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Recycled Materials Market Collapse and the Local Impacts

In 2018 the worldwide market for recyclable materials collapsed. This was due to a decision by the Chinese Government to ban the import of most recovered plastics, cardboard and other materials into China.
This decision was based on reducing the amount of non-recyclable material that was processed by Chinese recycling operators and impacting on the Chinese environment.

The China National Sword Policy has affected many countries, including Australia and changed the way in which recyclables are processed and reused.

Government at all levels and businesses have been required to adopt different approaches and options to manage the resulting change in the marketplace.

Council currently contracts out the processing of commingled recyclables to an external business, Shoalhaven Recycling.

To avoid the high cost of burying waste in a licenced landfill Council attempts to divert as much household waste to recycling as possible.

The yellow lidded recycling bin is collected by a council contractor and taken to Shoalhaven Recycling for sorting and sale to reuse markets.

Council pays Shoalhaven Recycling to take the unsorted recyclables from the kerbside collection via a fee at their gate and Shoalhaven Recycling then sells the products it sorts.

Before the China Sword Policy, the gate fee to Council was low and the income received from the reuse market was high.

With the collapse of the Chinese Recycling market, Shoalhaven Recycling has advised Council of the need to review its gate fee.

Director Assets and Works Paul Keech said:

“Shoalhaven Recycling and Shoalhaven City Council are not alone in this situation and the collapse of this market has also affected Councils across the nation.”

“Shoalhaven Recycling has requested an increase in the payment they receive from gate fees from Council, in recognition of the ongoing loss of income resulting from the decision and changes made in China.”

“Given the commercial nature of this matter, a confidential report was provided to Council at the Ordinary Meeting on 30 July 2019.”

“In recognition of the situation and acceptance of the need to support Shoalhaven Recycling to continue operations, Council has approved a $55.31 per tonne increase to the gate fee that will be paid to Shoalhaven Recycling.”

“This is the second increase since the China Sword Policy and the arrangement is still cheaper than sending the recyclables to landfill. The gate fee will be reviewed again before 31 January 2020.”

“Council also resolved to prepare a business plan to consider the option for Council to sort and process commingled recyclables to a high-quality end product in house at West Nowra in the future, and where possible sell the processed products to local markets, such as glass to sand for pipe laying.

“The increase in gate fee to fund the current Recycling arrangement will need to be recovered in the future and options to do this will be considered as part of the future business plan.”

“Whilst recycling is a good idea in terms of environmental and financial outcomes compared to landfill, residents are reminded that the best outcome for everyone is to reduce waste in the first place, particularly plastic products.

 “Consumer power demanding manufacturers reduce plastic packaging and single-use plastic products in the first place is the best waste management action.” 

CEO Stephen Dunshea said:

I am looking forward to reviewing the business plan that will enable Councillors to consider the option for Council to process kerbside collected recyclables in house.

“But in the meantime, I would like to emphasise that for our residents all services, collection schedules and Council’s operations remain unchanged.”

“All yellow bins will still be collected and processed. Residents are encouraged to continue to recycle and more importantly continue to find ways to reduce their overall waste.”  

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