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Sep 2018
13

China’s Ban on Recovered Material Imports Creates New Industry Challenges

By Adam Shine, Vice President of Sunnking

Since China banned the import of certain recovered materials last year, including a range of plastic types, the recycling industry has been facing major challenges with filling the market void left in China’s absence. China has been the biggest importer of recyclables in the world since the 1990s. While new solutions are being conceived, the government of Norway submitted a proposal this past June to tighten international regulation of recovered plastic material through the Basel Action Network, causing even more concerns for potential implications on free trade of scrap material and the environment.

Sunnking receives calls daily from industry organizations inquiring about solutions for their plastics that no longer can be sent to China and other Asian countries. We used to ship to our primary plastics vendor 2-3 times a week. Since China and Malaysia closed their doors, this vendor has not been able to accept our shipments. Currently, we have two outlets, but those may become unavailable soon as well. We are concerned because a significant proportion of our material is plastic. For instance, our shredded plastic has accounted for approximately 10 percent of our shipping exports this year, excluding what we currently have in inventory. We send out two different types of plastic, baled and shredded. If Sunnking and other recyclers run out of options, the plastic will have to go to landfills, which is not an optimal solution as a recycling company and will cost more. As new business costs are acquired due to uncontrollable market conditions, it may become necessary to implement fees associated to the challenges we are facing.

Consequences connected to China’s ban are being felt by residents as well. Some waste management companies recently have ceased curbside recycling services to homes, citing China’s policy to ban imports as the reason why they no longer have the ability to move plastics out of collected material. A recent article from USA Today cited an estimated 111 million metric tonnes of plastic will be displaced by 2030 as a result of China’s ban. It’s an international dilemma. Europe is having the same issues and they are generally ahead of the U.S. with environmental policies. There is one North American company that is said to be a month away from testing new plastic shredding equipment they’ve been building over the last year, but the majority of Sunning’s plastic is baled and switching to shredding is costly. Even still, the new equipment will only accept shredded plastic that has 2% contamination or less. Contamination denotes other materials such as metals are present in the plastic streams. When it comes to electronics recycling, it is especially difficult to reduce contamination because there are many other materials electronics are composed of. The most advanced sorting equipment can make plastic streams cleaner, but it is not always perfect, and the equipment can cost upwards of $400,000.

The containers China used to receive had valuable scrap that supplied their recycling and manufacturing industries. An American journalist and author, Adam Minter, was based in China for over a decade and reported on recycling for Bloomberg. He found that the Chinese government’s claims that imports are badly contaminated is untruthful as foreign containers have never been cleaner, and when compared to what is being generated by Chinese cities, they are impeccable. Although China does not want to be viewed as a dumping ground, and some claims are legitimate, they still have a domestic need for the materials that were imported. They’ll have no choice but to extract virgin materials to make up for the loss, leading to a higher carbon footprint, costs, and detrimental effects on the environment.
Many are left wondering why the Chinese government implemented these new trading policies. It is associated in part due to the Chinese and U.S. trade war, and is unclear when the situation will deescalate. Also, some say the Chinese government is more interested in the virgin materials industry than the recycling industry because the virgin materials industry is comprised of state-owned entities which are favored over the predominately private recycling industry.

The need for new plastic recycling solutions is apparent and necessary. We may be faced with plastics issues for a long time as there are currently no near-term solutions. Sunnking will remain transparent as we continue to collaborate with leading industry professionals, invest in the best solutions available, and adjust our business accordingly.

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