At the crossroads

Plastics recycling sector poised for major transformation in 2021.


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Plastic Recycling
 
December 22 2020
 
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The plastics recycling industry is set to undergo radical change. The amendments to the Basel Convention regulations regarding scrap exports are the focus of the waste recycling industry at the moment, as this also directly affects the plastics scrap trade the most. The Basel amendments are set to come into force on January 1, 2021. China’s total ban on scrap imports is also set to take effect in January 2021. Industry experts share with Swaliha Shanavas their thoughts on these developments and their implications for the plastics recycling sector.

“The impacts arising from Basel Convention amendment’s implementation are of great significance as there are practical difficulties for the industry to adapt to the change”

-Henk Alssema, Chairman, Vita Plastics and Chairman, BIR Plastics Committee

China has implemented a ban on plastics scrap imports for years. The ban on the import of all solid waste has very little impact to our industry. The impacts arising from the Basel Convention amendment’s implementation are of great significance as there are practical difficulties for the industry to adapt to the changes. Different countries may have different local policies for implementation, i.e., importers are confused on what can and what cannot be imported or exported.

Guidelines are not in place for clear HS codes to be used. It is hard to draw a clear line practically on the definitions of “almost free from contamination, recycling, environmentally sound management” when it comes to import and export of regrinds, and waste packaging. Position on re-export of clear single materials needs to clarify if PIC (Prior Informed Consent) is needed. Also, position on reuseable materials like big bags, plates of PC, PMMA, and rolls for packaging; There are a lot of basic single polymers and compounds, while the unrestricted 17 polymers only cover part of the plastics. Guidelines are needed on items eligible but outside the 17 items.

There is a requirement on guidelines for both importing and exporting countries to process the PIC. A global unified PIC is desirable. Due to the need of getting used to the new procedure and some uncertainties regarding the new regulation, companies are concerned that shipments will be postponed.

This means that waste storage in collection and processing facilities can get full in weeks, and without onward flow of scrap to recycling facilities, recyclable plastic scrap will go to waste-to-energy or landfill. All in all, there is the fear that plastic scrap requiring notification will fall in value and that recycling volumes maybe be diminished.

 

“Plastic scrap trade will be subject to more stringent procedures, paperwork and controls that will clearly impact trade flows and further encourage local recycling in the country of origin”

-Max Craipeau, CEO, Greencore Resources; Chairman, BIR tyres & rubber committee, plastic committee board member

The Basel Convention amendments will dramatically restrict dirty plastic waste imports into Asia, which is a good thing as Asia Pacific already accounts for over 80% of ocean plastic pollution and should deal with its own waste rather than importing more from developed nations. Plastic scrap (almost free of contamination) will remain non-regulated in most cases and will still be importable, yet it will be subject to more stringent procedures, paperwork and controls that will clearly impact trade flows and further encourage local recycling in the country of origin.

China, with its upcoming ban of all solid waste, is following a decade old trend initiated with rubber scrap, followed by plastic and now covering all type of wastes. It is however being implemented in a very pragmatic manner since “noble” grades which used to be classified as scrap are now considered as “secondary raw material” which are not only exempt from the ban, but importable with even less restrictions than before (No CCIC Pre-Shipment inspections, etc.).

This will give the opportunity to overseas recyclers to add more value to their materials, decontaminated in their country of origin, while ensuring the world’s largest importer of commodities has enough volumes to feed its ever growing demand. Last year Malaysia started to follow the same approach for clean plastic regrinds, which are now considered as raw material rather than scrap (HS 3915) and can be imported without “Approved Permit” since they can be used immediately in the production (of granules or end products).

The same pragmatic approach should be followed by other South East Asian nations, but it is unfortunately not the case for the largest of them - Indonesia - whose new complicated import procedures look more and more like a “ban in disguise” affecting local industries and economy more than solving their local waste problems.

The amendments affect both exporting and importing countries regardless of whether they are parties to the Basel convention or not. So, the United States is affected because for the restricted plastic scrap, neither is the US allowed to export nor would it be able to provide a procedure for the “notification”.

 

“As for Europe and other exporting countries, there is confusion over the classification of restricted and non-restricted waste exports and imports”

-Steve Wong, Founder & CEO, Fukutomi and Executive President, China Scrap Plastics Association

As for Europe and other exporting countries, there is confusion over the classification of restricted and non-restricted waste exports and imports, although under B3011, single polymer with no contamination, almost free from contamination of non-plastic wastes, and mix of “PE, PP and PET” are allowed to be exported. Exporters always argue as to why some clean mixed materials could not be exported under non-restricted items as these have been processed to materials that could be ready for further mechanical sorting and pelletising. An example is ABS mixed with PS extracted from WEEE plastic waste.

The other challenges exporting countries reflect on are HS codes to be used, and different countries implementing the amendments differently from others. Most importing countries have not provided guidelines for implementation of the rules. There are rumours regarding plastic scrap export and import. Shipping lines will not accept shipments of plastic scrap in both exporting and importing countries.

Starting 2021, no solid waste including scrap plastics will be allowed to be imported into China. The country has banned plastic scrap for some time now, and most plastic recyclers have been concentrating on domestic collection of the material. Hong Kong is under “one country, two systems” framework with a separate entity to the Basel convention. Therefore, Hong Kong is a party to the Basel convention under the special administrative region of Hong Kong.

A lot of plastic scrap would have to be imported and exported with PIC “prior informed consent” and many recyclers would not have enough scrap material for processing. Regarding our own business, since we have our own factories, I expect we are less impacted as business would be done directly between end customers and original suppliers eliminating middlemen.

 

“In the first few months, until the Basel Convention’s rule is adopted in a proper manner, global trade of scrap plastic will fall significantly, creating a negative impact on the recycling industry”

-Surendra Borad, Chairman, Gemini Corporation NV

The Basel Convention amendments set to come into force from 1st January would be substantially lowering the plastics scrap trade worldwide. As per the Basel convention rule, the shipment of waste to any Non-OECD country is subject to a pre-approval by the importing country.

European Commission has not received the required answers from the Non- OECD countries yet. Once EC gets responses, they would have to amend the waste shipment regulation 1418/2007. Generally, the whole process takes around a year. In the absence of a r eply from any country, the shipment falls in the “notification procedure”. All exporters would have to make notifications and wait for a positive response from the importing countries to ship the material.

Europe is practically not ready for all these, and it might bring a complete stop of shipment from Europe to Non-OECD counties. Adopting very strict measures could lead to future regrets as the world generates 1 million tons of waste every day. If this material needs to be recycled locally by mechanical/chemical, whatever method we use, it will be a big challenge. After China started the ban of plastic scrap import in late 2017, not much material got shipped to the country. In the last 3 years, the plastic scrap trade has reduced and shifted to different Asian counties. The total ban of waste import into China will not make a significant difference. The plastics scrap trade from Europe, which was standing at 1.7 million tons in 2016, has reached around 24 thousand tons in 2019. China’s new policies are focusing on the waste generated in their own country. They are putting efforts into creating an infrastructure to handle it within.

Our company is well diversified in the sense of commodity, countries, and products. For a long time, we are working in multiple stages of each product/commodity, concentrating on the circular economy model, which is key for fighting against the challenges. Certainly, in the first few months of 2021, until the Basel Convention’s rule is adopted in a proper manner, plastic scrap trade will fall significantly, impacting the recycling industry negatively.

 

“The timing of the amendments to the Basel Convention adds weight to the requirement for countries to take responsibility for the endof- life products”

-Adrienna Zsakay, CEO, Circular Economy Asia

Are the amendments to the Basel Convention, to control the shipment of transboundary movements of hazardous waste and its disposal a step in the right circular direction? As we all know, the China Sword Policy changed the global recycling industry forever, requiring countries to take responsibility for their waste. Unfortunately, recycling companies from the developed world went looking for new markets, and vulnerable countries in South-east Asia become easy pickings. With limited infrastructure, these countries ended up merely becoming new dumping grounds for waste, mainly plastic waste, resulting in these amendments to the Basel Convention.

The circular economy only becomes a solution when people stop seeing the items they dispose of as waste. Regardless of the limitations to plastic recycling, the reprocessing of all types of recyclable resources will increase exponentially over the coming years. There is some scepticism from various individuals who state that we cannot ‘recycle’ our way of our 21st century lifestyle. However, everything, eventually, reaches an end to its use-cycle and so they must be returned to be reprocessed into new products. This cycle of manufacturing-use-reuserepair- reprocess is the essence of the circular economy. The timing of the amendments to the Basel Convention adds weight to the requirement for countries to take responsibility for the end of use-cycle products.

The economics for reprocessing will improve once we include more circular principles, such as design and material type, and where consumers know their role. Waste-as-a- Resource is the new El Dorado. The good news is now many aspects of the industrial era that has brought humankind this far is now reaching for the reset button.

 

 

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