New waste rules to disrupt trade

As much as 5m teu of waste could become landfill under China’s new rules, which were implemented on January 1 As much as 5m teu of waste could become landfill under China’s new rules, which were implemented on January 1

As much as 5m teu of waste could become landfill under China’s sudden decision to impose more stringent quality thresholds on different waste imports, dramatically changing seaborne trade patterns.

That’s according to maritime research consultancy Drewry, which said in its Container Insight Weekly that it will not be easy to find alternatives to accept the waste.

The company estimated that there could be between 4m and 5m teu of waste under threat – a figure equating to almost 3% of world loaded-container traffic.

China initially gave notice of its pledge to turn away “foreign garbage” by adopting much more stringent quality levels for a number of waste products in July last year.

The new rules were implemented on January 1 this year and will become enforceable on March 1.

Currently, the country imports about 30m tonnes of wastepaper per year and some 8m tonnes of waste plastics, roughly the same as the rest of the planet combined.

The future for carriers

According to Drewry, other markets, in places like India, Vietnam and Malaysia, will be asked to take up some of the slack from China’s move - which potentially offers carriers a bonus extra shipment if the cleaned product is sent to China afterwards - but between them, they do not have the capacity needed to do what China used to do.

Although numerous lobby groups and vested interests have tried to get China to ease its new stance on waste products, the country currently seems determined to press on with it, Drewry said.

The consultancy firm also claimed that the country’s move is bad news for ocean carriers tasked with moving the waste materials, with one major carrier the company spoke to apparently saying that it continued to be concerned about the situation, as waste products can comprise half of backhaul voyages, and was most fearful for the most heavily-exposed westbound Transpacific market.

However, Drewry said that although volumes from the US and Europe to Asia will not hit the heights they could have without China’s move, all is not lost for the backhaul trades because other, rising cargoes could help fill the gap.

For example, Chinese beef imports have rocketed in recent years, hitting over 800,000 tonnes in 2016 against just 6,000 tonnes ten years previously, as growing incomes have given a boost to meat consumption and, additionally, Beijing recently got rid of restrictions on American premium grain-fed beef importing, which should give a boost, Drewry said.

A spokesperson for Drewry’s Container Insight Weekly said: “It is unclear at this early stage whether China’s new waste-quality thresholds can be attained, which puts significantly-more tonnage at risk of being incinerated or put into landfill rather than boarding containerships.

“Other backhaul cargoes, particularly foodstuffs, will ease the pain for shipping lines.”

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