Update: China’s National Sword Implementation

March 23, 2018
The CCIC North America visited our Tacoma plant and approved bales of shredded office paper.

Green Planet 21 is in the recycling and sustainability business. We work with our customers to maximize recyclables that they generate in their plants so that they landfill as little as possible and move towards their sustainability goals. There are many types or grades of scrap materials for cardboard and paper and plastic recycling. The useable scrap from our clients’ production processes is segregated at the source location then prepared for the global marketplace. 70% of what Green Planet 21 collects for recycling is old corrugated containers (OCC.) The OCC we sell to paper mills in the U.S. and around the world is both clean and of the highest quality. We do not ship garbage. What we collect and ship out is consistently of superior quality, the cleanest, most reliable product. Our product is such that 113 pounds of old cardboard recycles into100 pounds of new cardboard. By contrast, it takes 140 pounds of OCC gathered domestically in China to produce the same 100 pounds of paper linerboard for new corrugated boxes.

As of March 1, 2018, China, the destination for 30% of U.S. scrap exports, began requiring shipments with a prohibitive or contaminant rate of less than .05%. What does this mean? In a 2000 pound bale of recyclable OCC, there can be .05% of other material, the materials that often come attached to the cardboard, like the plastic wrap on top of a case of beverage containers.

Our used scrap cardboard is baled in 2000-2600 pound bundles prior to shipping. Less than ten pounds of that bale can include something that is not cardboard, a bit of plastic that was stuck to the cardboard, some shipping tape, a piece of plastic strapping or a scrap of baling wire that was accidentally included. It cannot include waxed cardboard, mixed paper, broken glass or anything tainted with food. Any shipments with the aroma of garbage will be rejected.

Over the past 30 years, 30% of U.S. scrap was sold to China for goods production because China has little oil and few forests, basically no raw material resources. During the 90’s the U.S. recycling industry made some errors in judging what was considered recyclable. There was a cost benefit impacting the idea of what a recyclable commodity is which included greenhouse gases and carbon offsets. Now, China’s leaders are restricting imports in order to diminish pollution in the form of byproducts from manufacturers. The Chinese government initiated Operation Green Fence (OGF) in Feb 2013 to enforce 2006 and 2010 regulations and also to implement new, stricter regulations beginning in April 2013, regulations that effectively changed the US recycling business by demanding higher quality commodities. The Chinese government has now changed the playing field again by demanding different specifications for importing recyclables to feed those mills. They have effectively incentivized the domestic collection in China while dis-incentivizing imported material. This is no longer an economic model but a political one. The most recent restrictions on imported recyclables ban several plastics and mixed waste paper, aiming to reduce contaminants and improve the environment in China.

China has modern, well designed, and efficient paper mills. For example, they have the capacity to treat the water and return it cleaner to the source than it was before they pumped it into their mill or before it is returned to a river. People knowledgeable about the paper making business and the recycling business are not driving these changes.

The Chinese government embarked on National Sword beginning in 2017 and now China is dictating product specifications. It is NOT a Capitalist free-form marketplace. It is a “Wild West” scenario that is roiling the recycling markets worldwide. Further, there is a new government policy, a ten-month program of special actions called Blue Sky being enforced by people who do not have the benefit of understanding the paper business, what is needed to make new material. Traditionally, over the past four decades, all sides negotiated the market and deals were accepted or not. The current situation is a one-sided deal that impacts how we work and our relationships with our customers in a high stakes, future-changing way.

Both our clients and the public must become knowledgeable about how the recycling markets function. In the West, Green Planet 21 has been working with large manufactures setting up and meeting sustainability goals. At Green Planet 21, we know that source separated commodities have the highest value. We continue to process and sell waste paper, an array of clean, high quality source-segregated post-industrial materials. We work with our source clients to ensure that what we ship out is high quality in the extreme.

Green Planet 21 is not involved in curbside recycling. The curbside recycling that most municipalities across the U.S. rely on produces a mixed mess that destroys the value of the recyclables. Curbside mixtures contain glass, many types of plastics, hybrid container packaging, and even food. The quality of recyclables produced is too contaminated to create a reliably clean and desirable product. The sorting and cleaning labor is not attractive to workers and the labor costs are considerable. Much of the material from curbside, single-stream collection will no longer be recycled. In the U. S., we have been underpricing disposal. Those cost will go up as we bury more in landfills and the waste companies raise landfill rates. Our collection systems will require massive refinement in order to recycle municipal wastes. Green Planet 21 is in a unique position to accommodate the changing market conditions and will continue to be a leader in recycling and sustainability.

Let’s Get your Team Closer to Zero Waste

Our team will work with your company to maximize what you recycle and get you one step closer to achieving your ESG goals.

Contact Us