How China Broke the World's Recycling | Wendover Productions

0:00This episode is brought to you by Pal Molliv. Family time isn't just the big moments. It's weeknight dinners, sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Pal Molliv Ultra. Pal Molliv's most powerful formula removes up to 99.9% of grease, leaving your dishes sparkling clean, and the new convenient pump makes cleaning even easier, so you can spend less time tackling dishes and more time together. Shop now at PalMolliv.com. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online makes sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus. Propel Fitness Water with Gatorade Electrolites, Zero Sugar, and Vitamins.

1:01Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade Electrolites. This video was made possible by Hover. Professionalize your web presence with a custom email address for 10% off at hover.com slash Wendover. This is the two-page document that changed the world. It's what's referred to as a notification to the World Trade Organization Committee on Technical Barriers to Trade, a type of document that to anyone in the know is thoroughly mundane. In fact, every few hours another such notification enters the WTO system, each signifying that yet another country wants to make yet another change to its rules regarding the import or export of goods or services. This particular notification, though, submitted on July 18, 2017, managed to send the entire global recycling industry into a tailspin, or possibly even a death spiral.

2:06But simply, this document broke the world's recycling system. But here's how it worked before this document. Let's say a woman in Littleson, Colorado has yogurt for breakfast. The yogurt is packaged in a thin polypropylene plastic container, and so, once finished, she disposes of it into her recycling bin. This is then picked up by recycling truck a few days later and brought here to the local recycling company's Materials Recovery Facility. There, this yogurt container, along with all the rest of the single-stream recycling picked up that day, is dumped out and placed into the semi-automated sorting system. Some products are simple to isolate. Glass metals, for example, can be picked up by magnets while paper and cardboard can be easily sorted by density as they're typically lighter than other recyclables. Glass, plastics, and non-magnetic metals are a little more difficult to sort, but each looks quite distinct, so optical scanners operate blowers or other diversion tools that are able to sort these out.

3:07With a few more steps, the facility is more or less left with just plastic, but that's where things get difficult. Plastic comes in all sorts of shapes, sizes, and types, and different shapes, sizes, or types of plastic are recycled in different ways. Optical sensors start out by at least accomplishing a high-level sort, though. For example, in many US states, plastic bottles are sold with a 5 or 10 cent deposit, meaning that recycling companies put a lot of effort into recovering those from the mix as they can be sold for, at least relative to the other plastics, a lot. They also put a lot of work into recovering certain plastic types, such as high-density polyethylene, as this both sells for more and is easier to sort out of the mix since it's typically used to make larger items like plastic crates, shampoo bottles, and other products where sturdiness matters. The polyethylene and other higher-value plastics are quite accurately sorted and then melted down into bulk raw plastic, which is resold to manufacturers. Certain other plastics, though, have a negative value.

4:10They can't be sold, and in fact, it would take so much work to turn them into usable raw material that recycling companies would have to pay someone to take it off their hands. Typically falling into this category are smaller items like bottle caps, plastic bags, and other scraps below 3 inches or 8 centimeters in width that just can't be easily sorted by automated systems. These are then aggregated together and, at best, used to generate electricity through incineration or at worst, are just sent to a landfill. So to summarize, there is high-value plastic that's recovered immediately, negative-value plastic that's either incinerated or sent to a landfill, and then there's a third category in between those two, and that's where things get interesting. Anything that isn't small and unrecoverable or large and valuable is typically mixed together and formed into big bales of unsorted, medium-sized, medium-value plastic that effectively have a neutral value on the free market. Are raw materials in these bales no-

5:11This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online makes sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus. This episode is brought to you by Palm Olive. Family time isn't just the big moments. It's weeknight dinners. Sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palm Olive Ultra. Palm Olive's most powerful formula removes up to 99.9% of grease, leaving your dishes sparkling clean, and the new convenient pump makes cleaning even easier, so you can spend less time tackling dishes and more time together. Shop now at Palm Olive.com.

6:31At least in the US. After it takes its trip through the materials recovery facility, that yogurt container from Littleton, Colorado, would, if properly sorted, end up in one of these MRF residual bales. These are then loaded into the back of a semi-truck driven 1,000 miles to the port of Long Beach, California. There, the bales are officially exported from the US, loaded into a shipping container, and placed on an enormous, yet empty Hong Kong-bound cargo ship. Now with this knowledge, some might ask a question. How on Earth did we end up with this system, theoretically designed to reduce our impact on the world, where our waste is shipped across the world? To that, there's actually a surprisingly specific answer. Back a day ago, in 1969, the first national conference on packaging waste convened, and in that room were a number of plastics industry executives.

7:31Throughout that event, they heard municipal leaders from around the country express their concern about just how permanent plastic was. Back then, the material was becoming cheaper and cheaper and was quickly gaining prominence in the packaging world, but this mountain concern among municipal leaders itself led to melting concern among plastics executives. They came to believe that this plastic hesitancy would quickly become an existential threat for the industry's growth, so plastics knew they needed a solution. They needed a way to make plastic sustainable. The problem? There wasn't one. So back up option. Rather than creating a real solution, they willfully and knowingly created and propagated the system that didn't work, but looked like a solution. Recycling. From a technical standpoint, you can sort, melt down, and reuse plastic thereby reducing its impact on the world, but that's not why it doesn't work.

8:35From a social perspective, people do often do their part, and at least somewhat separate their trash from recycling, but that's also not why it doesn't work. Why recycling doesn't work is because, overall, it's not profitable. It's very simple. Oil is cheap, at least now, and when oil is cheap, making new plastic is cheap. Meanwhile, sorting, transporting, and melting down existing plastic is expensive. In 2017, Virgin PET plastic cost about 54 cents per pound, while recycled PET cost about 63 cents per pound, and was lower quality than the alternative. Therefore demand for recycled PET was low, so waste management companies couldn't turn a profit turning used PET into raw recycled PET at scale. When companies can't make a profit recycling, it doesn't happen, or at least not at the rates needed to make the plastic's industry sustainable. For the plastics industry, though, all they needed was the perception of sustainability,

9:41and even though a big chunk of what went into a recycling bin ended up not recycled, consumers and municipal leaders were happy because they believed that the plastic they consumed was guilt-free. That's how that yogurt container tossed in Littleton, Colorado, ended up on a boat to harm, calm. Now, the rule just mentioned is still valid. Plastic is only recycled when it's profitable, but for a brief moment in time, it was. All thanks to a trifecta of economic conditions in China. First, shipping was incredibly cheap. Western nations like the US have long had a significant trade deficit. This episode is brought to you by Palm Olive. Family time isn't just the big moments. It's weeknight dinners, sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palm Olive Ultra. Palm Olive's most powerful formula removes up to 99.9% of Greece, leaving your dishes sparkling

10:43clean, and the new convenient pump makes cleaning even easier, so you can spend less time tackling dishes and more time together. Shop now at palmolive.com with Gatorade Electrolites, Zero Sugar, and Vitamins. Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade Electrolites. Fissite with China. Essentially, America buys far more from China than China does from America. That means that cargo ships from greater China travel to the US almost completely full,

11:45but then return with plenty of extra capacity, meaning shipping rates to China are far lower than shipping rates from China. Thanks to that, you could get one of those MRF residual bales across the Pacific for next to nothing. In addition to this, sent the 1980s, China has been riding its way through an unprecedented phase of economic growth. This was so dramatic that the company's industries literally could not find enough raw materials, including plastic, to fulfill their demand. Therefore, with constrained supply and high demand, even recycled plastic prices went up, giving the recyclers in the country more room to cover costs. In addition, especially in more rural areas, wages were low in China. Those MRF residual bales are composed of those difficult to sort plastics, but humans can sort just about anything profitably as long as their wages are low enough. So all in all, considering shipping to China was effectively free and raw materials were

12:49higher and wages were low, the equation just happened to work out that in the late 90s, 2000s and early 2010s, sorting and recycling MRF residual bales in China was just ever so slightly profitable. That's why, upon arrival to Hong Kong, the plastic yoga container dispose of in Littleton, along with everything else in these bales, is immediately transferred onto a smaller barge and re-exported out of Hong Kong for a short journey across the Pearl River Delta to the Guangdong Province in mainland China. Then, after an 8,000 mile, 13,000 kilometer journey to the other side of the world, it ends up at its final destination, the Well Pine Plastic Industrial Company just outside Guangzhou. There, the bales are unloaded, spread out, and low wage workers manually sift through the contents, eventually finding that yoga container and putting it in a pile along with the rest of the polypropylene plastics.

13:51From there, the polypropylene are melted down, purified, and reformed into pellets, which then eventually are sold in bulk to another manufacturer somewhere else in China for a very, very slight profit. Now this whole system of taking effectively valueless MRF residual bales and shipping them across the world to a place where they did have a very slight positive value worked. It wasn't elegant, it wasn't clean, but it worked. And that's how, for a few decades, the Western world recycling system functioned. The most valuable stuff was sorted and sold domestically, the valueless stuff was exported to where it had value in China, and the stuff with a negative value was sent to the landfill or incinerated. But then came that document. The notification to the World Trade Organization Committee on Technical Barriers to Trade. All this said was that China would, starting at the end of 2017, bayon the import of 24

14:55products covered under these HS codes, the numerical classifications used to simplify international trade. These particular five though were the ones that created this big problem for the plastics industry. They translate to waste, pairings, and other scrap of polymers of ethylene, of polymers of styrene, of polymers of vinyl chloride, of polyethylene glycol turfillate, and other waste, pairings, and scraps of plastics. Effectively, by banning these five HS codes, they banned the import of almost all plastic waste. As a result, the country's... This episode is brought to you by Palm Olive. Family time isn't just the big moments. It's weeknight dinners. Sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palm Olive Ultra. Palm Olive's most powerful formula removes up to 99.9% of grease, leaving your dishes sparkling clean, and the new convenient pump makes cleaning even easier, so you can spend less time tackling

15:59dishes and more time together. Shop now at Palm Olive.com. Propel Fitness Water with Gatorade Electrolites, Zero Sugar, and Vitamins. Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade Electrolites. 2018, plastic import volume dropped 99.1% compared to 2017. This massive global industry quite literally ended overnight. Now, while the true reasoning behind any Chinese government decision is always elusive,

17:04at least according to this document, it was that the import of these products was creating a serious environmental and public health problem. This is likely true. As MRF residual bales are, by their very nature, unsorted, they often included hazardous materials that could seriously harm those sorting them, and this went on to cost the government since the government runs much of the country's healthcare system. In addition, these sorting facilities in China would often illegally dump the portion of the plastics that even they couldn't profitably recover, creating an environmental problem that the government had to pay to clean up. Therefore, while the private companies that actually sorted and processed these MRF residual bales turned a slight profit, China, as a nation, was losing money by processing the world's trash. So essentially, even though it looked like plastic recycling was profitable, once the externalities were priced in, it once again became clear that plastic recycling was not, in fact, a viable

18:10system. That's why China issued this document, that's why they banned plastic waste import, and that's why the world's recycling system broke. Nowadays, when a woman in Littleton, Colorado, throws her yoga container into the recycling bin, the journey that ensues is often far, far shorter. First, as before, it's picked up by a truck, brought to a materials recovery facility, sorted down, and packed into one of those MRF residual bales, but after, there are now three main options. The first is that it's exported, as before, but not to China. In response to the import ban, Malaysia tripled their plastic import volume between 2017 and 2018, becoming the largest processor in the world, and some other nearby low-wage countries ramped up as well. Eventually, though, these countries will undoubtedly realize what China did. Processing MRF residual bales may be profitable to a company, but not to a country.

19:12The amount of health and environmental issues it creates in the long run costs more than the industry makes. Even despite the alternate plastic export options, the US' export volume, which includes more than just MRF residual bales, still dropped by a third between 2017 and 2018. There was just no one who would take these bales, even for free, since with the removal of China from the market, very few companies could turn a profit processing them even outside the US. The global value of one of these bales went from slightly positive to clearly negative, and remember recycling only works when it's profitable. Therefore, with far fewer buyers, MRF residual bales piled up and up until eventually. The waste processors gave up and put them into the same category as bottle caps, scraps, and those other small, unrecoverable, unprofitable pieces of plastic. Now, when you put something into one of those big blue bins that are supposed to lead

20:17to a second life for your waste, it ends up more often than not in the incinerator or landfill. Plastic recycling, with the exception of those few highest value items, is now definitively broken. But here's the thing. It was always broken. It was never recycling with a limited exception. Never generated more money than it cost, and so it was never economically sustainable. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had opened for weeks. Gemini and Chrome is here for it. Ready to make anything online makes sense? There's no place like Chrome. Chrome responses set up require compatibility and availability varies 18 plus. This episode is brought to you by Palm Olive. Family time isn't just the big moments. It's weeknight dinners.

21:18Sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palm Olive Ultra. Palm Olive's most powerful formula removes up to 99.9% of grease, leaving your dishes sparkling clean, and the new convenient pump makes cleaning even easier. So you can spend less time tackling dishes and more time together. Shop now at Palm Olive.com. Propel Fitness Water With Gatorade Electrolites, Zero Sugar, and Vitamins, Propel hydrates better than water to help you get the most out of your workout and get back to your best self. What propels you? Propel with Gatorade Electrolites The China system was just a blip. Thanks to a unique set of economic circumstances and a government that didn't yet recognize the cost of the industry's externalities. That puts the plastics industry back where it was in 1969. People are starting to realize that there is no way to make plastic sustainable. There are some half solutions. Some scientists are working to develop an enzyme that can eat plastic in a matter of days,

22:22and others are trying using chemical processes to break it down into its raw components, but the recycling problem is not a technical one. Simply performing the process of taking what's disposed of by consumers, sorting it, and melting it down into new raw materials is easy. What's not is the economics. The recycling problem is an economic one, and you can only solve economic issues with economics. The true solution is simple. Either the cost of recycling has to come down, or the price of raw recycled plastic has to go up. What's going to fix recycling is when it generates more money than it costs, but making that happen will take quite a lot. If enough consumers, for example, buy products that use recycled plastic rather than a direct alternative that uses the Virgin variant, market forces will work out in a way that, eventually, when critical mass is attained, what companies lose from customers choosing more sustainable

23:23alternatives is more than what they lose from paying to swap to more expensive, lower-quality, recycled plastic. Plastics recycling, as a system, was never created to make the world a better place. Rather, it was created by the plastics industry to plug a hole in their system, which created to propagate a false belief that consumption could be sustainable, so the only way to stop plastic from overwhelming our oceans, polluting our land, and making the world a worse place to live in is to shut the system, the entire system, down. So I get a lot of emails from potential sponsors, companies that want my business, and other professionals. I can tell you from personal experience that the biggest red flag for me in cold-call emails is when the address ends in Gmail, iCloud, Yahoo, or another generic provider's domain. Anyone could create that email in a few seconds, so I have no idea if the person is who

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