The recycling business isn't as stable as it once was. Photo / Getty Images
The recycling business isn't as stable as it once was. Photo / Getty Images
Oji Fibre Solutions has hiked paper recycling collection prices for a second time this year and wants government help to grow the industry as a global glut of recycling products drives down export prices.
From January, the collection cost of Oji paper recycling bins will climb to $24.40, an 80 per cent increase from the price set in July of $13.50. The monthly rental cost of a standard green wheelie bin remains unchanged.
That is the company's second price increase this year in response to a drastically shifting global market where China's State Council has sought to "ban importing solid waste" by the end of 2020 to improve that nation's environmental quality and decrease pollutant emissions.
In July, Oji told customers the combined impact of China raising the standards of imported recycling, and the global economic slowdown caused by the US-China trade war, had "flooded all cardboard and mixed paper markets, dramatically driving recycled fibre, pulp and paper prices down."
Last week, a spokesperson for Oji said more countries, such as Indonesia, had followed China in restricting imports of recovered paper, which was compounded by unresolved trade tensions.
Oji told customers that dynamic meant exporting to alternative markets was difficult and a permanent increase in 'lift charges' was necessary to recover collection and processing costs.
"We don't believe the falling export sales prices are a short-term glitch, which is why prompt action is being taken to ensure our collection service remains sustainable," Oji said.
The company said it still collects about half of the country's wastepaper and cardboard, then recycled about a third of it at paper mills in Auckland and Kinleith.
Excess wastepaper bales can still be sold offshore because of its "high quality," but that was increasingly difficult due to a "massive oversupply of product."
While the company was looking at options to expand domestic processing capacity, a spokesperson said it would require a huge investment in the industry.
"Ultimately, we think New Zealand has to face the fact that recycling costs will increase, and government will need to become involved in facing these challenges, particularly if we are to grow domestic recycling," it said.
Adele Rose, the chief executive of 3R, a consultancy which develops solutions for the management of waste products, said exporting raw recyclables was "definitely becoming unviable" and New Zealand needed to focus on adding value to products before attempting to sell them overseas. "If you have processed it and added value - say you've taken plastic and have created flakes or resin - then you've created a product that is tradable on the commodities market," she said.
But she warned people were unlikely to make multimillion-dollar investments in processing recycling without first having local councils standardise recycling at kerbsides.
People won't invest unless there was a secure supply and a secure market for the product, she said.
Oji collects about half of the country's wastepaper and cardboard. Photo / Getty Images
"We need to build the capacity in New Zealand of processing materials and that doesn't happen unless we secure supply of materials for reprocessing."
The government has established a national resource recovery task force to look at investment and standardisation. Rose said a likely outcome was regulation that requires producers and importers of waste products to have a plan for the recycling of those products.
"One key area this task force will look at is productive stewardship, making producers of waste streams responsible for that waste at end of life. In New Zealand we just have very low rates of producer responsibility, so that's why we are headed towards regulation."
Associate Environment Minister Eugenie Sage said consultation has recently closed on proposals for six products including tyres, farm plastics and packaging, which would make producers responsible for these products.
She also pointed to a proposal to increase levies on landfills as another way to tip the scales in favour of recycling.
"A higher price for disposing of waste to landfill will help to make alternatives, such as recycling lower-value material, more viable. By mid-2024, an extra 265,000 tonnes of materials could be recovered," she said.
Sage agreed domestic recycling needed a boost in order to stop reusable material ending up being scrapped.
"With China and other countries restricting the importation of waste material for recycling, New Zealand has to act to create our own onshore infrastructure for recovering materials or the waste we send to landfill will continue to increase."
Sage said the Provincial Growth Fund was being used to support infrastructure projects such as the proposed Organic Waste Recovery Facility in Reporoa and that proposals to increase and expand the levy would allow more investment in recycling infrastructure.
Over the weekend, Sage and Prime Minister Jacinda Ardern announced plans to phase out more single-use plastics, claiming success from the ban on single-use plastic bags.
The government will respond fully to a report by the Prime Minister's Chief Science Advisor on rethinking plastics within six months.
