Dive Brief:

• With 2018 fast approaching, clarity about the implementation of China's new scrap import policies is sorely lacking and the country has given no indication that it plans to heed requests for an extension period. "This could be one of those paradigmatic changes to the structure of the waste stream," said SWANA CEO David Biderman, comparing it to the advent of the Resource Conservation and Recovery Act in 1976, during a Sept. 19 webinar hosted by Forester University.
• While panelists agreed that the ban presented opportunities for new investment in domestic end markets, they also cautioned U.S. supply would exceed demand, and that the regulatory process to build any new facility is often lengthy. "It’s not easy building a new manufacturing plant in many parts of this country," said Chaz Miller, director of policy and advocacy for the NWRA. "If we want these jobs to return, if we want to be able to use this material domestically, we need to be sensible about a manufacturing policy in America."
• One hopeful sign, mentioned by both Biderman and ISRI President Robin Wiener, is that U.S. government officials have become increasingly engaged on the topic. Secretary of Commerce Wilbur Ross is reportedly expected to raise this issue during an upcoming trade mission to China.

Dive Insight:

As reflected by the webinar's title, "Now What? Preparing for China's Waste Ban," the policy change is now being accepted as inevitable by the industry. Groups such as ISRI, SWANA and the NWRA have all filed comments asking for a multi-year phase-in period. So far, those requests have gone unheeded, but that doesn't mean any of the groups have stopped working to engage with Chinese officials. ISRI is particularly focused on gaining more clarity about the "carried waste" threshold of 0.3% for commodities, which was never formally filed with the World Trade Organization. Wiener described that threshold as "essentially impossible" to reach.

In the weeks ahead, these associations plan to keep raising awareness about how the policy could affect businesses in and near China, while offering assistance to the government in developing stronger environmental standards. Further collaboration with industry associations in other countries is expected, too. Amid all of this work, they also remain focused on helping the North American industry prepare. While a spike in domestic processing investment could eventually happen, the markets for more vulnerable commodities, such as mixed paper and mixed plastics, could soon become very challenging.

For local governments and private operators, many of which are often co-dependent via contracts, it has been hard to predict exactly what they should do to get ready. In the short-term, this has involved more communication about what's coming, and a greater focus on reducing contamination to improve quality. In the longer term, this may eventually create a need for contract terms — which have already changed in recent years — to be revisited.

“Public agencies and private enterprises share more commonality and common interests in recycling than differences, and should be open to risk allocation as they renegotiate provisions in their processing agreements," said Constance Hornig, an attorney specializing in waste contracts, during the webinar.

At a time when many state and local governments are trying to maximize their recycling rates, the thought of dropping certain materials from their programs due to low commodity prices won't be popular. Another factor is that this could divert some of the resources and attention away from the rapid expansion of activity around organics processing in many areas. Further information may come as the start of this policy draws closer, but it's now looking more possible that despite preparatory efforts, the industry may still be forced to react on China's terms when this shift happens.