In our second blog on the Chinese waste ban, Mark Sayers takes a look at the risks and costs to the waste management and export sectors, and the opportunities for investment in UK infrastructure.
The EAC inquiry launched on Friday 12th January offered industry an opportunity to feedback and share their views on the market, highlighting short and long term challenges that have the potential to shape future recommendations to government on operations and due diligence best practice. But have the collectors, recyclers and exporters already made changes regarding the Chinese import ban for contaminated waste?
Back in summer 2016, the news feed manifested itself into export markets being closed as the required reduction in acceptable contamination would be near impossible. But, industry gathered, voiced concerns, and presented their thoughts to government ministers to insist that action was needed. Alternative downstream customers were sought, and initiatives to change material flow and increase motivation to segregate and sort materials rose up the agenda. These changes were vital to maintain business as usual into 2018.
Surge to waste action in 2018
In 2018 we are faced with a series of high profile stories in mainstream media, encompassing:
- Deposit Return Schemes (DRS) and tax recommendations
- A high level 25-year environment plan
- Calls for evidence on reducing single use plastics
- The import restriction in China
Are these connected? Or has industry and market forces, those same forces favoured by Theresa May in her 25-year plan speech, resolved the export problem themselves? Not entirely.
Progressively more attention came in run up to 1st Jan 2018, with statements from DEFRA and the Environment Agency steadying the situation in the face of Association and waste exporters voicing their concerns, despite concerns of waste stockpiling. More stakeholder backing and action sees the EAC inviting wider feedback through a brief one week consultation to gain further feedback.
If not China, where are the recycling streams going?
Recent HMRC export data indicates Malaysia and Vietnam are absorbing a huge proportion of paper and plastics exports (Figure 1), however it is not yet clear if this is contaminated to the same extent as waste sent to China. Nonetheless, the waste sector in the UK is still juggling the flow of material with storage issues, whilst simultaneously seeking new long-term material demand for remanufacture.
As we monitor the developments unfold, we hear feedback from clients and commentary from policy makers that the issues have not gone away, yet. Commodity markets were spooked ahead of the 2018 standards tightening, further devaluing some mixed packaging streams and making a plea for outside investment even more challenging. On top, an indirect impact will bring increased cost in shipping if there is less back-hauling demand (a great cost recovery missed by shipping firms).
Our market analyses are reinforced by HMRC data which indicates waste is still moving, but to new markets. We assume little has changed to the composition in such short time, but how long will these alternative markets last before adopting same stance as China. Are we surviving on borrowed time? Exports to Hong Kong and Taiwan that have close ties to China also show a strong decline in waste shipments, so a question remains - will these neighbours be forced to follow suit?
It doesn’t feel like these markets will last for long and now that we have a little more clarity on the policy direction, maybe infrastructure investment from UK recyclers and financial institution can come to the rescue? Is this the next step?
Reduce, re-use, recycle, and recover
Returning to common best practice and principles should set us on the right path with changes ahead. The two which stand out are:
- Polluter pays principle
- Moving up the waste hierarchy
The upcoming policy changes including plastics and material recycling targets should affect feedstock into recycling plants. There is a definite push to review:
- Single use packaging
- EPR reform
- The next evolution of Circular Economy
- Packaging Waste Directive targets
- The 4-point plan
These need to drive fundamental change to our social, economic and environmental approach to resource management.
We look to changes in our behaviour and attitude to how we consider waste versus resource in household and commercial and industrial applications. By working together alongside industry groups and experts, and even glance across to our colleagues across the globe with their own systems and solutions, it is possible to recover materials we discard as waste, and set the right targets to help the markets push for the outcomes we desire.
We have been forced in to looking at resource differently. Changes in China’s attitude to accepting the West’s dirty waste has changed, and represents a positive step to force markets globally to improve resource management. We need to be ready and aware of the advantage of early adoption to a new best practice. This carries a risk in comparison to following the well-trodden path we have become comfortable with – but has this path ended? Engagement is at its highest, so we will be seizing the moment and pressing on with change projects.
For more information on this subject matter or to discuss the risks and costs with waste management, please contact Mark Sayers or use our fill out form below.