It doesn’t rival the Great Wall in historic and cultural impact, but China’s “Green Fence” is having a dramatic economic impact on the plastics recycling market.
It’s no longer big news that recycling generates substantial economic, as well as environmental, benefits to our society. In April of this year, the Institute of Scrap Recycling Industries (ISRI) released the results of a study highlighting the impact of the U.S. scrap recycling industry.
According to the ISRI study, the recycling industry is responsible for more than 534,500 direct and indirect jobs in the U.S. and generates more than $13.2 billion in federal, state, and local tax revenue annually. The study also reveals the scrap recycling industry provides for 0.63 percent of the national’s total economic activity. In the state of Georgia alone, that translates into a $4 billion impact on the state’s economy and well over 20,000 jobs.
It’s also not big news that our world is linked together in a global economy more than ever before. And today, the recycling industry is a big contributor to that global economy. This is clearly illustrated by the current relationship between China and the U.S. recycling industry.
For the last decade, recyclables have been one of the United States’ largest exports to China.
It made good sense – shipping containers would arrive from China filled with manufactured goods and instead of making the return trip completely empty, the containers went back full of recyclable materials.
Things started to change in 2013, as Chinese authorities became increasingly concerned about the growing amount of contaminated recyclable materials entering their country. That year, Chinese Customs officials put up the first “Green Fence,” an aggressive enforcement of existing regulations on inspections to weed out contaminated waste materials.
Early this year, China introduced a renewed effort (also referred to as the “National Sword campaign”), which again intensifies the inspection of the waste materials entering their county. While we don’t know how long the stricter enforcement will be in effect (possibly as long as a year), we have to prepare for its continued impact on the economic future of the recycling industry – and especially the plastics market.
The recycling industry has always had to deal with quality issues in collected materials, and money is already being invested in the U.S. in new recycling facilities. The end result? Greater efficiency, but also the possibility of less advantageous financial benefits to the consumer.
As the Industry continues to evolve, M-PASS is also evolving, developing new ways to help our clients adjust to changing markets and policies. We are no longer relying solely on exporting materials, but are making an investment in the development of new secondary and tertiary programs which will involve different technologies as well as different destinations for our recyclable materials.
While alleviating these problems, however, these solutions are likely to impact the economic benefits to our clients.
M-PASS General Manager Chris Witherspoon explains: “With the over-supply domestically, pricing nationwide is expected to go down fairly dramatically, leading to reduction in the rebates our clients have become accustomed to.”
Even with these challenges, recycling is still the most viable way to manage our waste stream and avoid increasing the size and number of landfills around the country – and the world. But as a result of China’s actions, the industry will be forced to make extensive changes.
M-PASS is preparing for change and will maintain our high level of service and effectiveness. We will continue to produce significant savings by helping our clients become more sustainable through our proprietary 30-step audit process and through consumer education.
Our industry has made great advances since the first time we saw this now-iconic symbol in 1970.
And we can’t slack off now. But let’s end this on a positive note from Waste 360:
“If the Green Fence did anything, it created an opportunity for the recycling industry and municipalities to evaluate policies and practices and adjust to changing markets. Specifically, it’s time for recyclers to challenge the existing collection and sorting models and take a long, hard look at problem materials to figure out a better way to collect and process materials for recycling.”
We will keep you up to date as this situation changes; or check MPASSEnvironmental.com for new developments.