Control Engineering is a publication for automation engineers who design, implement, maintain, and manage control/instrumentation systems, components, and equipment for a wide range of industries and manufacturers. The magazine's Engineering Leaders Under 40 Program recognizes professionals under the age of 40 who are making a significant contribution as control and plant engineering professionals.
2019 China Recovered Paper Market & Policy Advisory Report available
Managing the Impact of China’s New Import Policies – The View from Inside China
A new report from NPC Partners is now available in the U.S. and Europe through Atlanta-based paper recycling consulting firm Moore & Associates. NPC Partners is a global consultancy based in Hong Kong with offices in Beijing, Shanghai and Atlanta. NPC Partners is committed to assisting the pulp and paper industry innovate and grow based on winning strategies and new market insights.
Objectives of the New Chinese Import Policies
China has been a dominant player in the global recovered paper (RCP) business for some time. Since China began to implement new regulations for recycled material imports in 2016-17, the global recycling industry has moved from turmoil to crisis. Often not understood are the objectives behind China's new policies and the impact the new regulations have had on China.
The recent report by NPC Partners indicates that goals of China's policy reforms have been to:
1) Cut overcapacity in the paper industry;
2) Reduce pollution, and
3) Improve environmental protection. China's central Ministry of Environmental Protection is responsible for policy development while China Customs and local governments manage implementation.
Supply side reforms were first announced within China in November 2015 and import inspections started in January 2016. The government began to phase out the lowest-quality grades of RCP due to high levels of contamination and to monitor the scale of imports much more closely. The initial target was to reduce the types and quantities of imports and gradually replace imports with domestic substitutes by the end of 2019.
China continues to develop new policy frameworks to tackle pollution and improve environmental protection, and is restructuring its ministries and import procedures in anticipation of future change. In June 2018, China's State Council announced a new goal of zero ‘solid waste' imports by year 2020. The exact definition of ‘solid waste', and the difference between ‘waste' and renewable resources, is not yet clear. While further clarification is expected, it is too soon to say the extent to which any specific grades of RCP will remain acceptable for importation.
One of the first impacts on RCP exporters was much greater difficulty in securing Import Permits for China. In the past, Chinese paper companies obtained their annual quotas for imports in the first few months of the year. With the new regulations, Chinese companies are required to apply for quotas on a quarterly basis which increases the time required for the process for both companies and government import managers, resulting in much lower numbers of Import Permits.
In October 2018, China's Ministry of Ecology and Environment announced a new organizational structure that includes a new Department of Solid Waste & Chemicals. The Inspection and Quarantine Unit that oversee import inspections was moved to China Customs. Because this restructuring will take some time to put in place, more regulatory change is not anticipated in the near future. For example, a leader for a new group that will focus on ‘waste identification', or distinguishing waste from renewable resources, has not yet been identified.
Impacts of China's New Trade Policies -- in China
NPS Partners' new report identifies some of the key impacts of the new regulations in the Chinese paper industry, as follows:
• Dual pricing has emerged for all RCP grades, the price in China vs. the price outside of China, with the price inside China being substantially higher.
• Chinese companies are experiencing much greater volatility in pulp and paperboard pricing, in addition to significantly higher prices, making production planning difficult.
• RCP imports to China declined by 17 million tons between 2017 and 2018, a decrease of 34%, and the share of imported RCP used in China's paper industry declined to 16% (from 24%) over the same period.
• Imported recycled pulp has emerged as a new category, reaching about 300,000 tons delivered in China in 2018.
• Imports of containerboard have grown substantially.
Overall, total paper and board imports into China actually grew by 1.5 million tons in 2018, a 34% increase over 2017.
New Opportunities in China's Paper and RCP Markets
NPC Partners point out that the Chinese government has more work to do in terms of defining ‘waste paper' more specifically and that has the potential to change current policies in future. Chinese investment overseas is likely to expand in search of additional sources of fiber. As Mixed Paper is phased out, it is expected that use of virgin fiber will increase in China.
Given the new landscape, NPC Partners suggests strategies that may be productive for RCP companies outside of China:
• Understanding the goals and objectives of Chinese policymakers at the top level and the challenges of implementation will help companies anticipate and prepare for future changes in regulation.
• While previous RCP export markets in China have declined or disappeared, new opportunities are opening up. The domestic recycling system in China is being upgraded, expanding the opportunity for exporters to provide recycling equipment, software, and other related business functions to Chinese companies.
• There is considerable potential for expansion of imports of both RCP pulp and virgin fiber.
• While RCP exports to China may be down, China's imports of non-RCP paper and board have grown and are expected to continue doing so.
Finally, China will need additional fiber beyond what it can supply domestically. In the new report indicated below, NPC Partners' new report provides multiple quantitative scenarios for OCC, ONP, Mixed Paper, containerboard, and recycled pulp that will give exporters extensive data and insights from which to assess RCP demand, and align with changing fiber market needs in China.
For more information about NPC Partners' "2019 China Recovered Paper Market & Policy Advisory Report", contact:
Bill Moore at Moore & Associates (for North America & Europe), email: [email protected]; Andy Tsu at NPC Partners (for Asia Pacific), email: [email protected], or via the website at www.npcpartners.com.
More from Industry News
Recycling continues to power the American economy based on a new study conducted by John Dunham and Associates and released by the Institute of Scrap Recycling Industries (ISRI). In addition to its positive environmental benefits, the recycling industry is responsible for more than 531,500 jobs and an overall economic impact of nearly $110 billion.
Petro-Canada Lubricants, a HollyFrontier business, has expanded its TRAXON and DURON product lines with the launches of DURON Advanced 5W-30 and TRAXON Synthetic 75W-85. The introduction of the new oils demonstrate continued product innovation from Petro-Canada Lubricants to help fleets meet new and emerging market trends.
Today Peterbilt Motors Company announced the appointment of Kate Rahn as the head of Sales and Marketing for Canada.
The Canadian operations of GEEP Canada and The Shift Group of Companies (consisting of Shift Recycling and Revolution) have merged to form Canada's most vertically integrated electronics recycler and ITAD services provider.
Stellex Capital Management, a middle market private equity firm, has announced that it has entered into an agreement to sell Morbark, LLC, the manufacturer of high-performance equipment and after-market parts for the forestry, recycling, tree care, sawmill, land clearing and biomass markets, to Alamo Group for $352 million. The sale includes all assets and operations of Morbark and its affiliate brands.
Czech recycling company OZO Ostrava s.r.o., recently commissioned a new line for processing pre-pressed plastic bales. At the heart of the line is a SENNEBOGEN 818 M powered by an eGreen electric drive.
The Government of Canada says it is dedicated to protecting Canada's land and waterways from plastic waste and marine litter. According to a recent press release, there are currently few options for recycling and disposing of boats made of fibreglass. As a result, most of these boats end up in a landfill, or worse, abandoned on land or in the water.
An important new report issued by the Solid Waste Association of North America's (SWANA) Applied Research Foundation (ARF) provides a number of significant observations and insights regarding the impacts of China's National Sword Policy on curbside recycling programs in the United States and Canada, and the resets that can be made to address them.
The Recycling Partnership has announced the public beta launch of DIYSigns, the debut of a free online resource that anyone can use to help people know what to throw into their recycling bins. Whether at home, at the office, at school, at a sports stadium, or anywhere, education is needed to show what is recyclable and where.
After the success of last year's inaugural event in Canada, the Environmental Research & Education Foundation of Canada (EREF-CA) is excited to once again hold its Silent Auction, October 9 and 10, at the Canadian Waste & Recycling Expo (CWRE) in Toronto, Ontario. Proceeds from this event, which is being held in partnership with the Ontario Waste Management Association (OWMA), support solid waste research needs in Canada.
Croatia's 6th of September deposit of ratification of the 1995 Basel Ban Amendment has allowed this global waste dumping prohibition to finally enter into the force of international law. The Ban Amendment, adopted by the parties to the Basel Convention in 1995, prohibits, the export of hazardous wastes from member states of the European Union, Organization for Economic Cooperation and Development (OECD), and Liechtenstein to all other countries.
A recent agreement with SENNEBOGEN LLC has concluded James River Equipment's two-year search to expand its range of OEM lines with the right complementary machines for its customers in the Virginia region.
United Metal Recyclers of California warn that proposed actions will destroy State’s metal recycling program
According to the United Metal Recyclers of California (UMRC), a newly proposed agency action targeting metal shredders and recyclers would eliminate California's thriving scrap metal operations and force tons of metal into state landfills.
The Canadian Plastics Industry Association (CPIA) has released a report that illustrates the resilience of the Canadian recycling infrastructure in weathering the significant market challenges that have affected the industry over the past two years.
Walmart and TerraCycle are joining forces to launch the nation's largest car seat recycling event in nearly 4,000 Walmart stores across the country.
Micron Waste Technologies Inc., a leading developer of waste treatment systems for cannabis and food waste, has announced that it has received a Health Canada Cannabis Research License to develop its aerobic waste digester technology for the treatment of cannabis waste. The license, effective for five years commencing August 23, 2019, will be used to further develop the world's first waste treatment system that alters and denatures cannabis waste while recovering reusable water. The Company's R&D team, led by Chief Technology Officer and Founder Dr. Bob Bhushan, will employ the new license to accelerate and expand the cannabis waste and wastewater programs, both through its industry-leading Cannavore waste processing system and through its developing facility wastewater management program at the Micron Waste Innovation Centre in Delta, BC.
ArcelorMittal Long Products Canada announced that it is acquiring the assets of Legault Métal Inc., a metals recycling company with facilities in Trécesson, Val d'Or, Rouyn-Noranda and La Sarre, in Abitibi-Témiscamingue (Quebec, Canada). These sites, which will now operate under the name Legault Métal, a division of ArcelorMittal, will continue to deliver its services to scrap dealers and individuals.
In apparent retaliation to the U.S. Administration's recent announcement of tariffs on Chinese products to begin in September and December, the Chinese government announced last week its intent to levy additional tariffs on $75 billion worth of goods from the United States. These tariffs add on to those already in place from announcements in 2018.
London-based Marketing Strategies & Solutions (MSS) has been recognized (for the third time) for excellence in graphic communications by the international Summit Creative Awards.
The Alliance to End Plastic Waste has announced that Jacob Duer will serve as the inaugural President and CEO of the newly formed not-for-profit, effective October 1. Duer joins the AEPW from the United Nations, where he most recently served as a Program Director for the UN Environment Programme.
Governments at all levels, industry, environmental groups, and taxpayers across Ontario have long agreed that the residential recycling framework that has been in place since 2002 requires an overhaul to improve the province's stagnant diversion rate.
DEX Heavy Duty Parts LLC, a Volvo Group subsidiary and leading supplier of recycled, renovated and surplus medium- and heavy-duty truck parts, has celebrated the grand opening of its new facility in Oklahoma City. The facility joins DEX's current facility in Advance, North Carolina to better serve owners of second- and third-generation trucks with recycled and renovated parts.
The Heico Companies, L.L.C. ("Heico") has announced that it has completed the acquisition of a majority interest in Shred-Tech Corporation, a market leader in the design and manufacture of mobile and stationary shredding equipment for the document destruction and recycling industries. Based in Cambridge, ON, Shred-Tech also has operations in the U.S., U.K. and Thailand. Heico has partnered in the acquisition with Rob Glass, Shred-Tech's President and CEO, who will continue to lead the Company.
Halfway through 2019, and with one of the busiest periods of grain bag recycling still ahead, Saskatchewan farmers have already recycled 25% more grain bags in 2019 than they did in all of 2018, recycling program operator Cleanfarms announced today.
Plastics industry applauds Ontario government move to producer responsibility for packaging, paper and plastics
The Canadian Plastics Industry Association (CPIA) and its members applaud today's announcement by the Honourable Jeff Yurek, Ontario's Minister of Environment, Conservation and Parks, directing the transition of Ontario's Blue Box residential recycling program to a producer responsibility model by 2025. Today, the Blue Box program is funded equally by municipalities and industry. Once the transition is complete, industry will manage 100% of the costs of the Blue Box system alleviating this burden from municipal taxpayers.
While headlines over the past few years might lead some to believe otherwise, the reality is that Americans say they are still recycling at the same rate, despite having little confidence that their recyclables actually get recycled. A national poll conducted by Mason-Dixon on behalf of the U.S. based Carton Council showed that 85% of respondents report they recycle.
Ontario is taking action to improve recycling across the province and address the serious problem of plastic pollution and litter, as committed to in the province's Made-in-Ontario Environment Plan.
The Solid Waste Association of North America (SWANA) has identified at least 30 solid waste worker fatalities in 2019 in the United States and Canada. These tragic deaths make it clear that more work remains to be done to improve industry safety and is why SWANA is supporting National Safe + Sound Week,August 12-18, 2019.
The US is the sole member of the Organization of Economic Cooperation and Development (OECD) -- the group of 36 developed nations, that has chosen to object to the adoption of recently agreed Basel Convention trade controls to ensure that plastic wastes that are dirty and mixed and thus difficult to recycle can only be exported with the prior permission of the importing country.
On August 3rd, 2019, Bunting Magnetics Co. celebrated its 60th anniversary as a company. Since being founded in 1959, Bunting Magnetics Co. has grown from a small company in Chicago, Illinois, to a growing global force with multiple locations in the United States, Canada and abroad.
Astec Industries, Inc. has appointed Barry Ruffalo as its President and Chief Executive Officer to be effective on August 12, 2019. Ruffalo has also been elected to the Board of Directors. Ruffalo will join the Board of Directors as a Class I director and will stand for re-election at the Company's 2020 annual meeting. On the effective date of Ruffalo's appointment, Richard Dorris, Interim Chief Executive Officer, will resume his role as Chief Operating Officer.
merQbiz, a solutions and analytics provider for buyers and sellers in the recovered paper (RCP) industry, introduces BaleVision, providing companies actionable insights into their RCP quality. Combining a leading quality assessment tool with comprehensive data, BaleVision helps RCP buyers maximize supplier performance and sellers earn a fair price for their product.
Superior Industries, Inc., the U.S. based manufacturer and global supplier of bulk material processing and handling systems, has announced a new partnership with Canada's largest distributor of conveyor belting, components and other bulk material handling solutions. Belterra, a 50-year-old distributor with 19 locations throughout the country, will stock, sell and service Superior's conveyor idlers, pulleys, scrapers and accessories in Quebec.
GFL Environmental Inc. ("GFL") announced today that it has acquired the Vancouver Island solid waste operations of Evergreen Industries Ltd., part of the Alpine Group.
Waste Connections, Inc. has announced that Elise L. Jordan has been appointed to its Board of Directors.
Recycle BC is sounding the alarm over the rising number of explosive and hazardous materials British Columbia residents are placing in the province's residential packaging and paper recycling. BC's major recycling collectors and processors have seen seven fires in 2019, with several of them having endangered lives and forced the temporary closure of facilities.