Plastic waste exports, problem and opportunity

In March 2021, the New York Times ran a story highlighting the continuing controversy surrounding the shipment of waste plastics, especially to developing countries which may not have the capacity to deal with such shipments in an environmentally-acceptable manner. This brief article looks at some longer term trends surrounding plastic waste exporting, both in the US and in the wider world. It ends with some good news; in 2020, new investment in plastic waste recycling facilities was over US$900 million, and interest continues to rise.

US exports of waste plastics peaked at US$72 million in June 2016, but the overall trend has been downward – if unevenly so – at least until mid-2020. The average monthly value in 2020 was US$19 million, compared with US$61 million in 2016. The US$18 million figure for January 2021 was therefore below the average for 2020, although it was indeed slightly higher than the US$17 million figure posted a year earlier in January 2020.

It’s tempting to see the small uptick in exports seen in the second half of 2020 as COVID-19 related, at least in part. Domestic recycling activities have been seriously affected by the pandemic and it is not unreasonable to assume that this has resulted in a greater amount being exported. But it’s too early to say with any certainty how great this effect has been, or indeed how permanent it is. The graph below shows the downward trend is far from linear, and the current level is after all below that of a year ago.

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The above graph also shows the value of waste plastic exports to China and Hong Kong since 2016. Prior to 2018, these shipments accounted for the bulk of US waste plastic exports. The Chinese government banned the trade in 2018, but the value was falling sharply from mid-2017 in anticipation. For much of the past year the figure has been negligible.

So where has the US been sending its plastic waste since 2017, if not to China? For the full12 months of 2020, Canada was the leading destination, accounting for US$59 million or 26% of the total. Mexico was third with US$23 million, or 10%. Aside from these NAFTA partners, other destinations in Asia have taken China’s place. Principally Malaysia, but also Vietnam, India and Indonesia. Trade in waste plastics is not popular in any of these countries, and other destinations are being sought as regulations are tightened.

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A global, not just a US, problem…

Exporting of waste plastics is far from a US-only issue, of course. Many other developed countries saw a surge in exports over the past decade. While this is being reduced by the Basle provisions, the trade remains widespread. In 2020, the US exported around US$225 million, but this was only the third-highest figure. Germany and Japan led the way with US$291 million and US$288 million respectively. The UK was fourth with US$119 million and France fifth with US$112 million. Malaysia and Turkey were among the leading destination countries, although it should also be noted that the leading importer overall was the USA.

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Global trade in waste plastic has diminished since 2016 when it stood at US$6.6 billion. But at US$2.8 billion in 2020 it remains substantial. There’s perhaps nothing terribly wrong in principle with this trade, but the key question is disposal. Do destination countries  – or more specifically the companies doing the importing – have adequate facilities for dealing with plastic waste? Or, as has been seen in China and elsewhere, is waste incinerated or simply dumped, to find its way into the world’s rivers and oceans? This shouldn’t be seen as a state of affairs to be blamed on the developing world. Indeed, the fact that there is still money to be made from exports indicates that developed countries have so far failed to create the necessary sorting and recycling infrastructure closer to home.

….but also an investment opportunity

As environmental and regulatory pressure increases, the waste plastic recycling sector is increasingly gaining the attention of planners and investors. In the last 12 months (Mar 20 to Feb 21), AcuComm reported on 51 new plastic recycling projects, worth US$907 million in total, or US$18 million on average. Europe, Asia and the Americas were the principal areas of investment, with the USA, UK, Korea, Belgium and Germany the leading countries in terms of investment value.

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Plastic recycling projects typically have a relatively short development schedule, and can be up and running quickly. Around 30% of projects are either operational or due to become so in 2021.

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