E-scrap plastics: ‘We need to press the reset button’

Plastic is still fantastic, despite the trade and environmental headaches, insists e-scrap plastics expert Craig Thompson. But we need to process more at home rather than relying on unsustainable export markets. ‘If they are not doing so already, businesses involved in e-scrap worldwide will have to reshape.’

*This interview was published in the Nov/Dec issue of Recycling International

Craig Thompson is what you could call a global citizen. He’s constantly on the move and his business card has mobile numbers for Hong Kong, UK, Netherlands, Brazil, Latvia and Canada and the USA. Recycling International meets up with Thompson in New Orleans at the E-Scrap 2018 conference.

Thompson has been active in the e-scrap recycling industry for almost 20 years but he has never seen such change affecting the business than what is happening now. ‘E-scrap plastics are one of the most complicated of plastics to recycle,’ he says. ‘Multiple polymer types, brominated flame retardants, contamination – wood, textiles, dirt, toner/ink residue, ceramics…. It is an endless list. The end markets have always been in China and more recently south Asia: Thailand, Vietnam and Malaysia. But now those markets have either closed or are closing and the recycling industry will be left with limited outlets to bring in revenue. But solutions do exist in Europe and there is talk of some new sites opening in the US and Canada.’

How would you describe the shift in the market?

‘There has to be a major change in the way recyclers and the industry handle e-scrap plastics. Over 25% of the items received by a recycler for processing will be plastic. For the European market, with kitchen appliances such as kettles, toasters, hand blenders and coffee machines, the percentage of the assembled product can be as high as 80%.

With negative values for e-scrap plastics (or at best cost-neutral after transport charges), large volumes and end markets disappearing, stockpiling could soon be the next issue. The market needs to re-adjust to a cost for the treatment for e-scrap plastics rather than it being an income. Otherwise the industry could have the same issues as it did with CRT glass when we had warehouses full of plastic.’

What are the main factors challenging the industry?

‘The lack of processing capacity and this presumption of receiving an income for e-scrap plastics are some of the main challenges. As for CRT TV monitor plastics: there are some established recyclers in the US and Canadian markets receiving, treating and processing these plastics but at a much reduced value to what recyclers received when exporting baled CRT plastics to Asia.

The shredded mix of e-scrap plastics is one of the hardest plastics to recycle due to the mixture of polymer types. If you recycle a PET drinking bottle you may have only two or three polymer types (bottle – PET, label – LDPE, cap – PP). With e-scrap shredded plastics you can be looking at over ten different polymer types as well as contamination in the shred resulting in as much as 40% being non-recoverable.’

China is being followed by others in the region in banning scrap imports. Based on your experience, what do you see?

‘It is not a sustainable or even ethical for western countries to send plastics in the volumes they generate to smaller countries who do not have the infrastructure or capability to cope. They can only just about handle their own plastic waste without adding huge volumes of PET bottles, HDPE (shampoo, detergent, household bottles), LDPE (agricultural films, food packaging) and e-scrap plastics. Vietnam and Thailand are already closed to e-scrap plastics. Some may still take clean washed regrind but not baled or shredded materials.

This summer, Malaysia announced the closure of 114 non-permitted sites. It is currently (October 2018) the only market in Asia accepting e-scrap plastics but this is likely to be stopped entirely soon. By the way, exports of plastics are not restricted to Asia. In Europe, Poland is also considering banning imports after seeing a major increase in volumes of low-grade materials delivered into the country. Some UK firms recently illegally exported more than 1,000 metric tonnes of low-grade material to Poland. The only sustainable solution is domestic recycling.’

What is the impact of import bans on e-scrap trading businesses?

‘Traders have either left the market or will do so shortly. Shipping lines are requesting large deposits on containers before loading them to ensure the container will be unloaded at the destination point and return empty. With Asian export markets closing, and reduced margins and policy changes in those countries receiving the plastics, it is just too risky for most traders.

European recyclers are also being inundated with direct approaches from the producers of e-scrap plastics, leaving no room for traders to broker material for processing in Europe. With US legislation on exports of e-scrap plastics being less stringent, some traders may continue but only by bending the rules on customs paperwork.’

What proportion of companies has changed their business because of import restrictions in Asia?

‘If they have not done so already, all such businesses will have to reshape. Regulations, legislation, permitting, health and safety regulations, product handling, tenders, certification and auditing – the list continues – are a large part of every recycler’s monthly routine and the paperwork burden will only increase. Those that have automated shredding and processing lines with investment in new processing equipment will gain market share, especially in the US and Canada. With new state legislation for recycling of e-scrap coming into force over the coming years, their volumes will increase.

Europe has had its Waste Electrical and Electronic Equipment (WEEE) regulations for over 10 years covering electrical and battery operated items. Throughout that period there have been many casualties, consolidations and changes within the market. Recyclers are having to change and adapt to new changes in the regulations and the types of products received for recycling: solar panels, large refrigeration equipment and battery operated scooters, bikes and power tools.’

Which other changes in business models do you see?

‘Recyclers are already experiencing fewer printed circuit boards and less precious metals in computers, telecoms equipment etc. They are now harvesting components and going down the reuse route to increase revenue. Reuse is always preferable to recycling but you are only delaying the end-of-life of the electrical item by anything up to two years before it is beyond economical repair or technically obsolete. So it will still need recycling.’

If you were asked to offer these businesses a survival kit, what would your top three tips be?

‘Invest in new recycling equipment and automation; work together to stop the illegal export of e-scrap leaking to non-registered or non-compliant recyclers; fight for legislation to prevent car shredders or incinerators processing e-scrap and to make sure it goes to a dedicated registered e-scrap recycler.’

‘What do you see happening two years from now? And what of the longer term, let’s say in 2025?

‘Every country, irrespective of the waste stream it generates, should stop exporting and process more – if not all – at home. There has been a major lack of investment in domestic recycling because it has been too easy to load a container and export it to Asia.

Short-term contracts issued by waste management companies and schemes are also a problem as recyclers do not have sufficiently long periods to invest in processes and recycling equipment. The technology does exist to process e-scrap plastics at home: it is simply down to changes in legislation and the necessary investment to make it worthwhile.’

That’s easier said than done, right?

 ‘Clearly, this cannot happen overnight. For a recycler in Europe to push the button today and install a system for recycling domestic e-scrap plastics would take at least 12 months. So if Malaysia bans the import of plastics you are still looking at 2020 before a recycler could start to process their own plastics in their own country. Therefore 2019 looks bleak.’

Sounds a bit pessimistic…

‘Lets not end on doom and gloom. Recycling is the way forward, technology and solutions do exist to recycle plastics and other waste materials. I can give you a long list of European recyclers who go beyond shredding e-scrap and carry out further processing, producing high quality consistent plastic regrind from e-scrap as well as pelletising.

At the same time, the wider recycling industry needs to press the reset button before it’s too late. Export markets for plastics to Asia are finished. Over. No more. So we need to invest and process at home rather than relying on unsustainable export markets. My focus is on e-scrap plastics but it is no different for shampoo, detergent bottles or agricultural films. Recycling of e-scrap has a bright future and it is still one of the world’s fastest growing waste streams. E-Scrap plastics have a higher revenue after processing so income can be generated for the long term.’