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Chile: the challenge of attracting investment

Seven months have passed since the implementation of the Extended Producer Responsibility Law in Chile, specifically in the field of packaging. This initial period has been a complex journey during which the different actors have undertaken the process of adaptation and of seeking to generate solutions to comply with the recycling rates imposed by the law. As it is a totally new process, it was expected that many changes would arise in the local market, and there will surely continue to be turbulence in the future that is necessary to activate and enhance recycling in the country.

The National Association of Recycling Industries (ANIR) continues to support the development of recycling in Chile and, in December 2023, once again launched the country’s most complete recycling statistics report.

The circular economy is becoming increasingly relevant in Chile, creating a favourable environment for investing in new recycling industry projects. The recent inauguration of a waste sorting plant, with a processing capacity of 60,000 tons per year and equipped with the most advanced technology in Latin America, exemplifies this drive. It is estimated that the country has room for at least five additional plants with similar characteristics, demonstrating the potential for growth and opportunities in this sector.

However, obtaining permits to build and operate facilities of this type takes between three and 10 years, which clearly hinders the advancement of the industry. When also considering the constant political struggle to impose reforms that seek to increase taxes, or that ultimately do not guarantee clear and reliable conditions for the future, it is difficult to expect greater investments in the sector. Chile needs to attract investment by reducing and simplifying the country’s permitting bureaucracy, offering incentives for investing in sustainability projects, and providing long-term legal and tax certainty for those investments.

In economic terms, Chile faces a period of certain stabilization, with the government turning the page on constitutional reform and concentrating its efforts on controlling inflation which is projected at around 3% for 2024. In addition, it is seeking to restore economic growth, with estimates close to 2%, although the Central Bank is showing greater optimism in projecting between 2% and 3%. However, a factor that cannot be overlooked and that could certainly affect these growth plans is the considerable increase in violence and the security crisis currently affecting the country, largely attributed to uncontrolled immigration.