One of Sydney’s largest recycling plants has become the latest casualty of a collapse in market prices for plastics and paper products two years after China slapped a ban on foreign waste.
Polytrade Recycling’s plant at Rydalmere in the city’s north west will close at the end of March, forcing four councils – Fairfield, the Inner West, Willoughby and Lithgow – to find alternative facilities to recycle materials residents drop in yellow-top bins.
The closure comes three years after the plant received a $5 million grant from the NSW government to help pay for installing equipment that processes mixed plastics. Polytrade also received another $5 million in 2017 for a glass facility in Sydney.
Willoughby Council said it “may consider an increase in rates in the future” because the cost of an alternative recycler was more than double the price of Polytrade.
Last week the council began sending recyclables to iQ Renew, which has a plant on the Central Coast, after Polytrade cited China’s waste ban and “subsequent collapse of the international and local recycling market” as reasons for the closure.
Polytrade group general manager Tony Lyons said it had become more expensive to recycle in Australia and “someone needs to pay for it”.
“The lease is ending at Rydalmere and the intention to build a large-scale materials recovery facility in Sydney has been put on hold until we are confident that the gate fee being collected creates a price mechanism that allows that investment,” he said.
That fee is what councils and companies are charged for the materials they send to a plant.
The company said it was hoping to provide employment for the plant’s 15 staff at its other facilities in Sydney, including one at Enfield.
The Waste Contractors and Recyclers Association said worldwide demand for recyclables had plummeted since China’s ban, while the cost of processing plastics and other materials had soared because buyers wanted much lower rates of contamination in the products.
“The users have to pay. There needs to be more money in the system if we are to achieve a higher standard of recyclables,” the association’s executive director, Tony Khoury, said.
“From an industry point of view, this has come about because the whole recycling industry worldwide is in crisis. We have lost half of the demand with a stroke of a pen.”
Recycling facilities in Australia have been built to comply with China’s previous specifications for waste, which had permitted a higher level of contamination and cross contamination of materials.
Mr Khoury said there was “no doubt” the crisis would force up the cost of recycling for councils, warning it would be “very prudent for them to make a provision for additional recycling processing costs”.
Fairfield City Council said it would not know whether costs would rise until a tender for a new recycling processor was completed, following the end of its contract with Polytrade.