China's ‘Green Fence' crackdown on dirty scrap materials has reduced imports of plastic waste by 5.5% in the first four months of 2013, a significant change for a country used to double-digit increases in recycled materials flowing into the country.
Imports of scrap plastic bound for recycling factories in the country fell to 2.4 million tonnes from January to April, after the Chinese government started implementing in February what recycling industry officials say is the toughest crackdown yet on imports of scrap materials.
The disclosure of the 5.5% decline, in data provided by China's General Administration of Customs at a mid-May conference in Guangzhou, is one of the first statistical indications that the ‘Green Fence' policy is having a big impact on the industry.
While a 5.5% decrease may sound small it is a major change in direction for an industry that has seen scrap polymer imports grow four-fold in the last decade and which was accustomed to nothing but increasing volumes.
Chinese government officials say they are trying to limit pollution from dirty or contaminated waste materials, such as scrap paper or plastics from other countries, and see the policy as a way to force the local industry to upgrade to higher, cleaner standards.
But some recycling industry executives, while supporting those goals, say the policies are also hurting legitimate businesses by causing long delays clearing materials at customs, creating shortages of materials in manufacturing plants and cutting into profits.
Speaking at a meeting of Chinese plastics recyclers in Guangzhou over the weekend, Chinese government representatives said they plan to continue the ‘Green Fence' operation through October or November.
The next phases will include exerting tighter control over the limited number of licenses issued to import scrap materials in China, including the practice of companies selling licences, government officials said at the conference, sponsored by the Beijing-based China Scrap Plastics Association (CSPA) conference.
Steve Wong, executive chairman of the CSPA and chief executive officer of Hong Kong-based recycler Fukutomi, said that the crackdown is the most serious in China yet, although not a result of new law but rather much stricter enforcement of existing laws, he said.
China has had other crackdowns over the last few years, including a more localised one that saw scrap plastic imports through the port of Guangzhou, one of China's largest for recycled materials, drop 52 percent in the first half of 2012.
Other ports in the country at the time reported an increase in scrap plastic imports, as shipments were rerouted, but the new Chinese government figures point to the tighter policies being applied country-wide.
But for some companies, the policies are proving beneficial.
Ni-Met Metals and Minerals, an Ontario-based recycler, said it was seeing increased demand from its customers in China because of Green Fence and the resulting shortage of materials there.
One recycler, speaking on condition of anonymity, said the policy had a dramatic impact on the company in February, when it was unable to get any materials to its factory in eastern Guangdong province.
But the company, which does not have a license to import materials directly, found a solution that works around the limits.
It buys its material from a factory that has that licence, and while that practice may not be legal because factories with licences are supposed to recycle all the material they import themselves, it is becoming a common solution, the manager said.
“Everyone is doing like this. Maybe some huge factory is not but most of the small factories do this,” he added.
He said part of the problem is that the government limits the number of licences, and getting one can be difficult and require political connections, creating incentives for corruption.