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National Sword cuts into recycling revenues
Local pros say China’s policy banning certain waste imports underscores need for sustainable action.
A recent sustainability panel discussed how local industries are overhauling their waste management plans following China’s ban this year on imports of certain types of solid waste and recyclables.
The policy, known as the National Sword, went into effect Jan. 1. China previously was the world’s No. 1 importer of waste materials, such as paper, plastic and scrap metal, which it processed and reused in products made for export, according to sustainability nonprofit The Center for EcoTechnology.
When Chinese President Xi Jinping consolidated power at the country’s National Congress of the Communist Party in October, he spoke nearly 90 times about China’s environmental crisis — paying particular attention to pollution of the country’s waterways.
The country notified the World Trade Organization in late 2017 it would ban imports of four classes of materials — all plastics, unsorted mixed paper, textiles, and some glass and metals — encompassing 24 kinds of scrap. It also told the WTO it would enforce a strict contamination limit of 0.5 percent on all imports, tighten shipment inspections and reduce the number of available import licenses for businesses.
About 30 percent of all recyclables collected in the U.S. are exported outside the country. Up until the National Sword, about 69 percent of all U.S. plastics exports were being sent to China and Hong Kong, according to the Michigan Department of Environmental Quality (MDEQ).
The West Michigan Sustainable Business Forum at its Sept. 10 luncheon hosted a discussion called, “West Michigan Responds to China Sword Recycling Impacts.”
Panelists included Kristen Wieland, marketing and communications manager for Kent County Department of Public Works (DPW); Matt Flechter, recycling market development specialist at the MDEQ; Lynn Mulder, sales associate at Holland-based recycling and scrap management company Padnos; and Heidi Fraser, who works on the global compliance and sustainability team at Grand Rapids-based Steelcase.
The speakers explored the quandary of what to do with recyclable post-industrial and residential waste if there is no longer a profitable export market for it.
Each panelist gave a brief presentation followed by a question-and-answer period.
Sustainable Business Park plan
Wieland said a global turning point such as the China National Sword confirms the importance of building the Kent County Sustainable Business Park for processing waste that is in the planning and review phase.
Her department receives and processes the majority of single-stream residential recyclables from Kent County and a surrounding eight-county region.
“We bale them and prepare and hope that we can send them out of our facility, and that’s where the challenges come,” Wieland said.
While recycling commodity revenues have “rarely ever” been high enough to cover the DPW’s processing costs, Wieland said the National Sword has worsened the situation. The value of corrugated cardboard by ton in 2017 was $160, but fell to $75 in 2018. Mixed paper sold for $75 per ton in 2017. Today, the DPW is not paid for mixed paper at all.
“That is significant because we still have to process it the same way,” Wieland said. “We still have the transportation costs and all of those things that we don’t have to consider, but (people) down the line have to consider.
“We’re fortunate that we have an outlet for it at all. That’s sort of where we’re at.”
She said the Board of Public Works approved a tipping fee increase — the cost for haulers to unload recyclables at the Kent County Recycling and Education Center — from $35 per ton now to $65 per ton for January 2019 to make up for an estimated $1.5 million loss in recycling commodity revenues. Even with the fee increase, Wieland said the DPW expects to see a $500,000 loss in 2019 based on market changes.
This will be the first year the cost of recycling surpasses the cost of landfilling in Kent County, Wieland said, noting she fears the cost increase may prompt residents to “question their commitment” to recycling.
The DPW is not considering raising the tipping fees at the South Kent Landfill because if it does so, Wieland said, “it will just drive waste haulers to other landfills” that have lower prices, shutting Kent County out of the market before it can make the transition to processing waste sustainably at the planned business park.
Wieland said by 2021, the county hopes to start processing residential waste at the business park that would have been destined for the landfill, a move that would lessen the county’s reliance on global export markets such as China.
Padnos and source reduction
Mulder said the U.S. was loading about 4,000 shipping containers of waste per day for export before National Sword took effect.
“When you have that much material that suddenly comes into the domestic marketplace, there’s a demand that cannot be adhered to,” she said.
She said Padnos is working to educate its customers about source reduction, which includes lightweighting (using fewer materials to create products), using recycled materials in production, and buying recycled products and materials, according to the Environmental Protection Agency.
“Our commitment to recyclability includes talking about what’s recyclable but then also what’s marketable,” Mulder said. “We heard our customers say, ‘But it’s recyclable material.’ Well, in its form, it is recyclable. Most things are recyclable. But then we look at it from a marketability standpoint.
“In the past, you could take a bunch of plastic, mix it together and ship it off in a bale to China. But what we didn’t see on the other end of that was employees in a China company sitting on the floor, hand-sorting all these different grades of plastics. What did not have value was being burned, dumped in the streets, thrown in the ocean, thrown in the rivers.”
Mulder said as a century-old company, Padnos has well-established markets for recyclables, but it also is improvising because of the National Sword cutting into that.
“Where we don’t have outlets, we are coming up with processing capabilities on our own. We are fully integrated with plastic recycling, where we are actually taking material, processing it and bringing it back in as a feed stream,” she said.
She noted the company also is looking into solutions for processing low-grade materials and films such as plastic grocery bags, which Wieland earlier noted are so difficult to recycle that the DPW ships them to Indiana.
Steelcase revamps processes
Fraser said Steelcase was most impacted by the National Sword’s tightening of post-industrial plastic imports, such as the shrink wrap, films and Iow-density polyethylene (LDPE) plastics so commonly used in manufacturing.
The main problem was the company had no internal processes in place for baling loose plastics, which it would have to do in order for its recycling company to continue accepting it.
“If anyone’s worked in manufacturing, you know that internal process changes are not easy; they don’t happen overnight,” Fraser said. “There are a lot of roadblocks in the form of logistics issues, safety concerns, space concerns — space is a huge commodity in the manufacturing industry — so these are all the internal processes we had to sort through in order to bale this material.”
Steelcase also struck a deal with a company that was willing to take some of its shrink wrap waste and use it to make a new decking product.
Fraser said Steelcase is doing an audit of its other waste streams to look for more sustainable end uses.
“I think this is reframing everyone’s approach to things,” she said. “I think we need that. We’ve all talked about how the China scenario was not sustainable. I’m not sure how it lasted this long, to be honest.”
Building a domestic market
Flechter, of MDEQ, noted China’s National Sword policy is stirring other countries to action.
“It’s not just China anymore. It’s all countries are looking at, ‘Why are we taking junk from the developed world and processing it here in our communities?’” Flechter said.
“I want to remind everybody why this started. National Sword, Green Fence and all of those things … it’s all because we have not done what we need to do to make sure the recyclables we are putting at the curb or at our loading docks are of the quality that’s needed for manufacturers. It’s been too easy to send that stuff in a shipping container overseas for somebody else to deal with.”
He said the MDEQ is taking two steps to “weather the storm”: launching a statewide campaign to educate businesses and residents on how to reduce contamination by properly using the recycling system and partnering with the Michigan Economic Development Corporation to develop a stronger domestic market for recycled materials.
“Let’s recognize this problem was caused because we set up systems that were not sustainable long term,” Flechter said. “And now, we’re quickly scrambling, asking, ‘How are we going to do this? How are we going to fix this issue in our community?’
“What is Kent County going to do to bring some of those materials and this processing close to home so we can have a better handle on it?”