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China’s Import Policy Changes will make Recycling Stronger

Susan Robinson, Sr. Public Affairs Director at WM and SWEEP Co-Chair

危机

“WHEN WRITTEN IN CHINESE, THE WORD ‘CRISIS’ IS COMPOSED OF TWO CHARACTERS. ONE REPRESENTS DANGER AND THE OTHER REPRESENTS OPPORTUNITY”             —John F. Kennedy

When I first started working in the recycling industry many decades ago, the municipality I worked for was the first large city in the country to add Mixed Waste Paper (MWP) to its curbside recycling program. The city paid something like $15-$25/ton to its recyclers to accept MWP, because recyclers had to pay their end markets to take it. But the City had a long-view, and hoped to eventually create a new market for this material.

In what is certainly a fortuitous coincidence, China’s economy began growing at lightning speed at about the same time that curbside recycling programs were expanding in the U.S. Simultaneously, many U.S. paper mills began closing.  So, my then-employer’s “build-it-and-they-will-come” approach to MWP recycling paid off as the Mixed Paper grade eventually developed into a commodity with a market demand in China.

We’ve had a roller coaster ride for 30 years as China’s economic growth and corresponding appetite for recycled materials from across the globe has fueled our recycling markets. I often wonder what the trajectory of our recycling programs would have been without the expansion of the global giant (China) with its seemingly insatiable appetite for recycled commodities.

Fast forward to 2013, and the wheels started to fall off this mutually beneficial relationship. China’s environmental problems could no longer be ignored, and their government simply had to begin to crack down on its full range of environmental problems – air quality, water quality, toxics, health impacts, and more.

One of the Chinese Government’s solutions to their pollution has been to tighten the quality requirements for recyclables coming into the country. First came Operation Green Fence in 2013 with its increased focus on quality. Operation National Sword in early 2017 reminded us of China’s focus on quality. These efforts were followed with China’s July 2017 announcement to the World Trade Organization that they would ban 24 materials from entering the country beginning in January of 2018. In August, new quality requirements were announced. And most recently, the lack of required government-issued import quotas has prohibited most Chinese mills from issuing orders for their mills.

Individually, any of these policies could wreak havoc on the global recycling markets. Combined, they have created chaos in recycling programs across the globe. The Global Recycling Industry has been frantically trying to understand what to expect in the next weeks and months – and into 2018. We’ve asked the Chinese Government for clarity. As an industry, we’ve enlisted the U.S. Government to intervene. We’ve written letters to the World Trade Organization. We’ve even offered to help China set up successful recycling programs while encouraging a phased-in approach to reducing their imports. Not only have we had no response, but orders from for recyclables from that country are slowing down further.

With very little communication from the Chinese Government, it difficult to plan. Will things ease up tomorrow? Next week? Next month? What will 2018 look like?   No one knows.

This uncertainty takes me back to my years working for the City of Seattle. It’s easy to forget that Seattle’s successful recycling programs were born from a potentially catastrophic environmental crisis. What is now arguably the best solid waste program in the country started with an environmental disaster as methane leaked from two city-owned landfills into dozens of nearby homes.

For several years after the city successfully maneuvered through this very real crisis, the director of their solid waste utility at that time, Diana Gale, spoke often of the relationship between crisis and opportunity.   She noted that the Chinese symbol for crisis and opportunity is the same.   Indeed – this was the case in Seattle. What started as a true crisis created an opportunity that has resulted in a wildly successful municipal waste program.

As I think about the current uncertainty in our industry associated with China’s changing import policies, I am reminded of my early days in Seattle. Can we find a way to make something good from this fundamental change in global market conditions?

Because there is real demand for recycled paper feedstock, we know solutions will develop. There is every reason to expect global markets to pick up where China’s will leave off, ultimately creating a more sustainable recycling solution for countries everywhere. And I’m heartened by the fact that our industry is increasingly communicating the long-term environmental benefits of recycling in reducing greenhouse gases and conserving natural resources. These attributes are likely to be valued more highly as time goes on.

In the meantime, we may have some road bumps…. Recyclers may scramble for markets. Tensions will be high.   But, by working together and communicating consistently, we will get through this and will be stronger than when we started. We will get past our short-term challenges and will develop new solutions that will result in stronger and more sustainable recycling programs.

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