Nina Ying Sun - PLASTICS NEWS STAFF
Rapid growth causes trouble for China’s PET recyclers

China has achieved an exceptionally high rate of PET recycling, a national average of 80 percent with higher figures in urban areas. Still, domestic supply, including post-industrial and post-consumer waste, totals 1.4 million metric tons. Counting in the 3.5 million annual demand of the fiber industry as well as other applications, China needs around 3 million metric tons of PET waste from the rest of the world per year.

But China only managed to import 2.1 million metric tons last year, Tan said. He compiled that figure based on a few channels, including official records from China Customs, estimates of smuggling, and estimates of imported PET waste labelled as other types of plastics - a popular way to manipulate claimed import value and save on taxes.

Chinese companies are also paying a premium for imported PET waste. Prices have nearly doubled from 2000 to 2006, Tan said.

Other issues facing PET recyclers in China include anti-dumping charges on fiber by the European Union and the United States, rising labor costs, material quality issues, taxation issues, competitive issues and environmental protection issues.

“Companies tend to stick to the conventional strategy of grabbing market share by lowering prices,” Tan said. “They don’t invest in product development or scientific research.”

With recyclers losing money, the sector should be at a turning point now, he said.

Hurdles exist, however, on the domestic policy front.

“National policymakers have different ideas on how to regulate plastic waste,” he said. “The enforcement of inspection varies at local ports. The allocation of import quota doesn’t take into account the distribution of capacity. The unreasonable taxation system encourages illegal operation,” Tan said.

The Chinese government has recently tightened control on plastic waste import. Tan said the recycling industry suffers a foul image in the eyes of the government and public. "[It’s caused by] some companies that lack the sense of social responsibility and cause serious pollution.”

One potential solution is to find new markets for recycled PET with domestic Chinese customers.

Using recycled PET toward a great variety of applications will help invigorate the industry. Currently, 86 percent of processed PET waste ends up as staple fiber and 12 percent goes back to bottles. In addition, China also has the annual capacity of converting recycled PET to 12,000 metric tons of amorphous PET sheet and more than 60,000 metric tons of strapping and 12,000 metric tons of zip fasteners.

• Lam talks about the state of plastics recycling in China (March 18, 2008)

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