Massive exports of used PET bottles, especially to China, are forcing some domestic recycling businesses to suspend operations as they run short of material.</PARAGRAPH> <PHOTO> <TABLE WIDTH='200' ALIGN='RIGHT' BORDER='0'> <TR> <TD><IMG ALT='News photo' BORDER='0' SRC='/images/photos2005/nn20051231f4a.jpg' WIDTH='200' HEIGHT='138'/></TD> </TR> <TR> <TD><FONT SIZE='1'><B>Workers sort through plastic fragments at this PET bottle recycling factory on the outskirts of Beijing. </B>KYODO PHOTO/COUNCIL FOR PET BOTTLE RECYCLING</FONT></TD> </TR> <TABLE> </PHOTO> <PARAGRAPH>More and more local governments are handing over used PET bottles to exporters. 'If things go on at this rate, the domestic recycling system will collapse,' an industry executive said.</PARAGRAPH> <PARAGRAPH>Osaka-based Teijin Fibers Ltd., a textile producer, in April 2002, invested some 10 billion yen to open the world's first plant that chemically dissolves used bottles and turns them into new ones.</PARAGRAPH> <PARAGRAPH>In fiscal 2004, the plant turned out about 2 billion 500-ml bottles.</PARAGRAPH> <PARAGRAPH>But the company was unsuccessful in its effort to buy used bottles from the Japan Containers and Packaging Recycling Association, which left it short of recycling materials this fiscal year.</PARAGRAPH> <PARAGRAPH>The company was forced to halt the chemical dissolution facility, and at present, it produces bottles only from new materials.</PARAGRAPH> <PARAGRAPH>PET Rebirth Co., a recycler based in Kawasaki, only managed to obtain 10 percent of its target for used bottles and has applied for court protection under the Civil Rehabilitation Law after its business soured.</PARAGRAPH> <PARAGRAPH>'Successful bids have become difficult because the volume of bottles that local governments are handing over to exporters to China is increasing, while the volume of used bottles going to regular channels through the association is decreasing,' said Yoshio Fukuda, director of the materials polymerization business at Teijin Fibers.</PARAGRAPH> <PARAGRAPH>According to the Council for PET Bottle Recycling, established by beverage producers, 239,000 tons of bottles were recovered by local governments in 2004, out of which 47,000 tons were exported.</PARAGRAPH> <PARAGRAPH>It predicts that exports in 2006 will reach 120,000 tons, 40 percent of the total collected.</PARAGRAPH> <PARAGRAPH>One municipal official said: 'It is more profitable to export bottles to China and other countries than to hand them over to Japanese recycling companies via the regular routes. What can be sold is sold to help –

the severe fiscal situation."

China's PET bottle production is expected to reach 4 million tons in 2009, more than twice its current output.

In two or three years, China's domestic output will likely satisfy the country's demand for used bottles, which are used to make such materials as filling for stuffed animals. If domestic production of PET bottles continues to rise, exports from Japan may become unnecessary.

Recycling in China presents another problem -- environmental pollution. Critics say Chinese plants are discharging untreated waste water from the recycling process into rivers.

"To prevent environmental pollution overseas, used bottles should basically be disposed of domestically, and the state should urge local governments to hand them over to recycling enterprises via regular routes," a council official said.