The UK could face up to a £480m hit to its recycling exports as a result of recent Chinese recovered paper import restrictions, according to a new report from Rabobank. The situation is also exacerbated by the risk of fewer export opportunities post-Brexit.
The bank has made the estimate following China’s decision earlier this year to tighten restrictions on recovered paper imports, of which the UK is the largest European supplier. Many British businesses previously relied on China to buy and recycle their waste paper packaging and other recovered paper, generating valuable revenues.
In 2016, 90% of the UK’s old corrugated containers and 67% of its mixed paper exports went to China, leaving it the most exposed country in the EU by a significant margin.

This in turn has already created an oversupply of recovered paper that the UK cannot immediately absorb, with some recyclable waste being incinerated or sent to landfill because of a lack of recycling infrastructure. The situation is also exacerbated by the potential risk of fewer export opportunities in the EU post-Brexit.
Between January and May this year, the UK’s old corrugated container prices dropped 30% and mixed paper prices suffered a 70% dip as a result of China’s changes to legislation.
Natasha Valeeva, packaging supply chains analyst at Rabobank, said: “While China’s recovered paper import restrictions have been in the pipeline for a while, the combined impact of this along with the UK’s withdrawal from the EU still leaves those in the industry with an oversupply to contend with.
“More cooperation in the supply chain between firms, local authorities and waste companies to improve recycling practices would help tackle this problem, as would significant investments by businesses to improve recycled paper collections and separations.”
Valeeva said the UK government may need to use policy changes to encourage businesses to invest in improving its recycling infrastructure to mitigate against Chinese import restrictions, which also impacts plastic waste, and Brexit.
She added: “It’s likely that the UK government will need to start boxing clever by using legislation to incentivise the industry to implement these changes.”
The UN Comtrade’s most recent figures show that the UK exported around 3.5m tonnes of recovered paper to China in 2016, in comparison to France which sent around 0.3m tonnes and the Netherlands, which exported 1.3m tonnes.
The findings come from Rabobank’s latest report on the UK’s packaging industry, Investments in Recycling Required to Restore Value in the UK Paper Packaging Supply Chain.