The Government of Malaysia has suspended the import licenses of 114 recycled plastics companies in the country for three months.
Effectively, this means that imports of plastics are banned for the duration of the suspension.
Malaysia’s Ministry of Housing and Local Government said that imports of the commodity code 3915, covering all types of waste plastic imports, would be suspended for the 114 companies for three months from 24 July.
In a press conference, Housing and Local Government Minister Zuraida Kamaruddin said that serious pollution from illegal factories had led to the ban.
Throughout the period of the import suspension, local authorities will need to inspect plastics recycling facilities to check they comply with the law and have been approved by the Ministry.
Zuraida Kamaruddin said: “In the three-month period, all plants that have had their licenses terminated will have to reapply with new criteria to ensure no abuse of power and violations of standards.”
This new criteria will include having an approval letter from the Ministry of Environment as well as a local authority premise license.
Recycling export disruption
For UK exporters, this move by Malaysia is likely to cause huge disruption. Since China banned imports of all plastics from the beginning of 2018, Malaysia has been the dominant export market. According to HMRC data collated by REB Market Intelligence, 45,663 tonnes of the waste polymers of ethylene commodity code has been exported from the UK to Malaysia from January 2018 through to May 2018. See our most recent Recycling Export Report: Plastic for more information.
In comparison, the whole of the EU took 30,090 tonnes in the same period, while Vietnam which has also temporarily suspended imports, was the destination for just 16,698 tonnes of UK material in the same five months.
Thailand also recently banned plastic imports, although volumes to there had been small from the UK anyway.
Malaysia previously banned imports for a brief period in September 2012, but the impact then was limited as China was by far the largest export destination. Asian recycling expert Steve Wong also recently predicted that Malaysia would ban plastic imports.
REB Market Intelligence understands that shipping lines are increasingly refusing to accept bookings for Asia-bound containers that include waste plastics, and to a lesser extent paper, due to the risk that new rules can be implemented while the shipments are on the water.
This could mean that when bans in Malaysia and Vietnam are lifted, it will be difficult to send material there anyway. Either shipping lines might refuse to continue taking containers, or they will require a very large premium for doing so.
Vietnam is expected to re-open for imports to a small number of license holders within the next six weeks, while Malaysia will now remain shut until the end of October.
