Borealis and Borouge have entered into a strategic partnership with Indonesian waste management experts and international climate funds to create the country’s first fully integrated circular waste management and polyolefin recycling ecosystem. This initiative aims not only to curb plastic pollution but also to provide industrial-scale, high-quality recycled materials for the sustainable packaging of the future.
Indonesia’s rapid economic growth and urbanization have placed immense pressure on local waste management systems. Until now, plastic waste treatment has been fragmented, lacking cohesive value chains. Borealis and Borouge, in collaboration with local operators Pelita Mekar Semesta (PMS) and Reciki Solusi Indonesia, alongside the Subnational Climate Fund (SCF), are now introducing a model that covers the entire process—from collection to the production of high-end recyclate.
A Milestone in East Java: Feasibility Study Underway
The first phase of the project involves a comprehensive feasibility study funded by the Subnational Climate Fund Technical Assistance. This research evaluates the viability of a “greenfield” recycling facility to be established in East Java.
The planned facility focuses on post-consumer plastic waste, specifically fractions rich in polyolefins. The goal is to implement advanced mechanical recycling technology capable of producing consistent, premium-quality recycled polymers. This is a critical requirement for the FMCG sector, where global brands are increasingly demanding sustainable sources for their packaging materials.
Strategic Partners and Synergies with Project STOP
This initiative does not exist in a vacuum; it is closely linked to Project STOP, a program co-founded by Borealis and Systemiq. Project STOP has already achieved significant milestones in Indonesia:
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It has provided waste collection services to more than 2 million people.
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It has prevented tens of thousands of tonnes of plastic from leaking into the ocean annually.
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The new integrated ecosystem builds upon this foundation to scale up industrial processing capacity.
Markus Horcher, Vice President of Sustainability at Borealis, emphasized that through this partnership, Indonesia will be able to transform plastic waste into valuable raw materials while significantly reducing environmental impact.
Quantitative Impacts and Economic Reach
While the final investment figures will be determined at the end of the feasibility phase, the project’s financial bankability is backed by the SCF (managed by Pegasus Capital Advisors) and the Catalytic Finance Foundation.
The expected impacts of the project in numbers:
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Total Integration: This is the first project in Indonesia to organize selective collection, automated sorting, and chemical-grade-standard recycling into a single ecosystem.
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Feedstock Stability: Through the networks of local partners PMS and Reciki, the planned plant is guaranteed a continuous supply of raw materials.
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Local Job Creation: Based on previous Project STOP experiences, such hubs can create hundreds or even thousands of direct and indirect jobs within local communities.
Trust Based on Data
The key to the project’s success is transparency. The system utilizes methodologies validated by the Gold Standard and the International Union for Conservation of Nature (IUCN). Consequently, the environmental benefits—such as CO2 emission reductions and the elimination of marine debris—will be accurately measurable and verifiable.
Bhima Aries Diyanto, Founder and CEO of Reciki Solusi Indonesia, stated that this collaboration could “revolutionize the Indonesian recycling industry” by making global standards accessible to the local market through technology transfer.
Summary: A Path Toward Global Circularity
The development in Indonesia by Borealis and its partners serves as a blueprint for replacing the traditional “take-make-dispose” linear model with a value-creating circular one. This cooperation, highlighted in February 2026, is important not only for Indonesia but also serves as global proof that the economic and technological foundations for a sustainable plastics industry can be established in emerging markets.