Are you ready for Round 3 of the plastic waste trade war?
Plastic waste exporting countries will soon need the informed consent from recipient countries to import their waste.
The heady mix of plastic waste, global damage and national interest already has sparked two sparring matches, and another is set to begin. At the heart of the issues is that much of the planet relies heavily on global trade, exporting and importing what we value. The trading of plastic waste is one example, although the exported value can come with a toxic cost. Finding the value in circular economy trading can help negate the need for some of these plastic waste trade wars.
The increased inability to easily move commodities, which plastic resources are if they are processed correctly, is part of the reason for the world’s plastic pollution problem. The other significant issue is the lack of local capacity for proper collection, sorting and basic processing for material recovery, across communities of all levels of economic advancement, including Hong Kong and Singapore, two of the world’s wealthiest cities.
In Round 1 of the plastic pollution fight, China announced its intention to cease the acceptance of scrap plastic imports in early 2017. Western industry insiders said, "It would never happen." They trusted market forces, expecting that such a ban would be viewed as an economic trade barrier.
This was a grave miscalculation, for as we now know, China’s application to the World Trade Organization also opened the door to human and environmental damage. This created the need to manage and limit the importation of plastic waste, where up to 40 percent of a bale shipped to China was unrecoverable, due to contamination and poor-quality material.
In 2018, China formalized its plan and ceased importing a number of materials for recycling, including all unprocessed plastic, leaving plastic exporting nations with enormous volumes of waste on their own front doors, and declaring a "plastic waste crisis."
China’s border closure was the modern day "shot heard ‘round the world" in terms of Western countries and their abilities to easily offshore their domestic plastic waste. Lack of homegrown capacities and high labor costs helped to shut the door on value-adding opportunities for many developed markets, while commodity traders often grabbed the resources from domestic processors, as the buyers in China paid more for lower-quality material.China’s border closure was the modern day 'shot heard ‘round the world' in terms of Western countries and their abilities to easily offshore their domestic plastic waste.
With China’s borders closed, Round 2 of the plastic challenge resulted in Western countries turning quickly to find new export markets. Malaysia, Thailand, Vietnam and Indonesia became the targets. Joining legitimate and responsible processors of these resources was a groundswell of illegal and irresponsible businesses. Like China, these countries felt, and feared, the harsh impacts of importing poor-quality, contaminated plastics. Their relatively quick actions to slow plastic imports for recycling, following China’s lead, means that most exporters did not find quick sustainable solutions for re-routing their previously China-bound exports.
Round 3 is on the way, as diplomats have been considering a proposal to add mixed plastic waste to a list of materials that require the receipt of a country's informed acceptance of this type of trade under the Basel Convention. If successful, trading mixed plastic waste resources will change from being business-led buying and selling to one of government determination. Plastic waste exporting countries will need the informed consent from recipient countries (such as Malaysia, Thailand, Indonesia or China) in order for importation to be approved.
The problem, in short, is shifting to one of sustainable trade.
For richer or poorer?
These topics were among those addressed across the world recently, both in Nairobi at the United Nations Environmental Assembly and at Plasticity Pacific in Fiji. Cutting across the localized need for solutions include the macro questions of whether recycling is really about sustainability, or is it a means for richer nations to shift a problem to poorer ones?
Today, the trade of waste plastic hides under the banner of doing environmental good at home without having to consider the impacts on recipient nations.
With the high publicity and visibility of plastic waste issues today, we all face much tougher questions than trying to decide which recycling bin to use for which type of material. We need plastic to maintain our modern lifestyles (think mobile phones, credit cards, auto parts and medical equipment). And the original concept behind recycling is still valid: to continually reuse materials for the ongoing benefit of all.
However, the mechanics of recycling are trapped in the industrial age where production is optimized with little thought for future consequence, while waste recovery facilities are mainly outdated, built primarily for recycling paper, glass and metal.
Far from shunning the complexity of the issues, many businesses recognize the implications of pleading ignorance, and instead have committed to being leaders in the solution, even if that solution is yet to be defined. Recycling for resource reuse is of paramount importance. Given no single company or nation possibly can reuse all resources that they consume, trade is essential. Trade, however, needs to be responsible, and it needs to be the trading of resources that will be completely used and managed.
The challenge we face is not whether plastic waste resources should be moved between countries for economies of scale and reuse. Instead, it is the question of how do we shift from thought to action, from principle to practical and from me to we.
Shifting the focus
Over the past eight years, we have held the Plasticity Forum around the world on the topic of plastic circular economies. We have engaged thousands of people from all parts of the value chain for industry-led, fit-for-purpose solutions.
From this diverse and deep exploration, we offer some thoughts on solving the key question: How do we optimize value for plastic in its second life, with localized processing, while allowing the transfer of materials only if needed for creating economies of scale from smaller markets to larger ones, and transferring only value, instead of burden (waste).
1. Continue the pressure: With the disruptive forces already in play, those countries that have been a dumping ground should continue the pressure on waste-exporting nations so that only recovered plastic feedstock is exported. In other words, only high-quality, fit-for-purpose material that has a second life in the recipient country.
2. Business focus on sustainable market opportunities: One Plasticity alumnus recently said that despite that his business collects used materials, processes it, then manufactures new goods for sale, his business is not that of a recycler. Rather, his business is a plastics engineering, design and product manufacturer that happens to specialize in using recovered plastic.
Like many entrepreneurs in this space, he starts with his customers, combining their needs with his strategic strengths to determine which profitable products to make and sell within the specialty market he serves (in this case, agricultural and aquaculture products where there is good market turnover and margin for profit). It is only after this analysis that he turns his mind to where he can source suitable waste plastic, its costs and the processes needed to transform it. Interestingly, he found that his customers are a great source of the very waste plastic he needs.
3. Collaborating for competitive advantage: The market disruption currently experienced globally is an opportunity for industries, countries and regions to apply this thinking from above. Each group knows its manufacturing strengths and weaknesses, and where it has strategic opportunity.
The only part missing is determining where there are viable opportunities to replace virgin plastic with recovered plastic, in order to ensure clear pathways for plastic waste to be transformed into feedstock for re-use.
4. Walking the talk: Governments and businesses wield huge buying power through their own procurement. Adopting policies favoring recovered content is a powerful demand catalyst to stimulate product development using recovered plastic.
5. Extract value from all plastic: Some plastics (such as clean, clear PET) are highly valuable as recovered plastic, yet many, either through lack of volume or high contamination, are perceived as worthless.
In sum, it is obvious that extracting valuable used plastic resources through collection, sorting and processing should take priority over downcycling the materials. Yet the greater challenge is what to do with the rest — the dirty mixed plastics where it is hard to derive value.
These materials can be converted from waste to energy, but increasingly entrepreneurs, scientists and researchers are looking beyond the calorific value to use dirty plastic’s embedded characteristics — for example, extracting the aluminium from chip packets and using a processed form to create a higher-performing building aggregate. Chemical recycling is also a growing opportunity that can yield a pure, high-quality polymer as a by-product, without the contamination burdens which some mechanical recycling processes need to contend with.The big challenge is what to do with dirty mixed plastics where it is hard to derive value.
This is a growing field of innovation that can be turned in business, industry and country level competitive advantage.
6. Innovative substitutes for non-recoverable hazardous plastics: There are more than 43,000 types and combinations of plastics. While all are technically able to be recovered and reused, it is simply not viable to do so for many of them, given today’s technologies and economies of scale in sorting and collection. Where there is no value, and not even recoverable energy, the innovation challenge should be set globally to identify substitutes or recovery solutions. Over time, the "too-hard basket" of plastics will diminish.
7. Engage in the conversation: It is easy to want to blame someone for the global plastic waste problem: Should governments have done more? Are community attitudes the cause? Are corporates the ones at fault? The problem with the blame game is that once started, the finger-pointing rarely ends.
Above all else, new collaborations and shared responsibility that can be created across business sectors can help shift thought to action, embed principle to practice and help to change the focus — from me to we.
Douglas and Trish invite readers to join industry leaders and influencers at the next world-leading action-based plastic circular economy forum, Plasticity Amsterdam, on June 19.