The New Economics of Recycling
Waste diversion does not necessarily equal recycling
As the Chinese government seeks to establish specifications for imported recyclables, the new specifications will be particularly challenging for mixed paper and mixed plastics recyclers across Colorado and the rest of the United States. Let’s take a look at how we got to where we are today, and in the concluding article to follow, we’ll assess how these changes may impact Colorado’s recycling industry.
A BRIEF HISTORY
In the 1990s, recycling programs across the U.S. expanded dramatically in an effort to divert more materials from the landfills while, at the same, China’s appetite for recyclable materials grew exponentially to feed their economic engine.
Consequently, the recycling industry grew successful at diverting materials from landfills, conserving natural resources and reducing greenhouse gas emissions by collecting, sorting, hauling and marketing recyclables to their end markets. For many years, China has been the largest end market, purchasing a majority of the recyclable materials collected in the U.S. In fact, according to the Institute of Scrap Recycling Industries, a trade association known as the “Voice of the Recycling Industry,” 31 percent of the United States’ recovered material, worth $5.6 billion, was exported to China in 2017.
As American cities and counties zealously expanded recycling programs to decrease materials heading to landfills, an increasing amount of trash became part of the bales of recyclables that we exported to China, sometimes accounting for up to 20 percent or more of the total weight, according to one industry expert. As a result, over the past year, China has taken numerous steps to limit the volume of recyclable materials coming into their country, including import bans on certain recyclable materials, imposing strict quality standards on contamination levels and developing a long-term plan to create a domestic recycling industry and infrastructure to recover their own recyclable materials and stop importing. In fact, based on recent policy statements from Beijing, warnings of an all-out ban on scrap materials may be implemented by 2020.
Bottom line: The U.S. recycling industry as well as the rest of the world's is being significantly impacted by China and other Asian countries’ import policies. The new normal in recycling is that China and other countries no longer want foreign garbage inundating their ports and mills. Beyond the recycling market impact, if no buyer can be found for some of our recovered materials, the good intentions may be for naught — the non-marketable recovered items could end up in landfills, or eliminated from what is accepted in the recycling streams programs.
Is this China’s fault or our own?
That depends on your perspective. China’s stipulations have shed light on the sloppy U. S. recycling practices, exposing the fact that waste diversion does not necessarily equal recycling. We have become aspirational in our recycling by setting out items for collection that we believe — or wish — are recyclable, even though they are not. U.S. mills have long complained about the quality of materials they purchase from our domestic material recovery facilities (MRFs), and China’s shift is shining a new light on this issue.
CHINA'S NEW RECYCLING SPECIFICATIONS
China’s widely publicized crackdown on importing materials recovered through recycling was announced in February 2017. Initially, this “National Sword” program focused on halting smuggling operations using illegal permits to import scrap materials and scrutinizing bales of low-grade plastics for contamination and paper with high-moisture content. By spring 2017, it became evident this program would be used to assess the overall quality of all material loads imported into the county, legally or illegally.
- In July 2017, China announced a ban on all imports of recovered mixed paper and post-consumer plastics, textiles and scrap metal by the end of 2017. At the same time, the country issued a policy document describing a big picture plan to stop importing any recovered materials that can be recovered domestically.
- In November 2017, China announced a new quality standard for material limiting contamination to just 0.5 percent. This standard would apply to all paper and paperboard materials, even those not banned, such as newspaper (ONP) and cardboard (OCC), effective March 2018.
- In January 2018, many U.S. exporters began to try to ship materials originally intended for the Chinese market to southeast Asia, including the countries of Vietnam, Malaysia and Taiwan.
- By August 2018, Chinese buyers had not been issued permits to buy any import materials since May, so the fallout was affecting municipal programs and material recovery facilities in Colorado and the rest of the U.S.
- In August 2018, Taiwan and Vietnam made announcements to heavily limit recycling imports that were now overwhelming their ports and manufacturing facilities.
- Also, in August 2018, China announced a 25 percent tariff on all U.S. imports of cardboard (OCC) and other recovered fiber and plastic in retaliation for the latest U.S. tariff proposals on China.
Because China is limiting imports of recyclable materials collected in the United States, the U.S. recycling industry has seen significant impacts. As a result, recyclers across Colorado and the rest of the country need to understand that the materials we recycle must be used to create new products that are valued in the marketplace without using virgin materials, not to blindly divert materials in the name of “recycling.” Part two of this series will examine how these changes are affecting the recycling industry both here in Colorado and around the country as well as offer solutions for what can be done to create new markets and make our recovered materials marketable again.
Bryan Isaacson is vice president of sales and marketing for Western Disposal Services, Boulder County's largest full-service waste management company for trash, recycling and compostable materials.