Trade challenges impact electronics recycling and reuse

TRADE CHALLENGES IMPACT ELECTRONIC RECYCLING AND REUSE

BY NEIL PETERS-MICHAUD

Owner/CEO of Cascade Asset Management

https://www.linkedin.com/pulse/trade-challenges-impact-electronics-recycling-reuse-peters-michaud/" target="_blank">www.linkedin.com/pulse/trade-challenges-impact-electronics-recycling-reuse-peters-michaud/

Tariffs and trade disputes are directly impacting the e-scrap industry, causing financial impacts and processing challenges throughout this sector.

Import restrictions on recyclable plastics started in China in 2017 as part of its "National Sword" initiative that was a response, in part, to the high volume of contaminated waste mixed into imports of recyclable materials. Since virtually 100% of all U.S. generated plastics from electronics recycling was sent to China for processing prior to 2017, many operators set up new processing facilities in other Asian countries to absorb the diverted plastic stream. The influx of material quickly created an immense burden on these countries, causing Vietnam, Malaysia and Thailand to subsequently enact bans on e-scrap plastics and other waste materials.

Drone view of factory in Thailand processing e-scrap. Copyright Basel Action Network, February 2, 2018. Used by permission through e-Stewards license granted to Cascade Asset Management

CNBC reported in late May that Malaysia and the Philippines rejected more than 3,000 metric tons of non-recyclable plastic waste, including contaminated milk cartons, and bales of electronic and household waste from the U.S. and Canada. More than 60 containers of "smuggled" waste will be sent back to their countries of origin.

In addition, a recent change to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal will make the shipment and processing of mixed plastics more challenging among the 187 countries that signed onto the treaty.

Import tariffs are also increasing costs on the recycling industry by raising prices on processing materials and supplies often sourced abroad.

One of the potential positive outcomes of these trade policies is the development of a more robust domestic recycling infrastructure to manage these waste materials in order to avoid these trade barriers and costs. The federal government recently committed to investing up to $70 million in new research to reduce recycling costs and boost recycled content in manufacturing, with electronics recycling one of the targeted sectors. At the current time, there is no U.S. based plastics recycler that accepts and processes mixed electronic plastic scrap domestically so the process to create this domestic infrastructure will take some time.

Cascade Asset Management responded quickly to these global concerns by identifying a responsible market for our generated mixed plastics at Interecycling in Portugal. This company operates within the OECD and consistent with European electronics recycling schemes (WEEE). They use a mechanical process to sort out flame retardant plastics from more easily recyclable non-FR plastics. They perform these tasks at a higher cost than if exporting to Asia, but this solution provides a better assurance the plastic is safely and properly recycled in compliance with all international laws.

Given all these changes in trade programs, it is essential to know where your materials go and whether your processor complies with all international trade laws. Otherwise, the materials may end up in the wrong hands or be rejected and shipped back at a great cost to all involved.