Declining recycling rates and continued market stability for recyclables. Those are just two of several issues that were first and foremost on the minds of materials recovery facility (MRF) managers recently interviewed by Waste Age during a cyberspace roundtable. The managers, who represented both the public and private sectors, also discussed the value of working with manufacturers and the effects of overseas recyclable demand on their operations and imparted some advice for their colleagues.

The participants in the annual MRF roundtable were:

Waste Age (WA): What recycling issues are of greatest concern to you right now?

Hammond: At present, our greatest concern is the amount of material we have been collecting through our curbside recycling program. For the past several years, the amount of material collected has remained flat even though the population rate has increased and the amount of MSW [municipal solid waste] has increased.

Brown: Ensuring that our residents participate at the highest level possible to enhance landfill diversion and fill capacity at the recycling facility. The concern is that recycling is losing its buzz. Additionally, we would like to offer a solution to commercial/business generators to make recycling economic and practical.

Taylor: The greatest concern is for the long-term economic health of the domestic fiber industry. While overseas demand has certainly helped keep supply and demand in balance, and has provided for stable pricing over the last two years, the domestic fiber industry will continue to be the driver for the recycling industry.

Viny: Market stability for recycled materials. Prices for fiber and metals are substantially influenced by Asian demand. As China's infrastructure growth rate begins to slow down, will U.S. pricing fall rapidly? Sustainability for recycling programs — for most cities in the U.S., recycling is an added cost to their solid waste management program.

Egosi: Our society's confidence in our industry is far from universally accepted. Too many resources are being spent to justify recycling; these could be used to advance and improve it.

WA: Many communities have said their recycling rates are declining or stagnant. Is this true in your area?

Hammond: Yes. We have instituted a public education campaign to increase public awareness about recycling. During the past year we have delivered, on average, 4,000 sets of blue and yellow bins per month to folks responding to our media campaign. But even with this effort, the amount of material collected has remained flat, which is extremely puzzling.

Brown: I think that this is correct and would say that our county is no different than others. We have an explosive growth movement, positively affecting our county's volumes. The growth is adding new business and residents at a significant rate.

Taylor: There are communities in which we work that have had recycling rates either stagnant or have declined. There are several factors that have influenced this condition, including declining population, mature recycling programs with no substantive program information, and elimination of public outreach efforts in conjunction with recycling programs. We have, however, seen many programs expand and recycling rates increasing. For example, we have seen significant increases in participation and recycling rates in southwest Florida where continued public outreach, in conjunction with program changes that included automated collection and single-stream processing, have resulted in a double-digit increase in the recycling rate.

Viny: Certainly true in Cleveland, Ohio. The city has dropped its blue bag program in favor of a more cost-effective drop-off program.

Egosi: Recycling areas throughout the Northeast have generally declined. We have studied this issue very carefully. There have been some offsetting efforts that have increased tonnage, such as converting a newspaper-only program to a mixed-paper program. The net is still a decline. Our data shows that changes in the packaging have taken their effect. Glass has been steadily replaced with plastic, and plastic bottle technology has greatly advanced, reducing the weight of a plastic container.

WA: Are there any changes that you would like to see in the recycling sector?

Hammond: More public awareness programs sponsored by the federal and state governments and by the business community.

Brown: We are evaluating a conversion to single-stream collection and processing programs with our municipal partners. We are faced with upgrading our processing facility that has greater than 10 years in service. We believe with the high costs of collection (fuel, workers compensation insurance, etc.) that there is a potential reduction in total collection costs for our municipal partners.

Taylor: Continued advancements to improve sorting capability and improve worker health and safety. We have focused a lot of attention on improving the MRF work environment in order to reduce the risk of worker injury and minimize exposure in what has traditionally been viewed as a hazardous industry.

Viny: The definition of recycling needs to be broadened to include more than just fiber and cans. For example, many materials have commercial value as a recyclable or as a fuel. These types of cost-effective projects should be developed without governmental barriers currently in place.

WA: Have the communities in your area switched to single-stream recycling?

Hammond: No. We work closely with our partners in the commodities markets and, as you might expect, quality is a major concern. We chose a dual-stream system 16 years ago with yellow bins for fiber and blue bins for containers. This system has served us well.

Brown: There has not been any single-stream conversions within our transportation range.

Taylor: There have been several markets in which we work that have completed conversions to single stream, and many that are contemplating such a change. In areas where single stream has been implemented, we have seen increases in the quantity of recyclables through the operations, and the municipalities report increases in the recycling rates. As expected, single-stream conversions have required some significant capital investment in new equipment and larger systems to manage the increase in material. We have found that because of this capital investment at the MRF operation, larger systems with high processing capacity often provide the best economics, much like any other manufacturing or production facility.

WA: How closely do you work with manufacturers to make it easier for you to process their products?

Brown: We are actually very proactive in this arena. We have structured a business deal with our MRF operator, FCR, to locate a cellulose insulation operation on site with the recycling operation. By doing so, we have linked a substantial amount of our recyclable tons and revenue to an on-site manufacturer, providing great stability for our recycling program. Additionally, we have an education facility on site that averages more than 10,000 visitors a year that provides a platform for manufacturers to promote their products.

Taylor: We work indirectly with product manufacturers through professional and trade organizations, especially with the packaging manufacturers, to understand which materials they will be using as they make changes in their packaging design. Our interest is to ensure that we can provide the appropriate technology to process new package designs, and to ensure that we will be able to recover and market the materials that will result from the changes in their product packaging.

Viny: We work very closely with our markets to provide recycled commodities that work for their operations. In 1994, we worked with our fiber mill to produce a mixed grade of fiber. This provided our mill with a cost-effective feedstock that likewise enabled our company to increase its recycling rate. We also work closely with our plastic vendors. Plastic sorting equipment has advanced significantly since 1993, and, thus, we have switched from separating HDPE natural, HDPE colored and PET to a mixed grade of plastics.

WA: How is the demand for recyclables overseas affecting your operations?

Hammond: The overseas demand has had a major effect on the pricing and marketing side of the business. Demand and competition have pushed up prices and opened additional markets. There have been some effects on the operating side as well. Shipping requirements for the commodities can differ from customer to customer. Also, dealing with ports and foreign laws, which differ from country to country, add another dimension to the process. Differing container and inspection requirements place extra demands on an MRF staff.

Brown: Directly, there is no effect due to our geographic location to the export lanes, i.e. ports. [However,] the high demand from overseas has propped up the industry as a whole by pulling large volumes of metals, fiber and plastic out of the domestic manufacturing segments, thus driving up the commodity prices.

Taylor: Demand for recyclables overseas has had a positive effect on the recycling business overall. Export demand has improved our ability to consistently move materials through the MRF operations at a price that provides a reasonable return on investment. It has also helped us manage through the ups and downs of the domestic markets in terms of supply and has, in part, been one of the reasons for stability in the recycling industry over the last three years.

Viny: It provides increased demand and thus increased commodity pricing.

Egosi: Many plants have shut down their fiber sorting systems and now simply bale the entire stream as a single grade for export.

WA: How have the prices for recycled commodities changed in the last year or so?

Hammond: The rise in oil (used to make plastics) and energy prices drove the price of plastics to an all time high earlier this year. Prices have stayed relatively flat on the fiber side, but have been explosive on the metal container side (steel and aluminum). The price of all metals has increased due to high demand.

Brown: We have experienced increases for plastics and metals year over year with a softening in glass and stabilization on fiber over the past few years.

Taylor: Pricing for recycled commodities overall have been fairly stable for the last year. Fiber pricing has been consistent and predictable for the last year, with no significant swings in price or supply. Consistent export demand had played a part in dependable movement and has helped keep pricing at levels which enable processors to make a reasonable return on investment. For non-fiber commodities, in particular plastics and aluminum, we have seen steady increases in value over the last six months. Recently we have seen these materials hit some of the highest prices achieved in the last 10 years.

Viny: Like all commodities, prices constantly fluctuate. Fiber markets from 1983 to 1993 were more stable with less fluctuation than today. In those years, recycled products were consumed exclusively in the U.S. Today, however, we are experiencing a global economy. Rapid growth in Asia has created a new demand for recycled fiber, plastic and metals.

WA: What advice would you give to other MRF managers looking for markets for their materials?

Hammond: Diversify your outlets for materials. Don't put all your eggs in one basket, so to speak. Secure both overseas and domestic markets to reduce your exposure to market swings. Produce a consistent, high-quality product. Explore longer-term agreements to take some of the wild swings out of the pricing.

Brown: You need to focus on three things: quality, quality and quality. Understand the specifications required by your buying entities, and operate your systems and train your employees accordingly. A MRF operator is only successful if he/she produces a quality/useable product.

Taylor: Produce a consistent, quality material that can be used by multiple companies in the marketplace. While certainly there are advantages to customizing some material to meet the needs of a particular local market, reliance on only one vendor can have serious consequences if something happens to that end user. Focus on satisfying several suppliers with consistent quality and a consistent supply in good times and in bad.

Viny: Know your markets.

Egosi: Work toward long-term deals that include clear market specifications that are tied to the MRF operations.

WA: What will drive the recycling business five years from now?

Hammond: We believe that overseas markets will continue to place upward pressure on prices and markets. Because of increased energy costs, businesses will continue to explore ways to reduce packaging and increase the use of recycled content in their products. So we may continue to see flat or lowered collection rates for recyclables, but higher prices for the materials.

Brown: Utilize innovative processing technology to recover more recyclables and produce the highest quality product. Establish economically feasible end market relationships that strive on eliminating the middleman and reducing transportation costs. Simplify the collection process to encourage more participation and lower operating costs.

Taylor: Much like the last 10 years, the demand for recycled commodities will have the greatest influence on the recycling industry. Without the demand for materials, market forces will ultimately dictate the circumstances surrounding which materials get recycled. Technological innovation in recycling equipment will also have an influence on the direction of the industry.

Viny: Cost-effective recycling solutions to local governments.

Egosi: The business will be driven in part by continued consolidation of the business, with a continued shift toward larger companies. Overall, the industry sophistication and knowledge base keeps growing, which leads to a greater understanding of costs and efficiencies. Continued change can be expected since we are far from a mature industry.