Until recently it was China that accepted much of the world’s mixed plastic waste for recycling, with exports of over 7 million tonnes received in 2016 – representing 56% of the global share1. But this began to change in early 2017 as the Chinese government focused on closely inspecting and restricting such shipments. This was brought to a head in July 2017 when China formally notified the World Trade Organisation of their “National Sword Policy”, imposing a ban on 24 different types of solid waste, including various plastics, and setting stricter recycling contamination standards for other waste exports, effective from January 2018.
Before this change, China had used the stream of plastic waste to fuel their own manufacturing sector – importing recyclable waste from across the world and exporting it back in the form of new manufactured products such as clothing or toys2. In a move to promote domestic recovery of recyclable waste materials and a circular economy approach, as well as to improve their own environmental conditions amongst other reasons, China’s National Sword Policy will mean big changes to the way these materials are sourced by the manufacturers, as well as causing a massive disruption to the global recycling export industry.
These disruptions are happening at a time when there is more focus on the issue of plastic waste than ever before. The world has now produced more than 8 billion tonnes of plastic, only 9% of which has been recycled3. The inability to capture and process this waste, along with the devastating and long-term consequences for the environment, have brought the issue of plastics to the forefront internationally, with increasingly more calls for action to address the problem.
Much of this attention has been focused on the brands and extended producer responsibility (EPR) for their products or packaging when it becomes waste, resulting in big campaigns and initiatives like beach clean-ups and banning plastics bags or straws. However, one often forgets that the waste treatment challenge has typically been addressed at a local government and municipality level.
So, when you shift the spotlight away from production, to the where, what and how of waste treatment, we begin to see another picture emerge of bottlenecks in recycling capacity and infrastructure in countries, then we need to dig deeper and ask; what now?
But if not China, where will the plastic waste go?
With the export option to China easily available and economically feasible in the past, many developed countries have only focused on the ‘collection’ part of recycling, and when combined with a ‘not in my back-yard’ mentality, the infrastructure is not in place locally for the processing and treatment of the different recyclable waste streams. Meanwhile, in emerging economies, the informal recycling sector often fills the void in the absence of a legal framework, resources or capacity to implement a formal collection and processing system, and export remains an economically viable option for these waste streams.
|Recycling in context: profiles of exporters
Hong Kong: The Special Administrative Region was the top exporter of plastic waste in 2016 at 19% of the global total. As a result of this heavy reliance, Hong Kong has done little to invest in recycling infrastructure and is said to lack the land to develop processing plants. Recycling is done by private companies; whose operation logistics often overlap causing inefficiencies4. Addressing a significant part of the plastic issue in Hong Kong, industry has come together to establish the Drink Without Waste group – commissioning an independent research study to find solutions to managing single-use beverage packaging in the region.
United States: In 2016, the U.S. was responsible for 13% of the global exports of plastic waste – sending approximately 4,000 shipping containers full of recyclables each day to China. With the new low contamination rate, hardly any of the U.S. Material Recovery Facilities (MRFs) are able to meet the target. Some MRF’s will slow down to try to comply with China’s new 0.5% contamination rate, but that will mean many items will be sent to landfill just to relieve congestion5.
Japan: At 10% of the global total, Japan was the third largest exporter of plastic waste in 2016. The majority of this waste was sent to China – 72% recorded in 20176. While the country strongly promotes a reduce, reuse, recycle mantra, it is often only the ‘recycle’ step that is done well (in the form of collection), but efforts to reduce are falling. For solutions, Japan looks to Thailand. However, Thailand may also impose similar quality controls as China to improve environmental standards in the rapidly developing country7.
Germany: Germany’s recycling rate is considered to be one of the best in the world, at over 50%. However, like many other developed countries, Germany is also among the top five exporters of plastic waste to China. The European Union is now taking back the power, and imposing new legislation to ease the amount of plastics entering the economy. This Plastics Strategy includes reduction targets, bans on consumer products such as straws, product requirements on plastic bottles, improved labelling, extended producer responsibility where producers will cover the post-consumer costs, separate collection of plastic bottles and awareness raising measures.
Southeast Asia: Prior to the ban, Thailand, Malaysia, Indonesia and Vietnam represented around 5% of the global plastic exports to China. However, since the turn of the year these countries have all seen a shift in that they’re now amongst top importers of plastic waste and are attracting Chinese investors who are keen to help take over the gaps in the industry8.
Australia: Though representing only 1% of the global plastic waste exports, Australia relies on China accepting approximately 36% of kerb-side plastic recycling, which have an average contamination rate of 6-10%. Some recyclers are choosing to store their recyclables, creating dangerous stockpiles around the country, while others are just sending bags filled with collected material for recycling straight to landfill9.
Countries are taking their own approach in addressing this export issue, with some options providing a quicker solution than others. Developing local recycling technology that is efficient and cost effective will take time. In the meantime, finding immediate solutions to dealing with the increasing build-up of recyclable wastes are being sought. For countries that have relied on export, there are three options (or a combination of these) as to what happens next:
- Local recycling infrastructure improves to handle domestic recycling;
- New export destinations are discovered; and/or
- Plastics become destined for landfills or incinerators.
The Bureau of International Recycling (BIR) believes that the surplus export volume is now heading to four key Southeast Asian countries: Vietnam, Malaysia, Indonesia and Thailand, where local recyclers are hoping to capitalise on China’s ban. There are concerns, however, that the capacity of these Southeast Asian countries to handle such large volumes of wastes may not be sufficient to meet the immediate demand. A public letter from Tan Cang-Cai Mep International Terminal (TCIT) in Vietnam to their customers and shipping lines highlights these concerns, as shipments of both paper and plastic waste have built-up at the terminal and led to temporary suspensions to clear the backlog. This also demonstrates that it is not only about the capacity to recycle the waste itself, but also the infrastructure available to support such a large industry – and it takes time to develop this capacity. With the Ocean Conservancy naming Indonesia, Thailand and Vietnam amongst the top five marine plastic pollution contributors in the world, questions remain on what would happen to the exported plastic waste backlog when sent to these countries.
Cleaning-up our problem
We are increasingly starting to see governments implementing plastic bag or single-use plastic bans, and international as well as local or small-scale campaigns around use of plastic straws or coffee cups, but the truth is that recycling will still play a huge part in addressing the global issue with plastic waste. Plastic as a material remains invaluable for many uses, and so where reduction or reuse is not an option, ways to scale-up the process and treatment of plastic waste together with ensuring an end-market for use of recycled plastic content will need to be developed and established.
It is clear that China’s National Sword Policy has been a massive disruptor to the wold’s recycling industry, and that the full extent of impact to the plastic waste recycling process is not yet fully known. But it is not just at a country level where these impacts are felt, but at a local and business level as well.
The plastics recycling value chain is a complex process, and addressing the recycling issues cannot be solved by one stakeholder alone. It will take effort and partnership from many sides – regulation and local government, brands and private sector, waste management and recycling (both formal and informal), as well as consumers to change habits and drive recycling rates. And the solutions are different for different countries – there remain challenges around collection and infrastructure no matter what location or market is considered.
At a high level, this means taking responsibility for our waste and making sure it gets routed to the right place by:
- Making recycling economically viable. We need demand for recycled content for use in products and packaging to drive the recycling economy, generate value, and create a pull factor – turning the plastic waste into a valuable resource that is worth more to someone than the costs it takes to divert to landfill. Brands such as Coca-Cola, Target, and Ikea have set targets to increase the amount of recycled content used, and will now need a source for this content, creating demand for these recycled plastic materials. Recycled content laws have also been enacted in a few U.S. states and are also being considered in Europe.
- Creating diversion opportunities. That is, driving more plastic waste into the recycling stream and away from landfill or leakage to the environment. Obstacles here can be varied, but most commonly are related to collection, sorting and technology capabilities. This is often the part of the recycling chain which can be limited by economics and lack of funds; the landfill option is often the cheapest. Other challenges include the lack of data, particularly when considering the informal sector, or reliability of information regarding volumes and rates when considering scalability of solutions. Strategies being used to improve collection and better domestic recycling rates include approaches such as deposit schemes, where consumers are encouraged to bring back their empty container for a small rebate. Such schemes are employed across Germany, Japan, and South Africa, amongst others, and have shown marked increases in recycling rates.
Developing a circular economy for plastic, where waste plastic is captured after use and routed back into the manufacturing process as feedstock, a solution being pursued by a number of stakeholders. Examples include the Ellen MacArthur Foundation who are focused on accelerating the transition to a circular economy, and the Closed Loop Partners who are investing in sustainable consumer goods, advanced recycling technologies and developing the circular economy.
What does this mean for business?
The plastics landscape in Asia can be a hard landscape to navigate. There are still many challenges to be addressed, but the drive to solve the problem with plastic waste has never been stronger. This is a fast-moving topic, where new solutions and opportunities will continue to emerge as innovation and technology rise to meet the challenge, and as more stakeholders engage in the conversations needed to fit the pieces together. For business, this means engaging in the conversations, understanding the landscape and finding the best partners to develop a plastic strategy, and being aware of these risks and opportunities; times are changing.
2. Storyline. Plastic China.
3. World Environment Day Outlook: The State of Plastics. United Nations Environment.
5. Do You Know Where Your Plastic Goes? Ocean Conservancy.
6. Market forces in Japan failing to tackle growing plastics problem. The Japan Times.
8. $13m recycling rescue package announced, but rates will rise. The Sydney Morning Herald.
Photo credit: Randy Olson, National Geographic