Brisbane, Australia: China has been a critical part of the supply chain for Australian recycling for three decades. In fact, since the 1980s, China has been the world’s largest importer of foreign materials.
China’s new ban on importing foreign recyclables, dubbed its “National Sword Policy” was initiated in July last year by its Ministry of Environmental Protection when it informed the World Trade Organisation that it would “forbid the import of four classes, 24 kinds of solid wastes, including plastics waste from living sources, vanadium slag, unsorted waste paper and waste textile materials.”
The ban on foreign trash was announced in a press briefing by Guo Jian, an official at the ministry. “The problem of foreign garbage is loathed by everyone in China,” Jian said.
“A few unscrupulous dealers at home and abroad illegally imported and carried foreign garbage for their own interest. It has caused serious environmental problems and should be treated strictly.”
The award-winning documentary, Plastic China, filmed by Wang Jiuliang, captures this sentiment well. It tracks the lives of two families who make their living from the plastic waste industry and shows in horrifying detail the serious health and environmental implications of the trade in foreign recyclables.
So what happens to Australia’s recyclables now?
During his talk at a recent sustainability conference, Mike Ritchie, Director of MRA Consulting Group, an industry veteran who holds 25 years experience in environmental policy in waste and resource recovery, explains the impact of China’s ban on Australia’s recycling industry:
“The big effect of the China sword is on plastic and fibre, cardboard paper. Before the ban, China took half of the world’s recyclables. Australia’s portion was miniscule compared with what Europe, the UK and the USA were sending.”
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According to Ritchie, China wants to build its own domestic recycling supply chain. “They’re using World Trade Organisation rules to control the imports and materials and limit the number of licences coming in through China as a way of stimulating domestic recovery of recycling product into the paper and plastic mills that they have.”
In Australia, kerbside recycling lies in the jurisdiction of councils. Recyclables that are put in yellow-top bins are picked up and dropped off at a Materials Recovery Facility (MRF). Recyclable materials such as glass, steel, plastic, aluminium, paper and cardboard are then sorted. Most of the plastic and fibres from paper and cardboard are exported to countries like China. The glass remains in Australia for use in the industrial market (typically crushed and turned into sand for use in road construction), and the aluminium and steel are sent to local or international smelters.
However with the China ban taking effect on 1st of January and now in full swing, Australia is starting to feel its full ramifications.
“An MRF operator makes about $100-$150 per tonne on input material. A household typically generates about a quarter of a tonne of recyclables a year so it takes roughly four houses to generate one tonne. With the China ban, MRF operators lose about $100-$150 value as there is no market for the materials. They then have to pass the costs on to councils.”
Councils are left with few options. “Some councils are trying to hold MRF operators to their contract. The net effect of that, of course, is that bins won’t get collected so councils have a binary decision to make: put more money into the pot or stop collecting recyclables.”
While some councils fear that recycling contractors will cut off service, other contractors are actually stockpiling materials rather than send to landfill. Some councils are even telling their residents to minimise use of their yellow bins.
To support the industry, the Victorian Government announced a $13 million package last month. Other state governments have yet to announce their rescue packages.
Australia has benefited enormously from this 30-year export deal and so too China, using the global trade of materials to fuel its manufacturing industry. “If it weren’t in place, households would have had to pay higher rates for their councils to deal with the volume of recyclable materials,” says Ritchie. “It’s much more efficient to send paper and plastic to the large demand-driven economy [of China] where they’re doing all the manufacturing, than us subsidising the mills here to do the same job. We don’t really have a secondary market here who buy the fibres and plastics.”
However, this “out of sight, out of mind” attitude to waste has come back to bite Australia and other developed nations. What happens now that some types of recyclable rubbish can no longer be exported?
“There are other international markets to sell to,” explains Mike Ritchie. “The problem at the moment, of course, is that China has limited the number of input permits and licences which has had an immediate impact on the supply of material that has been generated. We’re still generating the supply… [and] an unregulated market system where supply of recyclables continues at any price [is an issue]. So the problem we have is the mismatch between supply and demand. There has been a crash in the price of these materials… and with a limited number of paper and plastic mills in places like Korea, Thailand and Vietnam, the price they’re prepared to pay has fallen.”
Negotiations between councils and waste collectors are still taking place; with some calling for Australia to invest in a domestic recycling reprocessing centre. Still, the problem remains – if Australia produces products made from recycled materials, who is going to buy it?
“The question is, how deep do we want to go? Is this what we want to do, build paper mills or should we rely on an efficient global market? And that’s a judgement call that will have to happen over the coming months.”
In the short term, households can expect their council rates to increase by roughly $50 in an effort to cover rising MRF costs. What will happen in the long-term though is anyone’s guess.
The learning lesson from all this is clear; while effective recycling is a good solution to the waste problem, it’s not the best solution. Prevention of waste where people and businesses actively reduce material consumption and incorporate zero waste principles into their lifestyles and operations, is by far the best solution.
Want to do your bit to reduce material consumption? Read this post for helpful hints on how to consume less.
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