New Chinese paper import restrictions could impact the UK’s recycling exports to the tune of as much as £480 million, a new study by Rabobank has found.
China recently tightened restrictions on recovered-paper imports, of which the UK is the largest European supplier – many UK businesses look to China to buy and recycle their waste and recovered paper, generating valuable revenues.
Some 90% of the UK’s old corrugated containers and 67% of its mixed-paper exports went to China in 2016, meaning that it is the most exposed country to the new restrictions by some margin, said Rabobank.
The bank added that the situation is likely to be exacerbated by the risk of fewer export opportunities post-Brexit.
Oversupply
The UK is already facing an oversupply of recovered paper that it cannot absorb using its existing recycling infrastructure. Some of this recyclable waste is being incinerated or sent to landfill as a result.
Changes to China’s legislation have already impacted prices for the UK’s old corrugated container prices. Between January and May this year, prices dropped by 30% and mixed-paper prices suffered a 70% dip.
“While China’s recovered-paper import restrictions have been in the pipeline for a while, the combined impact of this along with the UK’s withdrawal from the EU still leaves those in the industry with an oversupply to contend with,” commented Natasha Valeeva, packaging supply chains analyst at Rabobank.
“More cooperation in the supply chain between firms, local authorities and waste companies to improve recycling practices would help tackle this problem, as would significant investments by businesses to improve recycled paper collections and separations,” added Valeeva.
Government Action
Valeeva said that she expected the UK government to “box clever” and use legislation to incentivise the industry to implement changes to the country’s recycling infrastructure.
The findings come from Rabobank’s latest report on the UK’s packaging industry, Investments in Recycling Required to Restore Value in the UK Paper Packaging Supply Chain.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
