Scrapping waste imports would cut deep, Vietnamese paper makers worry

By Huy Phong   October 31, 2018 | 05:31 pm PT
Scrapping waste imports would cut deep, Vietnamese paper makers worry
By 2025, the demand for material to make packaging paper in Vietnam is expected to rise to 13 million tons. Photo by VnExpress
Vietnamese paper makers are worried they will lack raw material for production if mixed paper waste import is banned.

The Vietnamese paper industry expects to import increasing amounts of paper waste to keep up with rising demand, particularly of packaging. This year, more than 2 million tons of paper waste are expected to be imported.

"By 2025, the demand for material to make packaging paper will rise to 13 million tons, but domestic trash collection can only provide 4.3 million tons, meaning we will have to import 8.9 million tons of paper waste,” Hoang Trung Son, vice chairman of Vietnam Pulp and Paper Association (VPPA), said at a recent workshop in Hanoi.

Among all kinds of paper waste that Vietnamese firms import to make paper, demand for mixed paper waste is highest, making up 30-40 percent of the total.

Data from the General Department of Customs shows more than 100 paper, packaging, and import and export firms in Vietnam are importing mixed paper waste.

But in a new draft regulation on scrap imports, the Ministry of Natural Resources and Environment has suggested removing several types of scrap from the list of permitted imports, including mixed paper.

Businesses and experts are worried about the impacts that this restriction can have on the production of paper in Vietnam, given the heavy reliance of the industry on this source of raw material.

“Mixed paper waste accounted for 37 percent of the total amount of paper waste imported into Vietnam in the first half this year. Prices of mixed paper waste are $90-100 per ton while that of other types of paper waste are around $150 per ton,” said Pham Dinh Thuong, a policy analyst.

If Vietnam bans mixed paper waste imports, producers will have to switch to importing other kinds of paper, which could lead to annual losses of $37 million per year, he said.

Thuong said the environment ministry has suggested banning mixed paper waste imports because it believes that this type of paper is the one that has yet to be categorized, making it difficult to manage.

However, most of the mixed paper waste that Vietnam has imported so far is from Europe and the U.S. and has been assessed in accordance with international standards, he added.

Check quality

Thuong suggested Vietnam should be flexible and check the quality of the imported paper waste instead of banning it outright.

“The authorities should make sure that the mixed paper waste imported into Vietnam has been recognized to have impurities as regulated and at the same time, inspect the paper factories to see how their operators deal with environment pollution when treating paper waste,” he said.

A sudden ban on mixed paper import will push companies into a passive position and have negative impacts on other sectors such as packaging and exports, he said.

Thuong’s analysis was supported by businesses, which said the domestic supply of paper waste cannot meet current demand. So far, domestic paper waste has only met less than 40 percent of local demand, while the global average rate is 56 percent. It is as high as 80 percent in Japan.

“Vietnamese people do not have the habit of categorizing waste. The government does not have any policy to encourage people to collect and recycle paper waste. The collection of paper waste is not well-organized, resulting in high collection costs and low efficiency,” said Son of VPPA.

Pollution concerns

The draft regulation drawn up by the environment ministry has followed the Prime Minister’s directive to tighten management of scrap imports because of huge environmental pollution problems.

The ministry said mixed paper waste comes from too many different sources and is usually used to make into low quality paper. Worse, the manufacturing process would dump dangerous wastewater into the environment.

Environment Minister Tran Hong Ha told a ministry meeting in July that the ministry will only allow companies that can equip themselves with warehouses and standard technologies to treat waste properly to import scrap.

In a directive issued in September, PM Nguyen Xuan Phuc instructed the Finance, and Industry and Trade ministries to review and make required changes to the temporary ban on the import, re-export, transit and transshipment of scrap.

The PM also instructed the Ministry of Natural Resources and Environment not to issue new licenses or extend existing licenses to units allowed to import scrap via third parties and those that import scrap merely to process and resell.

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