China bans imports. Demand suddenly drops for a commodity found on Canadian farms. Supplies build up and prices drop in the rest of the world.
No, we’re not talking about soybeans or canola.
That all-too-familiar market scenario is playing out in the global plastic recycling industry.
“The world is in a recycling crisis right now,” says Barry Friesen, general manager of Cleanfarms — the non-profit industry stewardship organization that recycles agricultural plastics across Canada.
“50 percent of the world’s plastics up until two years ago were being shipped to China. We were just shipping container loads, and China put a stop to it,” he explains. “All of that material has backed up into the rest of the world.”
Last year marked the 30th anniversary for Cleanfarms‘ flagship program for recycling chemical and fertilizer jugs.
“We’re feeling the struggle with trying to find markets for the jugs that we’ve been recycling since 1989,” says Friesen, noting half the world’s recycling infrastructure essentially evaporated from the supply/demand equation with China’s unilateral decision to stop importing recyclables.
As usually happens when there’s excess supply and low prices in a market, entrepreneurs come along and create new demand. But that takes time and an understanding of the supply situation, says Friesen.
It’s for that reason that Cleanfarms has launched a national research project to get a better understanding of what farms across Canada are generating in terms of recyclable plastic. Phase one of the project will focus on collecting data and identifying opportunities to boost the amount of farm plastic that gets recycled. This research will include on-farm visits and interviews with farm operation experts and potential plastics end-market customers.
“The key here is to try and determine what is being generated, where it’s being generated, and how much. Then we can develop programs to properly recycle it or properly dispose of it,” he says.
The second phase will see this information shared with investors looking to build recycling facilities, says Friesen.
“There are people asking us everyday ‘what if I build a recycling plant here?’ We say ‘absolutely, but on the other hand, perhaps we don’t need five of those plants because there’s not enough volume,'” he says.
The initiative also fits with the federal government’s effort to reduce plastic waste. Cleanfarms received financial support for the research project from Environment and Climate Change Canada.
“We’re doing it because it’s the right thing to do. It’s environmentally responsible, socially responsible, and economically responsible because we’re creating new jobs here in Alberta and across the country,” says Friesen.
Cleanfarms’ Barry Friesen joined Jessika Guse at FarmTech in Edmonton, Alta. last week to discuss the market for agricultural plastics and the new research project looking at on-farm plastic recycling opportunities: