China Recycling Market Update (01/08/2018)

China Recycling Market Update (01/08/2018)

As 2017 was filled with great policy change for China’s solid waste imports, these changes will be fully executed and followed in 2018. The main questions that the recycling industry would like to know, is to what extent plastic scrap will be allowed to be imported and the amount of import permits that will be approved. Based on the number of import permits approved for the first two batches,  the approved amount of permits is only a fraction of the corresponding batches in the preceding year (9,335 tons vs 3,856,114 tons on batch one). If this approval rate is continued for the subsequent import permit approvals, the major recycling operations in China, which used to rely on imports, would be forced to switch to sourcing from domestic supply. The common view of the industry is that there will be no reversal of China’s solid waste imports policies beginning in 2018.

China imported 7.3 million tons of plastic scrap in 2016, which makes up more than 50% of the total volume of all exporting countries. Such large volume is difficult to be absorbed by the remaining importing countries within such a short time. While increasing the volume of exports to South-east Asian countries, India, and others, apart from raising domestic recycling and reuse, the low-end plastic items still have no alternative outlet other than landfills and incineration in exporting countries. This is very concerning as the capacity of landfills and incineration plants in many exporting countries such as U.K., Germany, USA, and Japan, are not capable of handling the increased volume yet.

The drastic change has caused the market with a supply gap of around 5 million tons of plastic scrap for which the recycled plastic pellets from South-east Asian countries is far from enough to fill although the production capacities have been expanding rapidly.  To replenish the shortage arising from import ban, the long term goals of China are to raise the volume of recycling domestic plastic waste through implementation of waste treatment policy, and to enhance recycling facilities and techniques.

While the efforts of the industry associations to seek new developments is ongoing, we will keep watch for all changes and improvements in the near future.

By Dr. Steve Wong

Executive President, CSPA
Chairman, Fukutomi Company Limited
Committee Member, Plastics Committee of BIR
Committee Member, WEEE Committee of BIR

January 8, 2018

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