For many years China has been the world’s largest consumer of our recyclables, turning them into new materials to be exported around the world. China processed over 60% of California’s recyclables in 2016 and the U.S. has historically relied on demand from the Chinese market to sustain recycling operations. (see Bloomberg article on this topic by clicking here or a short video courtesy of VICE News here)
In July 2017, the Chinese government filed a notification with the World Trade Organization of its intent to ban certain recyclable materials through a national policy known as “National Sword”. The policy limits imports of recyclables to China, imposes strict contamination limits on recyclables and increases inspections.
These policy changes have come about due to the issue of contamination. Some of the items which wind up in recycling bins are trash, some have food residue still in the container, and others are made of multiple materials that can’t be separated.
Historically, China allowed for up to 10% contamination of trash in the recyclables that we sent over. Now the country has imposed a strict limit of 0.5%. A small amount of contamination in a 2,000 lb bale can result in the entire bale being rejected. A few contaminated bales can result in an entire tanker load of recyclables being rejected. These changes in China’s import policy are having a profound impact on the recycling industry. To reduce contaminants, local Material Recovery Facilities (MRFs) have had to significantly slow down their sorting lines and double the number of sorting staff to try to meet the new standards. Meeting contamination limits is extremely challenging and has substantially increased operational costs. Alternative markets for recyclables, primarily in southeast Asia, have been located for some materials but these come with additional shipping and processing costs. Domestic recycling markets are not currently developed enough to absorb the material historically exported, and expanding domestic markets and infrastructure will take many years.
Under new market conditions, some MRFs and recyclers have been forced to landfill recyclable materials to save costs. The City has opted to avoid this practice which has negative societal and environmental impacts, and would compromise the City’s ability to maintain compliance with State diversion requirements. The City’s franchised haulers are making necessary adjustments to maintain City diversion rates, and minimize disruptions, but the changes come with increased operational costs.
Adjusted RatesAlthough the City is doing everything it can to keep costs down, a rate increase in residential and commercial waste rates are necessary to cover additional sorting costs. The City’s two franchise waste haulers, Waste Management and E. J. Harrison, have requested a five percent rate adjustment to absorb the additional costs. This rate adjustment was approved by City Council on June 19, 2018.