The way forward

Exporters in Canada have already begun seeing disruption in trade flows stemming from China's Environmental Protection Control Standards for Imported Solid Waste Used as Raw Materials. Despite the concerns raised by governing bodies and industry representatives from around the world, the Chinese government moved forward with its decision to implement these severe and restrictive standards. Chinese import fees have increased, quotas and licenses have been drastically reduced, and exporters are finding it increasingly difficult to move material to the country that has long been the world's largest importer of scrap. 

Scrap markets have been beset by uncertainty since China first announced its intentions to restrict imports last year. The Bureau of International Recycling (BIR) predicts that exports of restricted materials could drop by 40 percent or more. What's more, China has announced a larger plan to stop importing materials that can be recovered domestically.  

Confusion surrounding the restrictions persists. While the full impact of these restrictions is unclear, one thing is certain: the recycling industry can no longer rely on China as its golden goose. The short-term effect of these restrictions will be painful, and will necessitate a change in the way we do business. The way forward will require diversity and innovation. 

North America is already seeing the impact of these restrictions on regional recycling and collection programs. Reactions have been varied: some municipal programs have stopped accepting certain types of recyclable materials, some have redirected material to landfills or incinerators, and some are adopting a moratorium on adding new materials to municipal collection programs. The rapid implementation of the Standards for Imported Solid Waste Used as Raw Materials gave the industry little time to adapt, and some facilities are stockpiling material in hopes of finding alternative markets.

Finding new and diverse markets for the long term is an inevitability. Trade is critical to the recycling industry's success, and scrap material is crucial to the global manufacturing supply chain. However, in the short term, there are few viable alternative destinations for these materials. Although many exporters are looking to other markets in Southeast Asia, these countries simply do not have the processing capacity to fill the void left by China. We will no doubt start to see countries seizing this opportunity to grow their industries. Trade in scrap material supports value-added economic activity, and investment in broadening their capacity will create jobs and opportunities for these emerging markets. 

Opportunities for investment and growth are also available to our domestic industries. Now is the time for innovation in the North American recycling and manufacturing sectors. New technologies and equipment will be needed to process certain materials to a high quality and in an efficient and cost-effective manner. Some MRF operators have already reportedly begun installing new equipment to better process material. But recovering secondary resources requires a market for the material as well as a system to process it. Manufacturers could take this opportunity to design products with recycled material and for maximum material recovery.

Although the impact of the Standards for Imported Solid Waste Used as Raw Materials remains to be seen, it is clear the status quo has changed. Moving our industry forward will be a difficult process, but it could lead to a new era of innovation. 

Tracy Shaw is president and CEO, Canadian Association of Recycling Industries (CARI). CARI's 77th Annual Convention will be held in Niagara Falls, Ontario, June 7-9, 2018. 

This article was originally published in the March 2018 edition of Recycling Product News, Volume 26, Number 2.