Falling Commodity Prices Force Local Governments to Rethink Approach to Recycling

A Stateline article (2016-03-29) examined the current fiscal challenges facing local government recycling and curbside pickup efforts. Prices for recycled materials have plummeted over the last several years, driven in large part by the declining demand from China which had previously been a major market driver. From the article:

For years, recycling programs seemed like magic. Municipalities, counties and state-run programs were not only improving the environment, but spending little to do so and in many cases saving money by not having to pay landfill fees or making money by selling the material to processors who wanted it. …

Prices during the cycle, from the late 1990s until the financial crisis that began in 2008, skyrocketed for nearly all raw materials. And many recyclables hit record peaks in 2008: ISRI’s weighted index of scrap metals and paper hit a high of $380.25 a ton in April of that year. Plastics experienced similar highs. Although prices plunged later that year, they rebounded quickly and nearly reached record highs again in early 2011. …

Prices began a long, gradual slide in 2011 and then dropped sharply over the course of 2015, when the ISRI index of paper and metals fell nearly $100 a ton to $156.77. Commodity prices had collapsed by nearly half from the record highs. …

Michelle Leonard, president of an association that represents public and private recyclers and haulers, the Solid Waste Association of North America, said “markets are so low right now that some processors are holding on to” recyclables rather than selling — especially those far from the West Coast ports that ship to China.

The article noted that as recycling has become more expensive, States and local governments are rethinking their approach to recycling, including placing more financial risk on governments rather than haulers and processors. However, the article stated that it was unclear if recycling rates are being reduced because of the fiscal challenges and it has not stopped states from pushing ahead with their recycling goals:

“Nobody has really been talking to us about any problems,” said Karen Moore, the recycling administrator at Florida’s Department of Environmental Protection.

“It’s far too early to tell,” said Mark Oldfield, the spokesman for CalRecycle, the state agency in charge of recycling in California. …

California, which is recycling 50 percent of its waste and wants to reach 75 percent by 2020, is also trying to find ways to create more domestic demand for recycled commodities so “we insulate ourselves from the ups and downs of the markets,” Oldfield said. …

Florida, which also has a recycling goal of 75 percent by 2020 and is at 50 percent now, has a less activist approach than California and generally leaves much of the responsibility for meeting those goals to cities and counties. However, counties that don’t meet the goals get a gentle push, Moore said.

Finally, the article highlighted the discussion within the recycling community about whether single-stream or separate collection is the best way to go. Single-stream is more convenient for consumers and has appeared to increase recycling volume. However it is also more expensive to operate and leads to contamination of material that could otherwise have been recycled. The recycling of organic and food waste is also a major topic.

Most communities that already collect recyclables from a single bin are unlikely to change any time soon. That’s because customers are used to the system and the convenience, and the infrastructure for handling it already is in place, most analysts say. …

But others argue that communities new to recycling should avoid single-bin systems. Florida’s environmental agency has gone so far as to send a memo to counties spelling out how the single-bin approach can lead to contamination and machine breakdowns.

Given that recycling of materials such as bottles, cans and glass has taken hold in much of the country, most recycling advocates and analysts argue that the next big step toward ambitious goals will be to find ways to collect and use food and other organic waste.

Useful Links

Florida Department of Environmental Protection Memo on Single-Stream Recycling Contamination

CalRecycle Website

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