11 March 2013

China waste crackdown sparks export volatility

By Will Date

Instructions from the Chinese government to crack down on the import of waste from overseas have lead to volatility in the export market, according to commodities market experts.

A letter seen by letsrecycle.com from the Chinese central government to port customs officials last month has revealed that the government is keen to take immediate steps to reduce the amount of waste that is being imported from overseas.

The Chinese government has instructed customs officials to carry out stricter inspections on waste imports

The Chinese government has instructed customs officials to carry out stricter inspections on waste imports

It has been understood for some time that China would be likely to clamp down on waste imports, with an Environment Agency bulletin sent out in October 2012 warning exporters of possible sanctions against unwashed post consumer plastics (see letsrecycle.com story).

The letter sent to officials is one of the governments first steps in restricting the import of material. In particular customs officials have been told to enforce stricter quality requirements for material coming from overseas, to prevent waste from being mixed or hidden among recyclable material.

Authorities have also been told to to ‘intensify investigation and punishment’ to better manage foreign waste.

The Environment Exchange (t2e), which provides a trading platform for recovered paper, has noted that trading has become more volatile in the wake of the instructions from the Chinese government.

Speaking to letsrecycle.com, Yaya Cao, marketing executive at t2e, said: “We see markets becoming more volatile. For those involved the certainty of traded forward contracts becomes increasingly desirable.”

Meanwhile, one UK-based plastics exporter commented that as a result of the communication, exporting lower grade material to Chinese ports has become increasingly difficult, and that some companies have been forced to return containers as a result.

He said: UK prices are weak as a result of the instructions from the Chinese government. Mixed bottles can get into Hong Kong, but from there they are not then moving to China as the port will say that they dont want them and shipping lines are cancelling containers. There is currently no specification for what quality material is available and it could be around four to six months before this is available.

Letter

The letter states that the newly elected president, Xi Jinping has ordered customs officials to intensify investigations of containers of waste material coming into ports from overseas as a high priority. Mr Xi was elected as leader of the Chinese Communist party in November 2012.

It says: Currently, General Secretary of the Central Committee Mr Xi Jinping has emphasised on the environmental impact brought by smuggling of foreign waste and calls for all customs and other authorities to intensify investigation and punishment to better manage foreign waste.

Central Custom General Administration has given high priority to this issue, the party has organised targeted meetings to study and comprehend instructions from the leaders, research measures to tackle the issue, and has decided to organise a special team to crack down on foreign waste.

The government then sets out a number of measures for port officials to put in place including raising awareness on the significance of waste imports and reinforcing supervision of material that is being brought into the country.

Instructions are then given for the robust measures needed to keep foreign waste outside of the country, including strengthening intelligence gathering and increasing the penalty for individuals found to be importing prohibited waste.

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