China ban on scrap imports a boon to US recycling plants
ALBANY: The halt on China’s imports of wastepaper and plastic that has disrupted US recycling programmes has also spurred investment in American plants that process recyclables.
US paper mills are expanding capacity to take advantage of a glut of cheap scrap. Some facilities that previously exported plastic or metal to China have retooled so that they can process it themselves.
And in a twist, the investors include Chinese companies that are still interested in having access to wastepaper or flattened bottles as raw material for manufacturing.
“It’s a very good moment for recycling in the United States,” said Neil Seldman, co-founder of the Institute for Local Self-Reliance, a Washington-based group that helps cities improve recycling programmes.
China, which had long been the world’s largest destination for paper, plastic and other recyclables, phased in import restrictions in January 2018.
Global scrap prices plummeted, prompting waste-hauling companies to pass the cost of sorting and baling recyclables on to municipalities. With no market for the wastepaper and plastic in their blue bins, some communities scaled back curbside recycling programmes.
New domestic markets offer hope. About US$1bil (RM4.1bil) in investment in US paper processing plants has been announced in the past six months, said Dylan de Thomas of The Recycling Partnership, a non-profit organisation.
Hong Kong-based Nine Dragons, one of the world’s largest producers of cardboard boxes, has invested US$500mil (RM2bil) over the past year to buy and expand or restart production at paper mills in Maine, Wisconsin and West Virginia.
“The paper industry has been in contraction since the early 2000s,” said Brian Boland of ND Paper, Nine Dragons’ US affiliate.
“To see this kind of change is amazing. Even though it’s a Chineseowned company, it’s creating US jobs and revitalising communities.”
The Northeast Recycling Council said last fall that 17 North American paper mills had increased capacity to handle recyclable paper since the Chinese cutoff.
Plastics also has a lot of capacity coming online, de Thomas said, noting new or expanded plants in Texas, Pennsylvania, California and North Carolina that turn recycled plastic bottles into new bottles.
Chinese companies are investing in US plastic and scrap metal recycling plants to make feedstocks for manufacturers in China, he said.
It has yet to be seen whether the new plants can quickly fix the problems for municipal recycling programmes that relied heavily on sales to China to get rid of piles of scrap.
In Sarepta, Louisiana, IntegriCo Composites is turning bales of hard-to-recycle mixed plastics into railroad ties. It expanded operations in 2017 with funding from New York-based Closed Loop Partners.
“As investors in domestic recycling and circular economy infrastructure in the United States, we see what China has decided to do as very positive,” said Closed Loop founder Ron Gonen.