China Amends Proposed Contamination Standards, Which U.S. Associations Still See as Too Steep

In its newest filings with the World Trade Organization, China’s Ministry of Environmental Protection (MEP) gave notice of adoption of new contamination standards.

In the filings, entitled Environmental Protection Control Standards for Imported Solid Wastes as Raw Materials, the MEP laid out a standard of 0.5 percent contamination for various materials, including scrap plastics and paper. This is a slight relaxation from what had been raised previously, but is not nearly as dramatic a reduction as U.S. recyclers had been hoping for. Previously, China had talked of having a 0.3 percent contamination standard for all materials.

The measures have a proposed date of adoption of Dec. 31 and a proposed date of entry into force of March 1, 2018. A 30-day comment period is in effect with a final date for comments of Dec. 15.

The Solid Waste Association of North America (SWANA), the Institute of Scrap Recycling Industries and the National Waste & Recycling Association (NWRA)—which all had submitted comments on the proposed measures in the months since they were first raised in July—were quick to react to the news.

“SWANA is disappointed that the Chinese government has made such a modest revision to its previous contamination standards for paper and plastic, and remains concerned that the proposed standards, together with other recent actions such a s the restriction of import licenses, may constitute a major trade barrier to the export of recyclables from the United States and Canada to China,” SWANA Executive Director and CEO David Biderman said in an emailed statement. “SWANA will be sending a letter to all 50 state environmental agencies concerning this important new development.  This letter updates state agencies on China-related developments since SWANA’s October 11 letter, which was well received by many state officials.”

“China’s proposed ‘carried waste’ thresholds that, like their earlier proposals, are not in line with standards followed globally by the recycling community and our industrial consumers,” ISRI President Robin Wiener said in a statement. “Although ISRI is heartened that the new proposal moves away from the 0.3 percent threshold, the new levels are still of great concern.  ISRI is reviewing the documents carefully and will submit comments through the WTO and directly to the Chinese Government.”

ISRI added that it will be submitting comments in response to China’s proposal to the WTO by the December 15 deadline.

Meanwhile, a spokesperson for NWRA said via email that the association will submit comments within the 30-day window. “Though the .05 percent specification is an improvement over the previous .03 percent specification, it’s still tight and doesn’t provide much relief,” the spokesperson wrote.

Stifel analyst Michael E. Hoffman wrote in a research note, "No operator in the US can meet a 0.5 percent contamination level without slowing the line and adding labor, in our opinion, all of which raises cost and makes recycling processing less profitable. That said the public US companies are better positioned then any to sustain an export market with good quality volume. But what happens to the fiber that can't qualify, where does it end up and how low does price have to go to reposition it in the global market?"

China’s crackdowns on imported recyclables have quickly driven changes in how some U.S. waste companies and municipal solid waste departments operate.

In California, for example, 24 percent of exported freight is recyclables alone, most of which has historically gone to China. Haulers in Oregon and Washington are now asking for permission to landfill materials that previously had been diverted. Municipal governments in Lane County, Ore., and Madison, Wis. no longer accept plastics they used to collect. Meanwhile, both Oregon’s and Washington’s environmental agencies are addressing emerging changes on their websites.

Most of the publicly-traded companies talked of the new standards as part of reporting third quarter results.