Recycling is one of the best ways to protect natural resources and preserve the environment for future generations, but recent regulatory actions in China have changed the way America’s recycling industry works, causing many recyclers to closely examine their business model and contracts with customers and municipalities.
The catalyst is “Operation Green Fence,” an enforcement of regulations on imported recyclable scrap materials like paper and plastics collected from single stream programs and processed at material recovery facilities in the United States and other countries. Chinese authorities started enforcing regulations aimed at preventing the import of waste that was contaminated, as defined below, which reduced the value of the recyclable materials in 2013. Prior to Operation Green Fence, the demand for materials was high, and the enforcement of contamination specifications was lax which resulted in lower processing costs and higher market prices. Many in the recycling industry built their business models anticipating a higher threshold of contamination and sustaining the same high volumes of demand for single stream recycling. Some of these models also provided for subsidization of pricing in contracts with customers and municipalities. … read more