China’s waste import ban may cost UK £500m

THE UK is to miss out on as much as £500m worth of recyclable paper exports and has been sending more waste to incinerators and landfill sites after China tightened restrictions on imported refuse.

Two thirds of Britain’s unsorted paper exports and 90pc of its “old corrugated containers” ended up in China in 2016, significantly more than that of any other country in the EU.

But China has imposed a total ban on the former, which, according to a research note by Rabobank, is set to cost UK waste management firms and traders £145m of annual exports. Meanwhile, stricter quality controls on corrugated containers could lead to a hit of between £170m and £335m.

The changes have led to a major glut of the materials in the UK market, driving unsorted paper prices down 70pc between January and May and old corrugated containers down 30pc in the same period.

Rabobank’s Natasha Valeeva said: “In the UK there is not enough recycling infrastructure, the country is not able to absorb all this oversupply.”

The slump is likely to have been a boon for domestic cardboard manufacturers such as DS Smith achnd Smurfit Kappa, however.

While their raw material prices have fallen as a result of the oversupply, strong demand for packaging and manufacturing bottlenecks have kept prices of new paper products high.

The UK exported around 3.5m tons of recovered paper to China in 2016, according to the UNS’ Comtrade database, compared with 1.3m tons by the Netherlands and 0.3m from France.

Rabobank’s research focused on paper but Ms Valeeva said the clampdown was likely to be having a similar impact on waste plastic exports. Exporters looking to shift their focus to other markets such as Indonesia, Taiwan or Vietnam face competition from the rest of Europe and the US.

Ms Valeeva said: “For the moment [south-east Asian countries] were still receiving this relatively low quality materials to process in their country to make paper.”