The Chinese Plastics Ban and the Consequences
Declining Demand for Polyethylene Expected
According to ICIS (Independent Commodity Intelligence Services), a London-based market research company belonging to Reed Business Information, China will ban or restrict the production, sales and use of disposable plastic products via three stages in the next five years. The following measures are planned on the basis of an instruction jointly issued by the National Development and Reform Commission and the Ministry of Ecology and Environment.
- Plastic Films: The policy explicitly prohibits the production and sale of products including ultra-thin plastic bags with a thickness of less than 0.025 mm and polyethylene agricultural mulch with a thickness of less than 0.01 mm.
- Foam plastics, cosmetics and microbeads: By the end of 2020, the production and sale of disposable foam plastic tableware, disposable plastic cotton swabs, and the production of daily chemical products containing plastic microbeads will also be phased out.
- Non-degradable plastic bags: By the end of 2020, non-degradable plastic bags will be forbidden in key cities, and the scope of implementation will be gradually expanded in 2022 and 2025.
- Disposable plastic tableware: At the end of 2020, disposable plastic straws will be banned in the catering industry across the country; disposable plastic tableware banned in key cities; and the scope of implementation will be further expanded in 2022. By 2025, the consumption of disposable plastic tableware in the catering and takeout area of cities above the prefecture level will be reduced by 30%.
- Disposable plastic items for hotels: By the end of 2022, star-rated hotels nationwide should no longer actively provide disposable plastic supplies. By the end of 2025, all hotels and home-stay businesses will have to follow.
- Express plastic packaging: By the end of 2022, key provinces and cities such as Beijing, Shanghai, Guangdong, Fujian, Zhejiang, Jiangsu and others, will be prohibited from using disposable plastic packaging bags and woven bags for express delivery, and the amount of plastic tape should be reduced. By the end of 2025, nationwide express delivery outlets will follow.
John Richardson, Senior Consultant, Asia at the commodity market intelligence provider ICIS: “China polymers or plastics demand is by volume is the biggest in the world and its growth in demand is also the largest. China is the biggest polymer import market in the world, especially for polyethylene, around half of the demand for which is in single-use plastics. So, whatever happens in China is a big deal for the global polymers business.”
ICSI assumes that China's demand for PE is currently about 37 Mt per year. Even with a growth rate of only 1% lower than in the base scenario (Fig. 2), global PE demand would be several megatonnes lower in a few years.
Effects on the Demand for Polyethylene
“For around two years now, the indications have been that China has been taking its plastic rubbish crisis very seriously. The first indication of this were the heavy restrictions it placed on imported, unsorted and uncleaned plastics that came into effect from January 2018. China was the dumping ground for plastic waste from the West. It introduced the restrictions to better protect the health of recycling workers”, says Richardson.
Reportedly, there were indications that China would start tackling its local plastic rubbish problem through introducing bans on single-use plastic that had little societal value and modernizing a pretty disorganized and inefficient local recycling sector.
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