THE RECYCLING INDUSTRY enjoyed a wave of popularity for much of the 1990s, as many communities instituted curbside collection and the public happily participated in the programs. However, the markets for secondary materials were unstable and sometimes non-existent. Today, the dynamic seems to have reversed: While markets are generally thought to be maturing and stabilizing, participation rates are dropping. This is forcing some communities to consider dropping certain materials from collection.
In its annual roundtable discussion with a selection of public- and private-sector materials recovery facility (MRF) managers from across the country, Waste Age found that a lack of interest and lack of education are two top concerns about the recycling industry. Economic woes and budget cuts, the MRF managers say, also explain some of the reasons for the decline in recycling participation. However, apathy may be the most insidious problem. Single-stream collection continues to be a hot topic in the industry, but worries about contamination have kept most of the roundtable participants on a source-separated track.
Other concerns in the MRF managers' search for balance include the skyrocketing costs of fuel and transportation, and the long-term effects — both positive and negative — increasing Chinese demand for secondary materials will have on domestic markets.
The MRF managers participating in this year's roundtable include:
LaDonna Bolton, facility manager for GDS Conover MRF in Conover N.C., a division of Republic Services Inc.;
John Chamberlin, recycling coordinator for the Orange Grove Recycling Center, Chattanooga, Tenn.;
Terry Horst, general manager of MinnKota Recycling, Fargo, N.D.; and
John D. Yingling, resource recovery manager for Lycoming County Resource Management Services (LCRMS), Montgomery, Pa.
Waste Age (WA): What recycling issues are of greatest concern?
Horst: I am concerned about the lack of education that MinnKota, as a private recycler, has completed with public entities, legislators and the residential sector during the past five years. We have concentrated so hard on getting our operations productive, creating new business development and keeping up with technology, that we have lost our educational focus.
Chamberlin: In my region, the community participation rate is still low, and the reason is a lack of education. Much of the recycling operations are subsidized by the city of Chattanooga, but it's getting difficult to justify those costs unless participation rates double.
Bolton: We are limited on storage space, both baled and loose. Outbound trucking has been less reliable. Customers have become more conscious of rebates [from local governments for recycling a certain amount] than [in] previous years. They do not want to put extra time and labor into “the right thing to do” if it does not produce immediate profit. Many businesses and industries in our area have struggled, and they are looking for every possible penny everywhere.
Yingling: The potential loss of Pennsylvania State Department of Environmental Protection grant funding for capital equipment [is a big concern]. The state has announced that this year may be the last year for the issuance of Act 101, section 902, recycling grants. This would have a major negative impact on public-sector programs, [and the] replacing [of] collection trucks and processing equipment.
WA: Are communities in your area switching to single-stream collection? How is that affecting your operations?
Bolton: As of right now, all of the material in this area is source-separated. We have tested single-stream before, and it was not beneficial at that time. Also, the mills that we sell our product to strongly discourage single-stream because of contamination.
Chamberlin: Our plant was built for dual-stream collection. We still run it that way, but Chattanooga is in the process of going to single-stream collection and eliminating glass collection this summer. This change won't affect us much because we put most of our material through our No. 1 infeed; the second one is there only because we had to take glass.
Yingling: No. The County of Lycoming provides source-separated curbside recycling pickup to 12 municipalities on a bi-weekly basis. We generally get a very clean product, which requires minimal handling and sorting prior to processing.
Horst: No, MinnKota advocates source-separation. What I do see is a community 75 miles away sending its recyclables over a great distance to a single-stream facility in Minnesota. I realize that, in spite of MinnKota's current position on source-separation, that we must envision the future. To me, that will dictate two-stream or single-stream collections, which puts demands on equipment manufactures to offer equipment that will suit smaller cubic space operations.
WA: How are regulations affecting your business?
Horst: MinnKota entered the document destruction business in 2001. Federal legislation such as HIPAA [the Health Insurance Portability and Accountability Act], the Gramm-Leach-Bliley Act and FACTA [the Fair and Accurate Credit Transmissions Act] have created a tremendous awareness of handling documents responsibly, especially when personal identification is involved. This has generated additional volumes of paper. Also, legislation regarding electronic scrap will create opportunities for some recyclers and waste problems for others who choose not to be involved in that aspect of recycling.
Bolton: Some [bans on landfilling cardboard] are helpful, because [they] almost force businesses to take the initiative to recycle and pay attention to the environment.
Chamberlin: Tennessee has a Solid Waste Act that says you have to recycle X amount by X date, but it's basically useless because there's no teeth behind it.
WA: Many communities have said their recycling rates are stagnant or declining. Is this true in your area?
Yingling: Although the loss of industry from the area has had an impact on the volume of cardboard available for recycling, LCRMS is showing a growth in the volume of plastic bottle recycling from the public and small business. LCRMS is reviewing collection options to meet the growing demand to include expanded drop-off collection services. With the high demand for PET [polyethylene terphthalate plastic] bottles and HDPE [high-density polyethylene] jugs, this is the current growth sector of our program.
Bolton: Our participation really has not changed, but our volumes have decreased because of the local economy. We have recently added [fabrics] to compensate for some of the decrease in volume. We are looking at textile and furniture industries in the area that have a lot of trim waste. We will explore any options that we can make work.
Chamberlin: The rates are not really declining — they're just stagnant. Some smaller municipalities in our area, however, have dropped out of the recycling program entirely. They see it as a “warm, fuzzy” activity that is not worth the expense.
Horst: I would agree that the recycling rate is stagnant or, at best, at mature growth. MinnKota has increased [its] volumes of marketable recyclables primarily by absorbing a larger part of market share currently available to us, or [by] reaching out [to] geographically farther distances. We have not taken on new recycling product beyond our current mix.
WA: How have recycled commodity prices changed in the last year?
Horst: The spikes and valleys are gone. We are seeing an acceptable steady price level that allows us to cover ROI [return on investment] and invest in the business' future growth.
Bolton: The cardboard markets have stayed fairly flat. The price of office paper has decreased. Steel, aluminum and plastics have been at an all-time high.
Yingling: LCRMS has experienced a stable market for demand and price for OCC [old corrugated containers] and No. 8 news[print] in the past 12 months. A strong demand for recycled plastic resins has been a plus for the LCRMS program. The management team is concerned about a steady long-term decline in market prices during the third and fourth quarters of 2005 and beyond. We have been reviewing product contracts and proposals with an emphasis on a guaranteed floor price.
Chamberlin: The price of oil has really helped the plastics markets, which are going strong for No. 1 and No. 2. Steel and tin can prices were unbelievably high just three months ago, at about $200 per ton, but they've come down some recently. Aluminum is also on its way down after an all-time high. Every year, glass has lost a certain percentage to the PET market, but for us, it has remained constant for a number of years. We ship glass to Atlanta, where there are two plants that actually want glass, so there is some competition. However, because of higher gas prices, some haulers are now charging a fuel surcharge — sometimes as high as $50 per load.
WA: How are secondary materials markets abroad affecting your operations?
Chamberlin: For the fiber and metal markets, just about anything that can be fit in shipping containers is still being sent to China. That has affected the West Coast more, but the demand has helped move many of our commodities as well.
Horst: I view these markets abroad as a short-term positive on our operations. What happens with the domestic economy and domestic mills will determine the long-term effect on our Midwest operations.
Bolton: We do not sell anything overseas, but because the demand of the overseas markets has declined, the domestic prices have softened.
WA: What are the most important changes would you like to see in the recycling industry?
Bolton: More public awareness and education to increase recycling would help our business.
Horst: We need to resolve the huge problem of transportation of materials and the costs associated with their collection and transfer. Drivers and units are just not there as in previous years.
Yingling: The development of a cost effective/self-sustaining market for mixed No. 3 to No. 7 plastics.
Chamberlin: I would like to see the municipalities in our area make recycling mandatory. Some other areas of the country have an actual solid waste bill, but we don't do that in Chattanooga, and many people get the impression that it's all done for free. We would be in support of a pay-as-you-throw system, where [customers] are charged for solid waste disposal rather than recycling. In other areas that have done this, participation in recycling went up immediately.
WA: What advice would you give to other MRF managers about developing markets?
Bolton: Relationships are the key. Spot tons do not pay off in the long-run. Good relationships will get you through good and bad markets.
Chamberlin: I know that there is a tremendous market in post-industrial waste that is an untapped source for markets. Given the right situation, there are a lot of products out there that could be processed, particularly shrink-wrap and other kinds of plastics. Just about every community has some kind of business that is trying to get rid of this stuff. Also, when I sell my materials, I try my best to sell them locally and regionally.
Yingling: I would recommend a lot of research on what it is you're collecting — what end-uses does it have and what are the buyers' specifications? I tend to be very conservative and have learned to avoid short-term, trendy collections.
Horst: You need to understand your end-markets. This requires you to appreciate what end-markets need to do to sustain their business and how they view their own customer base. Get out of the building and meet your end-market vendors.
WA: What's the most important thing you would want people to know about MRFs?
Yingling: We are sorting and processing a raw material for industry to reuse, and we are not just baling someone's garbage or unwanted materials.
Horst: MRFs play an intricate role in the process of waste stabilization. MRFs should be perceived as environmentally friendly in that capacity, but more important [are] the jobs that are created through recycling loop.
Chamberlin: We're not just about aesthetics and keeping trees from being cut down. We recycle secondary materials here, but [Orange Grove's] primary goal is to help the community by teaching job skills to developmentally disabled adults and at-risk high school students. We employ about 70 developmentally disabled workers, and have trained and placed about 120 people in the local workforce. These jobs have added up to over $12 million that these workers have earned and spent within the community.
Bolton: MRFs have value to everyone, whether they recycle or not. We do not know the availability or cost of land, landfill space, natural resources or energy in the years to come. Who knew 10 to 25 years ago that fuel would cost what it does today? We need to respect what provides for us. Everyone has something to recycle.
Randy Woods is a contributing editor based in Seattle.