China’s Plastic Ban Upgrade: Degradable Plastics and Paper-Based Alternatives Compete in Packaging

In recent years, the idea of green consumption has gained ground as supermarkets and malls stopped handing out free plastic bags, restaurants and hotels stopped proactively offering single-use plastic items, and more regions rolled out waste sorting. After New Year’s Day, China’s plastic restriction rules were tightened once again. What will change in daily life, and how will the upgraded policy affect the capital market?

During on-site visits, Securities Daily reporters found that numerous large shopping centers and chain supermarkets have removed traditional plastic bags from sale, using non-woven bags and degradable plastic bags as replacements.

Since the first plastic restriction order took effect in 2008, bringing one’s own shopping bag has become a common habit. In 2016, the National Development and Reform Commission reviewed eight years of implementation and reported that plastic bag use in supermarkets and malls had fallen by more than two-thirds overall, a cumulative reduction of about 1.4 million tonnes, equal to saving 8.4 million tonnes of oil.

Yet the rapid growth of the internet economy has complicated that progress. Emerging sectors such as express delivery and food takeout rely heavily on plastic packaging, diluting the reduction achieved under the earlier policy.

Against this backdrop, the new plastic restriction order that took effect on January 1 this year covers a wider scope than the first version and includes detailed provisions for plastic substitutes, giving the upgraded policy stronger enforceability.

Under the strictest plastic restriction order, the traditional plastics substitution industry has surged. In fast-moving consumer goods packaging, degradable plastic replacement is already being implemented; meal boxes, express delivery and other packaging segments are viewed as even larger potential markets for degradable plastics. However, because degradable plastics remain costly and are mostly priced at around 1 yuan, wider adoption still faces hurdles.

Compared with degradable plastics, paper products offer a clearer cost advantage as substitutes. Listed companies in the sector have begun preparing to expand production capacity, and many institutions are bullish on paper replacing plastics. A Sinolink Securities research report argues that paper products are inexpensive and easy to decompose, and that recycling them can save wood, making them the best substitute. A Qunyi Securities report notes that paper products have ample capacity, mature production technology and a clear cost advantage.

Beyond environmentally friendly substitution, the upgraded order strengthens the sorted collection, recycling and transport of plastic waste, regulates resource recovery and harmless disposal, and launches special governance campaigns.

A Wanhe Securities research report says the primary goal of the plastic restriction order is source reduction, alongside standardizing disposal methods and tightening pollutant emissions. Zhang Yansheng, chief chemical industry analyst at Cinda Securities, also believes that the main issue with plastic pollution lies in non-standard production, use and disposal. Therefore, the response must not only restrict traditional plastic products and promote sorted bin disposal, but also allow them to play a final residual role.

Source: China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-357494.html