Up until this year, China was THE largest importer of recyclables in the world, 50% of the global recyclable paper, plastics and metals waste went to China; and, it was the single largest consumer of recyclable materials generated in North America. For US recycling companies, it was cheap to send recyclable materials to China because ocean carriers delivering new goods made in China offered significant price reduction to get their shipping containers returned in order to continuously fill them with new goods for purchase. However, last July, China informed the World Trade Organization that, under its new waste policy called National Sword, it would ban the import of many recyclables effective Jan. 1st 2018, primarily impacting mixed paper and mixed plastics for singe stream recycling programs. China also stated it would impose stricter quality standards, establishing the allowable percentage of contamination at only a half of a percent, an unprecedented as well as unattainable threshold. Unlike Operation Green Fence I and II in 2013 and 2015, respectively – the two most recent waste regulatory changes imposed by China’s Ministry of Ecology and Environment – there’s been absolutely no indication of waning from the new standards dictated by National Sword as we soon enter into its ninth month. On the contrary, since the beginning of the year, additional restrictions have been imposed, for example the suspension of the approval process of new import licenses and the implementation of Operation Blue Sky, which enforced the new bans by targeting the inspection of 100% of shipping containers, both of these further limiting the flow of material into China.
China’s President’s top priority is to improve the country’s environmental and public health conditions by developing the necessary infrastructure to better manage waste and cease being the world’s dumping ground. For a quick reference, Resource Recycling produced a timeline of major events that have taken place in the material recovery world since 2013. Note China’s landmark mission announced just a couple of weeks ago: to ban all post-consumer recyclable waste imports by the end of 2020.
To grasp the magnitude of this market disrupter, in 2016 China consumed 28.5 MT of paper and so far this year over 13 MT have been DIVERTED from China . With respect to plastics, China imported nearly 13 billion pounds in 2017 but this year only 375 million pounds have been permitted as of May.
For Chinese businesses, the recycling import ban and tighter contamination standard have resulted in the closure of many of its plastics companies along with its paper manufacturers investing in foreign businesses in order to secure feedstock as well as develop capacity required for their operations. China Scrap Plastics Association’s Executive President Steve Wong reported an estimated 60-70% of Chinese plastics recycling companies that had relied on imports have closed. The remaining have sought domestic outlets or secured virgin material or moved operations to Southeast Asia or abroad. In the US, two Chinese companies opened plastics recycling operations [one in Alabama and another in South Carolina] AND Asia’s largest paperboard producer, Nine Dragons, purchased two mills [one in Maine and one in Wisconsin] earlier this year. US companies are also reinvesting in domestic recycling operations with Pratt Industries’ new mill currently being constructed in Ohio, Green Bay Packaging’s $500 million dollar plan to replace its Wisconsin mill and Cascades’ $300 million dollar upgrade for its newest mill acquisition in Virginia.
The Southeast Asian markets that have newly developed or expanded can only handle a fraction of what China imported and the symbiotic shipping container relationship is absent, driving transportation costs up. Some industry analysts are referring to this as an upside down business model, economically. Additionally, these countries have already executed practices aligned with National Sword, substantiating the demand for higher quality. Compounded by an immediate surplus of materials, nationally and internationally, the global market prices of the newly prohibited items identified by China have plummeted. In the US, although there is a strong domestic demand for cardboard, its value has dropped ~60% from last summer and, here in the northeast, mixed paper has been negative compared to its market price of ~$80 last August. Fortunately, both metals and plastics, specifically PET or #1 and HDPE or #2, have stable pricing as well as domestic outlets.
Countries globally are reporting similar impacts and remedies:
- Diversification of end markets and developing domestic infrastructure
- Upside down business models/paying to move recyclables
- Education for all waste generators and handlers via public campaigns
- Quality assurance via plant technological upgrades
- Stockpiling, burning and landfilling of recyclables
- Taxes and bans considered on some plastics
- Manufacturers reverting to using raw materials instead of recyclable materials
Nationally, Waste Dive is tracking the waste and recycling challenges and changes occurring across the country as a direct result of China’s new import policies.
One word that sums up why China drastically changed its foreign waste policy is CONTAMINATION, which is TRASH or non-recyclables in the recycling load. When non-recyclable items, or contamination, end up in your recycling, they have the potential to turn the entire load into trash.
Over a year ago, the documentary Plastic China was released, which has gained international attention and sparked the Chinese president’s immediate call to action. As the world’s largest plastic waste importer, dubbed the “United Nations of Plastic Waste”, the film documents the ill conditions and health effects of the life of Chinese workers sorting the waste and working in plastic recycling workshops. It provides a startling insight especially to nations ignorant of the relaxed waste management systems that exist in Asia. Plastic China also beckons developed nations to confront the impacts of their consumerism, particularly accountability and responsibility for how the massive amounts of things they consume are disposed. So, as China’s government is focused on cleaning up its environment with an economy that is significantly less export driven, boosting its domestic recycling infrastructure has trumped its domestic manufacturing priorities and concerns.
The emphasis on environmental issues, especially improving air quality and reducing wastewater contamination, is commendable. And the unprecedented international attention on recycling has forced a much needed shift to the QUALITY of recyclables. Unfortunately, with landfill waste diversion increasingly becoming a core component of sustainability goals and reporting metrics for businesses, recyclers have morphed into Wishcyclers; those who, despite best intentions, put more things in the recycling bin than what is accepted in the recycling program, hoping and even expecting that everything will be recycled. Common contaminants in single stream recycling programs include plastic bags, recyclables in plastic bags, food waste, electronic and medical waste. Confirm with your local recycling company what items can be recycled in your program.
China is doing right by its citizens and, in the long-run, it is helping the U.S. National Sword is the impetus for waste generators to find solutions to their own waste, for consumers to demand a higher increase of the percentage of post-consumer (recycled) content used in products, for manufacturers to design products with reuse and/or recyclability intent for end of life/disposal, and, for haulers to invest in the recovery of higher quality materials. This challenge has formed new stakeholder alliances that are addressing major complexities within the waste industry for future manufactured goods such as defining the recyclability or circularity of materials and environmental impacts, transitioning from low grade quality non-recyclable materials, mandating percentages of post-consumer recycle content material in manufacturing processes and innovating around multi-layer, flexible packaging, an ever-increasing stream of waste lacking sustainable disposal solutions.
And this couldn’t be timelier considering landfill capacity shortages in the northeast region, particularly CT, RI and MA. MA alone is expected to have to export 2 million tons of trash annually by 2020 based on current landfill capacity projections. The Environmental Research and Education Foundation recently released its report analyzing landfill tip fees in the US and reported over a 6% increase from 2017 along with landfill capacity diminishing by more than 15% in the next couple of years and the northeast region being most heavily affected.
With disposal costs, China and contamination now at the forefront of strategic planning for future business operations and growth, complemented by increased awareness of natural resource depletion, ocean conservancy and greenhouse gas emissions issues, fortunately, there is a plethora of waste reduction initiatives today from zero waste to single use disposable plastics bans.