Scrap materials are the US’s leading export to China by number of containers, according to US News and World Report. Chinese imports of US scrap materials increased by 916% from 2000 to 2008. Shipping our waste to China is an integral part of how the US economy functions. So what happens when China places restrictions on scrap materials imports?
Mixed plastics, mixed paper, scrap metals, and other recyclable materials are piling up in lots all over the US. People are saying that Chinese officials are turning away entire containers at the ports.
We met with Scott Horne, VP of Governmental Relations and General Counsel for the Institute of Scrap Recycling Industries (ISRI), to ask him how the Green Fence came about and how it is affecting recyclers in the US.
In November of 2012, a number of shipments of scrap material arriving at Chinese ports were discovered to contain what Horne calls “scrap without the s,” materials that were a danger to public health. As the Chinese media picked up the story it came to the attention of the newly elected Xi Jinping, who got angry.
A 100% inspection scheme was implemented. With $11.3 billion worth of scrap materials being exported to China in 2011, you can imagine that there are quite a few containers to inspect. Scrap exports slowed down dramatically in the beginning months of 2013. Not only did this create a backlog but many shipments that used to make it through customs were being turned back.
The ramped up inspections have resulted in fines and increased costs for some recyclers as well as pile-ups of materials they no longer can sell to Chinese buyers.
There are rumors of a document that has said that these policies will be continued by the Chinese government through November of 2013. Although Horne told us that he has already seen a loosening of some inspections and that he believes most companies will be able to continue normal business by the end of the summer. He did say that there are some companies who will continue to have troubles, largely as a result of their materials not meeting the specifications.
Chinese industries rely heavily on scrap materials from the US and many other countries. China imports annually more than 15 million tons of scrap from the US alone. The Green Fence policies have put pressure on Chinese business, who are struggling to acquire materials.
Although it has gotten a lot of press under the name Operation Green Fence, this year’s government crackdown on scrap imports to China was not given the name officially. It seems to have come from the media or business. There may have been one Chinese buyer who distributed a letter to his suppliers mentioning the Green Fence. Although its name may not be government sanctioned, it is clear that the policy has the full support of Xi Jinping’s administration.