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July 25, 2017 - Waste Dive, Plastics Recycling Update, Plastics News

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What comes next after China's scrap ban surprise? 

Less than a week after China shook up the global recycling industry with its announcement of a scrap import ban, details are thin and the possibilities are vast.

According to a July 18 filing with the World Trade Organization (WTO), the country will stop accepting four classes and 24 categories of "solid waste" by the end of the year. That includes multiple types of plastics, textiles, mixed fibers and other materials. The exact specifications of what will be rejected are still being investigated, but it’s clear that China will be accepting less material. Minimal rationale was provided in the Ministry of Environmental Protection's WTO filing aside from concerns about pollution from “foreign garbage” imports.

"To protect China's environmental interests and people's health, we urgently adjust the imported solid wastes list, and forbid the import of solid wastes that are highly polluted," read the filing.

This isn’t the first time China has gotten strict on scrap specifications in recent years. The 2013 Operation Green Fence limited imports and the more recent National Sword (or Sharp Sword) smuggling crackdown has slowed operations as well. Yet if this latest policy is what it seems, many believe the implications could be deeper and more permanent.

Based on initial reactions and conversations, here are some of the top questions on the minds of industry professionals so far.

Why did China file a ban and could it be willing to compromise?

Shortly after China’s announcement, the Institute of Scrap Recycling Industries (ISRI) released a statement calling this policy potentially “devastating” and “catastrophic” for the U.S. recycling industry. ISRI estimates that the U.S. exported $5.6 billion in scrap commodities to China last year and has conducted analysis showing the domestic scrap industry supports hundreds of thousands of jobs.

Adina Adler, ISRI’s senior director of international relations, told Waste Dive that less than 5% of Chinese scrap imports could be considered contaminated under these new standards, so her organization is trying to get a better understanding of what exactly the country hopes to target.

“You’re still going to be up against interpretations by port authorities on what they would consider as clean versus dirty," said Adler.

On a global level, the Bureau of International Recycling (BIR) has been equally perturbed by the news. Statements from the organization have similarly called this policy “serious” and “devastating." BIR has also taken issue with the 48-hour comment window and asked the WTO to enforce a more standard 60-day period.

Another key question is whether this new policy will achieve what China hopes. Adam Minter, author of "Junkyard Planet" and a longtime reporter on the global scrap trade, wrote an editorial for Bloomberg View making the case that it will not.

"It's a crowd-pleasing stand. But far from solving China's environmental problems, this crackdown will actually worsen them — and do so at the expense of jobs and economic growth around the world," wrote Minter.

Minter recognizes that contaminated imports are an issue, one which he has witnessed firsthand, but said that is far outweighed by the overall benefit of a cleaner recycling stream coming from the U.S.

How much responsibility does the U.S. industry bear and what will it do next?

Some may argue this ban should not come as a complete surprise following China’s other recent trade policies and the fact that imports for categories such as plastic have been declining since 2013. That trend, coupled with a rise in single-stream processing, has brought issues with contamination to the forefront. Consumer behavior plays a key role in this, but some industry observers say cities can do more to keep high residue rates in check through contract specifications.

"The cities don’t know that they’re in charge," said Gary Liss, vice president of Zero Waste USA, "and the waste haulers aren’t telling them they’re in charge."

Liss sees reduced quality as a side effect of the single-stream wave and doesn’t believe enough is being done outside of markets with regulatory drivers such as California.

"We all need to be doing our roles and what the cities don’t understand is their role is to hold the line on residue. If they don’t hold the line then the economic forces on the marketplace are pushing toward more residue and what China’s doing is squeezing down on that,” he said.

In Liss' view, the recent trend of service providers shifting more of the commodity risk toward municipalities may be counterproductive to getting the highest quality feedstock. Yet working to enforce cleaner streams also comes with a cost — depending as always on regional factors. “Zero waste” cities may choose to take that on for environmental reasons and charge customers accordingly. Though other cities may not be willing or able to factor in anything aside from pure economics.

Because not every city or service provider is going to start spending more on recycling, others worry this new China policy could set the U.S. industry back.

Steve Alexander, executive director of the Association of Plastic Recyclers (APR), said he remains optimistic about a better future that is less reliant on the volatile Chinese market but pointed to No. 3-7 plastics as vulnerable in the short-term.

"The real concern is this is going to impact the segment of the industry that we’ve worked very hard to grow the last five years," said Alexander. "What we’re worried about obviously is consumer access to recycling for these resins."

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