Residential recycling programs have existed in the United States for the better part of the last 30 years and recycling from home has generally made good sense both environmentally and economically for everyone involved, despite the ups and downs of the markets for recovered paper, plastics, and metals.
Residential collection companies, whether operated by municipalities or private companies, collect materials for processing at materials recovery facilities (commonly known as MRFs). MRF operators pay the collection companies for each ton of material delivered. In good times, collection companies can receive a substantial price for the recyclables. The earnings from these recyclables have helped subsidize the cost of providing the collection service to residential customers who expected recycling to be “free” or at least at a lower cost than trash collection.
The recycling world, however, has changed dramatically in the last six months. We have gotten to the point where longtime recycling veterans are saying that, “Recycling as we know it isn’t working.” (James Warner, the chief executive of the Solid Waste Management Authority in Lancaster County, PA “Recycling, Once Embraced by Businesses and Environmentalists, Now Under Siege,” The Wall Street Journal, May 13, 2018.)
Residential recycling will not make economic sense today in many places in the United States unless customers pay more for the service. The current price that recycling collection companies charge to collect recyclables from residential homes does not come close to covering the costs of deploying a truck and driver AND the cost of delivering recyclables to a MRF. MRF operators are now charging collection companies close to, if not more than, the cost to landfill the same material. The current conditions are the result of several factors, the two most critical ones are: 1) high levels of contamination in the recycling material collected from homes, and 2) changing international markets for recycling commodities, especially in China.
What do we mean by contamination? When recyclers put out their bins full of old newspapers, cardboard boxes, junk mail, water bottles, aluminum cans, and milk jugs, they face a dilemma – should I put this (whatever it is) in the trash or in the recycling bin? When recycling bins were small, people put the objects that might or might not be recyclable in the trash. But when customers were provided with big carts for recycling, the default became to put the object in the recycling container in the hope that it would get recycled (a behavior referred to as “wish cycling”). Confusing recycling arrows and messages have not helped. Single stream recycling (where a resident can put all recyclables into a single container) is also part of the challenge. There are countless stories of objects that have come across MRF conveyor belts that have no business being there – plastic bags, strings of Christmas lights, dirty diapers, hoses, bowling balls, car mufflers, etc. In most cities, the contamination levels of recyclables collected on the curb ranges between 15 and 30 percent.
MRF operators try, with some success, to get the contamination out of the finished commodities. Bales of processed cardboard, however, typically contain at least 5 percent contaminants by weight (92.5 pounds of junk for every 1850 pound bale of material). To reduce contamination levels to acceptable levels, conveyors need to slow down and additional sorting (either people or devices) need to be added – all of which have caused processing costs to soar. As a result, MRF operators have to charge more to stay in business.
What does China have to do with recycling? A lot. For over a decade Chinese paper mills have been important buyers of recovered paper from the United States. Last year, the Chinese bought almost two-thirds of the recovered paper (~10 million tons), most of the mixed plastic, and half the scrap aluminum that the US sold overseas, according to the Institute of Scrap Recycling Industries Inc. For years, Chinese mills complained about the quality of the recovered paper they bought from U.S. recyclers, but they continued to buy it and we continued to sell it to them. Things have changed now and the Chinese are unlikely to be the active buyers they once were. The Chinese Government has responded to concerns that China had become the dumping ground for other countries’ trash. Pollution levels in China are high, and air and water quality are poor – people were noticing. In early 2018, the Chinese Government imposed a restriction of no more than 0.5 percent contamination in recovered paper sold to China (9 pounds of junk in an 1850 pound bale) imposed a ban on mixed residential recycling materials of any kind and on post-consumer plastics, while making a push to develop their own recycling programs.
Without the Chinese market, US MRFs have turned to other markets in Asia as well as domestic producers, but recovered paper has flooded those markets and prices have come crashing down – the price for a ton of “mixed paper” (a hybrid of small cardboard, newspaper, and cereal boxes) that sold for $80/ton a year ago has a value today in many parts of the US of less than $0. Similar trends in old newspapers and mixed plastics have further reduced the entire value of the recycling stream. Like most commodity markets, the recycling market has been cyclical and adverse conditions eventually turned around, but this time it is different. The importation of recyclables/trash has become a political subject in China, not just an economic one.
What does this mean to you, our recycling customer? In the short term, it means that the cost of recycling outweighs the value of recycling for most companies involved in the process. MRF operators who face rising costs and falling values for their commodities must pass those costs on to collection companies to survive, and collection companies, in turn, must pass on those costs to customers. No collection company is immune to this challenge. Some may charge more for trash service to continue the illusion that recycling is lower-cost than trash collection, while others will charge appropriately for recycling services and explain why higher prices or additional fees are warranted. Although the convenience of residential recycling is attractive to consumers, it has to make economic sense for companies or local governments to continue providing it. No one is happy about the situation we find ourselves in today, but recycling that is not economically grounded is just not sustainable.