This study uses an IO-MFA model to reveal that recycled polyester is currently concentrated in low-value industries, identifying high-value invisible pathways in indirect supply chains to foster strategic industrial matchmaking. It provides a data-driven framework for policymakers to design "pull" mechanisms, such as mandatory recycled content, to redirect materials toward higher-margin economic streams.
By National Taiwan University
With increasing global concern for the environment, smarter ways to manage plastic waste are urgently needed. This study focuses specifically on polyester, a material widely used in clothing and beverage containers. Research indicates that in Taiwan, the vast majority of recycled materials come from households—the plastic bottles and old clothes we discard daily—which significantly outweighs industrial waste from factories. To track how these materials move through the entire economy, researchers used a map (the IO-MFA model) that links financial transactions with physical material flows.
Published in Resources, Conservation and Recycling, this study introduces an innovative material tracking approach that integrates inter-industry financial transactions with the physical weight of recycled plastics. By analyzing Taiwan's industrial data from 2013 to 2022, researchers identified that most recycled polyester currently flows into low-value sectors. For instance, a vast amount of recycled material is used to produce basic yarn and fabrics, which often operate on thin profit margins. However, the true "hidden gem" uncovered in this study is the pivotal role of indirect industries.
These high-value industries do not purchase recycled plastic directly from factories, yet their products contain a significant amount of "embedded" recycled content. Because these connections are typically invisible in traditional reports, these high-value companies often remain unaware of the profound impact they can have on the circular economy. By revealing these high-value opportunities hidden within the supply chain, this research provides critical data support for evidence-based policy formulation.
Therefore, the research suggests that governments should establish a "market pull" mechanism. By encouraging or requiring high-value brands to incorporate a specific percentage of recycled material into their final products, a powerful demand signal is created that travels back up the entire supply chain. This approach not only benefits the environment but also enhances the profitability of the recycling industry by directing materials toward higher-quality and higher-value applications.
By implementing "pull" policies, such as mandating a minimum percentage of recycled content in products, high-end brands would be incentivized to actively demand recycled materials from their suppliers, driving a technological upgrade across the entire supply chain. Such measures ensure that recycled materials are no longer perceived as mere cheap substitutes but are transformed into competitive green resources.
“This research uncovers hidden material flows within complex economic systems, providing an evidence-based tool for industrial matchmaking to more effectively accelerate Taiwan’s transition toward a circular economy,” says corresponding author Prof. Hwong-wen Ma from Graduate Institute of Environmental Engineering at National Taiwan University.
Prof. Hwong-wen Ma's email address: hwma@ntu.edu.tw