The top 10 issues facing China’s plastics recycling industry
Plastic recycling is a truly international business, but navigating this global business environment can be complicated. What are the top 10 issues facing plastic recycling in China and what can processors in the U.S. expect from their Chinese partners over the next several years?
1. The changing of the guard and competition to represent the industry
This year, the newly established China Scrap Plastics Association and Plastic Recycling Committee of China Plastic Processing Industry Association (PRC-CPPIA) convened separate ChinaReplas 2012 events in Beijing and Ningbo over the same period, causing widespread contusion. The two associations respectively issued their own statements and declared their own separate policy positions. The China Plastic Recycling Conference” (ChinaReplas) is the premier plastics recycling conference in China, the world’s largest import market of scrap plastics.
Historically, this event has helped brand plastics recycling in China, and has been an overall positive force on the industry. The battle for the ChinaReplas brand created confusion and sensation list reporting for both the domestic and international media that had flocked to the events. The struggle played out against the backdrop of ongoing systematic reform of plastics recycling in China.
Companies are increasingly concerned with the industry organization and how to enhance service awareness, and provide more valuable services for the development of recycling businesses. Many feel that the current industry leadership is not adequately promoting basic research, or communication with the government and media. Frankly, the industiy needs a new voice to vigorously promote the service quality of plastics recycling companies.
2. Comprehensive restructuring from environmental concerns
At present, the annual processing and utilization capacity of domestic scrap plastics in China amounts to more than 12 million tons, and the annual processing and utilization capacity of imported scrap plastic is more than 8 million tons. But due to the insufficient implementation of environmental policy, the waste water, waste gas and rubbish at processing centers has created a serious environmental problem. In addition, smuggled rubbish with imported scrap plastics are a persistent environmental and quality control problem.
This past year, many scrap plastic distributing and processing centers throughout the country have been rigorously investigated for possible connections to illegal smuggling of scrap plastics, illegal reselling, consigned processing and utilization, outsourcing cleaning and so on. At the same time, Guangdong, Fujian, Hunan, Jiangxi, Zhejiang, Jiangsu, Shandong and other places have issued “rectification programmes,” which shut down the waste plastic processing sites that do not meet environmental regulations.
In addition, China will take effective measures to implement policies to promote greater use of domestically sourced scrap plastics in manufacturing, to help create a truly renewable resource recycling system.
3. New regulations on pollution prevention
In order to prevent pollution as a result of scrap plastic processing, protect peopled health, ensure environmental security, and promote the healthy development of circular economy, the Ministry of Environmental Protection, National Development and Reform Commission and Ministry of Commerce jointly formulated “the regulation on scrap plastics recycling pollution prevention” (Announcement No. 55), which took effect from October 1,2012. As of Januaiy 1，the enterprises which have not passed environmental tests shall not be approved of importing scrap plastics.
Announcement No. 55 set a threshold for the domestic scrap plastics recycling industry, and also provided the policy, legal basis for the local environmental authorities to improve die scrap plastics recycling enterprises. With the implementation of Announcement No. 55, a lot of unqualified enterprises in all parts of the country are being eliminated. Many companies in the industry have to change their strategy and ways of doing business to comply and are looking for a breakthrough in new technology and new equipment. The ultimate effect of this will likely be more consolidation in the Chinese industry, however.
4. …and new regulations on scrap imports
The “Administrative Regulations on Solid Waste” and “Administrative Regulations on the Imported Solid Wastes as Raw Materials”, further strengthen the environmental management of imported scrap plastics, prevent the pollution of the environment, and promote the healthy development of the industry. The Department of the Environment drafted the regulations on imported scrap plastics through consultation with several industry associations and representatives from across the Chinese plastics recycling industry.
The China Scrap Plastic Association, and a number of other industiy associations, actively carried out trade research and summarized the various opinions and suggestions of firms. Upcoming additional regulations on imported scrap will provide an important basis for new production standards for scrap the plastics industry.
5. Plastics and hazardous wastes
Electronic waste — specifically chromium slag — is a major source of pollution in China and is often a byproduct of some unregulated plastics recycling. Scrap plastics and chromium residue in electronic waste will become the first priority in solid waste management in the latest round of update to regulations. With these regulations comes a new round of industry census and scrap plastics industry remediation activities throughout the country, in which a large number of small businesses and workshops without pollution control capacity will be shut down and banned, and many enterprises which don’t meet environmental requirements will be reformed within the specified time.
As part of the Twelfth Five-Year Plan, China will strengthen the comprehensive supervision on hazardous waste, strictly standardize electrical waste and electronic products recycling guidelines, accelerate the harmless disposal of medical waste, vigorously promote sludge treatment and disposal, increase waste prevention and combating illegal imports, strengthen the bulk of industrial solid waste and the historical legacy of solid waste pollution prevention and control, strictly control the environmental risk of reusing the polluted sites. Scrap plastics as a non-hazardous waste is on crack to become the top priority in solid waste management, ranked with electronic waste or chromium residue.
6. Finding a voice for the industry
The impressive growth of the scrap plastics industry in China over the past 30 year has created many new issues that need to be addressed in an organized manner. There is currently a lack of leadership in research and a lack of industry management. For the scrap plastics industry to continue to grow, plastics recycling businesses need to come together to take leadership on ecological and social responsibility, improve communication between business and government, and utilize social forces as a positive role in business.
To accomplish these goals, more than 50 companies have co-sponsored and established the China Scrap Plastics Association, which will promote the issues and interests important to the plastics recycling industry. This new organization faces many challenges with the continued slow growth of the global economy, as well as the ecological and procedural modernization that continues to affect scrap businesses in China. Nevertheless, this new organization has received a very positive response, and is optimistic it can meet these challenges ahead.
7. Scrap plastics will drive future growth in China
China has become largest plastic products production and consumption country in the world, with the total output value of Chinas plastics industry reaching RMB 1.77 trillion ($284 billion) in 2011. Exports of plastic products in China are also showing a trend of steady growth, accounting for 25 percent of the total plastics output.
The 11th Five Year Plan emphasizes energy-saving emissions reduction, and comprehensive energy efficiency gains. Adapting these new standards and technologies to Chinas recycling industry greatly improves the effect of scrap plastics on the environment. Additionally, Chinas scientific research institutions and enterprise technology innovation centers have continued to increase polymer materials research and development investments.
These investments will help the Chinese scrap plastics industry realize a leap frog transformation from primarily consumer goods and traditional processing into high level consumer goods and manufacturing. The China plastics processing industry has become the new manufacturing industry.
8. China is investing heavily in plastics and rubber recycling as part of its transition to a circular economy
Recycling and domestic production and consumption of goods plays a key role in the circular economy, which China is in the process of transitioning to. Over the next three years, the country will develop new technology, new equipment and relevant technical specifications and standards covering waste plastics, rubber and other bulk solid waste materials.
Our country will build engineering application demonstration lines and integrated demonstration parks through technology integration, which will provide technical support to improve the recovery of renewable resources, and reduce bulk solid waste and environmental pollution. The waste plastics using in China set up a total of three funding categories, under which projects can gain scientific research support funding of between 4-6 million yuan ($642,000 — $962,000).
One is for waste plastic in garbage, which will develop the equipment and the key technology for separating materials, improving product quality and the rate of cleavage of plastic garbage resource utilization, and construct technology demonstration production lines processing up to 10,000 tons of plastic in garbage. The second is for waste plastic used to produce wood-plastic composites. This funding will go to independently design special equipment, develop high-value functional wood-plastic composite materials technology and equipment, and construct demonstration lines. The third is for waste plastics and rubber modified asphalt production.
China will develop new high-quality road asphalt, enhance the level of research on modifying our country’s highways with waste rubber and plastic material, and form the technical standards and construction specifications for modified asphalt waste plastic rubber material.
9. Strengthening import supervision for solid waste
As China continues to strengthen its environmental protection regulations, enhance solid waste management, and regulate the scrap industry, greater oversight of material coming into the country is increasingly. As China continues to strengthen its environmental protection regulations, enhance solid waste management, and regulate the scrap industry, greater oversight of material coming into the country is increasingly important.
The Department of the Environment, the General Administration of Customs, and the State Quality Inspection Administration have joined forces to strengthen solid waste import supervision, urge enterprises to implement various environmental protection measures, improve the management system, ensure the pollutant discharge standards and import and recycle solid waste in accordance with the law and. regulations. Moreover, the General Administration of Customs will make unified arrangements and unified regulations for port law enforcement, in order to address the problem of illegal waste smuggling.
In 2012, more than 700 enterprises with import certificates failed to pass the extension auditing and were cancelled. Many of these enterprises applied for the certificate before September 1，2007. If these enterprises want to continue to engage the scrap business, they need to submit new applications to the local inspections directly under Inspection Quarantine Bureau and they will be issued certificate again after written auditing and on-site audit. At present, There are only 3,700 enterprises with “Domestic Consignees of Import Waste materials Registration Certificate” in China.
10. Growing businesses look beyond the Chinese border
International investment is a growing trend among Chinas scrap plastic businesses, with many enterprises setting up factories overseas. In recent years. China’s labor costs and land casts have been rising, and its appeal as a “world factory” is gradually losing its advantages. Meanwhile, China has continually strengthened supervision of scrap plastics imports for recycling enterprises, and implemented more stringent regulatory measures on environmental standards, inspections, import tariffs and customs valuation.
Since 2012, some Chinese scrap plastic businesses have begun investing in factories overseas, where the labor cost is low and environmental protection policies are relatively loose, such as in Thailand and Vietnam. Some enterprises want to takke advantage of relaxed regulations regarding scrap plastic supervision of America, and the U.S. has a lot of money, experience and material to help plan partnerships in these countries with Chinese scrap plastics enterprises. This cross-border investment can help reduce overall costs and enable the further growth of plastics as a renewable resource.
Jason Wang is the secretary-general of the China Scrap Plastics Association, as well as the president and chief editor of China Scrap Plastics magazine.