Tough Commodity Markets Strike a Blow for Recycling Industry

SEATTLE (Scrap Monster): As per various media reports, Canadian recyclers in certain provinces are being faced with the heat of negative market conditions. The implementation of tougher regulations by Chinese administration on recyclables exported to that country coupled with sharp drop in commodity prices has impacted the recyclers’ operations. This has resulted in stockpiles of paper and plastic recyclable material stranded with recyclers either due to having no market or due to rejection by overseas markets. However, provinces which have successful extended producer responsibility (EPR) system in place are seen mostly insulated from the challenge.

There have been reports of recyclables-paper and plastics being piled up in provinces including Alberta, Nova Scotia, Ontario and Prince Edward Islands. Tons of materials have been piled up or being sent to WTE facilities in Halifax and Calgary, instead of exporting them to regular destinations. Other cities like Toronto and Winnipeg are also starting to experience major hardships. Meantime, recycling in many B.C. cities such as Vancouver seems to be running smoothly, thanks to the increased domestic processing of the collected material, as implemented under the EPR system.

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According to estimates provided by the Canadian Plastics Industry Association (CPIA), only around one-fifth of plastics are exported to China for further processing. Despite lower export rate as compared with the US, the newly introduced Chinese regulations have in fact impacted the shipments of significant volumes out of the country. The situation must be best-utilized to find domestic markets for the collected recyclables. Also, recycling facilities must be encouraged to make investments in equipment upgrades so as to meet the standards set by importing countries, CPIA noted. In addition, EPR system must be strengthened across all provinces, it added. The EPR programme guarantees feedstock, which in turn may instill confidence in companies to make investments in newer technologies.

The Chinese ban on recycled products is feared to push up disposal costs to residents. It may also lead to more rubbish being dumped in landfills.