market report: Franklin Reports the Shape of Things to Come

The significant changes witnessed by solid waste professionals in the past few years are only the first steps toward the ultimate shape of the industry, according to a new report from Franklin Associates, Ltd., Prairie Village, Kan.

Its report, "Solid Waste Management at the Crossroads," describes a public sector that is working to improve its cost-effectiveness and to divert more wastes from landfills, and a private sector with emerging new companies and with existing companies that are downsizing and re-organizing.

This is all leading to a more efficient solid waste management infrastructure, according to Franklin. But before we get there, the industry has to face several challenges to increase recovery and reduce waste management costs.

For example, Franklin sees recycling and composting increasing "at a faster rate than many have predicted." It finds a 30 percent recovery rate by 2000 and 35 percent by 2010 "reasonable to expect, though not without effort and cost" (see chart).

"The real story in municipal solid waste [MSW] management," it reports, is the large increase in recycling and composting, "from about 10 percent in 1980 to 27 percent in 1995."

Source reduction - such as efforts to control or even ban yard waste - has become more prevalent, Franklin says.

And other source reduction measures "may be starting to take effect." For example, businesses are using electronic data transfer and making double-sided copies more frequently, while manufacturers of durable and nondurable goods are using less packaging to reduce the amount of materials going into the waste stream.

Franklin notes the creation in the last several years of a new infrastructure for materials recovery, which, it predicts, will be extended. The markets for the recovered materials, however, will continue to be affected by supply and demand.

Franklin predicts a continued reliance on landfills, "but tonnage landfilled will be 'flat' or [will] increase only slightly after 2000." The percentage of MSW landfilled peaked at about 82 percent in 1987 and has been declining ever since, the report notes, projecting that this decline will continue through 2010.

Simultaneously, disposal capacity has increased, which, coupled with the same or less waste headed to the landfill, has led to "tipping fees coming under pressure and landfill revenues declining in some areas."

A community can affect its waste management costs, the report suggests. For example, the community's goals should determine the level of reduction, recycling, composting and combustion, and landfilling. "Once goals are known, the optimization of collection and processing systems can improve the economics of any system."

aFranklin says that decisions are based on multiple goals: public desire to recycle, the industry's need for recovered materials, the need to preserve landfill space and, in some instances, state diversion mandates. Economies can be achieved, such as modifying household recyclable and refuse pickup frequency, instituting unit-based pricing for collection, improving processing systems and source reduction measures such as encouraging more at-home management of yard trimmings.

There are major hurdles to be overcome if the 1980s trend to increase recovery is to continue beyond 2000. The commercial sector will respond, the report suggests, to economic forces (cost avoidance vs. conventional solid waste services). Residences, on the other hand, provide the greatest challenge to continued growth of recoveries because: *Cost effectiveness of curbside collection cannot be achieved based on revenue from recovered materials because collection costs drive the economics of curbside collection.

*The extensive curbside collection infrastructure already is in place, as people are willing to overlook the increased cost over conventional collection and disposal because they want to participate in an environmentally beneficial activity.

*Once in place, the infrastructure to collect, process and prepare recyclable materials likely will stay, although it may expand and contract as markets fluctuate.

*To reach 35 percent recovery nationally, states with high recovery/diversion goals will have to offset those with limited or no recovery goals.

*Private industry continues to support recovery efforts for materials that can be recycled, but will not likely subsidize collection and processing from residential curbside programs.

*The economics of increased recovery of materials is more burdensome for programs that add materials or intensify collection requirements to push to higher recovery levels.

The report suggests that communities seeking to increase recovery or diversion must consider:

*The industry is reaching practical recovery limits for some materials, such as corrugated boxes, newspapers and yard trimmings. Curbside collection must become more cost-effective and prevalent.

*On-going educational programs must be provided to maintain recovery rates as part of the recycling budget. This includes educating citizens about environmental benefits.

*Encouraging market development for recovered materials, while recognizing that export markets are largely beyond local control.

*Adding materials and processes to gain significant value from mixed waste are proving to be difficult to implement.

One bright area is the forward integration of recyclables processing to create a higher value material output or to integrate processing with a user market. Also, improvements in composting techniques may come, the report suggests.

Markets will continue to be available for recovered materials, but some markets will not bring high prices. Prices will continue to fluctuate, and recovery and curbside recycling program costs will not be covered by recyclables revenues.

Local communities face the dual challenge of keeping costs down while responding to the recycled materials marketplace, which requires high-quality recovered materials. "Technology has not yet resolved this issue," the report concludes and suggests that it may not in the near future. With recovery for recycling and composting a background issue today, uncertainty will continue in the near future.

Acquisitions Republic Industries, Fort Lauderdale, Fla., has acquired a group of solid waste companies in a series of separate transac-tions valued at a total of approximately $70 million. The acquired companies include: Midco Waste Systems, New Brunswick, N.J.; Raritan Valley Disposal, Whitehouse, N.J.; Suburban Sanitation Services, Yuma, Ariz., and Imperial, Calif.; Rubbish Control Inc., Ventura, Calif.; and Fisk Sanitation Service Inc., Greenfield, Ind.

McLaren/Hart Inc., Rancho Cordova, Calif., has announced the signing of a definitive agreement to purchase Franklin Associates, Prairie Village, Kan. The acquisition was expected to be complete on April 1, 1998.

Eastern Environmental Services Inc., Mt. Laurel, N.J., has acquired Crown Recycling Inc., New York City, F.A. Carting Co., Nassau County, N.Y., and Ecology Systems Inc., Lyndhurst, N.J.