Introduction Effective waste management poses a critical challenge for developing nations, particularly in urban areas, where the burden of managing exponentially increasing waste generation is felt. Cities and municipalities often spend 20% to 50% of their available budgets on responsible waste management, as per a World Bank report. This underscores the need to urgently seek cost-effective alternatives. In Chennai, a city in India, there exists a robust “informal” ecosystem of stakeholders dedicated to recovering recyclable waste, distinct from the formal waste collection system operated by the city. A study revealed that this informal system collects 130,000 tons of recyclables annually, accounting for 24% of the city’s total volume. Developing accurate baselines of the materials collected and understanding stakeholder relationships in the informal recycling sector (IRS) would empower policy makers to design strategies that can leverage these networks for cost-effective urban waste management solutions. Analysis Improper solid waste management is a systemic problem for all of India’s cities. A study on waste collection rates found that over 90% of all solid waste collected is likely dumped in open landfills. For example, Chennai, the sixth largest in the country, collects around 6,000 tons of waste every day, with most of it ending up in the city’s two landfills in Perungudi and Kodungaiyur. Chennai has a formal system of waste collection run by the city department. In addition to this, there exists an “informal” ecosystem of stakeholders working to recover recyclable waste, primarily driven by financial profit. While numerous studies have been conducted on the informal recycling sector in India, they often focus solely on the socio-economic issues faced by one stakeholder group: the waste-pickers. There have been very few reports that elaborate on the quantity, material flow, and other informal actors responsible for the collection of recyclable waste in Indian municipalities. In 2017, Kabadiwalla Connect, a social enterprise, conducted a study of the informal recycling ecosystem of Chennai with an initial grant from the World Economic Forum and follow-on funding from the Global Partnership for Sustainable Development Data (GPSDD). In total, close to 2,300 aggregators were identified as stakeholders working to buy and sell recyclable waste. Informal Recycling Ecosystem Stakeholders of Chennai Based on the Study Level 0 Aggregators(Waste-pickers) Level 1 Aggregators(Small scrap shops) Level 2 Aggregators(Informal Material Recovery Facilities or MRFs) Processor / Recyclers Description Informal sector workers, who may or may not have means of transportation and incur zero or minimal input costs, primarily collect recyclable materials from roadside dustbins and landfills. Those who own a vehicle also collect from households. Informal sector workers typically have storage space and gather materials from Level 0 aggregators as well as residents and businesses. They conduct minimal or no processing of the collected materials. Informal sector workers purchase materials directly from Level 1 aggregators and other commercial sources in bulk. They usually specialize in a single super-category of material and perform pre-processing tasks such as baling or shredding. These stakeholders purchase specific grades of post-consumer scrap material from Level 2 aggregators and convert them into usable secondary raw materials for the manufacturing industry. Material source Street picking and dump sites Level 0 aggregators Level 1 aggregators Level 2 aggregators Procurement philosophy Material agnostic Material agnostic Specialized material Specialized material Tech adoption Low High High High Average volume 307 kg/month 9,293 kg/month 45,966 kg/month Average shop size 127 sq. ft. 5213 sq. ft. Average monthly income $384 $955 Smartphone 49% 69% Processing Manual segregation Baling, grinding, segregation For manufacturing Source: Kabadiwalla Connect. A material flow assessment of Chennai’s IRS revealed that the sector operates across three levels of aggregation facilitated by three distinct stakeholder groups. The first level (level 0) involves waste-pickers scavenging for recyclable waste from the city streets, bins, and other public areas. They then sell these materials to small scrap shops, which are considered level 1 aggregators. These small scrap shops operate as private businesses, strategically locating themselves in every neighborhood of the city to be close to where recyclable waste is generated. Apart from purchasing material from waste-pickers, it was found that these aggregators had long-standing relationships to procure recyclable material from households, apartments, and small businesses in the neighborhood. In total, close to 2,000 level 1 aggregators were identified across Chennai. Locations of Level 1 and Level 2 Aggregators in Chennai Source: Kabadiwalla Connect. Level 1 aggregators would then sell their materials to an informal material recovery facility (a level 2 aggregator), which represents the third distinct stakeholder group identified and enumerated during the study. These level 2 aggregators are larger and often located in industrial areas. They would typically perform some type of preprocessing on the materials they purchased, such as baling or shredding bottles, before selling them to a processing facility. The study identified close to 300 level 2 aggregators. Furthermore, the study revealed that scrap shops collectively purchase around 130,000 tons of recyclable waste annually, with the majority consisting of paper (42,000 tons), plastic (20,000 tons), glass (30,000 tons), and metal waste (38,000 tons) from waste-pickers, residences, apartments, and businesses. This volume accounts for 24% of the total recyclables generated in the city, which amounts to 542,000 tons per year. These figures highlight the informal recycling sector as the primary source of recyclable waste collection for Chennai. Implications The informal sector often holds significant untapped potential. One key to unlocking this potential is gaining a thorough understanding of the people, processes, circumstances, opportunities, and challenges associated with these sectors. Therefore, data-gathering measures are essential for informing policy reforms, particularly regarding the integration of the informal sector into formal systems to improve outcomes. The Chennai study highlights the informal recycling sector's potential to become a primary supply chain for collecting industrial-scale volumes of post-consumer recyclable waste in urban India. However, the lack of accurate baseline data and consensus on stakeholders' roles in these informal waste networks hinders policy makers from leveraging this resource, developing inclusive integration strategies, and improving community livelihoods, health, and safety. Developing the informal recycling sector could offer efficient and cost-effective strategies for collecting and diverting post-consumer waste, thereby preventing municipal recyclable waste from entering water bodies and landfills. Understanding the behavior of this sector in other cities of India and finding ways to connect, standardize, and incentivize these networks will further enhance this ecosystem and benefit communities. Policy makers can also consider implementing basic site and labor compliance measures in informal scrap shops to ensure safer work environments. Promoting digitalization can provide an added layer of traceability in the material supply chain, which is currently lacking. Registration of these shops for compliance is also a key step in formalizing the sector. Note: Siddharth Hande made his presentation on Increasing Waste Recycling in the Global South by Leveraging the Informal Sector during the Bangkok Plastics Week on 9–12 October 2023. Resources ADB Knowledge Events. Bangkok Plastics Week. R. Annepu. 2012. Sustainable Solid Waste Management in India. Columbia University: New York. The World Bank. 2022. Solid Waste Management. The World Bank. Management of Post-Consumer Recyclable Waste. Ask the Experts Siddharth Hande Founder and CEO, Kabadiwalla Connect Siddharth Hande is a development specialist and the founder and current CEO of Kabadiwalla Connect, an award-winning social enterprise in the field of waste management. His work focuses on developing scalable and inclusive solutions for the collection, aggregation, and processing of post-consumer waste in cities in the developing world. He aims to articulate a more cost-effective and inclusive approach for cities in the Global South to apply circular economy principles by leveraging the informal waste ecosystem. 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