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What the Trump Presidency Might Mean for Waste & Recycling

Look for the EPA playing a reduced role and some policies that could lead to a boost in MSW volumes.

Although President Donald J. Trump doesn’t take office for another two months and many details are yet to be determined, there are some indications as to what his administration might portend for the waste and recycling industry.

Solid Waste Association of North America (SWANA) Executive Director and CEO David Biderman told Waste360 that it’s too soon for any grand predictions on the Trump Administration. But there are key areas that the association will keep an eye on in the coming months.

“We will have to wait and see whether the Trump Administration seeks to reverse or modify regulations and policies issued by the United States Environmental Protection Agency (EPA), the Department of Labor and other federal agencies that impact the industry,” Biderman says. “SWANA will be monitoring the President-elect’s proposed appointments and statements for insights about potential impacts. However, at its core, managing America’s waste and recyclables is not a partisan issue. Local governments and their private sector partners work together throughout the United States to provide this essential service, regardless of which party occupies the White House or Congress. I expect they will continue to do so, in a safe and environmentally protective manner.”

Based on pre-election interviews and policy pronouncements, here’s the little of what we do know about Trump’s plans and potential appointments.

“As for the overall solid waste industry and recycling, Trump is not a big fan of subsidies and tax credits for renewable energy so those could be rolled back or ended,” speculates Patrick S. Sullivan, a senior vice president with SCS Engineers. “That would affect LFG and other biogas to energy projects, such as anaerobic digesters. The only thing I have heard him say on recycling is that we cannot lose money doing it, so I would not expect any federal regulations that require or mandate recycling or organics diversion. The Trump EPA would probably leave that to the states, but I don’t think we will see EPA doing the same level of cheerleading and advocacy for recycling.”

Michael E. Hoffman, a managing director at Stifel, put out a research note outlining some potential changes and how they could affect the industry.

“Solid waste is a high-cash tax payer as a percent of book taxes, 80 percent to 90 percent compared to most industrials with an average cash tax rate of 20 percent to 25 percent,” Hoffman wrote. “Revising the tax code to lower corporate taxes and we presume eliminating deductions is a very big positive for solid and industrial waste, which has few if any deductions other than depreciation and amortization and interest expense. Allowing a one-time repatriation of foreign domiciled profits is highly likely in our view.”

Hoffman also pointed to the possible repeal of Obamacare as having potential impacts for the industry. “Healthcare cost increases from Obamacare have been a material cost pressure in solid and industrial services and have dampened hiring,” he wrote.

Lastly, Trump has made trade policy a centerpiece of his campaign. The implications could be beneficial for all manufacturers.

“Cut U.S. corporate taxes and fix the burden of excessive environmental regulation of operating a manufacturing business in the U.S. and corporations stop moving operations overseas,” he wrote. “All of this stimulates better economic growth in the U.S. and that is good for solid and industrial waste.”

Ron McCracken, an industry consultant with RJM Associates, pointed to several potential Trump policies that could raise municipal solid waste (MSW) volumes.

McCracken lists:

  • Promised lower individual tax rates should support consumer spending, and the resulting waste generation.
  • Promised lower corporate tax rates should be good for corporate earnings, which might spur spending and waste generation.
  • If we see the promised repatriation tax reform, and it helps bring home the $2 trillion or more held overseas by U.S. corporations, it should spur spending and waste generation.
  • Promised reduction in regulations should be pro-growth and pro-waste generation.
  • Promised fiscal/infrastructure spending ($300 billion over three years) should contribute to construction & demolition and special waste volumes.

Environmental Protection Agency

Trump at times called for the elimination of the EPA. Although he backed off of that talk in September saying instead that he wanted to “refocus the EPA on its core mission of ensuring clean air, and clean, safe drinking water for all Americans.”

His comments in regards to the EPA have revolved around climate issues and conservation. He also has pledged to repeal major EPA environmental regulations, such as the Clean Power Plan, the Waters of the United States rule and Obama's Climate Action Plan.

The name being bandied about to head the EPA is Myron Ebell. Trump has tapped Ebell to lead his U.S. EPA transition team, according to a report by Scientific American.

Ebell is the director of the Center for Energy and Environment at the Competitive Enterprise Institute, a nonprofit public policy organization “dedicated to advancing the principles of limited government, free enterprise and individual liberty.”

Hoffman pointed out that legislation and regulations that govern solid and industrial waste are mature and established and therefore unlikely to change meaningfully. Hoffman also wrote that, “We would assume U.S. EPA decisions based on climate change principles will be walked back.”

Trump has also vowed to “cancel” the international Paris climate accord. He wants to open federal lands to oil and gas drilling and coal mining and throw out proposed regulations on controlling methane emissions of domestic driller.

It’s unclear if that mean any changes to the recently updated Final New Source Performance Standards and the Final Updates to Emission Guidelines that the EPA released in June.

“I think he will put someone in as the head of the EPA that will be much more business and industry friendly and will start replacing senior EPA staff with like-minded people,” speculates Sullivan. (Sullivan was involved in the process of the EPA’s consideration of the updated guidelines.) “I think many of the [greenhouse gas] regulations and programs that were started under the Obama EPA will be dialed back. Personally, I don’t think the landfill rule will be important enough for Trump’s EPA to reconsider, but I could see a dial down in EPA enforcement. But regulations, particularly GHG ones, affecting oil and gas, power and utility and other major manufacturing industries will be highly scrutinized, and he will attempt to stop or undo them if he thinks they could kill jobs or cause U.S. businesses to be less competitive.”

Infrastructure

Trump talked repeatedly on the campaign trail of the need to improve America’s infrastructure. In June, Trump said he was the only candidate who could restore the nation’s crumbling bridges and roads. A recent policy outline hints at private investments and user fees as a way to fund infrastructure improvements.

Labor & Other Appointments

Shortly before the election, Trump unveiled some potential cabinet picks. For the position of labor secretary, Politico reported Victoria Lipnic, the Commissioner of the Equal Employment Opportunity Commission as a possible choice. Lipnic also served as an assistant secretary of labor for employment standards from 2002 until 2009 and was reportedly being considered for the position of Secretary of Labor in a possible Romney administration in the 2012 election.

As for the Department of Energy, Continental Resources CEO Harold G. Hamm is seen as a leading candidate. He was an influence on Trump’s energy policy during the campaign.

And Forrest Lucas, the co-founder of oil products company Lucas Oil, is a top contender for Interior secretary.

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