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Recycling, Once Embraced by Businesses and Environmentalists, Now Under Siege
Local officials raise fees and send recyclables to landfills as economics erode
Business
Recycling, Once Embraced by Businesses and
Environmentalists, Now Under Siege
Local officials raise fees and send recyclables to
landfills as economics erode
By Bob Tita
May 13, 2018 7:00 a.m. ET
The U.S. recycling industry is
breaking down.
Prices for scrap paper and plastic have collapsed, leading local
officials across the country to charge residents more to collect recyclables
and send some to landfills. Used newspapers, cardboard boxes and plastic
bottles are piling up at plants that can’t make a profit processing them for
export or domestic markets.
“Recycling as we know it isn’t
working,” said James Warner, chief executive of the Solid Waste Management
Authority in Lancaster County, Pa. “There’s always been ups and downs in the
market, but this is the biggest disruption that I can recall.”
U.S. recycling programs took off in
the 1990s as calls to bury less trash in landfills coincided with China’s
demand for materials such as corrugated cardboard to feed its economic boom.
Shipping lines eagerly filled containers that had brought manufactured goods to
the U.S. with paper, scrap metal and plastic bottles for the return trip to
China.
As cities aggressively expanded
recycling programs to keep more discarded household items out of landfills, the
purity of U.S. scrap deteriorated as more trash infiltrated the recyclables.
Discarded food, liquid-soaked paper and other contaminants recently accounted
for as much as 20% of the material shipped to China, according to Waste Management Inc.’s estimates, double from five years ago.
The tedious and sometimes dangerous
work of separating out that detritus at processing plants in China prompted
officials there to slash the contaminants limit this year to
0.5%. China early this month suspended all imports of U.S. recycled materials
until June 4, regardless of the quality. The recycling industry interpreted the
move as part of the growing rift between the U.S. and China over trade policies
and tariffs.
The changes have effectively cut off exports from the U.S., the
world’s largest generator of scrap paper and plastic. Collectors, processors
and the municipal governments that hire them are reconsidering what they will
accept to recycle and how much homeowners will pay for that service. Many trash
haulers and city agencies that paid for curbside collection by selling scrap
said they are now losing money on almost every ton they handle.
The upended economics are likely to permanently change the U.S.
recycling business, said William Moore, president of Moore & Associates, a
recycled-paper consultancy in Atlanta.
It’s going to take domestic demand to replace what China was buying,” he said.
“It’s not going to be a quick turnaround. It’s going to be a long-term issue.”
The waste-management authority in Lancaster County this spring
more than doubled the charge per ton that residential trash collectors must pay
to deposit recyclables at its transfer station, starting June 1. The higher
cost is expected to be passed on to residents though a 3% increase in the fees
that haulers charge households for trash collection and disposal.
The additional transfer-station proceeds will help offset a
$40-a-ton fee that the authority will start paying this summer to a company to
process the county’s recyclables. Before China raised its quality standards at
the beginning of this year, that company was paying Lancaster County $4 for
every ton of recyclables.
Mr. Warner may limit the recyclable items collected from
Lancaster County’s 500,000 residents to those that have retained some value,
such as cans and corrugated cardboard. He said mixed plastic isn’t worth
processing.
You might as well put it in the
trash from the get-go,” he said.
Environmentalists are hoping landfills are only a stopgap fix
for the glut of recyclables while the industry finds new markets and reduces
contaminants.
“Stuff is definitely getting thrown away in landfills. Nobody is happy
about it,” said Dylan de Thomas, vice president of industry collaboration for
the Recycling Partnership in Virginia. “There are very few landfill owners that
don’t operate recycling facilities, too. They’d much rather be paid for those
materials.”
Pacific Rim Recycling in Benicia, Calif., slowed
operations at its plant early this year to meet China’s new standard. But
company President Steve Moore said the more intensive sorting process takes too
long to process scrap profitably. Pacific Rim idled its processing plant in
February and furloughed 40 of its 45 employees.
“The cost is impossible. We can’t make money at
it,” Steve Moore said. “We quit accepting stuff.”
China stopped taking shipments of U.S. mixed paper
and mixed plastic in January. Steve Moore said mixed-paper shipments to other
Asian countries now fetch $5 a ton, down from as much as $150 last year. Other
buyers such as Vietnam and India have been flooded with scrap paper and plastic
that would have been sold to China in years past.
Dave Vaccarezza, president of Cal-Waste Recovery
Systems near Sacramento, Calif., intends to invest more than $6 million in new
sorting equipment to produce cleaner bales of recyclables.
“It’s going to cost the rate payer to recycle,” he
said. “They’re going to demand we make our best effort to use those cans and
bottles they put out.”
acramento County, which collects
trash and recyclables from 151,000 homes, used to earn $1.2 million a year
selling the scrap to Waste Management and another processor from scrap. Now,
the county is paying what will amount to about $1 million a year, or roughly
$35 a ton, to defray the processors’ costs. Waste Management paid the county
$250,000 to break the revenue-sharing contract and negotiate those terms.
County waste management director Doug Sloan
expects those costs to keep climbing. “We’ve been put on notice that we need to
do our part,” he said. The county hasn’t yet raised residential fees.
Some
recyclers said residents and municipalities need to give up the “single-stream”
approach of lumping used paper and cardboard together with glass, cans and
plastic in one collection truck. Single-stream collections took hold in the
waste-hauling industry about 20 years ago and continue to be widely used.
Collecting paper separately would make curbside recycling service more
expensive but cut down on contamination.
“We’re our own worst enemies,” said
Michael Barry, president of Mid America Recycling, a processing-plant operator
in Des Moines, Iowa, of single-stream recycling. “It’s almost impossible to get
the paper away from the containers.”
Even relatively pure loads of paper
have become tough to sell, Mr. Barry said, noting the domestic market for paper
is saturated as well. He stockpiled paper bales at Mid America’s warehouse,
hoping prices would improve. They didn’t. He has trucked 1,000 tons of paper to
a landfill in recent weeks.
“We had to purge,” he said. “There’s
no demand for it.”
Write to Bob Tita at robert.tita@wsj.com
Appeared in the May 14, 2018, print edition as
'Recycling Firms Hit by Crushing Economics.'