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Will Australia’s recycling industry fall on China’s National Sword?

Updated: Sep 27, 2020

China’s recent policy decisions regarding their importation of recycled materials has had an immediate, significant and negative impact on the local Australian recycling industry.

Whilst recognising the need for an orderly transition, we, at BlockTexx, argue that these policy changes will be the catalyst that drive value adding innovation and much needed investment into Australia’s recycling industry.

The BlockTexx business model and technology solution is completely aligned to that agenda, we utilise the talent of our scientists and engineers to create an Australian solution, that creates local jobs and solves an Australian waste problem, generating valuable textile resources as an output.

To frame this discussion, China has not ‘banned’ the importation of recycled paper, plastics etc. The Chinese Government have reduced the contamination standards that they will accept, to such low levels that these standards cannot be currently met by our Recycling Centres, and so these centres have now had their most significant market effectively closed to them.

I do not see this as economic protectionism, it was a considered and calculated response that will economically encourage China’s own recycling industry to step up and meet its own waste generation and recycling challenges. It will encourage invention, innovation and investment. This stance was a change from recent economic history, where China’s waste import market grew tenfold to 45m tonnes by 2016 and Australia was an active and willing export customer, at our peak, in 2013 we exported over 800,000 tonnes of paper and plastic to our near neighbour. Following a series of Chinese Government policy announcements, starting with Green Fence in 2013, National Sword in 2017 and now Blue Sky in 2018, these initiatives have effectively closed China as an export market for us and many others, which combined with global oversupply, have seen our waste export prices crash.

This has caused significant challenges in the Australian Recycling Industry. As these commodity prices have fallen, there are many local services now facing the real potential of going out of business. This would be a significant setback for recycling as it would mean we face tough choices: either stockpiling waste in the hope China changes its mind; or we start to increase landfill usage again as we have nowhere to send it. Neither are sustainable. The thousands of people also employed in this sector also face an uncertain future and these are real people facing real issues. State Governments are intervening with financial support packages to support and increase the ‘gate fee’ for recyclables, to help these businesses, but this cannot be the long-term solution.

Whilst there are short term challenges to deal with, I think the recent article by Peter Shmigel, CEO of the Australian Council of Recycling, (ACOR), was extremely useful in reframing the debate about the direction of activity in our own recycling industry. Peter noted:

“We shouldn’t resent the Chinese for what they’ve done – we should emulate them. It’s time to re-set and re-boot Australian recycling to be more resilient to global impacts. We can move from being mostly about “push” (collecting material) to more “pull” (using that material to make recycled content products in Australia as part of a more circular economy).” (1)

The whole debate needs to move away from how we can just recycle and export our waste, to how do we move to a large-scale circular economy that converts our waste to a valuable resource, within the Australian economy, so generating jobs and economic growth in the process. This removes the dependency on external market shocks and internalises the externality costs of consumption. As noted by Mike Ritchie in the recent MRA Discussion Paper:

“The Circular economy is more than a catch phrase. It requires a fundamental reengineering of our economy to one which internalises externality costs, which prices materials recycling equally with virgin materials extraction and which prioritises reuse and recovery in the design and application of products.” (2)

At BlockTexx we support these sentiments entirely and agree that action must fall into three broad categories:

  • Investment in existing or new recycling infrastructure to support industry growth. This could include investment in existing plants to reduce waste contamination or investment in new technologies, e.g. BlockTexx’s Fibre Separation Process, to allow new industries to grow, employ and prosper.

  • Improving the existing legal and contractual frameworks and the accuracy of data. This could include standardised contracts with councils, consistent and reliable national data and consistent and managed kerbside collections.

  • Innovation in the procurement of recycled materials. As a catalytic first step, the adoption of a circular economy disciplines in all government tenders . This could include a legislative framework that mandates there to be a mandatory proportion of recycled materials in all Government procurement.

The Chinese Government has made the decision it feels is the right one for its economy and our opinions on that, whilst worthy of debate, are not going to change that policy.

Our real choices lie in how we choose to deal with that policy decision and whether we decide it is a problem or an opportunity? At BlockTexx, we see this firmly as an opportunity to encourage and drive investment in the textile recycling industry, at home, here in Australia.

The top-level numbers easily demonstrate why. We landfill between 2.8-3.1million tonnes of textile waste every year. The charity stores receive nearly 8000 tonnes of donations every year. The actual amount of household textile waste is probably understated as it all goes into the ‘red’ bin and the data is not recorded, but we know there is a huge opportunity. At BlockTexx, we believe we can access, recycle and separate back into fibres, between 50,000 and 80,000 tonnes of textile waste per year. This will produce significant ‘value-add’ to the product during the process, remove this tonnage from landfill and generate over 100 jobs in the recycling centres that undertake this task.

We do not believe Australia will impale itself on China’s National Sword but can instead use this once in a generational chance to generate a future facing, technologically advanced and value adding textile recycling industry within Australia. At BlockTexx we are firmly committed to being part of that future.




Photo by Bas Emmen on Unsplash

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