Beat the clock: the onus is on exporters as an important inspection deadline in China looms

Recycling Today, Oct, 2004 by Dan Sandoval

The Chinese government has reacted to widespread concerns over perceived shipments of sub-standard secondary commodities by imposing new inspection techniques that will soon greet all shipments of imported scrap materials.

The Chinese government has mandated that all shipments of recyclables, including recovered fiber, will be inspected and approved by an inspection agency starting this fall. The measure is expected to cut down on the possibility of poor quality shipments from North America, Europe and other parts of Asia making it to mill locations in China.

Even though some uncertainty remains about the deadline, the Chinese government, through its General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), is putting a system in place that will require scrap exporters to receive and maintain an ASQIQ certificate.

ASQIQ ORIGINS. What is the ASQIQ, and where did it come from? As China has grown to become a major end market for many raw materials, including recovered fiber, a host of concerns has arisen that unscrupulous companies have been shipping material that has been deemed as much waste (or even hazardous) as recyclable.

The mainstream press has jumped on this controversy with a host of documentaries and news highlighting dangerous materials that have been shipped to various Chinese ports.

In an attempt to combat these problems, the Chinese government has implemented a more rigid set of standards and policies, which it hopes will sharply curtail the importation of this unwanted material.

The policy is slated to go into effect Nov. 1, 2004. While a fair amount of politicking has been going on, several sources contacted seem to feel that the date will hold. While November is the month when companies need to have a registration number to ship, the initial registration submission was supposed to have been postmarked by July 20, 2004.

Several questions have arisen over this new policy. One area that has generated some uncertainty is when the AQSIQ will offer applications for its next round of registration. At the present time there has not been any indication whether the AQSIQ will be accepting applications at all next year.

Although there is a fair amount of uncertainty over what exactly this will mean, several sources say that initially it is highly unlikely that they will see any problems in the short term.

According to notes from the Institute of Scrap Recycling Industries Inc. (ISRI), an industry association based in Washington, the initial registration period will last for three years.

David Lee, vice president of Ralison International, the purchasing arm for Lee & Man, one of the largest paper companies in China, says that most companies will receive the permit to ship to China. However, he cautions that once a company re-applies for a permit in a couple of years, the Chinese government will be able to look at the quality of the material that had been shipped and then to determine whether to re-authorize the new permit.

On the other side of the coin, there are some questions as to what the impact will be on the consumers of recovered fiber in China. With surging demand for recovered fiber, any potential restriction on the flow of material could make it even more difficult for some mills to obtain enough fiber to run their machines.

Lee also notes another wildcard is the European market. While at the present time Chinese mills can move between the United States, Europe and Asia to get the material they need, within the next couple years Europe will be a net importer of recovered fiber. This will result in Europe swinging from a supplier of fiber to China to a potential competitor against China for enough recovered fiber.

CLEANER STREAM. While concerns about quality of shipments to China have been growing for several years, what truly galvanized the country toward developing some type of inspection process was a shipment from Japan that was filled with non-recyclable plastics.

After finding this material, the Chinese government began calling for a tightened flow of material. At the same time some have speculated that a side benefit to seeking restrictions is that it can act as a way to cool down the Chinese economy, which was surging in a dangerously inflationary manner.

Lee adds that the move by the Chinese government through its ASQIQ policy is to force recyclers to clean up the material. For paper this is especially applicable to mixed paper, a grade that can be defined in a number of ways. While gaining in popularity, mixed paper has been one of the biggest problem grades for mills in China.

While in and of itself mixed paper often is a very loosely defined grade, adding in the overall problem have been changes within the municipal collection section. This sector, where a significant amount of mixed paper is generated and collected, has been identified as the area where a large number of the quality problems arise.

As a step to improve the collection of material through municipal programs, single-stream collection systems have gained popularity. While this method boosts the overall volume of the material collected, the result in some locales without the accompanying processing equipment and expertise has been a decline in the quality of the collected material.