A Crisis Years in the Making

By Duncan Watson, Assistant Public Works Director, City of Keene, NH, President, Board of Trustees, Northeast Resource Recovery Association & Member SWEEP Steering Committee

Trade journals and even the mainstream media is awash with articles about the impact of China’s National Sword policy, which took the 2013 Green Fence policy–the proverbial shot across the bow–and turned it into a crippling blow that has left recyclers scrambling. Allow me to provide a brief synopsis of how the recycling world got caught with its pants down.

Around 2 decades ago China began incorporating capitalism into its economy and the result was at first a trickle, then a torrent of demand for raw materials to fuel its double digit economic growth.  At the beginning of these unprecedented two decades, China had its own “Wild West” phase—a free-for-all with little law or regulation to keep things in check. Developed countries seized on the opportunity to send their recovered discards to meet China’s seemingly insatiable appetite for pretty much everything.

For pennies on the pound, waste brokers were making a killing, as there was little in the way of specifications to risk a load being rejected. Soon upwards of 2,000 shipping containers filled with discards–paper, plastic, and metal–were leaving U.S. ports bound for China each day. In 2013 Chinese officials realized their country was becoming a dumping ground with, in some cases, over 20% of a received load being off specification and therefore requiring alternate disposal other than recycling. This problem was further exacerbated by the lack of infrastructure to properly dispose of the non-recyclable material. The result was polluted waterways, open burning dumps, and the expense of additional infrastructure to handle someone else’s problem.

Through its 2013 Green Fence policy, China began the slog towards gaining control over its waste imports and put the world on notice that if demand called for a ton of mixed paper to feed a Chinese paper mill the expectation was a ton of paper, not 80% paper and 20% garbage. As a demonstration of seriousness, a couple of container ships were turned back because of non-compliance of specifications. But it was still mostly a free for all and China continued to have an unquenchable thirst for raw materials. So, with a token effort at improving quality control, the world continued to send China the bulk of its discards. Although the Green Fence policy was in place, it was apparent that economic growth was more important than environmental protection and the beat went on.

Last July, China announced a new policy that would come into effect in 2018. National Sword, which took effect on January 1^st, has taken everyone by “surprise”. Unfathomably, little to no heed was paid to the potential impact on recycling programs and the domestic industry of eliminating demand for 55% of the world’s scrap paper. But just because scrap paper and plastic demand has dried up, does not mean that supply has done the same. Recycling programs, built on 40 years of exhortation to do the right thing, continue to collect huge amounts of materials, materials that now have nowhere to go.

While the national recycling rate in the U.S. is nothing to crow about, we are currently in crisis mode as the painful adjustment to the global commodities market begins to settle in. Yes, there will be some developing countries with lax environmental laws filling some of the void, but the simple fact is there is not enough capacity in the world to replace China’s lost demand. What we need is a profound rethinking of market structure and infrastructure in the U.S. While it may not be possible to fulfill Chinese quality requirements, nonetheless, we should be responsible for improving the quality of the material processed by materials recovery facilities, and we should have greater capacity to utilize these raw materials domestically.

As this crisis continues to unfold—according to Waste Dive, recycling programs in approximately half the country are already feeling the impact of National Sword—the next six months will likely see communities and recycling processors in the U.S. needing to make some uncomfortable decisions. There is no practical way to stockpile all the material that would normally be shipped to China. As painful as it is to admit, there probably will be a need to burn or bury large amounts of material until the market responds to make recycling domestically more economical.

Because I operate a dual stream materials recovery facility, I am able to produce a quality of material that continues to make our product marketable. That may change as this crisis grows. As difficult as this is making things, I support China’s crackdown. While I may believe the new specifications are literally impossible to meet, the specifications were not designed to improve the materials coming into China, they were meant to stop them completely, and on that score they’ve succeeded magnificently.

Perhaps a more reasonable specification will be in place down the road, but it is incumbent on recyclers to improve the quality of their product to the greatest extent possible to compensate for the years where there was little to no accountability. China’s recycling ban is akin to the wake-up call provided by the MOBRO garbage barge.

It’s time for a new moonshot that will lead us to taking greater care of how we manage our materials, from extraction through the end of life. In the interim, we might throw some things away in the near term, which, to a die-hard recycler such as myself, is beyond painful, but I will keep my eye on the larger prize which is finally taking that quantum leap in treating our discards as the valuable commodities they deserve to be.