China’s Ban on Foreign Waste

When you put out the recycling bin, do you stop to think about where your waste ends up? And would you be surprised to learn the answer, in some cases, is China?

The world’s most populous country has been the largest importer of recyclable materials, taking in more than 30 million metric tonnes of waste from all over the world, including from the US, EU, Japan, and Australia.

But in July, China — also the world’s biggest manufacturer — decided it would no longer take what it called foreign garbage.

It is set to ban 24 categories of solid waste to protect the environment and public health.

A tractor separates material for recycling at Re Group's Hume facility.

China’s ban on foreign waste is reverberating through Australia’s waste industry, but operators are taking a positive approach.

They do not see it as a crisis yet, but a wakeup call which should serve as the trigger to take responsibility for our own waste and transition to a cleaner economy.

“The real opportunity in Australia is to create that circular economy that’s happening overseas and that’s what China is moving towards, where they’re saying we produce that material, we actually want to recycle that material and reuse it back in the economy,” said Gayle Sloan, the chief executive of the Waste Management Association of Australia (WMAA).

But Ms Sloan admitted the process would not be easy.

The Chinese ban, which will be fully implemented early next year, affects an annual average of 619,000 tonnes of materials — worth $523 million — in Australia alone.

“It’ll be a real challenge finding homes for these products in the short term,” Ms Sloan said.

“It’s going to change the nature of the recycling industry in Australia for us.”

Recyclers who are unable to ship their waste to China will be forced into more expensive solutions, and may have to renegotiate their contracts with local councils so ratepayers could end up footing the bill.

China decision hits prices

Recyclers said there was no-one in the industry who was not feeling the pain at the moment.

“Whether you’re selling your material into the domestic market or export markets, this is a huge impact,” said Garth Lamb, business development manager for Sydney-based Re.Group.

Pepsi, Coke, and alcoholic drink cans are crushed and cubed and stacked next to each other.

The company has recently invested $8 million to open a new recycling operation at Hume in the ACT.

Although they sell most of their recycled products in Australia, the company said China’s decision still had a major impact because the market would become flooded with recycling material.

“The price has absolutely collapsed, that’s the problem. We don’t actually even have a price benchmark in some cases because so little material is now trading with China’s recent ban,” Mr Lamb said.

He said China’s decision to only accept material with a contamination level of no more than 0.5 per cent was a virtual ban, because it was unachievable when processing household waste like plastics.

A plastic bottle with a lid or label would be rejected under the new restrictions.

Re.Group is stepping up its campaign to grow its local customer base.

“At this facility we process all the glass that we receive, which is about a third of everything that comes in. We make that back into sand that we can reuse locally,” Mr Lamb said.

“And instead of mining a beach or a river bed and getting new sand, we can use this more sustainable product for building all kinds of infrastructure like roads.”

Glass sand made from recycled materials at Re Group's Hume facility.

How has China responded to waste ban?

In China, recyclers and environmental groups have generally welcomed the waste import ban, despite predictions of manufacturing material shortfalls.

China’s President Xi Jinping made environmental protection a key priority when outlining the Communist Party’s future blueprint for the country in October.

He said the Government would promote recycling and “establish linkages between the circular use of resources and materials in industrial production and in everyday life”.

China’s domestic waste has been increasing in line with growing consumption.

Each year on November 11, the world’s biggest online shopping frenzy produces huge amounts of rubbish, with couriers this year reportedly delivering more than 330 million parcels across China.

Cardboard collection workers sort boxes at a recycling facility in Beijing.

According to Greenpeace, the nationwide recycling rate for packaging is about 10 per cent.

“If this ban blocks the importation of foreign rubbish, the reality is we still need materials for production, and that may increase domestic factories’ demands on original resources, even fossil resources,” Liu Hua, a Greenpeace campaigner in Beijing, said.

“This is the very first step to change the global recycling system, to disrupt the trading chain from exporters to importers, so China not only improves its domestic recycling but also raises environmental standards.”

A worker at a scrap metal recycling facility at Tongzhou, Beijing.

For those already in the recycling industry, the ban presents a huge opportunity.

“In the next five years, professional recycling companies with large capacity will emerge, including online start-up companies like ours,” said Fang Hao, the manager of a Beijing-based cardboard collection company called Magic Quadrant Technology.

“Our Government, the state-owned entities, public companies will make a big move into the recycling sector because it’s such a big market.”

As the ban nears, the waste industry in China is bracing for what it hopes will be short-term upheaval, but there is little enthusiasm for delaying the implementation so countries like Australia can cope with the transition.

“If a country has always relied on exporting rubbish to a developing nation, then yes, it is going to take a long time to adjust,” Mr Liu said.

“But demanding that China should delay its foreign waste ban is highly questionable.”

Cardboard and plastic bags stacked in a pile

The WMAA wants the Federal Government to assist in establishing a circular economy by helping industry and encouraging consumers.

While the Federal Government was prepared to intervene to address the energy crisis, it is steering clear of this issue.

In a statement, Environment Minister Josh Frydenberg said, “Waste management and recycling is primarily the responsibility of state, territory and local governments.”

“While China’s ban is going to put pressure on some industries, it could provide opportunities for others in the recycling industry.”

But Ms Sloan believes more can be done to create an incentive for customers.

“We don’t have sufficient demand in secondary markets of recyclable product on shore at the moment, so people who want to do it are struggling to find markets to sell the product into,” Ms Sloan said.

Recycled products may be more expensive in the short run, but there is plenty of scope to grow the domestic market to reduce the cost of these products.

Ms Sloan said all levels of government could show leadership by mandating the use of recycled product in their purchasing policies.

Industry could also be instructed to use recycled content wherever possible, while consumers could be encouraged to choose recycled packaging through the introduction of clear labelling disclosing the degree of recycled content.

“You can’t just keep providing packaging into industry and the market and not use it back,” Ms Sloan said.

“It’s unfair to create waste in the first instance without thinking where it’s going to go and how it’s going to be re-used.”

South Australian data has shown that an extra 25,000 jobs would be created over five years by recycling and reusing our waste rather than dumping or exporting it.

The chief executive of Green Industries South Australia, Vaughan Levitzke, said it was time the Government stepped in and supported innovation in a move to a circular economy.

“I think that’s been lacking, and to ask fledgling start-ups to be able to test their products and then hope to gain market share when they’re competing against a whole range of virgin materials that are quite established in the market is quite difficult,” he said.

Can we do nothing?

Mr Levitzke said the industry was at a point of no return.

“I don’t think we have a choice … this is us taking responsibility for our own negative impacts and taking care of it locally,” he said.

“While Europe and other nations including Japan, and now China, move towards a circular economy, Australia risks being left behind.

“Up until now, the negative effects have probably been in China. So this is us taking responsibility for our own negative impacts and taking care of it locally.”

If nothing changes it means sending more material to landfill, which will end up being more costly and more damaging to the environment.

“No-one wants to live next to a landfill. No-one wants to have to put up with the issues that are associated with landfills,” Mr Levitzke said.

For now Re.Group is staying the course, committed to recycling and keeping its waste from landfill.

“Recycling generally generates about nine times more jobs per tonne of waste than sending it to landfill,” Mr Lamb said.

“So not only are we putting material back into the productive economy, we’re generating jobs, and they’re local jobs.”

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