South Korea Launches Circular Economy Regulatory Sandbox for waste Plastic Recycling adn Beyond

the South Korean Ministry of Climate, Energy and Surroundings is actively recruiting businesses to participate in three “planned regulatory special cases” (sandboxes) focused on advancing the circular economy, with a meaningful emphasis on innovative waste plastic recycling technologies. The application period runs from January 19 to February 27, 2026.

What is a Regulatory Sandbox?

Introduced in January 2024, the “Regulatory Special Cases in the Circular Economy Sector” system allows companies to test new technologies and services in a controlled environment – limited by time, location, and scale. If these demonstrations prove safe and effective, the government will revise or supplement existing regulations to facilitate wider adoption. This approach aims to foster innovation while ensuring environmental protection and public safety. Ministry of Environment

Focus Areas for the 2026 Sandbox

This iteration of the sandbox program utilizes a “planning-type” approach, where the government identifies specific challenges and solicits business proposals to address them.The primary focus is on chemical recycling, especially pyrolysis, to enhance the high-value recycling of waste plastics.

1.Pyrolysis Raw Material Verification

Currently, most pyrolysis facilities in South Korea rely on waste vinyl from households. A key challenge is expanding the use of waste plastics generated by businesses, which are often thermally recycled due to logistical and economic hurdles. This sandbox task aims to address this by:

• Granting temporary exceptions to waste regulations to allow for the use of workplace-generated waste plastics as pyrolysis feedstock.
• Establishing standards for recognizing these recycled materials as “circular resources” by assessing potential hazards and economic viability.

2. Utilizing Pyrolysis Products as Solid Fuel

Existing regulations restrict the use of solid fuel products (derived from pyrolysis) to licensed facilities like power plants and industrial boilers. This task proposes a regulatory exception to allow these products to be used as raw materials *within* pyrolysis facilities themselves. During the demonstration period, the amount of pyrolysis oil produced (yield) and the characteristics of any residual materials will be carefully monitored.

3. Recycling Pyrolysis Residues

Pyrolysis residues currently lack a specific waste classification code in South Korea and are typically disposed of in landfills as incineration facility floor ash or combustion residues.This project seeks to demonstrate the feasibility of transforming these residues into valuable recycled products, such as land betterment agents and building materials. Successful demonstrations could lead to the creation of a new waste classification number and the recognition of pyrolysis residues as recyclable materials.

Beyond Plastic Recycling: Expanding the Circular Economy

The sandbox program extends beyond plastic recycling to include initiatives aimed at reducing packaging waste and upcycling agricultural by-products.

Reducing Packaging Waste with E-labels

Household chemical products require detailed labeling regarding their purpose and usage. Though, changes to corporate or legal information frequently enough necessitate replacing entire packaging runs. This task explores the use of electronic labels (e-labels) for non-essential information, reducing packaging waste and establishing a standard model for appropriate labeling practices.

Upcycling Agricultural By-Products

Agricultural by-products, such as pear and tangerine peels, are currently classified as “other vegetable residues” with limited recycling options. This project will demonstrate various recycling methods – including applications in food,cosmetics,and industrial materials – to establish new waste classification codes and expand recycling opportunities.

Application and Support Details

Businesses interested in participating can apply from January 19 to February 27,2026,through the environmental technology industry comprehensive service (ecosq.or.kr) operated by the Korea Environmental Industry & Technology Institute. The Ministry will select participants based on the alignment of their proposals with the stated tasks and the specificity of their business plans.

Approved businesses will receive:

• A two-year demonstration period (with potential for a two-year extension).
• Financial support of up to KRW 120 million for verification project costs.
• Coverage of up to KRW 20 million in liability insurance premiums.
• Consideration for revisions to relevant laws based on project outcomes.

“We will pursue multifaceted support to expand high-quality recycling of waste plastic, including this pyrolysis planning project,” stated Kim Go-eung, Director of the Resource Circulation Bureau of the Ministry of Climate, Energy and Environment. “We will continue to identify and improve regulatory improvement tasks so that higher-level technologies and services can be commercialized in all areas of the circular economy.”