New China plastics bans could affect polyethylene trade

China, having banned imports of plastic scrap, is now tackling the problem of plastic waste internally. On 19 January, the government announced new regulations that will prohibit or severely limit the domestic production and use of various plastic products step-wise in the years ahead. The resulting shifts in China's domestic market could add to the challenges faced by net exporters of polyethylene, say analysts at IHS Markit.

The measures include a ban on the production and sale of plastic shopping bags with a thickness less than 25 microns and polyethylene agricultural mulch film with a thickness less than 10 microns, although the timeline is not yet clear. Disposable foamed plastic tableware and cotton swabs will be prohibited by the end of 2020. Production of personal care/beauty products containing plastics beads will be prohibited by the end of 2020, with sales to follow by the end of 2022.

On the recycling front, imports of plastic scrap continue to be banned completely, and the recycling of plastic medical waste is also now banned.

Other measures take aim at single-use plastic products. By the end of 2020, the use of non-degradable plastic bags in shopping malls, supermarkets, pharmacies, bookstores, catering, and exhibitions will be banned in Beijing, Shanghai, Tianjin, Chongqing, and other cities. The ban will be extended to all areas above the prefecture-level and coastal counties by the end of 2022, and to smaller regions by the end of 2025.

Caterers will be forbidden from using non-degradable plastic straws nationwide by the end of 2020, and non-degradable plastic tableware for cities in the prefecture-level and above. By the end of 2022, the rules will be extended to counties.

Nationwide, star-rated hotels will no longer be allowed to provide single-use plastics supplies such as toothbrushes, slippers, personal care items in plastic bottles by the end of 2022, and the policy will be extended throughout the hospitality industry by 2025.

Delivery plastics packaging - Non-degradable plastic packaging bags and single-use plastic woven bags in Post offices in Beijing, Shanghai, Jiangsu, Zhejiang, Fujian, Guangdong, and other major provinces will ban plastic delivery packaging and non-degradable plastic tapes by the end of 2022. The ban will be extended nationwide by the end of 2025.

"The banning of polyethylene shopping bags and agricultural mulch film that are less than a specific minimum thickness would mean thicker bags and films will be produced in the near term if alternative material solutions are not developed for these applications," says Joel Morales, senior director/polyolefins, Americas at IHS Markit. "Restricting the uses of disposable plastics bags will likely lead consumers to adopt alternative materials such as reusable PP woven and nonwoven bags as a replacement."

It isn't clear yet what constitutes "degradable" under the new rules. "Until biodegradable technologies mature and become cost-competitive, most of the goals around the use of biodegradable materials appear unrealistic and are therefore unlikely to significantly impact near term resin demand," says Morales.

The restrictions on disposable tableware products will mainly affect polystyrene, the resin used for most disposable cutlery and food delivery packaging in China. Polypropylene is used to make single-use straws, but the volume is small.

"However, these policy changes do have major potential effects on other regions," Morales adds. "The National Sword Campaign has effectively blocked scrap imports from other regions since 2018 and has been a huge, demand driver for virgin polyethylene and polypropylene, as much of the scrap demand has been replaced by virgin products. Given the very competitive local markets for virgin resin in China, other net export regions could face additional challenges beyond the existing global oversupply conditions if China’s demand for virgin polyethylene is reduced [by the new policy]."