In this paper, we examine how French plastic waste exporters have adapted to a sudden fall in global demand for these products. To this end, we draw on the experience provided by China’s decision to ban imports of plastic waste in 2017. Following the ban, there was a sharp increase in exports to other Asian countries, but this reorientation appears to have been short-lived, unlike the shift towards the EU. Furthermore, changes in the structure of French exports suggest a form of polarisation in plastic waste flows between destinations. In light of these findings, we examine the potential impact of new regulations introduced by the EU, which aim to significantly reduce European exports of plastic waste.
From Guangzhou to Naples: French exports of plastic waste
This paper examines how French exporters have adapted – in terms of export volumes, destinations and prices – to the sudden fall in global demand for plastic waste. It then examines the potential impact of new European regulations.
Reference IPP Policy Brief No. 64
Presentation
Key Results
- Since 1 January 2021, the European Commission has (i) banned exports of hard-to-recycle plastic waste to non-OECD countries, and (ii) introduced a ‘prior written notification and consent procedure’ for all other transactions involving hazardous or hard-to-recycle waste.
- This regulation amounts to a demand shock for European producers of plastic waste.
- We examine the potential impact of this shock using data from a comparable natural experiment, namely China’s 2017 ban on plastic waste imports.
- Before the ban, China imported 85 per cent of the volume of plastic waste traded on international markets. In 2018, when China completely banned the import of such waste, the overall volume of global trade fell by 55 per cent, but a substantial proportion of trade flows was redirected to countries other than China.
- French exporters directly affected by the Chinese ban increased their exports to other countries, notably Malaysia and Turkey, but also within the EU, to Spain for example.
- The data appear to indicate a specialisation of intra-EU trade following the ban: some countries, such as Germany and Belgium, are absorbing relatively low-quality plastic waste, whilst others, such as Spain and Italy, are importing more expensive products.
- Such specialisation may prove effective, although certain recent developments suggest that some of these effects can be attributed to the growth of illegal activities.
- Mitigating the impact on markets caused by the 2021 European regulations requires immediate investment in sorting and recycling capacity to prevent the growth of illegal trade.
Partners
The authors would like to thank the following for their support: the Investissements d’avenir programme (ANR-11-IDEX0003/Labex Ecodec/ANR-11-LABX-0047), the European Research Council (ERC) under the European Union’s Horizon 2020 Research and Innovation Programme (grant agreement No 714597), and the UQAM Research Chair on the Local Impact of Multinational Corporations.