14 August 2017

How long will the doors stay open?

Adam Clover, director at Mick George Commodities, looks at the impact China’s import ban will have on the global commodities market.

Adam Glover, director at Mick George Commodities

On July 18, China notified the World Trade Organisation that it would stop accepting shipments and imports of 24 different waste types including plastic waste, unsorted waste paper and waste textile materials which are environmentally hazardous.

The official filing from China said: “We found that large amounts of dirty waste or even hazardous waste is mixed in the solid waste that can be used as raw materials. This seriously polluted China’s environment. To protect China’s environmental interests and people’s health, we urgently adjust the imported solid wastes list, and forbid the import of solid wastes that are highly polluted.” (source WTO)

Impact

The import ban will become effective by the end of 2017, and experts are predicting it will have a major impact on the Global Recycling Industry and waste commodity prices across the World.  Over the last 25 years, China has been one of the major importers of waste material. In 2016, they imported 7.3 million tonnes of waste plastic valued at $3.7 billion, accounting for 45% of World imports and 83% of Europe’s Plastic exports.

The question being asked across the Global Recycling Markets is how long will the doors stay open with other import countries? We all know and understand the decision by China was all about quality issues, but some say this ban was inevitable as their industries upgrade and environmental protection is made a priority in the country.

Can we blame China for closing the door? Not really, would we continue to accept poor grade material in to our recycling sites from waste producers, or would we offer to help educate on how to produce a quality product that attracts the highest possible market price. Eventually if nothing changes, we would say ‘no more’, which is exactly what has happened with China.

Investment

Businesses employing more staff and investing in new technologies and equipment to improve waste management is a solution to the quality issue but at a cost and in today’s highly competitive market, this can make or break a deal. We all want and need to have a supply route for the material that we collect and process and if this means time and education or investment, so be it.

The UK needs to drive for better quality, as for years we have fallen behind our European counterparts in this sector and the time has come for us to clean up our act and push on. We have some incredibly talented people in this industry with fantastic ideas and vision. We need to collectively work together with other countries and promote and implement best practices in to the Recycling Sector, before other major import countries shut their doors to foreign waste.

The answer by many in the industry will always be this is business and we need to turn a profit, and they will turn their attention to supplying waste commodities to south east Asia, India and Pakistan. Making money is key for business and we all get that, but these countries have relatively small capacity and won’t be able to satisfy global demand for the level of waste produced. If we have limited options for exporting waste material then naturally the prices for commodities will fall and the costs to process will outstrip any potential profit.

Energy from Waste

Without large supply markets like China, more and more recycled waste will end up in landfill or feeding waste to energy markets, which some will see as massive backward step within the UK.

We are a service industry but we need to also be an educator and advisor on the reality of what is happening in the Global Recycling Market. Companies expect a solution and rely on us to provide this at a cost that they deem to be acceptable. Anything is possible but reality will always prevail. The future of UK recycling could potentially be bright, but only we can make it happen by changing our ways before it’s too late.


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