Following a change in China’s legislation regarding its U.S. recycling imports, the recycling industry across the U.S. has taken a hit and been forced to re-evaluate its services. At the heart of the issue is ongoing over-contamination, which raises the cost of recycling efforts in the U.S. market. In short, China only wants to import clean recycling and single-stream services – everything in one bin, picked up at the curb – which results in recycled materials that could be classed as “dirty.”
For decades leading up to recent changes, China served as the largest consumer of recyclable materials generated in the United States. Five years ago, China fronted the “Green Fence” initiative to crack down on contaminated recyclables coming into the country. In January 2018, China continued its crackdown on contaminated recyclables and passed its “National Sword” policy. The action effectively bans 24 types of solid waste, including various plastics and unsorted mixed papers, in addition to raising contamination standards again. Under its “Red Sword” policy, China is rejecting shipments with contaminants above 0.5 percent, a level that most U.S. recyclers have difficulty meeting with current methods.
In May 2018, China suspended all imports of U.S. recycled materials until June, regardless of the quality. Due to increasing costs and the decreasing value of materials, the switch created a stockpile of recyclables and a lack of available buyers.
The impact has area municipalities and the waste haulers that serve them debating the future of single-stream, curbside recycling, which makes up over 90 percent of the region’s waste management market.
“China and the world markets have not been silent regarding their concern of contamination being collected curbside and shipped by the U.S. recycling processors,” said Mary O’Brien, Meridian Waste Services’ chief marketing officer. “This has been an issue brewing for many years, and just this year, the issue reached the height of its impact with China’s Green Fence policy followed by its Red Sword policy.”
“The policies were an effort on China’s part to reduce the amount of contamination coming into their country,” Brent Batliner, general manager for Republic Services, said. “They went from standards where the material you shipped in could have 2 percent contamination in it and dropped those standards to around half a percent, which is almost impossible to meet.
“If we got everything in perfect, and if the public did everything we wanted, we would still have about 3- or 4-percent contamination, just by things breaking or ripping in the truck,” Batliner said. “Small pieces of paper or plastic that break become grit in the system, kind of like dirt.”
According to O’Brien, China’s crackdown is due to widespread ignorance about proper recycling.
“Contamination in the recycling stream is the No. 1 reason the U.S. is in the predicament we are in,” O’Brien said.
According to the National Waste & Recycling Association, contamination rates via the collection and processing of residential single-stream recycling start at about 25 percent, thus making the contamination levels unacceptable for collection.
Resource Management Companies [RMC], which owns and operates material recovery facilities across the country and serves locally as the collection facility for a large number of waste haulers, has said it will not accept single-stream recycling collections after Nov. 1.
That change has forced municipalities to reconsider recycling options for residents moving forward.
The end of single-stream?
“It’s not hitting us yet, but we do anticipate that it is going to hit us because it is essentially a nationwide issue that is being dealt with by the entire country,” Rick Brown, Wildwood’s city engineer and director of public works, said. Wildwood residents are served by Meridian Waste Services.
Other municipalities are seeing a more immediate effect.
In August, Kirkwood announced the suspension of its residential curbside recycling collection. The single-stream program, which allows plastic, cardboard, paper and aluminum to be recycled in one container, will come to an end in October. Kirkwood’s recycling processor is RMC.
Batliner, of Republic Services, said, “The demand is still there, it’s just the logistics of handling it, which has backed material up globally. It has drastically driven the value of the material down.”
Republic Services is currently working on increasing personnel along sorting lines and in other areas to continue to provide recycling services to customers in municipalities like Ballwin, Chesterfield, Ellisville and Manchester, to name a few.
“We are going to have to invest more money in equipment to make a cleaner product to sell worldwide, and we are making that investment,” Batliner said. “We have had to add a few more people to assure, with the quality control at the end of our line, that everything is coming up to the specification we need. Long term, the processing cost will probably increase, but once again, what offsets it is the value of the material. That’s really the problem right now … but that will recover.”
Waste Management saw a 36-percent decrease in average recycling commodity prices in the first quarter of 2018 and saw an increase in operations costs. The increase is credited to the transportation of materials to areas like Vietnam and India, whose criteria is not as strict as China’s.
“If I’m not shipping thousands of tons a month to China, now I have to find a new home for it. That doesn’t happen overnight,” Batliner said.
And it doesn’t come cheaply.“Recycling is not free,” O’Brien said. “It takes money to buy trucks, hire commercial driver’s license [CDL] drivers, invest in heavy equipment and processing machinery, ship baled recyclables to end markets and so forth. Understanding the costs of recycling is step one. Then, when markets are good, sharing the benefits of a rebate is step two.”
Due to the steady export of contaminated materials, the stability of the market for recyclables has resulted in processors having to pay more money to get rid of materials, rather than reselling cleaned materials with reusable capabilities for a profit.
“It’s very attractive to recycle when markets are good, as they were five years ago and even earlier in the 2000s,” O’Brien said. “However, when markets shift and what used to be a refund becomes an expense, the financial impact is harsh and very real.”
According to O’Brien, Meridian’s current recycling processing fee of $37.45 per ton is significantly higher than the company’s internal rate of transportation and disposal at locations across the country, including the Eagle Ridge Landfill in St. Louis, equating to about a 25-percent differential between the current cost of recycling processing and local landfilling in the St. Louis marketplace.
Due to facilities like RMC no longer collecting residential single-stream recycled materials after November 2018, the $37.45 per ton rate is expected to increase even more over time. According to O’Brien, municipal waste contracts are typically long-term, fixed-rate contracts.
“Recycling is a commodity-driven business – individual materials have a value based upon market conditions,” O’Brien said. “Single stream, mixed materials have a value as well. It truly is a classic economics example of supply and demand.”
The rising cost of ‘wish-cycling’
The trend of “wish-cycling” is one of the factors complicating the process.
Wish-cycling happens when uncertain consumers choose the recycling bin for an item that should go to the trash. Non-recyclable items like coolers, diapers, food waste and plastic shopping bags get tangled up in the system due to ignorance or wish-cycling, creating additional demands, delays and often repairs to the system.
According to O’Brien, some of the most common wish-cycling items are plastic toys, aerosol cans, pizza boxes and clothes. Waste from non-recyclable materials can contaminate other collected materials, thereby impacting the ability of all the goods to be recycled.
“If someone throws a whole jar of peanut butter in [the recycling bin], and that jar gets smashed, a pound of peanut butter squirts out into all the other materials in that truck,” Batliner said. “A lot of that material then has to be trashed with it.” Even small amounts of such viscous materials are problematic.
Landfilling, by contrast, is easier and cheaper, but with no value added.
“Maybe to have [trash] picked up from your curb and hauled to a landfill where one guy shoves it down a hill and properly buries it, maybe that cost is roughly $30 a ton, but, it’s done,” Batliner said. “There’s no value. You’ve paid for someone to pick it up and properly dispose of it. To pick it up, bring it to a recycling plant, have it sorted, repackaged, loaded and shipped out for markets, that costs maybe $70 or $80 a ton, but there’s value at the end.”
One potential solution may be asking consumers to separate their recyclables. Education about what is and is not good recycling also plays a role.
Dual-stream recycling is a method that relies on residents keeping paper goods in one container and other recyclables – such as plastic and metal – in another. St. Peters is one of the few municipalities that not only uses dual-stream recycling but also has its own processing facility.
Recycling facilities at the local level
Located at Recycle City on Ecology Drive, the city of St. Peters’ processing plant is used by residents and non-residents alike.
According to David Kuppler, who manages St. Peters’ group health and environmental services, the recycling center was built about 21 years ago to address the need for waste sustainability in the community.
“We can take [recyclables] here and handle it all ourselves,” Kuppler said. “It makes us less dependent on others and … also allows us to patrol those costs and basically return our investments back to city residents in terms of the lowest, solid waste rates in all of St. Charles County.”
For the past 12 months, the facility has taken in about 86,245 tons of waste from St. Peters and surrounding communities. Of that number, 30,710 tons came from St. Peters residents specifically. Of that amount, roughly 5,400 tons were recyclable.
According to Kuppler, the facility made an estimated $780,000 off recycling in 2017.
Other citywide recycling efforts include the Blue Bag curbside program, aluminum can programs, commercial recycling, cardboard recycling and more. Workers at the recycling facility sort trash and separate recyclable materials such as cardboard, paper items, plastic, glass, aluminum and steel cans.
The facility allows 24/7 drop-off of pre-sorted materials by residents.
“The goal is to eliminate excuses,” Kuppler said.
According to Kuppler, the facility’s contamination rate is less than 1 percent for overall exported recyclables. The facility’s recycling of in-demand materials ultimately saves money due to the reselling of materials and the reduction of landfill tipping fees. However, dual-stream recycling doesn’t solve the ongoing issue of reaching out to residents with no interest in recycling.
“The national standard continues to be around 30 percent of people who recycle,” Kuppler said. “Even if you still consider everything we’ve done, there’s still 70 percent of people out there that don’t want to recycle or aren’t interested. We’re battling that 70 percent to get them to use our Blue Bag system, and single-stream is battling that 70 percent to get them to not put in any contaminated materials.”
The future of recycling
The future of single-stream recycling is currently being debated at a residential and governmental level.
According to O’Brien, Meridian is meeting with the municipalities it serves, such as O’Fallon and Wildwood, regarding recycling options. It is predicting that there will be changes to enhance transparency of contract language and that many local governments will pursue waste management alternatives like suspending collection until markets return, limiting the collection of materials, increasing collection and processing fees for the foreseeable future or converting into a multiple-sort collection system for cleaner recyclable materials.
“Recycling is a cycle,” O’Brien said. “Successful recycling must result in providing usable recyclable materials that manufacturing end-markets are willing to purchase to make into products that purchasers are willing to buy and use. At home or worldwide, the economics of supply and demand are fundamentally the same.”
For processors like Republic Services, waste processing will remain consistent with the intent to raise awareness about contamination and proper recycling techniques in an effort to export cleaner bales.
“It’s a blip in time,” Batliner said. “It’s not a short blip it time, it’s going to take a while for the logistics to catch up with the world. Overall, recycling pricing will recover. The demand is still there.”
Kuppler shares a similar view.
“If you think of our dependency on oil when prices went up, we changed the way we did business and our reliance on fossil fuels. Now, today you’re seeing more electric and other fuel options. I consider this to be the same,” Kuppler said. “We had a great dependency on China; China has said, ‘no more,’ so we will find a way to recycle and to continue on. Recycling isn’t going anywhere, but we’re definitely in a transitional phase.”