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China doesn’t even want to buy our garbage anymore

Since 2007, one of America's top exports to China has been...  trash. Yes, trash. That includes everything from scrap metal and paper to cardboard and crumpled soda cans. The United States sold $10.8 billion worth of metal and paper scrap to China in 2011.

It sounds weird, but the trade made a lot of sense. China had been sending so many consumer goods to the United States that all those shipping containers were coming back empty. So U.S. companies began stuffing the return-trip containers with recycled cardboard boxes, waste paper and other scrap. China could, in turn, harvest the raw materials. Everyone won.

Especially U.S. recycling programs. Those trash exports to China became indispensable for municipal recycling. In 2011, the United States recycled some 52.8 million tons of paper and paperboard — and about 15.8 million of those tons were sent to China. Likewise, China imports nearly half of America's recycled plastics, including bottles and containers of all sorts, around $500 million worth.

But now that cozy arrangement is in danger. Over at Quartz, Gwynn Guilford reports that China has recently launched "Operation Green Fence" — a policy to prohibit the import of unwashed post-consumer plastics and other "contaminated" waste shipments. And that's led to a serious crackdown of U.S. trash imports:

Of course, you can’t always tell how serious a Chinese government ban will be, and it’s not even clear why China would come down so aggressively. Despite its “trash mountain” woes, it actually needs the plastic resin for manufacturing.
Regardless, Green Fence looks like the real deal. Chinese ports have turned away “foreign garbage" by the hundreds upon thousands of tons (links in Chinese). “If China customs found a syringe, even if it’s just one, in a bale of plastic, it’s considered medical waste and the whole shipment would get rejected,” Peter Wang, CEO of recycling exporter America Chung Nam, said at a conference recently.

For its part, the U.S. recycling industry appears to be genuinely worried. “Export buying activity has slowed for low-end grades of post-consumer plastics due to recent regulations and China’s green fence,” one reprocessor told Recycling Today.

So what comes next? There seem to be a few possibilities:

1) This is all overblown and the Green Fence won't last. Maybe Chinese manufacturers, who really do need the plastic resin and other raw materials, will pressure the government to relax its restrictions on trash after a few months. We'll see.

2) Other countries will take our recycling instead. A recent Recycling Today article raised the possibility that a great deal of America's plastic and paper waste will simply get shipped elsewhere, to countries such as India. Still, it's not clear that anyone can replace China, whose demand for America's trash has been enormous.

3) The United States will simply have to recycle more of its trash at home. This is harder than it sounds. Guilford passes along this great chart noting that North America hasn't built a new recycling plant since 2003 — that's how reliant we've become on China:

Could that change? Perhaps. Luke Vernon of Eco-Products, a food-service company in Boulder, has some ideas along those lines: "What’s needed is an end-market for recycled materials. Essentially, more manufacturers need to demand recycled plastics to use in their products. That means that the economics need to be in favor of choosing a recycled plastic vs. a virgin plastic."

4) U.S. cities will figure out how to produce less contaminated waste. Here's an interesting post about China's Green Fence from Valerie Androutsopoulos of the recycling firm Vangel. She argues that the United States produces so much contaminated waste because of our reliance on "single-stream recycling," in which all types of recycling are jumbled together in one collection truck.

"If the materials we are exporting are so contaminated that they are being rejected by those we sell to," she notes, "maybe it’s time to take another look at dual stream recycling." This would require everyone to keep paper waste separate from glass, plastic and metal. (Do note that Vangel has a vested interest in dual-stream recycling, but it's an idea worth mentioning.)

There are also all sorts of technologies that allow even single-stream recycling programs to sort their waste more carefully, reducing contamination. That includes improved screening and optical sorting. But these options could make recycling more expensive.

5) U.S. cities will simply recycle less. That's the last possibility. If there's no market for recyclable materials, or if recycling becomes too expensive, many of that trash could just end up in landfills.

However this shakes out, it's reminder that America's recycling habits, like so much else, are highly dependent on trade and markets — particularly in China.

Further reading:

— All credit to Gwynn Guilford for unearthing this fascinating story. Her write-ups are worth reading, including her link to a story about how plastic is piling up in Oregon because China has stopped taking shipments.

— This presentation (pdf) on U.S. plastic recycling is interesting, too. It argues that Chinese demand for U.S. waste is likely to drop soon regardless — especially if U.S. manufacturing starts rebounding (fewer empty container ships returning to China) or if China expands its own domestic recycling programs.