Unsurprisingly China is finally stepping in to regulate this sector.
They will not quit, but they will stop outright abuse.
There are obviously still ample places to send garbage besides China.
Yet the other problem out there is that alternative processing is
becoming available to grab some of that feed. What China does
provide is ample manpower to operate a picking line. This will
become more and more important and once set up is easy to manage
profitably.
On the other hand, a picking line manned by unskilled people also
works in North America and haulage pays for several hours of minimum
wages. It is only artificially viable to ship garbage to China.
China puts up a
green wall to US trash
US recyclers are
nervous about losing their largest market after China began enforcing
new environmental laws this year.
By Peter
Ford, Staff Writer / June 19, 2013
A Chinese woman holds
her baby as she strips labels from plastic soda bottles so they can
be recycled. If she works hard, she can earn about $15 a day.
Have you ever wondered
what happens to the soda can that you toss into a recycling bin?
Chances are high that it ends up in China – like 75
percent of the aluminum scrap that the United Statesexports. Or
60 percent of its scrap paper exports. Or 50 percent of its plastic.
But a new Chinese
edict, banning "foreign rubbish," has thrown the
international scrap and waste trade into turmoil and is posing a
major new challenge for US recyclers.
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Operation Green Fence,
a campaign by Chinese customs to strictly enforce laws governing the
import of waste, "could be a game changer," says Doug
Kramer, president of Kramer Metals, an international scrap dealer
in Los Angeles. "A lot of companies have used China as a
dumping ground, getting rid of ... substandard scrap and trash,"
Mr. Kramer says.
As China's government
seeks to raise environmental standards, he says, "I understand
China's need to take a hard look" at its imports.
That hard look,
involving stepped-up inspections of containers filled with scrap
metal, paper, and plastic at Chinese ports and a merciless
application of the rules, has intercepted more than 800,000 tons of
illegal waste since the campaign began in February, according to the
customs agency.
Now nervous traders
are refusing to ship consignments of recyclables that might contain
unacceptably large amounts of unrecyclable materials (anything from
unwashed items to the wrong kind of plastic to random bits and pieces
of garbage that get mixed in with the recyclables). And cities and
towns across the US and Europe are finding there is no longer a ready
market in China for their poorly sorted and often impure bales of
plastics, paper, and other waste.
"A butterfly in
China has caused a tornado in Europe," Surendra Borad, chairman
of Gemini, the world's largest collector of waste plastic, told the
Bureau of International Recycling (BIR), an international federation
of recyclers, at its annual convention in Shanghai last
month.
Why China needs the West's scrap
However, China is not
bringing down the hammer on every kind of scrap (and "scrap"
is the preferred term of art). The country has few resources of its
own, and its fast-growing industry relies heavily on reprocessing
other countries' plastic soda bottles into fabrics, or their junked
metal into machinery.
"Making proper
use of this scrap supplements China's resources, helps save energy,
protects the environment, and boosts economic efficiency," Li
Xinmin, a former pollution inspector at the Chinese Ministry of
Environmental Protection, told a recent meeting of the China Metals
Recycling Association.
But in China, much of
the imported plastic scrap, for example, is recycled in primitive,
family-owned workshops with no facilities to treat waste water before
it flows into local rivers. And Chinese recyclers "have got used
to expecting 20 percent trash" in the bales of mixed plastics
they buy from the US, according to David Cornell, technical
consultant to the Washington-based Association of Postconsumer
Plastic Recyclers.
That trash has to be
sorted from the recyclables, then buried or burned, further degrading
China's environment.
Though Chinese
regulations have long banned excessive levels of contamination in
imports of recyclables, they were rarely enforced until Green Fence
was launched, traders say. "Before, we were able to import dirty
materials and bottles, but not any longer," explains Sun
Kangning, who owns a small plastics recycling plant in the village of
Laizhou in Shandong Province (see sidebar on the industry's
woes).
Since February, he
says, 24 shipping containers of plastic waste that he had bought from
the US have been turned away by customs – about 20 percent of his
business.
Because the government
finds it hard to control all the mom and pop makeshift recycling
workshops, it appears to have chosen to enforce environmental
standards on imports at the pier.
Those imports have
been skyrocketing in recent years. Scrap was America's top export to
China by value in 2011 – worth $11.3 billion, according to US trade
figures. (Last year, record soybean sales knocked scrap and waste
into second place.)
Also in 2011, the US
exported 23 million tons of scrap (a little less than half of
everything that was collected for recycling). Two-thirds of it went
to China, according to figures from the Institute of Scrap
Recycling Industries (ISRI) in Washington.
'We don't have the capacity'
The international
trade has boomed partly because the US cannot dispose of all the
waste it generates; the country has neither enough recycling
facilities nor sufficient manufacturing demand for all its scrap.
"If the US border
were closed, most of the scrap that is exported today would go to
landfill," says Robin Wiener, president of ISRI. "We don't
have the capacity to absorb it all."
The rising overseas
sales of paper, aluminum, copper, plastics, and steel also have to do
with the nitty-gritty economics of America's trade deficit with
China.
Because China exports
so much more to America than it buys back, the shipping containers
from Shanghai that are full of computers, mobile phones, and TVs on
the journey to Long Beach, Calif., risk returning empty for the trip
back.
Shipping companies,
seeking to cut their losses, offer bargain rates on their westbound
freighters: It is cheaper to ship a 40-foot container full of iron
scrap from Los Angeles to a Chinese port than it is to send it by
train to a foundry in Chicago. US and Chinese scrap merchants have
not been slow to take advantage of the deals.
At the same time,
sorting and recycling is a lot cheaper in China, where wages are a
fraction of US levels. At Mr. Sun's courtyard processing plant, for
example, women using box cutters to strip labels from plastic soda
bottles before they are ground up earn about $15 for a day's work.
Such factors have made
the world "over-dependent on China" for scrap recycling and
vulnerable to sudden changes in the rules, such as Green Fence,
worries Mr. Borad. "That is a matter of concern."
Some traders say the
new policy in China has forced them to sell their scrap in different
countries, such as Vietnam, Indonesia, and Malaysia, where it is
either reprocessed or simply sorted and cleaned to the new Chinese
standards and then shipped on to China.
"We've seen a
pretty good uptick in shipments to Southeast Asia," says Joe
Pickard, ISRI's chief economist. But capacity there "is not
sufficient to take up the slack from China," he adds.
Nor are the new
destinations likely to tolerate being the planet's trash can
indefinitely, predicts Kramer, who sells American scrap iron and
nonferrous metals in several Asian countries. " 'If you can't
send it anywhere else, send it here' is not the kind of message
anyone wants to send," he says.
Some businesses do not
expect Chinese customs officials to go on being so zealous for long.
Indeed, previous similar crusades have petered out in the past, and
the General Administration of Customs in Beijing has announced that
its current campaign to "reinforce inspection and prevention
work in key areas" will end in November.
But well-placed
observers do not think that the old lax habits will reassert
themselves. "Before Green Fence, both companies and customs
officials were unclear about the laws and regulations," says
Wang Jiwei, secretary-general of the China Metals Recycling
Association. "After the campaign, both sides will understand the
laws better, and I think they will continue to be enforced."
The first four months
of the campaign have certainly hit the Chinese recycling industry –
raising prices for some recyclable materials that are now in shorter
supply. "Our industry is really facing a very big adverse impact
from the stricter environmental standards," complained Huang
Chongsheng, chief executive officer of aluminum scrap smelter Ye Chiu
Metal Recycling at last month's BIR conference.
US recyclers, too, are
beginning to feel the effects, especially those who collect, sort, or
trade low-end materials, such as the cheaper sorts of mixed plastics
often extracted from household waste.
"The market for
mixed rigids [such as plastic yogurt containers, margarine tubs, or
buckets] has gone to hell in a handbasket," says Jeff Powell,
publisher of Resource Recycling magazine. "Mixed paper and mixed
plastics are being put into landfill" now that they cannot be
sold to Chinese recyclers, he adds.
"We used to send
garbage because it was the cheapest thing to do and because the
Chinese would accept it," Mr. Powell explains. The new Chinese
policy, he says, will force US recyclers either to sort recyclables
more carefully, or to recycle more material in the US, or both.
"We are going to
find ourselves forced to be much more innovative" in dealing
with waste, predicts Michael Schipper, a scrap trader with
International Alloys in Mendham, N.J. "We will have to find ways
of processing that material here in a much more cost-effective way."
US processors "are
beginning to dip their toes into" that future, says Mr.
Schipper, but they are constrained by the cost of more sophisticated
machinery.
Already, however, US
businesses handling scrap are dealing with it more carefully,
according to Steve Alexander, spokesman for the Association of
Postconsumer Plastic Recyclers. "People who took the easiest
route" before by baling and selling heavily contaminated
material "may be running it through a second sorting step,
putting it through optical sorters," he says, because that is
what the market now demands.
That means that more
of the plastic ends up where it is meant to be, and less gets thrown
away or burned, either in the US or in China. "Environmentalists
love Green Fence," says Powell.
"We are at a
turning point in our business," Gregory Cardot of the French
waste management firm Veolia Propreté told the BIR conference. "We
have to seize this opportunity ... for a sustainable environment for
our planet."
If the new Chinese
policy lasts, predicts Borad, "the fly-by-night exporters will
be eliminated. Green Fence will be a blessing in disguise for our
industry."
use of groundwater to increase yields. Getting more "crop
per drop" not only improves farm productivity but
provides enough return on investment to fund additional high-tech
solutions.