China’s recent environmental policy shift is transforming the global recycled pulp market. After years of tightening restrictions on solid waste imports, China has now expanded its scope even further by banning certain types of recycled pulp. This development highlights the country’s ongoing goal to eliminate “foreign garbage” and improve the quality and sustainability of its locally produced paper. Let’s examine how these changes unfolded and what effects they may have.
The Road to Restriction: A Timeline
- The National Sword Policy (2021)
In January 2021, China fully implemented the National Sword policy — a sweeping ban on most solid waste imports, including unsorted and recycled paper. This landmark regulation marked the end of China’s role as the world’s largest importer of recyclable materials, disrupting global recycling systems that had long relied on Chinese demand.
The policy clearly aimed to cut environmental pollution, encouraged cleaner recycling at home, and stopped the import of low-quality waste passed off as recyclable materials.
- The 2025 Tightening: Crackdown on Recycled Pulp Imports
In October 2025, China took its environmental agenda a step further by targeting specific types of recycled pulp — particularly those processed through dry-milling techniques. Officials described this move as part of a campaign against “disguised foreign garbage,” emphasizing higher standards for product cleanliness and transparency in processing.
This tightening caused temporary suspensions of pulp imports and created widespread uncertainty among exporters, as inspection timelines became unpredictable. Some suppliers halted shipments entirely, concerned about possible detentions or rejections at Chinese ports.
While the government framed this as a push for higher quality, industry observers see it as a signal of an impending long-term ban on certain recycled pulp processes.
Economic and Industrial Impacts
- Supply Chain Disruptions - The new restrictions have rippled across the global paper recycling supply chain. Exporters that previously relied on China’s massive demand are scrambling to find alternative markets, while Chinese paper producers face delays and shortages in pulp supply.
- Rising Costs for Paper Manufacturers - With recycled pulp imports tightening, Chinese paper mills must turn to potentially costlier alternatives — such as virgin pulp and domestically produced recycled material. This shift is inflating production costs and, ultimately, the price of finished paper products.
These higher costs are also beginning to affect converters — companies that turn paper rolls into finished goods like packaging or tissue. Many converters that previously relied on inexpensive imports are now forced to source domestically, where material and transportation costs are higher.
In previous years, some producers — including major players like Nine Dragons Paper — had found workarounds by producing recycled paper rolls overseas and shipping them back to China. The latest restrictions appear to close this loophole, making such strategies less viable and reinforcing China’s move toward a self-sufficient, cleaner paper industry.
More broadly, once demand for containerboard and packaging grades recovers, OCC consumption is expected to stabilize, helping balance raw material prices in North America. However, with ongoing global headwinds — from tariffs and insurance costs to potential recessionary pressures — uncertainty will continue to shape the recycled pulp market heading into 2026.
- Quality Over Quantity - China’s latest policy is driven in part by a desire to improve product quality. Low-grade recycled pulp often contains impurities and dust, which compromise paper appearance and performance. By tightening controls, the government aims to encourage mills to use cleaner, higher-quality inputs.
- Global Trade Shifts - Countries in Southeast Asia and India are emerging as new destinations for recycled pulp that once flowed to China. This redistribution of trade is reshaping the recycling landscape — though these markets often lack the capacity or infrastructure to fully absorb the displaced material.
- Local Fallout - In exporting nations, the restrictions have caused some municipal recycling programs to falter. With fewer buyers for mixed or lower-quality paper waste, more recyclables are ending up in landfills, undermining sustainability goals.
Looking Ahead
China’s tightening stance on recycled pulp marks another phase in its broader anti-pollution and industrial upgrade campaign. While these policies aim to build a cleaner, higher-quality domestic manufacturing base, they also send shockwaves through global supply chains — testing the adaptability of exporters, recyclers, and manufacturers worldwide.
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