The Changing Global Recycling Market February 27, 2018

Background China became the world’s main solid waste importer in the 1980’s when it need cheap, raw materials to feed its growing economy. Contamination of recycling has been an issue for some time. China had an abundance of cheap labor and could afford to remove the contaminants

Background Sizable changes in the Chinese economy have created a vast and surging middle-class. The government has initiated major anti-corruption and pollution control initiatives. Federal action comes at a time of rising environmental attention in China, with social media exposure of environmental problems being a key driver. During China’s 19th National Congress back in October, President Xi Jinping, president of China and leader of the ruling Communist Party, mentioned the environment more than 60 times.

Background 2013: February 2017: The Green Fence Reject recycling shipments at ports if they were too contaminated. February 2017: As part of a broader “National Sword” campaign Customs enforcement began a one-year crack down on illegal smuggling of “foreign waste.” Thus, over the past three-plus years, the Chinese government has undertaken two campaigns (Green Fence and the National Sword). Contamination doesn’t necessarily mean “toxic chemicals” Its anything that doesn’t belong: plastic in a shipment of cardboard, paper inside a bale of plastic bottles These initiatives included specific actions: -- inspect 1,600 paper mills and plastics reclamation plants, and shutter many of them.

Background July 18, 2017: August 10, 2017: Notified the World Trade Organization (WTO) of intent to ban 24 materials from being imported. These include mixed plastic and mixed paper effective January 1, 2018. August 10, 2017: Announced a new quality standard for material, limiting impurities to 0.5 percent (down from 1.5 percent). This requirement applies to all materials, even those that are not banned (such as ONP or OCC). Takes full effect on March 1. As a result, there will be/has been a reduction of all recyclable tons entering China. -- impose bans on the import of certain grades through import license restrictions (mixed paper, mixed plastics, etc.) and bale inspections. -- impose tight bale standards (0.5 percent).

Why do China’s policies matter? Lots of stuff headed to China… Global issue – EU, Canada, Japan all experience restrictions

Recycling Industry Exports 37 million metric tons exported from U.S. $16.5B value of U.S. materials exported Approximately 30% of scrap processed in US is destined for export China is the single largest consumer of recyclable materials exported from the United States. Over 40 percent of paper is exported 70 percent of mixed paper is exported Over 20 percent of bottles are exported 33 percent of non-bottle rigid plastics are exported (tubs, trays, containers) Metals tend to stay state side

US Paper Exports Source ISRI

US Plastic Exports Source ISRI

Impact of Ban The ability of other international markets (e.g., India, Taiwan, Vietnam) to absorb all the recyclables will be strained. Domestic markets will not be able to respond. Some materials may not be able to find an end market: Drop in commodity prices, Reduction in the types of materials accepted in recycling programs, Stockpiling of materials, Closures of recycling facilities, Landfilling of recyclable materials.

Industry Response The recycling industry is working to better sort incoming recyclables to lower contaminant levels and improve the quality of the material that is exported: Increasing its workforce Slowing down processing times.

Municipal Impacts Ban could have significant adverse impacts on municipal recycling programs in the United States: Additional charges due to excessive contamination Price increases Fewer rebates Elimination of materials accepted in recycling programs

Education Contamination of recycling has been an issue for some time. Increase in single-stream recycling. Underinvestment in education and communication, resulting in gaps in public knowledge. More expansive education programs to reduce contamination: Phoenix, AZ: “Top 10 in the Bin” campaign Massachusetts: “MoreBetter Program” which looked inside bins and quantified contaminants Corpus Christi: “Dirty Dozen Recycling Campaign” San Antonio: inspections, warnings and fines When recycling programs first started, had to sort paper from containers

Available at RecycleSpot.org

A positive side? Looking at ways to use more recyclables domestically. China’s recycling industry is looking to expand in the U.S. to create facilities to clean and pelletize plastics for export.

Questions?