Recycling may happen far from the place where waste is produced. Paper, metals, plastics and glass discarded in one country can be shipped across the world and used as raw materials in another. This international market is a major part of today’s circular economy, yet it is often overlooked when national recycling policies are designed.
A new study by CMCC researchers Eugénie Joltreau and Luis Sarmiento examines why recyclable waste moves between countries, how its price is formed and how public policy shapes these flows. Published in the Journal of Applied Economics , the research combines a theoretical model of international waste markets with data on trade in plastics, paper, aluminium, glass, and iron and steel.
The study finds that global trade in recyclable waste has remained at around 170–200 million tonnes per year since 2010 . Much of it originates in high-income countries: in 2022, these countries exported up to 72 million tonnes more recyclable waste than they imported. The market is also highly concentrated, with the ten largest exporting countries accounting for 67% of global exports.
Why waste crosses borders
At the heart of the study is the concept of “material imbalance”: the mismatch between the materials a country needs for production and the waste it generates through consumption. A service-based economy, for example, may import many manufactured products and produce large amounts of waste while needing relatively few materials for domestic industry. A rapidly industrialising economy may have the opposite profile, with strong demand for materials but less locally available waste.
These differences can make international trade economically attractive. Waste is more likely to move between countries with complementary profiles – from a country that generates relatively more of a material to one that has a greater need for it. Transport costs and the costs of collecting, recycling and disposing of waste also determine whether this trade takes place.
The researchers tested this relationship using international trade data, with results supporting the idea that material imbalances are a significant driver of global waste flows.
“The fact that waste was being directed towards countries with high material needs, such as China at the time, led us to think more deeply about the relationship between the waste countries generate and the materials they need for production,” says Joltreau , lead author of the study. “This led us to introduce the concept of material imbalance into the theoretical model and then test it empirically. We found that these imbalances do indeed play a role in explaining international trade in recyclable waste.”
Waste or resource?
The theoretical model also helps explain why recyclable waste does not behave like an ordinary product. Depending on demand, transport and processing costs, its price can be positive or negative. An importer may pay for waste as a useful source of materials, or an exporter may pay another country to take it away.
“This work helped me understand a market just before a major upheaval in the global waste trade, when China, the world’s leading importer of waste, drastically reduced its imports,” says Joltreau. “At the time, very different narratives emerged in the public debate: ‘We’re exporting our trash’ versus ‘They’re buying our recyclable materials.’”
The research shows that both narratives can contain part of the truth. Recyclable waste is simultaneously an unwanted by-product that is costly to manage and a potential input for production. Its value can shift as market conditions and public policies change.
“One of the insights from the model is that the price of waste traded for recycling can shift from positive to negative, depending on demand and costs, which are themselves influenced by recycling policies,” says Joltreau.
When policy drives exports
The findings show that recycling and waste-management policies can influence not only how much material is recycled, but also where that recycling takes place. Measures such as collection and recycling subsidies, disposal taxes and recycling targets can increase or reduce the incentive to export, depending on how they are designed.
The European Union illustrates this connection. Waste exported for recycling can count towards national packaging recycling targets. The study reports that, on average, 10–13% of EU packaging recycling took place outside the bloc between 2018 and 2021 .
This means that a higher reported recycling rate does not necessarily reflect more domestic recycling. According to the model, some policies can lower the cost of preparing waste for export, making it attractive to ship recyclable materials abroad. The study also suggests that, for countries that tend to export waste, targets requiring recycled materials to be used in domestic production may do more to support local recycling than targets focused only on the share of waste recycled.
The results do not imply that international waste trade is always harmful. Trade can connect available recyclable materials with industries that need them. However, it does warn that poorly designed policies may encourage exports without strengthening domestic recycling systems, while shifting environmental pressures towards importing countries that may have lower environmental standards or weaker collection infrastructure.
By placing international trade at the centre of circular-economy analysis, the research highlights the need for policymakers to look beyond national recycling rates. Effective policies must consider where waste is processed, where recycled materials are used and how incentives affect global flows – while continuing to reduce overall resource use and waste generation.
For more information
Eugénie Joltreau and Luis Sarmiento (2026), “Recycling in a globalised economy,” Journal of Applied Economics , 29(1), article 2699509. DOI: 10.1080/15140326.2026.2699509
The research received funding from the European Union’s Horizon Europe research and innovation programme through the CircEUlar project
Journal of Applied Economics