Recent moves by China to limit its imports of Australian comingled recycling are not the end of the world for kerbside collections – they are actually an opportunity some in the industry have seen coming for some years.
David Hodge, managing director of plastic film recycling enterprise Plastic Forests, told The Fifth Estate the situation with China was part of a major “global reset” for recycling.
In terms of the market, he said the door closing on sending plastic waste offshore changed the local economics for Australian innovators in the plastics recycling space for the better.
The company has recently expanded its plastic recycling facility, which is the only known dry-cleaning operation for contaminated plastic films in the world.
Mr Hodge said the China crisis was a tremendous opportunity for Australian companies and government to build the infrastructure to deal with its own waste.
He said China’s strengths were having cheap labour, cheap power and weak environmental controls. Plus it has large offtake markets for using the recycled resin back into low-cost, high-volume products, he said.
By comparison, Australian reprocessors have high labour costs, some of the most expensive electricity in the world and are required to work within stringent environmental controls.
Now the “command and control”-style Chinese economy has elevated environmental concerns – because the Chinese people are losing their tolerance for poor air quality and other forms of pollution from dirty industrial manufacturers. Mr Hodge said the plastic recycling industry has been identified as a major producer of pollution and hence has been targeted for major reform.
“One of the things I’d like to see come out of the conversation about China is that all levels of government commit to purchasing locally made, recycled products,” he said.
There needs to be “some form of hand-holding” for the industry as it navigates the costs of high wages and high energy costs compared to China, Mr Hodge said.
The former head of the NSW EPA, Steve Beaman, foretold at a conference back in 2014 that the Australian plastics manufacturing industry had to prepare for a shift in the Chinese policy.
The sector needed to head towards value-adding and secondary products, the audience was told.
Currently, the majority of Australian plastics manufacturing is not mass produced, high volume, cheap plastic products, Mr Hodge said, but high-value, short-run specific products.
He said we needed to work towards developing more markets in Australia for high-volume products that contain recycled plastic.
There is a positive dividend already emerging for local firms focused on manufacturing products from waste-stream plastics.
While China’s decision has not been made to “smack prices down” in terms of the cost of waste plastics, the secondary impact has been to drive domestic plastic waste prices down.
Waste companies that were exporting mixed plastics were being paid up to $350 a tonne – now the price is between $50 and zero. This makes the handful of Australian-based plastic reprocessors more economically viable.
“Thank you China for making the whole world deal with their own waste – at home,” Mr Hodge said.
The price drop makes it viable for more innovators to look at turning plastics reclaimed from MRF facilities into products.
“This is a wonderful tipping point for the world – and for China.”
China impacts still uncertain
Ken Chernabaeff, sales and business development manager for Advanced Plastic Recycling, said the impacts of China’s waste policy were still uncertain.
However, there could be opportunities for Australian manufacturers like APR to obtain the resin pellets derived from recycling plastics at a lower price.
There are companies already established in Australia that process and regranulate plastics for manufacturing use, he said.
One of the issues the Australian industry has in common with China is the need for clean product. Contaminated waste results in poor quality outputs in terms of resins and pellets, Mr Chernabaeff said. This in turn leads to poor-quality products.
That is not good for the entire market, because if a consumer uses a new type of product that is not fit for purpose in Australian conditions, they are likely to dismiss all similar products as not suitable in future.
His company remanufactures post-consumer plastic waste and post-consumer wood waste into a range of products including bollards, boardwalks, bridges and railway sleepers. It has been supplying products to organisations including national parks, local councils and schools in every state.
Mr Chernabaeff said the potential opportunities for Australian enterprises in the remanufactured plastic products space were “huge”.
The opportunities include using remanufactured product to replace other conventional products that are becoming harder to source. His company’s boardwalk and decking products, for example, are an alternative to hardwood products. Because hardwood is getting harder to source and its price is going up, the recycled timber substitute products are now more economically competitive.
The whole situation with the limits on exporting plastic waste is not unique to the current focus on plastics, Mr Chernabaeff said.
The metals recycling industry and the cardboard industry have already been through a similar process of seeing offshore markets decline and increased demand for better quality recovered resources.
More support needed, and consumers are onboard
The waste industry’sposition is that governments at all levels need to do more to support the Australian recycling sector.
Research released on Thursday by the Australian Council of Recycling (ACOR) found that the majority of Australians supported recycling, and believed the government should take action to support domestic efforts.
The survey, conducted by Crosby|Textor, found that 88 per cent of respondents supported government action to assist the recycling sector.
“This survey shows the Australian public overwhelmingly supports leadership by governments to re-boot recycling,”ACOR chief executive Pete Shmigelsaid.
Support is strong across all age groups, geographic locations and political persuasions.
Mr Shmigel said specific actions people strongly support include a national plan for recycling, governments buying more products with recycled content, and making it compulsory for the packaging industry to produce goods that are both recyclable and contain recycled content.
Crosby|Textor chief executive Yaron Finkelstein said: “You don’t often see very high figures of overwhelming support for policy changes like we saw on this issue.”
ACOR, the Waste Management Association of Australia and the Boomerang Alliance are jointly called on Friday 27 April’s meeting of environment ministers to take decisive action.
The groups want the ministers to initiate a National Circular Economy and Recycling Plan with a $150 million one-off investment to boost capacity in the recycling sector.
“The community knows recycling makes sense and that’s why they participate,” Mr Shmigel said.
“They have made the system strong over 30 years and it’s up to ministers on Friday to future-focus recycling for its next 30 years as a domestic industry that’s a key part of a circular economy.”
Without leadership and concrete commitments, the community could start to wonder why “environmental results, jobs and their own efforts are being put at risk”, he said.
The Greens have been quick off the mark to deliver a firm position, announcing a $500 million plan to “reboot recycling”.
The policy aims to have the federal government invest $500 million over five years – matched dollar-for-dollar by the states – into waste avoidance and resource recovery initiatives.
Specific measures include national deposit schemes for containers, tyres and other products; a government commitment to purchasing recycled products; a national ban on plastic microbeads and plastics bags; and a phase-out of single use plastics.
The policy also advocates for the establishment of a Plastics Co-operative Research Centre to find ways to clean up the plastic waste in the oceans and find better uses for plastics waste. Federal funding of $50 million over five years has been proposed for the CRC.
Research by MRA Consulting released earlier this month outlines the economic windfall that could be ours if the plastic waste issue is seen as an opportunity rather than a problem to send offshore.
The report found that if 50 per cent of the material formerly sent to China was to be domestically remanufactured, the result could be the creation of around 500 new jobs and a reduction in greenhouse gas emissions equivalent to taking 50,000 cars off the road.
Remanufacturing of plastics is the crucial step to close the loop.
“Recycling doesn’t actually happen until collected material is put back into products and this is therefore vital,” Mr Shmigel said in response to the NSW government’s new recycling package, which was announced last month.
The package includes more support for more domestic capability to remanufacture collected material to high quality standards.
He said moves like the NSW package would help switch Australia from being a “push” system that primarily collects material to a “pull” system that puts those materials into useful, homegrown products and applications.”
“It’s time to shift from ‘crisis’ mode to claiming recycling’s potential as a major national industry of the future.”