Brazil’s Plastic Packaging Recycling Reveals Three Uneven Circular Economy Pathways

Plastic packaging sits at a paradoxical heart of modern industry: it protects food, extends shelf life, and enables globalized consumption, yet it has become one of the most stubborn obstacles to building a circular economy. A new study published in the Journal of Industrial Ecology by Larissa Costa and Gabriela Scur of Centro Universitário FEI in Brazil argues that the real bottleneck to circularity is not a lack of technical ideas. Redesign, recycling, and material substitution are all well understood. What has been missing, the researchers contend, is attention to the system-level conditions that determine whether those ideas can actually travel through an entire value chain. Drawing on Global Value Chain and Global Production Network theory, the study examines how transaction complexity, codification requirements, capability gaps, and extra-firm institutional conditions jointly shape which circular upgrading pathways are feasible in Brazil’s plastic packaging industry.

The research is grounded in an in-depth qualitative case study of the Brazilian plastic packaging sector, one of the largest in the Global South. The empirical base consists of ten semi-structured interviews with actors spanning the value chain, from packaging producers to recyclers and institutional stakeholders, supplemented by twenty-seven secondary sources including webinars, lectures, and industry events. The analytical coding structure was applied to identify patterns of upgrading across firms and their networks. Full interview recordings remain confidential because the combination of participants’ professional positions and accounts of specific circular initiatives could allow deductive identification, but de-identified excerpts supporting the findings are reported in the manuscript.

The study’s central contribution is the identification of three distinct and markedly uneven pathways of circular upgrading. The first is design and material upgrading led by focal firms, typically the large packaging manufacturers and brand owners with the resources to reformulate products, substitute conventional polymers, and introduce mono-material constructions. The second is process upgrading, in which firms improve internal efficiency and tighten control over material loops within their own operations. The third is network-dependent recovery and recirculation, which requires coordinated action across collectors, cooperatives, recyclers, municipalities, and regulators. The crucial asymmetry, the authors find, is that the first two pathways sit largely under the control of individual firms, while the third depends on collective infrastructure and institutional arrangements that Brazil, like many Global South economies, does not reliably provide.

The theoretical machinery behind this conclusion comes from the governance framework of global value chains. In that framework, the complexity of transactions, the ease with which they can be codified, the capabilities of suppliers, and the degree of coordination required jointly determine how value chains are governed, from arm’s-length markets to captive and hierarchical relationships. Costa and Scur extend this logic to circularity. Circular upgrading in design and materials, for instance, is tractable for focal firms because transactions with suppliers can be specified, codified, and monitored. By contrast, circular upgrading in recovery and recirculation involves transactions of high complexity that resist codification and depend on capabilities that are dispersed and unevenly distributed across informal waste pickers, small recyclers, and municipal systems.

Brazil’s institutional landscape plays a decisive role in these outcomes. The country’s National Solid Waste Policy, established by federal law in 2010, introduced the principle of shared responsibility for the product lifecycle and mandated reverse logistics systems, yet implementation has been fragmented and uneven. A 2021 law created incentives for recycling through fiscal mechanisms, but the researchers find that regulatory limitations continue to constrain network-dependent pathways. Informality compounds the problem: millions of waste pickers, or catadores, perform the frontline work of material recovery, often outside formal contracts, without guaranteed quality standards, and with limited bargaining power in the value chain. This informal foundation keeps the recovery loop partially functional but unstable, undermining the traceability and consistent recyclate quality that industrial buyers require for circular inputs.

The findings illustrate a broader pattern in Global Value Chain scholarship: power is unevenly distributed, and focal firms can impose requirements on suppliers while remaining insulated from the weakest links. In the Brazilian case, focal firms can demand recyclable designs and cleaner inputs from their supplier base, and they can audit process improvements within their own facilities. But they cannot, on their own, build curbside collection networks, formalize waste picker cooperatives, or guarantee the institutional stability that large-scale material recirculation demands. The result is a circular economy with a missing middle: sophisticated eco-design at one end, and a patchwork of informal recovery at the other, without the codified, quality-assured reverse logistics infrastructure that connects the two.

That infrastructure deficit has technical consequences, not merely administrative ones. Without reliable collection streams, recovered plastics arrive contaminated and heterogeneous, raising processing costs and lowering the quality of recyclate. Without codification of material specifications across the chain, downstream buyers cannot verify whether recycled content meets food-contact or performance standards. The study shows that these transactional failures are exactly what Global Value Chain theory predicts when capability gaps meet weak institutional coordination. Circular economy initiatives that focus exclusively on firm-level innovation, the authors warn, will keep colliding with these structural limits, because circularity is not a property of individual companies but of interconnected arrangements spanning technical, organizational, and institutional dimensions.

The comparative context sharpens the lesson. Prior studies of plastic packaging in Europe, Italy, Taiwan, and the United States have documented how mature extended producer responsibility schemes, standardized collection, and formal reverse logistics enable higher recirculation rates. In the Global South, by contrast, research has emphasized the pivotal role of informal recycling sectors and the co-creation of circular economy research agendas attentive to local conditions. Costa and Scur’s Brazil case bridges these literatures by showing precisely where the value chain severs: not at the design table, where focal firms have made genuine progress, but in the recovery and recirculation segments where network coordination and public capacity are essential. The pathway analysis thus offers a diagnostic template that can be applied to other Global South economies where similar informal-institutional configurations prevail.

For policymakers, the implications are concrete. Strengthening network-dependent pathways will require more than awareness campaigns or voluntary commitments. It demands investment in collection infrastructure, mechanisms to formalize and support waste picker cooperatives, codification of recyclate specifications that industry can transact upon, and regulatory enforcement that gives reverse logistics obligations teeth. For firms, the study suggests that design and process upgrading should be coupled with deliberate network-building, such as co-investment in sorting facilities and quality systems, since unilateral firm-level circularity cannot close loops that span the entire chain. For researchers, the work demonstrates the analytical value of marrying Global Value Chain governance concepts with Global Production Network perspectives that capture state and civil society actors alongside firms.

The research, supported by the São Paulo Research Foundation and the Coordination for the Improvement of Higher Education Personnel in Brazil, ultimately reframes the debate about plastics in the Global South. The question is not whether companies want to go circular, but whether the governance conditions exist to let circular materials, information, and value flow across a fragmented chain. In Brazil’s plastic packaging industry, the answer is a qualified yes at the level of the firm and a resounding not yet at the level of the network. Closing that gap, the study concludes, will require treating circularity as a collective achievement built on shared institutions, rather than a badge that individual firms can earn alone.

Subject of Research: How governance structures and institutional conditions shape circular economy upgrading pathways in the Brazilian plastic packaging value chain.

Article Title: Governance and upgrading in plastic packaging in the Global South: evidence from Brazil

Article References: Costa, L., & Scur, G. (2026). Governance and upgrading in plastic packaging in the Global South: evidence from Brazil. Journal of Industrial Ecology. https://doi.org/10.1007/s44498-026-00162-5

Image Credits: AI Generated

DOI: 10.1007/s44498-026-00162-5

Keywords: circular economy, plastic packaging, global value chains, governance, Brazil, Global South, circular upgrading, recycling, reverse logistics, informal waste sector, industrial ecology, sustainability