World Recycling Markets

Brown County Solid Waste Management

Stakeholder Meeting

June 18th, 2018

Jennifer Semrau, Waste Reduction & Diversion Coordinator

Bureau of Waste & Materials Management

Global Recycling Marketplace

U.S. is part of a global recycling industry

• Global scrap exports: 160M tons worth $70B

• U.S. exported 37M metric tons worth $17.9B

• ~30% of scrap processed in US is exported

• U.S. exports to China worth $5.6B

China is world’s largest importer of fiber and plastic

Source: ISRI

What is happening in China?

China facing severe environmental issues & dramatic growth

• 60% of groundwater unfit for human consumption

• 19% of arable land contaminated with heavy metals

• 100 million new cars on the road in last decade

• Staggering increase in urbanization

• Lack of enforcement of existing environmental laws

• Decades of putting economic growth above the environment

Source: ISRI

China’s Environmental Goals

Ministry of Environmental Protection of the People’s Republic of China established various goals:

WATER

• Improve quality of >70% of seven key river basins

• Amt of foul water in urban areas not to exceed 10%

SOIL

• Return >5,000 mi2 of polluted land to forest & grassland

• Make 90% of farmland safe

AIR

• Reduce carbon intensity 40-45% below 2005

SELF-SUSTAINABILITY IN RECYCLING Source: ISRI

By yr

2020

What is National Sword?

• In 2013, China implemented “Green Fence,” an import restriction program

• US exports to China fell by 40%

• In July 2017, Chain announced “National Sword”

• Limits or outright bans the importation of certain recyclables, including some paper and plastics, as of Jan. 1, 2018

• Sets a new, exceedingly stringent contamination standard of 0.5%, inconsistent with global standards and nearly impossible to attain (or even measure)

2

Why National Sword?

• China seeking to prohibit import of “solid waste with major environmental hazards and intense public reaction by the end of 2017.”

• Halt imports that can be replaced with domestic resources by the end of 2019

Chinese goals:

importation of “waste”

domestic recovery 6

Actions by China to Control Imports

July 2017 WTO notified of bans & carried waste standard; “Implementation Plan to Enhance Solid Waste Import Management System by Prohibiting the Entry of Foreign Waste” released

July 2017 Country-wide inspections, permits revoked

Jan. 1, 2018 Ban on 24 categories of materials, including post-consumer plastics and mixed paper

Mar. 1, 2018 Carried waste standard (0.5%) into effect

Mar-Dec 2018 ‘Blue Sky’-General Admin of Customs focused on “combating smuggling of foreign garbage” via concealment, false declaration & entrance where no customs. Blue Sky used 1,300 agents to capture 137 suspects & 606,000 tons.

Source: ISRI & Resource Recycling

Actions by China to Control Imports

May 4, 2018 Chinese government suspended China Certification & Inspection Group (CCIC) ability to inspect and certify shipments for 1 month. CCIC only organization allowed to provide pre-shipment approvals of US scrap.

May 18, 2018 China announced Canadian CCIC was allowed to conduct inspections on US loads

Jun. 4, 2018 US CCIC inspections resume, but self-inspection no longer allowed. CCIC delegates physically examine each load on-site, with significant financial implications.

Source: Resource Recycling

CCIC:$152 inspection fee,

plus $60/hr for inspector’s

time & $0.54/mile to travel

to facilities, according to

American Metal Market.

Impact of National Sword

Source: ISRI

Impact of National Sword

Source: ISRI

Other Southeast Asian Countries

Source: Resource Recycling

Other Southeast Asian Countries

Source: Resource Recycling

Other Southeast Asian Countries

Vietnam

• Ports became overwhelmed

• 1 of largest terminals amassed more than 8,000 TEUs (twenty-foot equivalent units)

• Stopped accepting scrap materials

• More documentation to be required starting June 15th

Source: Resource Recycling

Other Southeast Asian Countries

Indonesia

• Began inspecting 100% of scrap paper & plastic imports in early April.

• While US exports to Indonesia are down in ‘18, UK imports are up over 18 M pounds (Jan-Mar).

Source: Resource Recycling

Other Southeast Asian Countries

Malaysia

• Stopped issuing scrap plastic import permits May 23, but have since resumed

Thailand

• Temporary ban of plastic scrap imports in April, since lifted

Overall, SE Asian countries being flooded with scrap, examining quality & considering restrictions similar to China

Source: Resource Recycling

Paper • Newspaper, cardboard, magazines and office paper

are only materials banned from landfill disposal, but many programs collect ‘mixed paper’

• Strong WI paper industry should allow for programs to still effectively market their material

• Quality will be of utmost importance; significantly increased domestic supply will allow mills to take the best feedstock

• Educate and reduce contamination • Lower paper prices

16

National Sword Effects on WI

Plastic • #1 PETE and #2 HDPE are only materials banned from

landfill disposal, but some programs collect #3-7 or mixed bulky rigid plastics

• Only few domestic buyers of #3-7 bales; much mixed bulky rigid plastic is also exported

• RUs /haulers/MRFs may cease collecting certain (non-LF banned) plastics

• City of Madison stopped accepting mixed bulky rigid plastic

National Sword Effects on WI

How is WDNR Responding?

• DNR providing clarification on what is included (and not included) in WI recycling law

– Can MRFs legally landfill collected, sorted & processed (baled) #3-7 plastics? Yes

• Monitoring MRFs on material marketing, global markets

• Emphasizing education and communication between RUs, haulers and MRFs to reduce contamination

• Considering statewide educational campaign focused on ‘recycling right’ fashioned after FL DEQ and the Recycling Partnership efforts

Looking Ahead

• ISRI, SWANA, NRC and other organizations seeking clarification & offering China assistance

– Scrap is not waste; commodities with value

– Unclear definition of “carried waste;” differs from international standards

• Some Chinese manufacturing moving outside of China

– Import license restrictions resulting in shortfall of 7M tons of plastic scrap needed for manufacturing

• Market growth opportunities in India, Mexico, Canada and the Netherlands

• Potential domestic market growth and infrastructure development in the U.S.

• DNR continue to monitor & encourage quality Source: ISRI

Questions?

Jennifer Semrau

Waste Reduction & Diversion Coordinator

(608) 267-7550

Jennifer.Semrau@wisconsin.gov