carbon markets. The signing took place during the ASEAN Recycling Summit 2026, part of the Indo Waste & Recycling 2026 Expo & Forum at the Jakarta International Expo (JIEXPO), Kemayoran, Jakarta, on Wednesday (12/8/2026).
The collaboration will be directed at building data infrastructure that allows collection and recycling activities to be recorded digitally. This data can then be used to generate more measurable and verifiable information regarding environmental impact. The three parties will also explore the IDCTA × ADUPI × ESGIN Circular Economy Digital MRV Pilot Project with ADUPI member companies participating voluntarily. The pilot project will include the preparation of a baseline assessment, a digital traceability and Digital MRV framework, verified recycling data, and an environmental impact assessment. Once this foundation is established, a feasibility study will be conducted to assess the potential for development towards Plastic Credits and carbon market opportunities.
ADUPI, IDCTA, and ESGIN are positioning data development and verification systems as the initial stage before recycling activities are directed towards environmental market mechanisms. This approach is necessary because plastic collection and recycling activities do not automatically generate Plastic Credits or Carbon Credits. Any issuance or claim of environmental units must still comply with applicable methodologies and standards and undergo relevant validation, verification, registry, and legal processes. This step is required to prevent double counting, double claiming, overclaiming, and greenwashing.
In this partnership, ADUPI plays a role through its recycling industry ecosystem, which includes member companies, recyclers, collectors, waste banks, and related industry players. The organisation also supports the identification of companies and locations with the potential to become part of the pilot project. ESGIN contributes to the development of digital infrastructure through Digital MRV, material traceability, digital verification, ESG data management, dashboards, and digital monitoring. Meanwhile, IDCTA strengthens aspects of carbon market readiness, carbon accounting, market integrity, capacity building, and national and international market networks.
Strengthening this system is expected to connect recycling activities at the community level with collectors, recycling companies, manufacturers, and brand owners. This data chain can subsequently support the needs of the government, corporations, investors, financial institutions, and environmental markets. The collaboration is also part of efforts to strengthen Indonesia’s position in the development of the circular economy within ASEAN. The Digital MRV and traceability infrastructure is considered capable of increasing transparency in the recycled material supply chain, the quality of ESG data, sustainability reporting requirements, and industry readiness to face developments in the environmental market.
The ASEAN Recycling Summit 2026 itself carried the theme ‘Towards a Circular ASEAN: Strengthening Policies, Innovation, and Trade in Recycling’. One of the forum’s strategic agendas discussed the integration of the recycling industry with the ASEAN carbon market. The collaboration between ADUPI, IDCTA, and ESGIN is still in its initial stages. The implementation of the project, investment, technology, data ownership, environmental attributes, Plastic Credits, Carbon Credits, benefit sharing, and commercial activities will be further regulated through a separate implementation agreement. Thus, the development of the recycling industry is directed not only at increasing the amount of material successfully collected and recycled, but also at the industry’s ability to prove its environmental impact through measurable, traceable, and verifiable data.