But now, after the termination of the lease with the Hong Kong Science and Technology Parks last September, they have moved operations to a new site in Ping Che, near the border with mainland China.

Insiders in the recycling industry have also said last month’s shelving of a waste-charging scheme has put a damper on business amid Hong Kong’s continued economic woes.

They added they were struggling to survive without government support.

“The recycling sector [in Hong Kong] is highly dependent on external help, such as the government,” Chung Shan-shan, a senior lecturer of biology at Baptist University who specialises in waste management, said.

“Many practitioners expected to benefit from waste charging, but it is gone now.”

Environmental authorities last month shelved the long-awaited pay-as-you-throw scheme because of poor results from a two-month trial that started in April and covered 14 sites.

A government report revealed that the participation rate in some premises was as low as 20 per cent.

The review also highlighted the views of property management and sanitation services firms that the additional workforce needed and extra operational costs had been a burden.

(From left) The co-founders of Mil Mill, Harold Yip and Nigel Lo, at their new recycling plant at Ping Che, Fanling. Photo: Elson Li

Deputy Chief Secretary Warner Cheuk Wing-hing told lawmakers as he announced the suspension of the waste disposal scheme that the government would expand the community recycling network and boost public education before there was discussion of a relaunch.

He added that authorities would address a Legislative Council panel in the middle of next year about public participation in waste reduction.

Authorities had predicted that waste charging could rake in up to HK$1.79 billion (US$229 million) in revenue in the following financial year, which would be used to promote waste reduction projects.

Chung said the suspension would affect collectors of household recyclables the most, as the government was one of the few channels through which they could raise funds.

Authorities set up a HK$1 billion fund dedicated to the city’s recycling industry in 2015 as part of a strategy to reduce the amount of municipal solid waste generated each day and curb carbon emissions.
A worker piles up bags of drinks cartons for recycling at Mil Mill’s new plant. Photo: Elson Li

The fund was created to subsidise the expansion of individual recyclers and support trade and industry groups, professional bodies and research institutes in projects designed to help the sector improve operational standards and productivity.

Another HK$1 billion was allocated in 2021, with the application period extended to 2027.

Government statistics showed that, of the 3,865 applications submitted to authorities by March last year, 2,596 had been approved.

The Audit Commission last November said environmental authorities took too long to process applications and release funding, and that the rejection rate was high.

The Environmental Protection Department explained at the time that many applicants had failed to provide sufficient information for evaluating their bids.

It added that some of the proposed projects were outside the fund’s scope and others were ruled to be unfeasible or not cost-effective.

Mil Mill is the city’s first beverage carton recycling plant. Photo: Elson Li

Maverick Leung Chun-pong, a third-generation owner of a 50-year-old waste paper recycler, was among those who failed to secure government funding.

His plant in Yuen Long recycles 15 tonnes (16.5 tons) of waste paper a day.

“The economic situation is not very good,” Leung said. “Inflation is going up. Rising costs are putting pressure on us.”

He added that recycling businesses had a narrow revenue base and were susceptible to fluctuations in global market demand.

“Global scrap prices have fallen in recent years and the demand has decreased because recycled raw materials are more expensive than virgin ones,” he explained.

SunSirs, a mainland Chinese commodity data analyst, said prices for corrugated paper derived from waste paper had dropped from 2,722 yuan (US$345) a tonne in mid-March to 2,629 yuan per tonne at the start of the month.

The analysts said the fall was caused by an oversupply and weak demand from downstream paper mills.

It added that paper mills were expected to maintain low prices for waste paper in the short term under pressure on profits.

Allan Wong Wing-ho, the executive chairman of the Hong Kong Scrap Plastic Association, said the present waste treatment policy was not sustainable because the pressure of recycling weighed too heavily on authorities.

“The average cost for the government to treat one tonne of recyclables is HK$10,000,” he said.

“If authorities want to reduce waste by 2,000 tonnes daily, it will cost HK$20 million a day, or HK$7.3 billion a year. No other people, no other country, would commit to that.”

The latest government figures showed that the city produced 11,128 tonnes of municipal solid waste a day on average in 2022.

That meant every Hongkonger was responsible for 1.5kg of trash every day.

Environmental authorities have said they aimed to cut the amount of waste generated by up to 45 per cent and boost the city’s recycling rate to 55 per cent by 2035.

The city’s recycling rate has hovered at about 30 per cent over the past few years.

Wong said the recent increases in public awareness of waste charging had not translated into more action to cut waste production and boost recycling.

He added that the government should consider the introduction of policies to help build a circular economy – an economic system based on the reuse of materials or products.

“Our society, residents and leaders are walking in the wrong direction,” he maintained.

“The government said it had to improve recycling facilities [before reintroducing waste charging], but it is a chicken-and-egg dilemma.

“You have no incentive for residents to recycle. There is no stick, and there is little carrot.”

Mil Mill is expected to reopen later this month or early July.

The company has joined forces with private corporations such as city drinks giant Vitasoy, Cathay Pacific Airways and clothing manufacturer Crystal International for new projects at the Ping Che site.

Yip, Mil Mill’s chief executive, said the idea to set up a pulp plant was sparked by a discussion 15 years ago on waste charging, because the founders believed it would lead people to recycle more.

But he said Mil Mill was barely holding on at present and the waste charging proposal appeared to have fallen apart.

“Residents should seriously consider whether they should support waste charging,” Yip added.

“I am happy to share our experience at Mil Mill as a reference to explore how to build a circular economy in Hong Kong.”