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Reduce, reuse … rethink?

Jul 6, 2015
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Plastic foam is perfectly recyclable. There are machines the size of a refrigerator which can melt it down into blocks that can then be shipped to China and used to make patio furniture. Manufacturers who deal with large amounts of the stuff do recycle it, but in general, consumers don’t.

Why not? The economics just don’t work.   

Its density is low, it’s often dirty and the price one can get for those blocks shipped off to China is not lucrative enough to motivate cities or recyclers to collect and recycle it.

Recycling could not be what it is today without the good will and conscientiousness of people all over the world. But recycling is made possible in the first place by markets. Aluminum, glass and plastic from recycling plants are sold by the ton as a raw material just like steel or wheat. 

“This industry is based on creating markets for those recyclables — today’s plastic bottle can become tomorrow’s carpeting,” says Sharon Kneiss, CEO of the National Waste and Recycling Association. Aluminum cans can go from recycling bin to new cans full of soda on store shelves in about 40 days. 

But recyclers don’t set the prices at which they sell their materials. Those prices are set by the global market, and they have fallen drastically over the past year. 

“On a lot of recyclables, the economics are starting to challenge it,” Kneiss says. “We have heard that from our industry over the past year plus. That because it is a commodity market, and the commodities are significantly challenged right now, the economics of recycling are also challenged.”

Robert Anderson, a regional business development manager for the Northeast and mid-Atlantic regions for ReCommunity Recycling, says he’s been in the waste industry for 30 years. “The current market environment has been the most difficult of my career,” he says.

He offers up a litany of price shocks to make the point: “We’ve seen highs in aluminum at $2,000 per ton. Until recently it was $1,800 per ton, and today we’re less than $900 per ton. Corrugated cardboard has gone from $200 per ton to $80 per ton. PET, the plastic water bottles, were $699 per ton, now $250.”

Anderson says the current downturn is different from previous ones — the recession saw similar price falls. “In the past they were brief, and we were able to sustain it and work our way through it and wait till commodity markets return,” he says. But he now worries this could be the new normal, “which means we need to rethink our business.”

There are other phenomena undermining recycling’s profitability — and even viability in some circumstances.

Many companies have made significant progress in reducing the amount of material used to make packaging, a practice called lightweighting. 

“Today’s PET water bottle is 30 to 40 percent lighter than its brothers and sisters from even five or 10 years ago,” Anderson says. It’s a boon for resource conservation, but another burden for recyclers. “It takes 11,000 more aluminum cans to make a bale today due to lightweigthting than it did five or 10 years ago.”           

Lightweighting has meant that the makeup of the stream of recyclable content has become less lucrative. More and more of it, by mass, is made of glass these days — one of the least remunerative recyclables. 

The combined pressures have contributed to several recycler bankruptcies and plant closures. 

Those pressures have also started to change the cost-benefit analysis of recycling versus old fashioned throwing away. In urban areas, recycling has long been cheaper than landfill dumping, which has its own fees associated with it, because the value of the material subsidizes the costs of disposal, and landfill fees are high (as much as $150 per ton). New York, for example, saves 20 percent on recycled waste versus non-recycled waste that goes to landfills or incinerators.   

As recyclable materials have lost their value, landfills look more cost competitive, particularly in regions where landfill fees are cheaper, such as the Midwest. Landfill fees there can be as low as $20 per ton, according to Anderson.

In some instances, it has also contributed to commodities that have long been staples of recycling starting to go the way of plastic foam. The city of Harrisburg, Pennsylvania, is among several municipalities that have stopped recycling glass altogether. 

If prices stay low, towns and cities will have to pay more to recycle or recycle less.   

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