The other day I was giving a friend a ride home from work and we started (actually I started) talking about the China Waste Ban which is supposed to go into effect at the end of the year. I tried to spell out for her the impact such a ban would have not only on the United States, but also around the world. I told her that today’s recycling is a $117 billion industry that directly employs 155,000 people along with indirectly supporting 378,000 jobs throughout the economy.
I didn’t get any further than that when she interrupted and asked, “Why haven’t I heard about this on the news? Why isn’t this a huge story? Why aren’t people talking about this?”
My reply was that “most people didn’t have the basic understanding of the extent to which recyclables flow throughout the global economy.”
So I’m asking you (readers) to go out and help me spread the word. I’m even going to arm you with a few talking points.
For example, in any given year, between 30-40% of what is processed in the US for recycling is actually processed for a consumer in another country.
In this recent year, we shipped recyclables to 155 countries around the world (37 million tons of scrap material valued at about 16.5 billion). In 2016, the US recycling industry exported $5.6 billion of scrap to China.
In terms of global scrap exports, about 160 million tons worth $70 billion was traded globally. The ban is not just affecting the US industry; it’s affecting recyclers around the globe.
China accounts for roughly 27% of global scrap imports with the majority of it being copper scrap, plastic scrap, and recovered paper and fiber.
For some background, this past July China announced to the WTO “the Ban” on certain waste imports along with defining what is considered “waste.”
Why now? There is a huge environmental problem in China (which is not breaking news), but China has been going from one industry to the next in trying to clean up those industries, and recycling is one of them. It’s been discovered that the problems are not with the inbound shipments; this is actually an attempt to clean up China’s domestic recycling industry.
China then issued a policy statement that was not done through the WTO. It’s called the “Implementation Plan to Enhance Solid Waste Import Management System by Prohibiting the Entry of Foreign Waste.”
This is the document that provides the framework for where China is headed and why it’s doing what it’s doing, and it gives us some context.
The “Implementation Plan” is 6-pronged:
- Prohibit the import of solid waste with major environmental hazards and intense public reaction by the end of 2017 (namely mixed paper and post-consumer plastics).
- Halting imports that can be replaced with domestic resources by the end of 2019 (mixed metals).
- Raising the GB Standards (environmental protection standards for importation) to a nearly-impossible-to-achieve 0.3% “carried waste” threshold for all imports.
“That is found in the GB Standards that they are proposing to change, again, was not notified to the WTO, we’ve raised that with the commerce department and we understand that they will be raising that with the Chinese government as well and we’ve raised it directly with the Chinese government. So hopefully that will be an avenue to get this changed. But that 0.3% across all commodities is essentially impossible to reach and it’s certainly inconsistent with global standards. We have urged that it is an alternative; that the Chinese government relies on global standards; the ISRI specs that are used for the trade of materials around the globe and the thresholds for the various commodities depending upon what best practices are for that commodity.” – Robin Wiener/ISRI President
- Greater customs enforcement to reduce smuggling/illegal wastes (100% inspection of containers)
- Refine laws, regulations, and related systems (reductions in import licenses)
- Increase domestic recycling
Jobs and tax revenues are at stake. $3 billion of federal, state, and local tax revenues are generated and will be lost if this trade is shut off. Not to mention the 40,000-plus jobs that are at stake.
China says its main goal with the waste ban is to clean up the environment. The support for those concerns is widespread. But recycling industry advocates say there needs to be clarity and transparency in adopting standards that are consistent globally. They’re also asking for more time. The market needs time to adjust.
I have no doubt China is being sincere about its environmental concerns. But as it is with most things, follow the money. I believe China has concerns with succeeding in the waste and recycling markets that are just as pressing.
For an extensive discussion of the China Waste Ban involving industry experts, watch this free webinar offered by Forester University.