China's demand for PET bottles could cause the demise of Japan's recycling industry. `There is the strong possibility that the recycling system in Japan will be completely destroyed in a year or two.'TAKEHIKO MATSUMOTO Japan Containers and Packaging Recycling Association

For municipalities, it makes financial and environmental sense. Shipping used polyethylene terephthalate (PET) bottles to China brings in a tidy profit and the waste is recycled all the same.

But others in Japan don't see it that way. In fact, some say if used PET bottle exports to China continue to grow, the end of an industry in Japan is inevitable.

``There is the strong possibility that the recycling system in Japan will be completely destroyed in a year or two,'' says Takehiko Matsumoto, an official of the government's Japan Containers and Packaging Recycling Association (JCPRA).

Under the current system in Japan, municipalities collect the PET bottles and either sell them to domestic recyclers or donate them to the JCPRA.

In fiscal 2005, however, the JCPRA expects to receive at least 5 percent fewer PET bottles, the first decrease since 1997 when the recycling law came into effect.

JCPRA officials say the association will process around 177,000 tons of PET bottles in fiscal 2005, down 7.3 percent from the 191,000 tons in fiscal 2004.

The JCPRA as well as domestic dealers and processors are losing out to exporters that annually ship about 100,000 tons of used PET bottles to China.

That figure is expected to rise, considering the heavy demand in China for used plastic.

Industry sources here fear that within a matter of years, the growing exports of recyclable waste will spell the end for domestic operators.

``We hope that (municipalities) will try to understand the whole picture and cooperate with us,'' says a JCPRA official. ``Japan's objective is to be self-sufficient in recycling resources.''

But such calls to the municipalities will likely not be enough to halt the trend.

In fact, from April, the city of Kashiwa in Chiba Prefecture will enter the PET bottle market. Instead of donating its used plastic resources to JCPRA, some will be sold to exporters and shipped off to China.

Many municipalities are dissatisfied with what they call a ``flawed'' recycling system that offers little more than a huge financial burden.

For years, the city of Narashino, also in Chiba Prefecture, has either donated its waste plastic or sold it to domestic recyclers. Narashino has now decided to sell its PET bottles to the highest bidder.

Exporters pay 22 yen per kilogram of PET bottles, more than double the rate domestic dealers pay.

``It actually costs the city 80 yen to 100 yen (per kilogram) in wages just to collect and sort the bottles,'' says a Narashino official. ``Considering our tight budget, we decided to go with exporting.''

Such decisions will add to woes of domestic recycling plants, which are currently operating at only about 60 percent capacity.

Those that rely on the JCPRA supply chain will go out of business, officials fear.

Most of Japan's used PET bottles end up in Ningbo, a city 150 kilometers south of Shanghai that has emerged as one of the largest recycling hubs in the world. Each year, the port city receives tons of plastic waste, which is processed and remade into toys, stationery and even cartons for eggs.

Plastic bottles are not the only Japanese waste materials being shipped overseas.

According to the National Institute for Environment Studies, more than 10 million tons of scrap is sent to overseas recyclers each year. That's around 10 percent of the nation's total export volume.

In the five years to 2003, exports of plastic chips grew 4.8 times, copper chips quadrupled and used paper rose 3.5 times.

Most of it went to China.

However, some researchers now question if such exports are in line with the 1989 U.N. Basel Convention, which bans the shipping of hazardous waste overseas for disposal.

``We must not allow exports to so-called recycling plants that contaminate out environment,'' says Michikazu Kojima, a researcher with the Tokyo-based Institute of Developing Economies.

Last fall, Kojima visited the Guiyu district in China's Guangdong province.

Small recycling yards there contained piles of old pachinko machines and Japanese computer keyboards.

Printed circuit boards were being burned to retrieve embedded integrated-circuit chips. Noxious fumes filled the air, enough to cause an instant headache, Koijima says.

Under the Basel Convention, only waste that does not put the environment or workers' health at risk can be shipped. But the actual situation is much different.

``Exporting waste may be one way to recycle,'' says Shinichi Sakai at the National Institute for Environmental studies. ``But on the other hand, we could easily be transporting pollutants.''

He says materials that could be safely processed in Japan end up contaminating developing countries.

Although countries realize the dangers in accepting potentially toxic waste, the heavy demand sometimes outweighs the costs.

Last May, China banned all plastic scrap imports from Japan after discovering some shipments included hazardous waste.

Yet shipments are still getting through via Hong Kong.

Japan's Ministry of Economy, Trade and Industry, and the Environment Ministry say that once a shipment is treated in Hong Kong, it is no longer subject to the Chinese government's ban.

Industry sources say that China, which also accepts recyclable trash from the United States and Europe, is largely ignoring the environmental problem because of the fierce demand.

China, in fact, has yet to develop a management system to track the flow of waste material.

And in light of China's rapid economic growth, it might eventually produce enough recyclable waste that it no longer needs to import it.

Some European countries are already looking to India at the next recycling depot, according to a Japanese industry source.

Kazuhiro Ueda, a professor at Kyoto University, says things have to change.

``We need economic plans that cut down on the amount of waste produced,'' Ueda says.(IHT/Asahi: February 12,2005)