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Insight | Time: Dec 27 2017 4:37PM
Policy signals from the first batch of government approval of re-PET
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On Dec 26, 2017, Gov announced the suggested 1th batch, 2018 of enterprises got approval to import re-PET , with quantity of 5,692tons. The approved import volume in the 1th batch of 2017 totaled 1.486million tons, of which, waste , parings and scrap of PET was 1.218million tons, and waste PET bottle bricks was 268kt. The approved import volume in the 1th batch of 2016 totaled 1.113million tons

2018 Re-PET import approval (Batch No.1)Suggested version
No. End-user Wastes Applied import quantity (MT) Approved import quantity (MT) Customs
1 Ningbo Dafa Chemical Fiber Co., Ltd. Waste , parings and scrap of PET (waste PET bottles (brick) not included) 4342 860 Ningbo
2 Ningbo Shunxing Technology Co., Ltd. Waste , parings and scrap of PET (waste PET bottles (brick) not included) 1350 670 Ningbo

Reasons behind the slump

1, Tightened policy
The Ministry of Environmental Protection stressed many times that all local governments shall strictly limit the review of import license of solid waste in 2018. The top priority now is to greatly reduce import volume so that the task set in the Implementation Plan on Prohibiting Importing Foreign Garbage and Promoting Solid Waste Management System Reform be over-fulfilled. Thus it is not surprising that the first batch of import license recorded such stunning fall.

2, No applications summiting in some areas
2018 will mark the turning point of policy reform. Policies will greatly change and environmental protection show very strict. At present, though some local governments have accepted enterprises’ application for import license, the application is still under review before related departments summiting information to their superior competent departments. Some say that given the historic change of policies, some local governments may wait until they get a clear hang of these changes and get some experience in this respect.

3, Fewer applying enterprises
Some were found with many problems during the government’s inspection over solid waste import enterprises in July so that they were banned or restrained in applying import license. Of all 1792 enterprises inspected, 1074 or 60% of them were punished, of which, 62 were recycled polyester fibers plants. Some traders in Shanghai and Guangdong were also impacted due to the inspection. What’s more, new policies required that importers and en-users of solid waste shall be the same. This also reduced applications.

Significant implications

1, Import of clean flakes still disallowed
Though the name of the wastes and their HS Code change not, the imported sources allowed may only come from industrial wastes while import of re-PET from living sources not allowed. Thus the saying that clean flakes may be allowed to import can’t stand water. For detailed information, please refer to: Interpretations of setting-tone re-PET import policy
2, Reform policies set to be implemented
From the publication of the solid waste import ban to its implementation, the government wastes no time. It aims to fulfill the target set in the Implementation Plan by vigorously controlling the approved import volume.

3, Government reviews will increase or not
As stated before, some municipal or provincial departments are still reviewing the applications of enterprises. Later as policies become clearer and more enterprises submit applications, the number of reviews may increase. However, now that the government tries to limit the import volume of solid waste and strengthen regulation, this increase, if any, will not show positive.

4, How much import volume in 2018
On the basis of current policy implications, import volume of re-PET, if all is from industrial sources, is positively estimated to be 300kt. What’s more, as many enterprises have invested in producing recycled granule in foreign countries, recycled PET chip import volume may increase, bridging somewhat the shortage of PET flakes.

On the whole, recycled polyester industry is bound to reshuffle in the future. However, enterprises have no reason to think that the industry will collapse. Instead, they should adjust themselves to these changes and dig out the opportunities behind them and do their part to upgrade the industry.
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