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March 12, 2019

Green Supply Chain News: The Recycling Sector Is Broken

China Ban on May Recyclables has Led to a Freefall in Prices, Many Materials to Incinerators

 
By The Green Supply Chain Editorial Staff

The prices for materials sent for recycling has collapsed, imperiling the entire sector.

 

The proximate cause: Last year, China announced that it would stop taking in American recycled materials, supposedly to combat pollution. China not only banned 24 foreign materials, including “mixed paper” and post-consumer plastic, among other restrictions.


 
The Green Supply Chain Says:
All this obviously impacts municipalities and consumer recycling, but can have a big impact on corporate Sustainability programs as well.

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China’s “National Sword” policy, enacted in January 2018, banned the import of most plastics and other materials headed for that nation’s recycling processors.  China is the giant in the recycling sector, handling about 50% of the world’s recyclable waste over the last 25 years.


That left US materials sellers without the giant Chinese market, sending prices in a freefall and bringing the American recycling industry to the point of existential crisis

 

Mixed paper and plastic exports to China plunged more than 90% between January 2017 and January 2018, according to data compiled by the US Census Bureau and the US International Trade Commission. As the industry scrambled to find new buyers, prices went through the floor.


For example, the current price per ton for mixed paper being sent to US recycling facilities is now just $3 per ton. That, incredibly, is down from around $100 per ton a few years ago.

 

Recycling has now become so expensive due, given the cost to collect recyclables, sort them, and clean them, that with the rock bottom prices a growing number of cities in the United States are sending recyclables to waste incinerators, where they are burned along with non-recyclable trash to generate electricity, according to Gizmodo.


In Philadelphia 2012, for example, the city was selling its recyclables to processors at $67 a ton. Last year, however, it was paying the contractor, Republic Services, $20 a ton to take its recyclables. In September, the city and the contractor began negotiations on a new contract. The contractor asked the city to pay $170 a ton to continue recycling. 

 

“All recyclable plastics from municipal recycling programs have been pretty much banned,” says Anne Germain, vice president of technical and regulatory affairs for the US trade group National Waste and Recycling Association. “It’s had a tremendous impact. Costs associated with recycling are up, revenue associated with recycling is down. And that’s not turning around in the next few weeks.”

 

All this obviously impacts municipalities and consumer recycling, but can have a big impact on corporate Sustainability programs as well. Many companies embracing “zero waste” initiatives rely on recycling their materials to meet their program goals  - channels that may either be cut off completely or sending materials to incinerators, not recycling processes.

 

However, there is hope the current recycling crisis triggered by China’s ban could have an upside, some experts say. The crisis could leads to better solutions for managing the world’s waste, such as expanding processing capacities in North America and Europe, and spurring manufacturers to make their products more easily recyclable.

 

The crisis may also lead to actions sharply cut down on single-use plastics.

 

Are you seeing signs of the recycling crisis? How do you see this playing out? Let us know your thoughts at the feedback button below.



 
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