Impacts of Operation Green Fence on the Global Recycling Industry

Operation Green Fence was a 10-month robust secondary material shipment inspection policy of China that took place from February to November 2013. With China being the importer of 12 million tons of plastic waste and 70 percent of world’s 500 million tons of e-waste every year, Operation Green Fence has changed how the global recycling industry works, both negatively and positively.

Negative Impacts of Operation Green Fence (OGF)

The value of the Recyclables Decreased: The immediate impact of OGF was a substantial decrease in the value of recyclables.

Prior to OGF, the demand for recyclables was high and the processing costs were quite low as there was not much processing required as contaminated waste could be exported to China. The market prices were high as well. But after the OGF was introduced, the recyclers those who built their business models assuming that high level of contamination would easily be exported had to change their processes, resulting in significant decrease of demand and the market price of the recyclables.

Higher Processing Cost: Prior to OGF 3-10 percent contamination in shipment bales was allowed by the Chinese Customs officials.  But once the policy came into effect, anything more than 1.5 percent contamination was rejected. The word “Contamination” sounds a little too negative as it indicated the presence of other material in a bale other the material being sold. So, the presence of a piece of newspaper in a bale of cardboard was regarded contaminated.

The recycling facilities in the U.S. and European countries had to adapt quickly to the policy change by improving the processing and decreasing the contamination levels. So, investment was required in processing equipment, which definitely increased the overall processing costs.

Positive Impacts of Operation Green Fence

Given an Opportunity to Build a Strong Domestic Market: Surely OGF gave industry players to think about possible ways to develop a stronger domestic market, finding the flaws of curbside recycling problems that contaminate recyclables, while reevaluating the sustainability of an export based recycling system.

David Newman, president of the International Solid Waste Association (ISWA), said, “We must think twice about the costs and benefits of exporting recyclables to developing countries and identify the consequences along the value chain of a monopoly market player like China." That being said, building a stronger domestic market is surely one of the top alternatives to U.S. and European countries.  

Focus Shifted To More Sustainable Recycling Innovations: To build a stronger domestic recycling market, a wave of innovation and investment in recycling technologies was necessary. So, the focus of the recyclers gradually shifted to finding more sustainable handling and treatment techniques. One such example is Veolia UK, an environmental services firm that invested £5 million in plastics recycling innovations and expressed their interest in investing £1 billion in recycling infrastructure in UK.

Improved Waste Quality: OGF is one of the many reasons behind the current crisis in U.S. recycling industry. But it has surely helped U.S. recyclers to improve the quality of waste prepared for export. Yes, it may take years to make the waste quality as good as it should be as the flaws of curbside recycling programs make it quite difficult and costly to short and process the recyclables.

Final Note: Operation Green Fence seems to have had a great negative impact on global recycling until now. But it has presented western recycling businesses and municipalities with an opportunity to evaluate their existing business processes and policies and find alternatives to an export based recycling system.