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China, not a garbage dump anymore?

  • Classification of waste and value recovery process for solid waste
  • China, the largest importer of solid waste
  • Deteriorating environment compelled China to impose a ban on import of 24 types of solid wastes
  • Plastics, the major contributing factor in environmental degradation
  • Long-term benefits of finding biodegradable alternatives

 

Solid waste or municipal solid waste ([MSW], primarily rubbish and garbage) constitute of plastic, paper, glass, wood, textile, metal and decomposed food wastes from households, industries, institutions and streets of a city. 

Waste generation is a continuous process and with an ever-increasing population, it is also rising at an alarming rate. This necessitates proper handling and disposal of waste as improper management poses grave health concerns (vector-borne diseases, environmental pollution, etc.) for people at large. There are several waste management companies which handle waste through collection, transfer and disposal while extracting a value in the process.

Furthermore, waste management is a significant industry in the global context. In 2016, the global solid waste management industry was valued at ~USD 240 billion (managed ~2 billion tonnes of annual waste) and is estimated to reach USD 340 billion by 2024 at a CAGR of 3%. (Source: Global Market Insights, Inc.)

Although all nations engage in internal waste management activities, most prefer to export the solid waste (majorly rubbish [scrap trade]) to overseas markets due to a high cost involved in the value recovery process, strict government policies, volatile revenue pattern and fewer margins and it also protects the domestic environment.

The value recovery process (recycling) involves:

a. Sorting of different types of wastes into: 

  1. Valuable
  2. Those which are to be directly sent to landfills

b. Treatment of sorted recyclables
c. Cautious landfill dumping
d. Strict protocol to be followed as per the government regulations
e. Recycled material market is highly dependent on commodity pricing, which may or may not make the recycling process profitable 

China has dominated the global scrap and waste management landscape. In 2016, the country recycled 256 million tonnes of solid waste (including domestic and imported) and the number is projected to reach 350 million tonnes by 2020 at a CAGR of 6.5%. (Source: Ministry of Environmental Protection and Ministry of Commerce, China)

According to ISRI (Institute of Scrap Recycling Industries, Inc.), in 2016 global exports of all scrap commodities were valued at more than $85.6 billion. The United States was the major exporter followed by the UK, EU and Japan, while China dominated as an importer. Though the nation entered the scene in the late 1980s due to lack of resources but has since become the largest importer of waste accounting for more than half of world’s total by 2014.

This trade was favourable for both China and the exporting countries. While China converted scrap into an inexpensive raw material and fed its large manufacturing requirements, it also helped the major developed markets to keep waste and scrap out of their local environment at a comparatively lower cost. Positively, since most of these countries ran a trade deficit with China, the waste transportation cost from these countries was drastically cheaper. This was due to the fact that containers carrying consumer goods from China to these nations were loaded with wastes on their return trip, thereby China offered a good discount on the return.

Nevertheless, increase in imports of waste led to a severe health concern in China as numerous recycling firms breached the import and recycling license set by the government in order to increase their revenues (Although, Chinese government blamed exporting countries for degrading the environment by mixing dirty and hazardous waste with solid waste). For instance, China surpassed NAFTA (North America Free Trade Agreement) countries and became the biggest producer of plastic waste in the world (2006-15). Plastic waste poses a major threat as it takes 450-1,000 years for decomposition and is a main environmental threat.

In 2013, the Chinese government strictly enforced regulations to establish limits on moisture and impurities contained in imported recycled paper and plastics. It restricted the import of certain other plastic recyclables as a measure to improve the public health. Further, the government came up with sustainable solutions such as the use of wholly biodegradable plastics or either complete plastic free aisles, high taxation on plastic bags and people were educated on healthy consumption and disposal habits.

  

But a drastic step was taken in July 2017, when China notified the WTO (World Trade Organisation) on the ban of 24 different types of solid wastes. The sudden announcement and implication of this prohibition from the start of 2018 sent shock waves to the multi-million dollar solid waste management industry. The ban included hazardous items such as unsorted paper, several types of post-consumer plastic scrap, textiles, metal slags and a restriction on the maximum weight of contaminated waste to 0.5% of the total contained in a shipment.

Moreover, owing to a heavy dependency on the Chinese market there was a lack of domestic waste processing facilities in several exporting nations. For example, the United States did not build new recycling plant since 2003. Thus, this prohibition compelled waste disposing nations to look for alternatives. Hence, with all sustainable solutions quite futuristic in nature, the present waste pile up is resulting in a falling value of recyclables, a release of toxic gases, public health concern and occasional fire in stored waste.

The nations are desperately searching for immediate alternatives and this has provided an opportunity to the developing countries, especially the Southeast Asian region, which is followed by Spain and Mexico. The export to these areas has risen tremendously in 2017 as compared to the preceding year.

PE and PET imports have increased in Southeast Asia

PVC and mixed plastics have increased in Mexico, Spain and Southeast Asia

Hence, following a rise in the trade of the above commodities (table) to the Southeast Asian countries, China's solid waste imports dropped by 12% (2017). According to Li Ganjie, the Chinese minister for environmental protection, still, these nations will not be in a position to bridge the gap created by the Chinese ban as the recycling quota is limited and cannot match the scale and the quantum of Chinese operation. These emerging countries have their own waste to deal with and this poses an additional burden on the overall recycling capacity. There is no quick fix solution to the sudden announcement by China, few nations are hoping that the regulations will be liberalised.

Televisory believe that resolution to the problem is through steady and a gradual approach. The imminent recourse for these nations is to simply burn the waste, move everything to landfills, dump in an ocean or divert exports to less developed and lowly regulated countries, but this will expose mankind to even bigger threats in the future. Further, as no other foreign destination can match up with the capacity of China, a solution, for now, can be the extension of the transition period and to keep a partial ban on, otherwise, the entire market may collapse.

Although there are immediate repercussions for solid waste management industry, this ban is slated to have several long-term benefits. Already there is a stress on the use of biodegradable plastics by several nations, which will enhance the quality of environment globally. According to news reports, the UK and European Union have initiated plans to reduce local waste. The EU officials stated in January (2018) that there are plans to phase out single-use plastics and to make all packaging reusable or recyclable by 2030. The UK is also working on a framework to eliminate all avoidable plastic wastes in the next 25 years.

On a macro perspective, a sudden Chinese ban has forced all the major developed and developing nations to ramp up their domestic recycling facilities. While this is expected to boost the recycling industry globally. In addition, another way could be to increase and improve the energy self-sufficiency by generating electricity through energy recovery process (incineration). Although, extreme caution is required as this can exceed pollution levels if handled unprofessionally. It should also be noted that the major waste exporting countries (developed) are way more capable both in terms of technology and resources to develop a better, sustainable and efficient recycling process. However, as Greenpeace’s East Asia plastics campaigner Liu Hua said, the ‘out of sight, out of mind attitude we’ve developed towards waste’ needs to change. Therefore, it would be right to say that it is more about self-management of waste rather than dumping this on others.