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A lot of US plastic isn’t actually being recycled since China put up its Green Fence

By Gwynn Guilford

For many environmentally conscious Americans, there’s a deep satisfaction to chucking anything and everything plasticky into the recycling bin—from shampoo bottles to butter tubs—the types of plastics in the plastic categories #3 through #7. Little do they know that, even if their local trash collector says it recycles that waste, they might as well be chucking those plastics in the trash bin.

“[Plastics] 3-7 are absolutely going to a landfill—[China’s] not taking that any more… because of Green Fence,” David Kaplan, CEO of Maine Plastics, a post-industrial recycler, tells Quartz. “This will continue until we can do it in the United States economically.”

The Green Fence went up…and it’s not coming down

Kaplan is referring to an initiative the Chinese government launched last year ostensibly to reduce pollution. Dubbed “Green Fence,” the policy bans the import of all but the cleanest, most tidily organized bales of reusable rubbish—and bars some types altogether.

The program was supposed to end in November of 2013. Now Chinese industry sources say that Green Fence is here to stay, reports American Metal Market, supporting what many in the US recycling business have suspected.

Before Green Fence, when American households and businesses recycled their plastic, for the most part what they were really doing was sending it for collection at US recycling companies. Some of that plastic trash would be shredded, granulated and packed into bales, while other types were simply bundled up as is. US recycling companies would then export it to China.

The many lives of plastic junk

Why would China import this? Plastic has many lives. That means that what to Americans is just a used Stonyfield Farms yogurt container is actually valuable raw material to Chinese manufacturers, which use the plastic resin from the processed tub to make everything from laptop cases to cosmetics. Chinese recyclers would import the bales of used plastic, sorting the valuable stuff from the chaff, cleaning it and breaking it down into plastic resin that can be remolded by manufacturers.

Recycled plastic resin is much cheaper than “prime”—i.e. new—plastic resin. The vast majority of what’s used in plastic packaging still comes from prime resin, though that can be supplemented by resin from recycled plastics to make it cheaper. Particularly for manufacturers in countries with a high degree of worry about the environment, being able to say that recycled plastics were used to make a product counts as valuable marketing as well.

The US may have Save the Earth campaigns to thank for the embrace of recycling. But more likely, it was made possibly by China’s emergence as a manufacturing powerhouse. The more China made, the more it needed used plastics, eventually sucking up around two-thirds of the US’s plastic scrap each year, worth several billion dollars.

Cheap plastic’s toll on China’s environment

But China’s cheap plastic came at a cost. Anything recyclers couldn’t use was heaped onto China’s growing massif of trash mountains. Worse still, the majority of recycling processors are small firms—often mom-and-pop operations—that pollute heavily but are hard to regulate.

As outrage among the Chinese public over the country’s noxious air and befouled waterways has surged in the last few years, the Chinese government has scurried to respond. Maine Plastic’s Kaplan thinks that’s what’s behind Green Fence.

“Because China got this bad press for pollution, the Chinese government says, ‘You know what? It’s because of importation of plastic scrap. The reason… that people can’t breathe in Beijing is plastics emissions,’” he tells Quartz. “That seems kind of arbitrary.”

Though China obviously has many more severe sources of pollution, Green Fence’s suspension of 247 import licenses for domestic recyclers will force smaller outfits out of business, making environmental regulation easier for the government.

Plus, China actually needs the US’s and other countries’ plastic in order to meet the demands of its manufacturers. Perhaps to take address that, the Chinese government announced plans for 100 pilot Recycling Economy Cities where it will invest in developing infrastructure for recycling.

Time for a US recycling renaissance?

Historically, higher labor costs and environmental safety standards made processing scrap into raw materials much more expensive in the US than in China. So the US never developed much capacity or technology to sort and process harder-to-break down plastics like #3 through #7.

Green Fence might be a chance to change that, says Mike Biddle, CEO of California-based recycling company MBA Polymers. “China’s Green Fence offers a real opportunity to the US government and recycling industry to step up its efforts on recycling and catalyze a strong domestic recycling market in the US,” Biddle said at a recent webinar on Green Fence.

Kathy Xuan, president of Parc Corp, one of the few US companies that processes post-industrial and post-consumer scrap, agrees that Green Fence will be good for the US. “Definitely it’s going to create a lot of job openings,” Xuan tells Quartz, adding that “every job China did can be done here, but it costs more.”

More demand from US manufacturers

China’s virtual monopoly on processing made it so US manufacturers imported raw materials mostly from China. But with Green Fence shutting down processors, supply of plastic resins is much scarcer.

Parc Corp’s Xuan says more US companies are now buying from her company. The lower supply of plastic resin will presumably help other US recyclers because it will raise prices enough to allow them to hire and invest in new capacity.

But it will take time

It might not be that simple, though.

Developing new recycling capacity in the US will “eventually” benefit the country, says Maine Plastics’ Kaplan. For the moment, though, Green Fence restrictions have blocked Chinese demand for his company’s clean, sorted post-industrial scrap. And while US and other countries’ manufacturers need that scrap as well, finding those markets takes time.

Plus, the proximity of Chinese manufacturers to the Chinese plastic processors kept transportation costs down. Green Fence has changed that. New markets for processing and sorting plastic scrap are growing in Indonesia, Malaysia and Vietnam. But “after [the plastic is] processed, they send it to China, which costs extra money, which means we get less for the material,” says Kaplan.

With Green Fence remaining in place, unless US manufacturing demand for plastic resins picks up a lot, margins are likely to remain uninviting for all but the biggest US recyclers.

What does that mean for consumers? Given the choice, the best answer’s probably “paper.”

For the full article visit: http://qz.com/122003/plastic-recycling-china-green-fence/

China does not want our trash.

China puts up a green wall to US trash

Written By:
Peter Ford, Christian Science Monitor, June 19, 2013 Beijing

US recyclers are nervous about losing their largest market after China began enforcing new environmental laws this year.

Have you ever wondered what happens to the soda can that you toss into a recycling bin? Chances are high that it ends up in China – like 75 percent of the aluminum scrap that the United States exports. Or 60 percent of its scrap paper exports. Or 50 percent of its plastic.

But a new Chinese edict, banning “foreign rubbish,” has thrown the international scrap and waste trade into turmoil and is posing a major new challenge for US recyclers.

Operation Green Fence, a campaign by Chinese customs to strictly enforce laws governing the import of waste, “could be a game changer,” says Doug Kramer, president of Kramer Metals, an international scrap dealer in Los Angeles. “A lot of companies have used China as a dumping ground, getting rid of … substandard scrap and trash,” Mr. Kramer says.

As China’s government seeks to raise environmental standards, he says, “I understand China’s need to take a hard look” at its imports.

That hard look, involving stepped-up inspections of containers filled with scrap metal, paper, and plastic at Chinese ports and a merciless application of the rules, has intercepted more than 800,000 tons of illegal waste since the campaign began in February, according to the customs agency.

Now nervous traders are refusing to ship consignments of recyclables that might contain unacceptably large amounts of unrecyclable materials (anything from unwashed items to the wrong kind of plastic to random bits and pieces of garbage that get mixed in with the recyclables). And cities and towns across the US and Europe are finding there is no longer a ready market in China for their poorly sorted and often impure bales of plastics, paper, and other waste.

“A butterfly in China has caused a tornado in Europe,” Surendra Borad, chairman of Gemini, the world’s largest collector of waste plastic, told the Bureau of International Recycling (BIR), an international federation of recyclers, at its annual convention in Shanghai last month.

Why China needs the West’s scrap

However, China is not bringing down the hammer on every kind of scrap (and “scrap” is the preferred term of art). The country has few resources of its own, and its fast-growing industry relies heavily on reprocessing other countries’ plastic soda bottles into fabrics, or their junked metal into machinery.

“Making proper use of this scrap supplements China’s resources, helps save energy, protects the environment, and boosts economic efficiency,” Li Xinmin, a former pollution inspector at the Chinese Ministry of Environmental Protection, told a recent meeting of the China Metals Recycling Association.

But in China, much of the imported plastic scrap, for example, is recycled in primitive, family-owned workshops with no facilities to treat waste water before it flows into local rivers. And Chinese recyclers “have got used to expecting 20 percent trash” in the bales of mixed plastics they buy from the US, according to David Cornell, technical consultant to the Washington-based Association of Postconsumer Plastic Recyclers.

That trash has to be sorted from the recyclables, then buried or burned, further degrading China’s environment.

Though Chinese regulations have long banned excessive levels of contamination in imports of recyclables, they were rarely enforced until Green Fence was launched, traders say. “Before, we were able to import dirty materials and bottles, but not any longer,” explains Sun Kangning, who owns a small plastics recycling plant in the village of Laizhou in Shandong Province (see sidebar on the industry’s woes).

Since February, he says, 24 shipping containers of plastic waste that he had bought from the US have been turned away by customs – about 20 percent of his business.

Because the government finds it hard to control all the mom and pop makeshift recycling workshops, it appears to have chosen to enforce environmental standards on imports at the pier.

Those imports have been skyrocketing in recent years. Scrap was America’s top export to China by value in 2011 – worth $11.3 billion, according to US trade figures. (Last year, record soybean sales knocked scrap and waste into second place.)

Also in 2011, the US exported 23 million tons of scrap (a little less than half of everything that was collected for recycling). Two-thirds of it went to China, according to figures from the Institute of Scrap Recycling Industries (ISRI) in Washington. ‘We don’t have the capacity’

The international trade has boomed partly because the US cannot dispose of all the waste it generates; the country has neither enough recycling facilities nor sufficient manufacturing demand for all its scrap.

“If the US border were closed, most of the scrap that is exported today would go to landfill,” says Robin Wiener, president of ISRI. “We don’t have the capacity to absorb it all.”

The rising overseas sales of paper, aluminum, copper, plastics, and steel also have to do with the nitty-gritty economics of America’s trade deficit with China.

Because China exports so much more to America than it buys back, the shipping containers from Shanghai that are full of computers, mobile phones, and TVs on the journey to Long Beach, Calif., risk returning empty for the trip back.

Shipping companies, seeking to cut their losses, offer bargain rates on their westbound freighters: It is cheaper to ship a 40-foot container full of iron scrap from Los Angeles to a Chinese port than it is to send it by train to a foundry in Chicago. US and Chinese scrap merchants have not been slow to take advantage of the deals.

At the same time, sorting and recycling is a lot cheaper in China, where wages are a fraction of US levels. At Mr. Sun’s courtyard processing plant, for example, women using box cutters to strip labels from plastic soda bottles before they are ground up earn about $15 for a day’s work.

Such factors have made the world “over-dependent on China” for scrap recycling and vulnerable to sudden changes in the rules, such as Green Fence, worries Mr. Borad. “That is a matter of concern.”

Some traders say the new policy in China has forced them to sell their scrap in different countries, such as Vietnam, Indonesia, and Malaysia, where it is either reprocessed or simply sorted and cleaned to the new Chinese standards and then shipped on to China.

“We’ve seen a pretty good uptick in shipments to Southeast Asia,” says Joe Pickard, ISRI’s chief economist. But capacity there “is not sufficient to take up the slack from China,” he adds.

Nor are the new destinations likely to tolerate being the planet’s trash can indefinitely, predicts Kramer, who sells American scrap iron and nonferrous metals in several Asian countries. ” ‘If you can’t send it anywhere else, send it here’ is not the kind of message anyone wants to send,” he says. How long will this last?

Some businesses do not expect Chinese customs officials to go on being so zealous for long. Indeed, previous similar crusades have petered out in the past, and the General Administration of Customs in Beijing has announced that its current campaign to “reinforce inspection and prevention work in key areas” will end in November.

But well-placed observers do not think that the old lax habits will reassert themselves. “Before Green Fence, both companies and customs officials were unclear about the laws and regulations,” says Wang Jiwei, secretary-general of the China Metals Recycling Association. “After the campaign, both sides will understand the laws better, and I think they will continue to be enforced.”

The first four months of the campaign have certainly hit the Chinese recycling industry – raising prices for some recyclable materials that are now in shorter supply. “Our industry is really facing a very big adverse impact from the stricter environmental standards,” complained Huang Chongsheng, chief executive officer of aluminum scrap smelter Ye Chiu Metal Recycling at last month’s BIR conference.

US recyclers, too, are beginning to feel the effects, especially those who collect, sort, or trade low-end materials, such as the cheaper sorts of mixed plastics often extracted from household waste.

“The market for mixed rigids [such as plastic yogurt containers, margarine tubs, or buckets] has gone to hell in a handbasket,” says Jeff Powell, publisher of Resource Recycling magazine. “Mixed paper and mixed plastics are being put into landfill” now that they cannot be sold to Chinese recyclers, he adds.
What next?

“We used to send garbage because it was the cheapest thing to do and because the Chinese would accept it,” Mr. Powell explains. The new Chinese policy, he says, will force US recyclers either to sort recyclables more carefully, or to recycle more material in the US, or both.

“We are going to find ourselves forced to be much more innovative” in dealing with waste, predicts Michael Schipper, a scrap trader with International Alloys in Mendham, N.J. “We will have to find ways of processing that material here in a much more cost-effective way.”

US processors “are beginning to dip their toes into” that future, says Mr. Schipper, but they are constrained by the cost of more sophisticated machinery.

Already, however, US businesses handling scrap are dealing with it more carefully, according to Steve Alexander, spokesman for the Association of Postconsumer Plastic Recyclers. “People who took the easiest route” before by baling and selling heavily contaminated material “may be running it through a second sorting step, putting it through optical sorters,” he says, because that is what the market now demands.

That means that more of the plastic ends up where it is meant to be, and less gets thrown away or burned, either in the US or in China. “Environmentalists love Green Fence,” says Powell.

“We are at a turning point in our business,” Gregory Cardot of the French waste management firm Veolia Propreté told the BIR conference. “We have to seize this opportunity … for a sustainable environment for our planet.”

If the new Chinese policy lasts, predicts Borad, “the fly-by-night exporters will be eliminated. Green Fence will be a blessing in disguise for our industry.”

Written By:
Peter Ford, Christian Science Monitor, June 19, 2013