1. China National Sword Issues & Responses Tue 6th Nov 2018
Presented by: Mike Ritchie
WasteMINZ 2018 – Target 2050: China National Sword
Date: Tue 6th Nov 2018
Time: 11:00 AM – 12:30 PM
20 minutes presentation
Venue: Plenary Room

2. What is China’s National Sword policy?
The goal:
“Imports of solid waste that can be substituted by domestic resources will be phased out by the end of 2019” – State Council of China
- it is NOT about contamination. It is about industry policy.
Revoked licences
Inspections at ports
The actions:
Feb 2017
‘National Sword’
Suspended processing facilities
July & Nov
0.5% contamination - paper & plastic
Note – MRFs were never designed to achieve 0.5%
Ban of paper & plastic scrap (24 waste categories) - WTO
Revoked licences
Inspections at ports
Mar 2018
‘Blue Sky’
Suspended processing facilities

3. Size of the Problem – NZ Fibre Plastic
485,000t recovered (120,000t domestic)
Loss in value – Visy mixed paper $10.5M; OJI $6.4M
Loss in value to Councils = 120,000t x $200/t = $24M
Plastic
45,000t recovered (10,000t domestic)
Assume all mixed $100/t fall in price (assumes PET & HDPE maintains price)
Loss of value to Councils = 10,000t x $100/t = $1M

4. Tonnages Fibre NZ Generation – 485,000t
C&I
MSW
Export (275,000t)
155,000t
120,000t
NZ use (210,000t)
150,000t
60,000t
Plastic NZ Generation – 40,000t
C&I
MSW
Export (~100%)
30,000t
10,000t
NZ use

5. Some key points Contamination
MRF contamination is not the same as export contamination
MRF contamination 8% and CONSTANT
It is not efficient to reduce the last 5% in MRF 
Therefore it is exported with 5% contamination
Reflected in the price

6. It is all about fibre (94% of the problem) – Australia

7. It is all about Fibre for MRFs as well
Material input stream
Percentage (%)
Fibre - paper and cardboard 53
Glass 30
Plastic 6
Tin cans 2
Al cans 1
Contamination 8
TOTAL
100

8. The impacts on MRF’s MRF $225 Paper Mix $50 $250 Plastic Mix $50 ustr
$72 Glass ($60)
$100 Steel
Processing costs
($100)
Gate fee
+$30-($40)
$1,500 Aluminum
Weighted Average loss
= $100/input tonne
MRFs are no longer profitable at new commodity prices and existing gate fees

9. Impacts on “mini” MRF gate fee
BASE
CURRENT
DIFFERENCE
Material category
input %
Historical average sale price ($/t)
Jan18 average sale price ($/t)
Drop in price
($/t output)
Weighted loss in output value ($/t MRF input)
Paper and paper products (mixed fibre)
55%
$225
$50
$175
$96
Plastics (mixed plastics) 8%
$250
$200
$16
Glass
30%
$72
-$60
$132
$40
Ferrous material 2%
N/A
Non-ferrous material 1%
Other
TOTAL
100%
$152
National Sword
National Sword
Aust. Market
Or $112 without glass…

10. The impacts on Councils and households
Increased MRF costs – ~$100/t
Rate increase to cover the increased MRF cost – ~$31/hh/year
Approx 4% (NOT including on-shore costs or future falls)
1 Source: NSW Local Government WARR Data Report
Average household generates 5.4 kg/wk1 or 280kg/yr

11. What is actually happening?
Recyclables ARE still being exported, albeit at lower prices
Recycling gate fees ARE increasing
but they remain lower than landfill gate fees due to landfill levies

12. Mid term – Circular Economy - “on-shore” reprocessing
Accept the lower sale price of exporting to other Asian countries
Cost $ /t
Only available if Asian markets are able to absorb
Operate MRFs to 99.5% quality
Up to $400/t
On-shore secondary reprocessing
value-add to product
Plastic most likely
Est $250/t
Cost benefit has not been done – limited markets for plastic pellets. Unlikely fibre mill will be “on-shored”. OR OR

13. Recycling supply chain

14. Analysis Number of potential actions for NZ
Current fall due to National Sword
Further fall of $100 in mixed plastics & mixed paper
 Results didn’t change

15. Actions reviewed 1 Short-term gate fee variations MRF 2
Model contract development 3
Contamination bands 4
Commodity price risk-sharing arrangements 5
Improve quality of MRF output 6
Develop database of domestic re-processors
Reprocessor 7
Investigate growth of on-shore fibre processing 8
Investigate growth of on-shore plastic processing 9
National waste data recording system
Government 10
Positive procurement policy

16. Actions reviewed 11 Education to reduce contamination Household 12
Stop collection of plastic grades 3-7 13
National facility licence limits
MRF 14
Regulate recyclability of packaging
Government 15
Regulate recycled content of packaging

17. Actions reviewed 16
Additional source separation at kerbside (especially glass)
Household 17
Reduce compaction ratios of collection vehicles 18
Relaxation of stockpile limits
MRF 19
Developing consistent facility license limits

18. Commercial
Strategy
Planning
Auditing
Education
Modelling
Engineering
Due diligence