Difficult decisions to come?

Columns - Editor’s Letter

Recyclers around the world may be facing difficult decisions in the years to come based on regulatory changes that might materialize in China.

May 31, 2017
DeAnne Toto

China’s National Sword campaign, introduced in February of this year, was a popular topic of conversation with recyclers around the globe in the first quarter of 2017. The program is a joint effort on the part of several Chinese agencies to more carefully scrutinize recycled materials that are being shipped to Chinese ports. Shipments of electronic scrap, plastic scrap and mixed household waste and recyclables were initially targeted.

As Recycling Today reported earlier this year, as far back as October 2016 at the Paper & Plastics Recycling Conference Europe in Rotterdam, a European trader who ships most of his materials to China said he had been hearing the central government was preparing to block imports of multiple scrap materials, including mixed paper and most plastics.

Subsequently, National Sword has resulted in plastic scrap shipments being rejected, held up at ports or assessed with considerable customs clearance fees that make transactions unprofitable.

China’s recent actions have led PARC Corp., the Romeoville, Illinois-based plastics recycling company and the subject of this issue’s cover story, to revise its business plan. The company, which operates an extensive plastics recycling operation in the Chinese city of Qingdao, has decided to expand its processing capabilities here in the U.S. as a result of National Sword and potential political changes in China.

While PARC President and CEO Kathy Xuan says the company will continue to recycle plastics in China, handling scrap that is generated within the country rather than shipping scrap over from the U.S. for processing, it will process that material in the U.S. and ship recycled plastic pellets to Chinese manufacturers. She says she views the move as necessary in light of increasing costs related to National Sword.

PARC is relatively well-positioned to respond in such a way to changes in China’s regulatory climate. How easily other recyclers within and outside of China will be able to respond to other regulatory changes that are rumored to be coming in that country remains to be seen.

These more recent rumors have scrap metal traders and processors in China and around the world expressing concern that China’s Ministry of Environmental Protection (MEP) is preparing a directive to ban imports of several scrap materials.

According to recyclers who say they have spoken to trade association representatives based in China or to lower-level Chinese central government employees, as of mid-May 2017 the MEP has not made any detailed statements about the pending changes but has acknowledged that such changes are being drafted.

These metals processors say “category 7” scrap metals, including high-volume baled wire and cable and shredded motor grades, are among the types of scrap that could be prohibited, perhaps as soon as 2019.

Recyclers around the world may be facing difficult decisions in the years to come based on regulatory changes that might materialize in China.