Market forces put America’s recycling industry in the dumps

Ben Harvey, an owner at EL Harvey & Sons, a waste and recycling company, stands on Sept. 6 next to bundles of mixed fiber, composed of a variety of paper and cardboard, in Westborough, Mass. The company is stacking and keeping about 2,500 tons of the material, which is awaiting a destination where a recycler will process the bundles. Recycling programs throughout the United States are being shut down or scaled back because of a market plunge blamed on contamination at the curbside bin. (AP Photo/Charles Krupa)

By MARY ESCH
Associated Press

America’s recycling industry is in the dumps.

La Crosse is just one of many cities throughout the country that have scaled back their recycling policies in response to a crash in the global market for recyclable materials. In many places, mountains of now-worthless paper have piled up at sorting centers. Cities and towns that once made money on recyclables are instead paying high fees to have processing plants take them. Some financially strapped recycling processors have been shut down entirely, leaving municipalities with no choice but to dump or incinerate their recyclables.

“There’s no market. We’re paying to get rid of it,” says Ben Harvey, president of EL Harvey & Sons, which handles recyclables from about 30 places at its sorting center in Westborough, Massachusetts. “Seventy-five percent of what goes through our plant is worth nothing to negative numbers now.”

It all stems from a policy shift by China, long the world’s leading recyclables buyer. At the beginning of the year, China enacted an anti-pollution policy that closed the country’s doors to loads of waste-paper, metal and plastic materials, save those that are 99.5 percent pure. That’s an unattainable standard at many U.S. single-stream recycling processing plants, which tend to be designed to churn out bales of paper or plastic that are, at best, 97 percent free of contaminants such as foam cups and food waste.

The resulting glut of recyclable materials has caused prices to plummet from levels that had already been depressed by other economic forces, including lower prices for oil, a big ingredient in plastics.

The three largest publicly traded residential waste-hauling and recycling companies in North America — Waste Management, Republic Services and Waste Connections — reported steep drops in recycling revenues in their second quarters. The Houston-based company Waste Management reported its average price for recyclables was down 43 percent from the previous year.

“A year ago, a bale of mixed paper was worth about $100 per ton; today we have to pay about $15 to get rid of it,” says Richard Coupland, vice president for municipal sales at the Phoenix-based company Republic, which handles 75 million tons of municipal solid waste and 8 million tons of recyclables a year. “Smaller recycling companies aren’t able to stay in business and are shutting down.”

A child’s shoe, which was co-mingled with recyclable materials collected from residential collections, is transported on a conveyor belt to a machine that separates paper, plastics and metals in a processing building at EL Harvey & Sons in Westborough, Mass. (AP Photo/Charles Krupa)

Kirkwood, Missouri, announced plans this summer to end its curbside-recycling program after a St. Louis-area processing center was shut down. Recycling programs have also been canceled in Gouldsboro, Maine; DeBary, Florida; Franklin, New Hampshire; and Adrian Township, Michigan. And beyond La Crosse, programs have been scaled back in Flagstaff, Arizona; and Kankakee, Illinois.

Other places are maintaining recycling programs but taking a financial hit as regional processors have raised their rates to offset their losses. Richland, Washington, is now paying $122 a ton for Waste Management to take its recycling; last year, the city was paid $16 a ton for the materials. Stamford, Connecticut, received $95,000 for recyclables last year; the city’s new contract requires it to pay $700,000.

A big source of trouble, besides lower commodity prices overall, is sloppy recycling habits.

In the early days of recycling, people had to wash bottles and cans, and sort paper, plastic, glass and metal into separate bins. Now there’s single-stream recycling, which allows all recyclables to be tossed into one bin. Although single-stream recycling has made certain things more efficient, and customers like it, it has impeded attempts to prevent contamination.

One need only go to Republic’s recycling center in Beacon, about an hour’s drive north of New York City, to see why. About a third of the material dumped there by collection trucks is non-recyclable “contaminants” such as garden hoses, picnic coolers and broken lawnmowers.

Workers have to pull that out and truck it to a landfill, adding to the total cost. Plastic bags contaminate bales of other materials and tangle machinery. Spilled ketchup and greasy pizza boxes turn otherwise marketable material into garbage.

“The death of recycling was completely avoidable and incredibly easily fixed,” says Mitch Hedlund, executive director of Recycle Across America, which calls for standardized labeling on recycling bins so people understand what goes in and what doesn’t.

A range of initiatives have been started to get people to recycle right. Chicago is putting “oops” tags on curbside recycling bins with improper contents and leaving them uncollected. Rhode Island is airing “Let’s Recycle Right” ads.

Although some recyclable materials have been diverted to other Asian markets since China closed its doors, there are also signs of market improvement in the U.S., said David Biderman, CEO and executive director of the Solid Waste Association of North America. He noted that Chinese paper manufacturers that had relied on having recyclables imported into their country have recently purchased closed-down mills in Kentucky, Maine and Wisconsin.

Meanwhile, materials processors are re-negotiating contracts with municipalities in response to the fact that prices paid for recyclable materials no longer offset the cost of collecting and sorting them.

“What we’re advocating is to step back and re-look at recycling,” Republic’s Coupland said. “This is the new normal. The model no longer funds itself.”