On The Waterfront

In 2006, China imported about 6 million tons of scrap plastic, about 18 percent more than the 4.96 million tons imported in 2005. In 2007, it is estimated that China will import 10 million tons, an increase of almost 71 percent from last year, according to T&T Group and the Plastics Recycling Committee (PRC) of the China Plastics Processing Industry Association (CPPIA).

PORTS OF CALL. While Hong Kong exports 1.62 million metric tons (28 percent) of plastics to China, much of the plastics coming by way of Hong Kong are actually originating from other countries that are also directly shipping to China’s mainland ports, such as Australia (795,000 metric tons, or 14 percent), Taiwan (478,000 metric tons, or 8 percent), Germany (379,000 metric tons, or 6 percent), Philippines (370,100 metric tons, or 6 percent), America (354,000 metric tons, or 6 percent), Spain (215,000 metric tons, or 4 percent), Japan (204,400 metric tons, or 3 percent), Korea (192,000 metric tons, or 3 percent), Malaysia (143,300, or 2 percent) and other countries (1.12 million metric tons, or 19 percent), according to T&T Group and PRC-CPPIA.

Plastics are imported mainly through the Chinese ports of Guangzhou (2.5 million metric tons, or 42 percent), Shenzhen (1 million metric tons, or 19 percent), Shanghai (630,000 metric tons, or 11 percent), Ningbo (407,000 metric tons, or 7 percent), Tianjin (400,000 metric tons, or 7 percent), Qingdao (285,000 metric tons, or 5 percent), Huangpu (236,000 metric tons, or 4 percent), Shantou (79,000 metric tons, or 1 percent) and Dalian (70,000 metric tons, or 1 percent), while other Chinese ports import a total of 215,000 metric tons, or 3 percent, of secondary plastics, according to T&T Group and PRC-CPPIA. Guangdong Province, which is closest to Hong Kong and includes Guangzhou and Shenzhen, accounts for about 60 percent of the scrap plastics China imports.

China imports polyethylene (30 percent), polystyrene (4 percent), PVC (20 percent) and polyester (13 percent), among others (33 percent). A large portion of the PE and PET is most likely post-consumer packaging (bottles) from MRFs (material recovery facilities).

TALK THE TALK. CCIC (China Certification & Inspection Group), an independent, legalized entity that is incorporated by voluntary enterprises with China Certification & Inspection (Group) Co. Ltd. as the parent company and reorganized from the China National Import and Export Commodities Inspection Corp., performs inspection, certification and testing of commodities destined for the mainland. The inspection can be conducted at the origination country or at an entry point into the mainland, such as free-trade zones like Hong Kong. Hong Kong is one of the more established and efficient routes into the mainland and why a lot of material goes there first.

AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine) requires foreign enterprises that export raw scrap materials to the mainland to be registered. Shipments to Hong Kong do not require registration, so this is part of the reason why shipments are directed there en route to the mainland. In the future, the import enterprise will also require AQSIQ registration.

The gist of the import duty and VAT (value-added tax) is that Chinese Customs assigns a value to the scrap plastics being imported and then charges an import duty (8.6 percent) to get it in the country and a value-added tax (17 percent). The VAT can be refunded or reimbursed and is fixed, yet the import duty changes. In 2007 it has changed from 10.6 percent to 8.6 percent. Currently, the total import duty and VAT for plastics being imported into China is about 27 percent.

LOW-TECH APPROACH. An outstanding number of people and companies are involved in recycling based on data from the Chinese government. Approximately 40,000 to 60,000 companies, most of which (90 percent) are small mom-and-pop shops, and approximately 10 million people are involved in the recycling industry, PRC-CPPIA reports. Plastics are mostly handled in designated districts of a city.

Some examples of low-tech sorting and size reduction include burners (cooking) being used to heat PET bottles to remove the labels; purge lumps and chunks being hand-picked from the pile; manual contamination removal using hand tools; and size reduction of purgings accomplished using a table saw and grinder.

More examples of low-tech sorting include hand-sorting of plastic taillight lenses; sorting of plastic flake using a lighter to identify plastics using the burn-sniff technique; and sink-float tubs used for washing.

Some examples of blending and extrusion include workers moving material from one pile to the next in succession in preparation for extrusion and workers formulating on the fly, or taking material from a pile on the floor and hand-blending it with material next to the feed throat.

Once processing is complete, the material is often packaged in 25 kilogram bags and sold in the country’s designated markets without product datasheets, so customers will take hand samples to determine the quality.

There are definitely concerns with this approach, and it is part of the reason why recycled plastics [in China] tend to have a negative stereotype. In addition to worker safety, health and environmental concerns, these low-quality operations produce low-quality products that cannot be reused in higher-end applications.

RAISING THE STANDARD. Things are beginning to change. In January of 2006, the Chinese government implemented pollution control technical standards aimed at improving the plastics recycling industry. The new environmental control standard aims to make the plastics recycling industry more "normative." As time goes on, many (95 percent) of these small companies will be unable to comply with these new standards, according to PRC-CPPIA. China has adopted standards similar in scope to the European Waste Electrical and Electronic Equipment (WEEE) Directive and the Restriction of Hazardous Substances (RoHS) Directive.

MBA Polymer’s 40,000-metric-ton-per-year feed capacity plant in China, Guangzhou GISE-MBA New Plastics Technology Co. Ltd. (GMP), is among the minority of companies that are meeting these new standards today. GMP holds a recycling license and plastic scrap import permit, which are not typical of most recycling operations in China. In addition, the plant meets stringent air, water and noise pollution standards and emphasizes worker health and safety. It can also provide utilization reports to suppliers that are concerned about the end disposition of their scrap plastics.

Our approach to plastics recycling is creating a paradigm shift in the industry. The combination of technological know-how, capacity and quality practices enables MBA’s facilities to produce 100 percent post-consumer resin capable of replacing virgin resin in new consumer products.

With the adoption of the Restriction of Hazardous Substances (RoHS) and other guidelines such as the Electronic Product Environmental Assessment Tool (EPEAT), there are challenges and incentives for using recycled plastics. RoHS acts to restrict the use of polymer materials that contain mercury, lead, cadmium, hexavalent chromium, and a collection of brominated flame retardants above set levels measured in percentages or parts per million (PPM). EPEAT rewards manufacturers that use recycled plastic, yet RoHS is part of the criteria, and there are incentives to go beyond RoHS.

These standards and guidelines can actually inhibit the use of recycled plastic, yet we believe this was not their intent. New material suppliers cannot intentionally add restricted elements to their plastics, but recyclers receiving raw material with restricted elements that are already within the polymer matrix are faced with a different challenge—they need to both identify and remove these plastics as well as refrain from adding restricted elements during processing. Through the combination of supply chain management, mechanical recycling technologies, good manufacturing practices and finished product testing, recyclers can provide materials meeting those standards.

MBA believes the adoption of restrictions on specific elements would benefit from a phase-in period for recycled material to avoid inhibiting efforts to close the loop. Our goal is to have most consumer products contain recycled plastics, similar to what has developed in the paper and metal recycling and manufacturing industries. To get there, organizations must understand how legislation and voluntary adoption of specifications and general guidelines on consumer product manufacturing can negatively impact the plastics recycling industry and their own efforts to use recycled plastics.