Environment minister Tse Chin-wan on Tuesday said he believes a market-led approach in recycling plastic containers and beverage cartons will reduce overall operational costs.

The government plans to introduce legal amendments to require drinks companies to collect plastic bottles and cartons for recycling.

The bottles and cartons would come with a minimum 10-cent rebate.

There will be four phases to the plan, and the initial recycling targets will be set at 30 percent for plastic containers and 10 percent for cartons.

Speaking on a radio programme, Tse said companies will be penalised for missing targets.

"This means requiring beverage importers or manufacturers to make their own arrangements, while the government only sets a target for how much they need to collect, as well as setting a minimum rebate amount," he said.

"So, we believe that a market-driven model will reduce overall operating costs and give companies more flexibility in managing their operations."

Under the plans, companies can either handle recycling themselves or hire scheme operators.

Simon Wong, president of the Federation of Restaurants and Related Trades, told the same programme that it could be difficult for small and medium-sized companies to implement the scheme.

"Plastic bottles and drink cartons will need a special label for recycling to help people get their 10-cent refund when recycling. But it might not be easy for some importers because adding these special labels to their products isn't simple and requires changes to their production process," he said.

The administration hopes to recover up to 75 percent of plastic containers and 50 percent of drink cartons within eight years.