More than three months after China announced it will restrict recyclables imports, key details on logistics and timing of the new regulations remain unknown. But industry associations are piecing together some more concrete facts.

Adina Renee Adler, senior director for government relations and international affairs at the Institute of Scrap Recycling Industries (ISRI), recently shared information she’s gathered from visiting China and speaking with industry insiders and governmental authorities.

She laid out what is known and unknown about future shipments to the world’s largest importer of scrap materials.

“When China sneezes, the world catches a cold,” Adler said, quoting a saying in the international trade circles.

Permits and contamination

U.S. exporters have seen their buyers diminish or disappear as Chinese authorities delay issuing new import permits for the fifth month in a row. Adler said there may be a few permits issued in November, but that is mostly information gleaned through rumors from industry players.

“We have heard that they will issue import licenses in 2018, but we’re pretty sure it’s going to be a lot fewer licenses and that whatever licenses are issued are going to have significantly less quotas involved with them,” Adler said. However, she added, no import licenses will be issued for materials covered by the ban.

During a recent conference call with investors discussing financial results, an executive at Waste Management said China has granted a few import licenses. Accordingly, Waste Management is preparing to send shipments to Chinese buyers during the fourth quarter.

Chinese officials have proposed a 0.3 percent maximum contamination level on scrap imports. Adler said there is talk that the 0.3 percent limit will go through, but also that she’s heard the government is considering a somewhat more lenient 1 percent threshold.

It’s well accepted the 0.3 percent contamination level would be virtually impossible for the U.S. recycling industry to meet. But in an Oct. 26 webinar hosted by the U.S. EPA, Anne Germain of the National Waste & Recycling Association noted there are the official Chinese standards, ISRI standards and Chinese buyers’ standards. In recent years, shipments have largely adhered to the buyer’s guidelines rather than the official Chinese government standards, Germain said.

“The previous standards were not strictly enforced, so the real question is how strictly, even if these are adopted, would they be enforced,” Germain said.

Importing agents who still have permits have been able to dictate quality, Germain said, “and they can be a lot pickier than they have in the past.”

Adler said it’s unclear how Chinese officials came up with the 0.3 percent contamination limit or what the thinking was behind that figure, whether Chinese regulators see it as a realistic level or whether it’s meant to be a de facto ban. It’s also unknown when the restriction could go into effect, because the country hasn’t announced an implementation date.

Market alternatives

Adler said she thinks there are other market opportunities around the world. ISRI has heard of a number of Chinese companies moving operations or opening up new operations in Southeast Asia to get around this policy.

ISRI staff members were in India for the Bureau of International Recycling bi-annual convention in mid-October. Adler said India is an important market currently but also presents a large opportunity. The country is working to bolster its own domestic materials recovery, but it is still predicted to be a major downstream market for U.S. and other countries’ exports.

“That opportunity definitely is going to be there for the foreseeable future,” she said. She added ISRI wants to make sure India doesn’t feel like that growth means the country is replacing China as the importer of the world’s garbage.

“We certainly don’t want them to go down the path of a similar policy,” she said.

She also described growth in already strong end markets including Canada, Mexico, Turkey and other countries.

Adler said she does know of companies that are still successfully exporting paper, plastics and metal to China, at least until those importers run out of permits. She offered some thoughts on why customs agents have allowed those shipments.

“It’s really about what they perceive as quality,” she said, noting companies could benefit from technology upgrades, outreach to households or other measures.


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