An upheaval in the markets for recyclable paper and cardboard will cost Whanganui District Council if it wishes to maintain a recycling service, waste minimisation chairman Rob Vinsen says.
Late last year China, which had taken 50 per cent of world paper and cardboard, stopped accepting it. The only overseas buyer now is India, and the price per tonne has dropped from $500 to $50- $60.
All paper and cardboard for recycling forms a single pool at New Zealand wharves. The cost of getting it there is around $200 a tonne.
This means in 2020 Whanganui's 1000 tonnes of bundled paper and cardboard will cost $112,000 to recycle, instead of earning $43,000.
"We just can't sustain that," Vinsen said.
In 2019 the Whanganui Resource Recovery Centre (WRRC) made $320,000 by selling product, and received $200,000 from its council contract. It made a small loss of $12,000, which it can absorb.
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An added $112,000 this year, and a projected $184,000 in 2021, cannot be absorbed.
The council will be asked to increase its contract to cover the deficit - or it could decide to stop offering its only recycling service at the WRRC.
Businesses have been offloading more cardboard at the centre because their collection costs have gone up. The centre is considering charging them when they bring large amounts. Or it could ask people not to bring cardboard or paper any more.
The problem may be temporary, Vinsen has been told. After 2021 the market may improve.
Councils that provide kerbside recycling have been hit very hard by the change. It will cost Christchurch $3 million to $4 million this year, and Auckland $9 million. In Sydney two big recycling businesses have shut down.
A new facility recycling paper and cardboard in New Zealand would need 500,000 tonnes a year, and cost $200 million to build. That makes it a central government issue, Vinsen said.
The last upheaval in world recycling markets was when China stopped taking plastic. That situation has stabilised, with all the number 1, 2 and 5 plastics the WRRC collects now recycled in New Zealand.
Plastics numbered 3, 4, 6 and 7 represent only 4 per cent of what is dropped off, and the centre is considering asking people not to bring them.