Buying Recycled: Investing Dollars To Close The Loop

Richard Keller

Just as fish depend on water for survival, recycling's key to survival is within market development. With this in mind, at least 40 states and the District of Columbia have enacted comprehensive recycling laws, according to the National Solid Wastes Management Association, Washington, D.C. But these laws, which mandate recycling goals ranging from 15 to 70 percent, often fail to address the demand side of the equation.

As a result, a search has begun for buyers. While states and cities can make a difference, their support cannot do it alone. Newly formed alliances are enlisting both large and small companies on their campaign to support recycling, develop markets and buy recycled materials.

What The Feds Are Doing Federal involvement with recycling and waste prevention was limited until President Clinton's recent executive order requiring federal agencies to use recycled paper and other recycled content products.

The executive order will:

* Require all federal purchases of printing and writing paper to contain 20 percent post-consumer material by the end of 1994 and 30 percent by the end of 1998. Paper containing 50 percent recovered byproducts from the production of goods other than paper or textiles can be used provided that the waste would otherwise end up in a landfill;

* Require agencies to seek bids for recycled paper in advance of the requirements;

* Not increase federal spending on paper goods. Agencies must make up any price increase by cutting waste and by using less paper;

* Remove unnecessary brightness specifications for paper;

* Streamline the Environmental Protection Agency (EPA) process to designate recycled and environmentally preferable products;

* Mandate federal procurement of re-refined lubricating oil and retread tires; and

* Establish federal environmental executives and agency environmental executives to carry out the order.

David Gatton, the managing director of the United States Conference of Mayors' (USCM) Municipal Waste Management Association, has found Clinton to be a strong leader in the buy recycled arena. "This commitment tells federal agencies that they must be involved in creating markets by buying recycled products," he said.

Gatton cautioned that the executive order is just a stepping stone for federal government. "It will take time to implement and we must have continuous commitment from the White House and federal agencies," he said. Gatton added that the USCM will work with cities to mirror the executive order's standards and programs.

"We hope that this is the first of many product standards set by the federal government," said Marsha Rhea, executive director of the National Recycling Coalition (NRC). She also emphasized that it is important for the private sector and state and local governments to set standards to increase their recycled products purchases.

The EPA's procurement guidelines were created to assist federal, state and local agencies (and their contractors) buy recycled products. The EPA procurement guidelines are for paper and paper products, re-refined oil, retreaded tires, building insulation and cement and concrete with fly ash.

Public Sector Efforts In 1986, only 13 states and few local governments had any buy recycled policy. Today, all 50 states, the District of Columbia and more than 200 local governments have enacted procurement policies. The four most common types of buy recycled programs include:

* General policies favoring recycled products. Although vague, some governments find it better to have a broad general policy rather than none. For example, a typical general policy will state, "The government shall buy recycled products whenever feasible."

* Price preference. The government will pay a higher price (usually five to 10 percent) for recycled paper or recycled products. King County, Wash., for example, has a 15 percent price preference for paper products and 10 percent for re-refined motor oil.

* Set asides or goals. This requires a certain percentage of total paper purchases or total product purchases to contain recycled content. Maryland reportedly was the first state to establish goals for purchases of recycled products.

* Recycled only. Some jurisdictions require recycled content as part of their specifications for certain programs.

Other state and local government buy recycled programs include: price preferences for recyclable and reusable products; requirements to consider cooperative purchasing with other jurisdictions; providing state contracts to local governments and cooperative purchasing by multistate organizations; reviewing purchasing specifications to eliminate prohibitions against recycled, recyclable and reusable products; technical assistance on buying recycled products to public and private agencies; seminars on buying recycled products; and requiring contractors and printers to use recycled products.

Maryland And The Midwest In 1977, Maryland established one of the first buy recycled programs in the nation. With buy recycled paper as its forte, the state continues to buy large quantities of recycled paper. In fact, the state received an award from Conservatree Paper Co. and the National Association of State Purchasing Officials for buying the largest quantity of recycled printing and writing paper in the U.S. in 1992.

During fiscal year 1993 (July 1, 1992 June 30, 1993), the Department of General Services purchased $7 million worth of recycled paper products for state agencies. The recycled purchases, which weigh nearly 5,000 tons, represent approximately 74 percent of all paper purchases by weight and more than 61 percent by dollar volume.

Maryland's typical buy recycled paper shopping list includes bond paper, envelopes, computer paper, writing pads, printed materials, paper towels and toilet tissue. According to state officials, the purchases met or exceeded the EPA standards.

In addition, the state purchased nearly $1.2 million in miscellaneous recycled products, including desk trays, file folders, note pads, trash cans and liners, remanufactured laser cartridges and mailing bags.

The Wisconsin's State Bureau of Procurement has led a coalition of Midwestern and Great Lakes states in a cooperative effort to buy recycled xerographic paper for high-speed copy machines. Vendors must supply pre-qualified mill brand paper meeting a minimum recycled content of 50 percent waste paper and 10 percent post-consumer waste, based on EPA definitions. All papers met the 50/10 requirement (50 percent recovered material and 10 percent post-consumer materials) with one bidder providing 20 percent post-consumer materials.

In both 1992 and 1993, nine states participated in the request for bids developed by Wisconsin, including Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, South Dakota and Wisconsin.

In 1992, the Midwestern coalition awarded bids to seven states for three mill brands, with an estimated purchase of 28 million pounds.

In 1993, five states awarded three mill brands, with an estimated purchase of 23 million pounds. Awards were made in Indiana, Illinois, Minnesota, South Dakota and Wisconsin. In addition, Michigan and Ohio extended their contracts to 1994.

King County, Wash. King County, Wash., requires departments to purchase recycled products wherever practical, evaluate recycled products, ensure that contracts require recycled products and report all purchasing progress to the purchasing agency. Recycled products are considered practical when they are available in the market and are cost competitive.

The county has a waste reduction goal of 65 percent by the year 2000. Eric Nelson, King County Purchasing Agency's recycled product procurement coordinator, said that they are willing to spend more for recycled products.

Nearly 80 percent of the paper purchased in King County is recycled paper -- $718,000 worth in fiscal 1993.

Although most of the products purchased adhere to Environmental Protection Agency minimum content standards, the county's printing and writing paper, computer paper, stationery and envelopes use the 50/10 standard. The majority of county paper reportedly contains 30 percent post-consumer and 20 percent pre-consumer material.

More than 60 contracts for recycled products were awarded in fiscal year 1993. Contractors also are required to use recycled products wherever practical.

Other county recycled-content purchases include aggregate and recycled concrete, antifreeze, trash can liners, compost, recycled latex paint (made from waste paint and paint collected at hazardous waste collection facilities), ground wood waste, re-refined oil and remanufactured toner cartridges. To date, more than $440,000 was spent on materials such as these. The recycled concrete, paint, antifreeze, compost, oil and toner cartridges are either re-manufactured or re-refined products that either use all recycled material or are 100 percent recycled. The trash can liners use 30 percent post-consumer materials.

King County is working with federal, state and local purchasing solid waste officials to learn more about their programs. "We are attempting to get additional information on buy recycled programs across the country," Nelson said. "If we can find out where governments are succeeding - and failing - with their buy recycled efforts, it will help us improve our program," he added.

Seattle's Buy Recycled Ordinance was established in August 1992 by the Seattle Engineering Department's Solid Waste Utility and the Department of Administrative Services' Purchasing Services Section. The ordinance, which intends to help the city achieve its 60 percent recycling rate by 1998, requires vendors, contractors and consultants to use recycled products.

The city has mandated content standards for paper and paper products, building insulation, cement with fly ash, lubricating oils, latex paint and products from recycled glass and plastic; paper products, building insulation, cement with fly ash and lubricating oils must meet EPA standards.

The buy recycled law requires a minimum of 25 percent recycled material for latex paint, glass and plastics. Specifications also are mandated for retread tires, compost and glass cullet. Following the president's executive order, Seattle is evaluating its paper printing and writing paper standards to make sure they meet or exceed the suggested post-consumer requirements.

Norman Nakamura, a buyer for the city, said Seattle has already bypassed original standards since vendors have been supplying products with high recycled content.

Incentives include a price preference of 10 percent for recycled products and a 15 percent preference for products derived from the local waste stream. Projects such as city community centers, which are to be built using 50 percent recycled products, can provide an end-use for recyclables.

Newark, N.J. "If a recycled product is available in the marketplace and meets our needs, we will buy it," said Frank Sudol, manager of the Newark, N.J., division of engineering and contract administration. "Products are specified with recycled content and awards are made to the lowest responsible bidder who can provide the product with recycled content," Sudol said about the city's mandatory recycled content purchasing program.

Newark's comprehensive procurement ordinance, which was adopted in 1990, requires:

* A specifications review. This will determine if they should require or exclude recycled, reusable or recyclable products. At this time, changes also will be prepared to ensure the maximum use of such products;

* Outside contractors to use recycled materials;

* The purchasing agent to work with the copier industry to develop a high speed copier that will accept recycled paper. Also, the city will purchase only new copiers that can use recycled paper;

* Labeling of recycled products;

* Use of recycled paper for stationery and envelopes;

* Bid documents for recycled, reusable and recyclable products wherever available; and

* Cooperative purchasing and annual reports.

In 1992, Newark purchased approximately $119,000 of paper products a 15 percent increase over 1991. Purchases included xerographic copier paper, envelopes and letterhead, stationery and miscellaneous paper products such as pads, mailing materials and cards. Newark also purchased an estimated $212,000 of other products including: nearly $80,000 in metal products such as traffic control devices and iron boxes; more than $82,000 of plastics such as barricades with 75 percent post-consumer materials; and approximately $50,000 in pavement millings. The city's recycled products purchases totaled nearly $330,000.

Sudol cited several challenges in the program including educating agency employees about buying recycled products. "Obtaining information from vendors about available recycled products and getting prices for recycled products also is a challenge," said Sudol. It is difficult to get follow-up information from contractors about the use of recycled products, Sudol said.

NE Maryland Authority The Northeast Maryland Waste Disposal Authority, a regional solid waste organization, works with the city of Baltimore and four surrounding counties. As part of a regional market development effort, the authority has trained the city of Baltimore and Anne Arundel and Montgomery Counties on how-to-buy recycled. The training teaches buyers and agency representatives how to make the commitment, content standards, writing specifications, product testing and purchasing options.

Price, quality and availability continue to be the key issues for both buyers and using agencies, according to the authority.

Purchasing agents from the authority's member jurisdictions and state agencies such as, general services, transportation and the University of Maryland, receive buy recycled information every two months to help increase their buy recycled programs. This information includes brochures and samples from new recycled product suppliers, updates on federal, state and local buy recycled programs, copies of presentations by key leaders in the buy-recycled field and new purchasing specifications.

With assistance from the EPA and the USCM, the authority will conduct training for state and local governments.

Help From The Private Side The Californians Against Waste Foundation Buy Recycled Campaign educates California consumers about buying recycled products. Through the media, seminars and workshops, the campaign provides updated information on recycled products and recent research to educate the public.

"When we started the campaign in 1990, there were good programs for government buyers, but none for businesses and consumers," said Susan Kinsella, director of the campaign. "We also recognized that, while government purchasing was important, businesses and consumers purchase about 80 percent of the products in our economy and they need to hear the buy recycled message."

Using its own Buy Recycled! Guide, the organization recently sponsored a recycled products seminar for Los Angeles area law firms which featured firms that use recycled paper. After the seminar, approximately one-third of the firms reported that the seminar had encouraged them to start buying recycled products.

Other programs focused on using recycled paper for automated billings at utilities and banks. The seminar matched companies that had successfully used recycled paper with companies that were having difficulty due to cost or equipment.

Environmental Task Force The Environmental Defense Fund (EDF), along with six other organizations, formed a task force to encourage using environmentally preferable paper and paperboard products.

The Paper Task Force includes Duke University, Johnson & Johnson, NationsBank Corp., McDonald's, the Prudential Insurance Co. of America and Time Inc. Together, the organizations purchase more than $1 billion in printing and writing papers, publications and packaging.

The Environmental Defense Fund is working to improve markets for environmentally preferable paper without regulations or mandates. In the end, Richard Denison, EDF's senior scientist, hopes the demand will provide stronger economic incentives for the paper industry to invest in improved technology.

Ultimately, the task force hopes to expand its members' use of environmentally preferable paper products and to design a purchasing model for other institutions. To do so, the Environmental Defense Fund task force must review current performance needs and scientific and economic information on the environmental effects of paper production, use, recycling and disposal.

Final recommendations based on the analysis are expected to be complete by either late 1994 or early 1995.

Paper Recycling Project The National Office Paper Recycling Project (NOPRP) was established in 1990 and is a joint effort by private companies and public interest groups to promote a national office paper recycling strategy. The project, which is managed by the USCM, is developing programs that will triple office waste paper recycling by 1995.

Christine Denniston, project director, said it has brought diverse groups together to find ways to increase paper recycling and to purchase recycled paper products. The collaborative effort includes paper manufacturing corporations, office machine producers, wastepaper collectors and solid waste representatives from state and local governments.

The National Office Paper Recycling Challenge includes more than 250 public and private agencies that have agreed to increase paper recycling through buying recycled paper products, collecting office waste paper and developing special projects such as promotion programs or community recycling projects. To date, more than 120 companies, including AT&T, Chevron, Dow Chemical, McDonald's and Walt Disney World Co., have accepted the challenge. Regional programs have been launched to increase membership in areas with high concentrations of waste paper. The first program will be held in the Washington, D.C., area early this year.

Buying recycled is a critical component of the program. "We have emphasized throughout the project that collection is not enough; programs must include both collection of office wastepaper and buying recycled paper products," Denniston said.

What started a little more than a year ago as a handful of companies committed to increasing their purchases of recycled products has turned into a corporate "buy recycled" movement that accounts for more than $10 billion spent by businesses on recycled products and materials.

The Buy Recycled Business Alliance, which was launched last year by the National Recycling Coalition (NRC) and 25 major corporations, has signed on more than 500 companies that have agreed to re-examine their purchasing practices to see where they can buy more recycled products.

Each year, Alliance companies are asked to complete surveys of their internal and external purchases of recycled products to determine how much they are buying and where they could buy more. In October, NRC announced that Alliance companies had spent $10.5 billion on recycled products and materials in the past year.

"This shows how much the collective buying power of even a small portion of the business community can help recycling and move markets," said Harry Capell, vice president of operations for Johnson & Johnson Personal Products Worldwide, a founding company of the Alliance. "In the Alliance's first year, the founding companies spent $2.7 billion on recycled products and materials. By making an effort to increase our purchases and getting more businesses of all sizes to make the commitment, we've more than tripled the effect on the recycled product marketplace."

Recycled products purchased by Alliance companies range from post-consumer paper and tissue products to recycled content construction materials and bulletin boards made from old tire rubber. Consumer product manufacturers in the Alliance have made a concerted effort to package their items in recycled paperboard, plastic, steel, aluminum and glass.

Following are some of the efforts that major Alliance companies have made to buy more recycled products in the past year.

* American Airlines increased its recycled product purchases by 18 percent in 1992 by procuring recycled content in all of its napkins, tissue, towels, company newspapers, market bags and the company's annual report.

* Bank of America purchased nearly 11,000-tons of recycled paper with a minimum of 10 percent post-consumer content; approximately 1,000 tons of that paper had 50 percent post-consumer content.

* Johnson Controls' Plastic Container Division spent more than $3 million on recycled products and materials last year and set a 1994 goal to increase that amount by 50 percent. The company hopes to achieve its 1994 goal by purchasing items such as office paper with 25 percent post-consumer content and business cards made on recycled polyethylene terephthalate (PET) sheet.

* McDonald's Corp., through its McRecycle purchasing program, spent $227 million in 1992 on recycled construction materials, paper packaging, plastic goods, steel, playground equipment, dispensers, high chairs, office furniture and carpeting.

* Rubbermaid Inc. is converting 24 of its existing products to a minimum of 20 percent post-consumer content and converting four additional products to 50 percent post-consumer content, bringing the total number of products it makes with post-consumer content to 64.

Other corporations that sponsor NRC's Buy Recycled Business Alliance include: the American Plastics Council; Anheuser-Busch Inc.; AT&T; The Coca Cola Co.; Cracker Barrel Old Country Store Inc.; E.I. Dupont Co.; Food Marketing Institute; Fort Howard Corp.; Garden State Paper Co.; Inland Container Corp.; James River Corp.; Johnson & Johnson; Kmart Corp.; Laidlaw Inc.; Lever Brothers Co.; Menasha Corp.; Moore Business Forms Inc.; The Quaker Oats Co.; Quill Corp.; ReClaim Inc.; Rock-Tenn Co.; Safeway Inc.; Sears Roebuck & Co.; Steel Recycling Institute; Sweetheart Corp. Co.; The Southern Co.; Turner Broadcasting; Wal-Mart Inc.; Wellman Inc.; Wisconsin Tissue Mill; and WMX Technologies Inc.

In addition to the major corporations, the Alliance includes more than 400 small, local businesses. "Every company, no matter what its size, can make a difference," said Connie Cloak, environmental affairs coordinator for Cracker Barrel Old Country Store Inc.

1. Make a public commitment to buy recycled products.

2. Adopt a local ordinance.

3. Assess the primary products frequently purchased.

4. Compare the prices and quality of the virgin product versus recycled products.

5. Obtain a list of communities your size that are purchasing products with recycled content. Advice from experienced communities is valuable.

6. Educate purchasing agents and buyers on the importance of buying recycled.

7. Analyze bid specifications from other municipalities offering the type and level of service you seek to provide.

8. Prepare bid specifications with advice from your own legal, technical and financial experts. Be specific and provide as much information as possible when drafting bid requirements.

9. Compare local purchasing prices with cooperative purchasing prices that are available through regional, district or county contracts.

10. Determine if state contract prices for products are less and if your municipality can include the purchase of products under state contract. Note: With state contract purchasing, cooperative purchasing can often reduce the perunit cost.

11. Hold seminars with the purchasers of the recyclable goods and the recycling coordinator. Inform appropriate personnel of resources that can assist in their buying decisions.

12. Develop an efficient record keeping system to obtain information on the quantity and content of the recycled products purchased.

13. Educate residents and local businesses on the importance of buying recycled.

14. Prepare an annual report to document the activity of your buying recycled program. Use the report to measure progress and to list future goals.

15. Scrutinize your buying recycled program and make changes for an improved year.