The knock-on effects of China's import ban

Written by: Helen Mcgeough | Published:
Helen Mcgeough, senior consultant at PCI Wood Mackenzie

China’s waste import ban is understandable in terms of its attempt to clean up its materials-handling industries, but what will be the effects on the country, its neighbours and those that are doing the exporting?

Plans by the Chinese government to ban waste imports including plastics by the end of 2017 could have significant repercussions for the recycling chain across the globe.

It’s true the move could have positive repercussions in the long term, with exporting countries being forced to reassess their approach to waste and improve systems and outputs to produce higher-value opportunities for the waste material. In a true circular economy, generating low-quality bales is not an optimum outcome.

Without a significant end market such as China and its fibre industry, some countries may lose the incentive for plastics collection efforts due to zero reprocessing capacity or secondary markets in the domestic setting.

Of course, this would then drive plastics into the undesirable routes of littering, landfill or waterways, and ultimately marine pollution. Nobody in the plastics industry wants this to happen.

Is a ban the right way to go?

Given the scale of waste imports coming in to China, it has always been a challenge for the country to monitor and control the material effectively. It was, therefore, no surprise that China opted to announce a ban in an attempt to clean up the recycling industries and prevent hazardous waste from entering the environmental streams.

However, in doing so, the government has potentially jeopardised prominent industries such as the recycled fibre industry. This industry requires these feedstocks to operate and exist within a competitive global market, not to mention the countless thousands of citizens kept in regular employment within processing and recycling plants.

It’s important to note the ban is unlikely to deter those who operate within the murky waters of smuggling. There has always been a grey market in the trade of waste plastics and this activity could potentially simply shift to other parts of the region.

What next for current exporters?

The main contributors shipping waste plastics to China have historically been the US, Japan and Hong Kong, but the tale of what’s on the horizon is different for all three.

According to recent statistics, the proportion of collected material being exported from the US has been on a downward trend due to the region absorbing a greater share of the collected material. Many will see this as a golden opportunity to keep material within the domestic market, lower the region’s carbon footprint in the recycling chain, and truly achieve a circular economy.

For Japan and Hong Kong, the situation is less transparent. The opportunity to overhaul the national supply chain is there for the taking in both countries, although this is more likely to be the case in Japan.

Who will be the ‘new China’?

The sub region of South East Asia could potentially become a world leader in importing plastic waste. This region has traditionally been the single largest source of waste imports into China and is now in the position to develop its reclamation capacity and secondary markets further.

With financial investment from China, advances are currently under way across the chain and are building momentum. Will more bans follow? It’s highly unlikely, in the short term, that other countries will opt to ban waste plastic imports.

Similarly to China, the majority of other countries within Asia are not governed by legislation in regards to the recovery and recycling of plastic waste deter those who operate within the murky waters of smuggling way to alternative Asian countries that already have an end market, such as those in fibre production. With capacities likely to shift from China to elsewhere in Asia, it is doubtful that governments will back a ban.

The recent news coming from China should serve as a warning signal to those countries that do export waste plastics, however Asian countries may be happy to accept waste plastics, but the quality must be of acceptable levels to ensure the stream is viable and sustainable for both the industry and environment.

Waste plastic product future

Many countries process plastics waste and do it very successfully. In the example of PET, the recycled material has already been used in a range of secondary applications including fibres, bottles (both food and non-food contact), sheet and strapping for a number of years.

In Western Europe alone, the use of RPET can account for around 40% of the sheet market today. There are both economic and environmental implications of imposing an injunction. It is hoped China will revert the ban in the future and instead opt to impose more controlled measures permitting high-quality imports, as seen back in 2010 with the bale import permit system.

Helen Mcgeough is a senior consultant at PCI Wood Mackenzie

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