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For decades, the U.S. has exported about a third of its recycling material, half of which went to China. In fact, for decades, China has used recyclables from around the world to supply its manufacturing boom. But this summer it declared that this “foreign waste” includes too many other non-recyclable materials that are dirty and hazardous. So China filed with the World Trade Organization listing a variety of solid wastes it would ban from entering the country in an effort to “protect China’s environmental interests and people’s health.”

Linda Li is chief strategy officer of Re-Teck and an expert in green supply chain management who specializes in cradle-to-cradle and design-for-recycle programs. Li claims, with the ban the U.S. is left with more recyclable material to process than normal. Recycling manufacturers were already running at a high level, and now that there is more material to process, they’re scrambling to adapt to the situation. If they don’t adapt, it leaves more potentially reusable waste sitting in landfills.

Historically Speaking

As Christy Hurlburt, vice president of marketing at Enevo, explained, during their manufacturing boom, China was willing to accept a variety of recyclables from other countries to use as raw materials by Chinese manufacturers. And for years, this worked well for the global economy. But now, China’s manufacturing has cooled and the country no longer has the capacity to take on that volume of recycled materials, so they are banning the import of foreign waste.

According to Hurlburt, the initial step China took in this direction was with Operation Green Fence, implementing this program to improve the quality of recycled materials exported to China. But the industry has not fully cleaned up its recycling, so China is taking a stricter stance as they localize their nation’s recycling efforts.   

“The waste and recycling industry around the world is now in chaos, and the full impact of China’s ban is currently unknown,” Hurlburt said. “There are a lot of questions as we work to figure out who will accept and process the restricted recycling materials moving forward.”

The ban is having a significant impact on recycling companies in the U.S. and throughout the world because many developed countries that have been exporting their recyclables to China do not have the capacity at home to take on the processing of the recycled materials.

“Recycling is piling up,” Hurlburt said. “And unfortunately, if there is nowhere else to put the materials, it is being landfilled. This is challenging the business models of recycling companies worldwide.”

Indeed, as Li explained, the ban leads to an increase in scrap material, which in turn leads to a decrease in scrap prices. While some companies are taking advantage of the decrease in scrap price, other companies are helping to elevate a circular economy.

“In order to shift towards a circular economy, these companies must begin modifying the way they design and manufacture products from the very beginning,” Li said. “By considering a products entire lifecycle in the early stages of development, companies can get the most from their recycled devices and keep the most from landfills.”

There is also an environmental challenge, Hurlbert said. "With exporting recyclables, the responsibility of dealing with any contaminated or hazardous materials was China’s responsibility during sorting and processing. Now, those hazards need to be handled locally."

“This ban impacts the entire supply chain, not just at the end with the recycling bin or dumpster,” Hurlburt said. “We’ll have to take more responsibility for our waste generation as an industry and as consumers.”

Strategic Approach

In response to the ban, Hurlbert said that some organizations are working with China to modify or reverse the ban. But while they do, recycled materials are piling up, and recycling companies are even finding that they are unable to accept more materials while consumption and waste generation continues.

Hurlburt said that in the short term, U.S. recycling companies are responding by looking at ways to clean up the contamination. Some have already started to exclude specific materials from their recycling collections as a result of the ban.

“These companies are evaluating where the banned recycled materials can now be processed, searching for other markets that have the capacity to take on these recyclables,” Hurlburt said. “And in many instances, they aren’t having much luck so these materials that should be recycled are being put in landfills.”

“And in the long term, experts predict that U.S. recycling companies will likely need to modify and build facilities here at home that can take our country’s recyclables. This is challenging though as immediate action needs to be taken to address the current recycled materials that are piling up, but modifying a facility is typically a 2 to 5 year project and building new facilities can take up to 5 to 10 years,” Hurlburt said.

Future Outcomes

In today’s world, technology mega-trends, like IoT and EaaS, result in a shorter lifecycle for devices. Shorter lifecycles result in more recycled devices, leading to more e-waste than recycling manufacturers are used to. “For recycling companies, adapting to the influx of material might prove to be more difficult than expected,” Li said. “Because of the ban, companies are having to rethink the way they design products. A better product design is critical to facilitating recycling and making devices easier to recycle or repurpose. By rethinking the way products are designed, manufactured and repurposed, companies can extract the most from devices and keep valuable, reusable resources from landfills.”

As Hurlburt explained, we all know the three Rs of “reduce, reuse, recycle” but before this ban, the society in the U.S. and the recycling industry were really focused first on the third step. This ban may also force consumers, municipalities, and the industry to take a deeper look at our systems, to better understand where we are producing waste – trash and recycling – so that we can shift the focus instead on reducing first.

"Also, because China had been so willing to accept the world’s recyclables, waste generators were not forced to sort the materials. For years, we’ve been able to dump our recycled materials and not worry about what happens after that," Hurlburt said

“Organizations and consumers alike have taken pride in their recycling as sustainability efforts. And we’ve even been able to get away with the process being less expensive by exporting the materials,” Hurlburt said. “This ban will push the world economy to localize the recycling process, bringing more jobs back home to process materials, making us more accountable for what materials are being recycled and shifting our systems to reflect the true cost of waste.”

Hurlburt expalined that the recycling industry is starting to see a push of technology-enabled solutions in the waste industry. "At recycling facilities, the use of robotic sorting technology is progressing. While still expensive, robotic technology is proven to sort materials faster and more accurately than their human counterparts."

“In our trucks, we are seeing the use of cameras to take pictures of contaminated loads so that the haulers can send notices and even fines to the end customer for not adhering to recycling standards,” Hurlburt said. “This puts more accountability on the waste generators”

At the dumpster level, Hurlburt said Enevo now has container sensors that use IoT technology to consistently monitor the volumes of materials coming out of a site. These connected devices allow waste services providers to identify changes in volume and understand where in the supply chain the materials come from, which ultimately helps with the goal of reducing waste.

“I think more companies will move from a linear economy to a circular economy, where resources are kept in use for as long as possible and are recovered and regenerated for new devices,” Li said. “Companies will be more accountable for the amount of recycled material produced and be forced to develop a closed-loop solution. Not only is it good for the environment, but it can drive economic growth by demonstrating commitment to long-term sustainability efforts.”

Published in the February 2018 Edition