Recycling Still Matters
By George Stubbs
On January 12, 2020, the Boston Sunday Globe published a front-page, above-the-fold article titled “Reckoning Comes for Recycling Programs.” The news, especially for those of us who believe in establishing a “circular economy,” and that recycling is a necessary part of that economy, was dispiriting indeed.
According to the article, recycling revenues are depressed, and the economics of recycling some categories of commodities, such as mixed paper, are currently upside-down. The recycling industry, the article suggests, is in a state of crisis. As the article’s subhead read, “Soaring collection costs leave communities at a loss.”
The article focused on recycling generally and did not drill down into situation with plastics—which is also dire, and a contributor to the overall business’s woes. The Globe provided some data on commodity prices. A recent update by the National Waste & Recycling Association (NWRA) provides a bit more, listing the prices of certain recycling commodities at the end of December 2018 and at the end of December 2019:
Corrugated cardboard: $70/ton; $25/ton.
Mixed paper: $4.69/ton; -$2/ton.
Aluminum cans: 60.19 cents/pound; 51.06 cents/pound.
PET bottles and jars: 15.11 cents/pound; 10.29 cents/pound.
HDPE: 38.69 cents/pound; 58.25 cents/pound.
Glass: varies regionally.
Clearly, pricing is down almost across the board, even in the long-established aluminum sector (the corrugated cardboard decline is not a surprise, as direct-to-home packaging by companies like Amazon has dramatically increased the supply, while new cardboard re-processing capacity is slow to come on line--although it’s coming).
The one bright note is the year-over-year increase in pricing for HDPE—high-density polyethylene plastics, which includes most milk and juice jugs, butter tubs, detergent bottles, and toiletries. We believe that the improved prospects for recycled HDPE relate strongly to the domestic nature of the market and the relatively limited influence of international tariffs and import bans.
At the other end of the spectrum, however, is mixed paper, which is now in negative territory. Basically, waste management companies can’t sell this material.
For some other categories of recycled materials, including glass, it now costs more to recycle the commodity than recyclers can make by selling it, as the Boston Globe article points out. In many cases, the capacity to reprocess is limited on a volume and geographic basis. A viable re-processor is often not available locally, and transporting materials to a more distant re-processor costs money, making it uneconomical to move the material. This is why we see some jurisdictions in the country shutting down their glass recycling programs (but not everywhere).
For certain types of plastic, the supply-demand situation is a unique story of its own, summed up in two words: cheap gas.
The tremendous uptick of natural gas production in the United States over the last few years has led to an oversupplied market, to the point that producers are looking for new ways to monetize the gas. This ramped-up production has been facilitated by technological advances in hydraulic fracturing (“fracking”) and horizontal drilling. One key product of this production boom is ethane, which is a key feedstock for plastics production. Looking at this abundant ethane supply, oil and gas producers are investing in the development of new plastics production facilities here in the United States. Shell Oil, for example, is building a $6 billion ethane cracking plant near Pittsburgh, aiming to produce up to 1.6 million tons of plastic annually once the facility comes on line in the early 2020s.
In a December article, YaleEnvironment360, a publication of the Yale School of Forestry & Environmental Studies, summed up the situation succinctly: “As public concern about plastic pollution rises, consumers are reaching for canvas bags, metal straws, and reusable water bottles. But while individuals fret over images of oceanic garbage gyres, the fossil fuel and petrochemical industries are pouring billions of dollars into new plants intended to make millions more tons of plastic than they now pump out.”
The article continues: “Companies like ExxonMobil, Shell, and Saudi Aramco are ramping up output of plastic — which is made from oil and gas, and their byproducts — to hedge against the possibility that a serious global response to climate change might reduce demand for their fuels, analysts say.”
So more plastics to recycle, which would be worrying enough. But there’s a far more worrying aspect to this picture—specifically, it is becoming uneconomical to recycle plastics. With the advent of cheap gas, it is, in the case of certain categories of plastics, currently less expensive to make new plastic products out of virgin materials than from recycled materials. Thus, many of the plastics we’d like to recycle have to go elsewhere.
So where do these materials—indeed, all recyclable materials—go if recycling loses favor as an option? There are three alternatives: landfills, incinerators, and the environment—i.e., roadsides, fields, forests, streams, beaches, and oceans.
We are running out of space for landfills in our country. Certainly, no more landfills are being built in New England, so our high-consuming public needs to send its stuff out of state—and other states don’t like that. As a country, we export lots of waste, but that option was always unsustainable and has become politically untenable. Meanwhile, incineration leads to harmful emissions, which we don’t need or want more of.
Sadly, far too much of our plastic and other waste still ends up in the environment. So, let’s suppose for a second we could collect all those tons and tons of stuff that’s out there on our beaches and in our oceans and dispose of it properly. We’ve already noted that landfills and incinerators aren’t viable in the long term. That leaves two options: recycle, or consume less.
It can’t be an either/or, however. We could—we must—reign in over time our consuming habits, ideally to the point where our reduced consumption of plastics makes those investment decisions in new ethane cracking facilities look unwise. In the meantime, however, our hyper-consuming society will keep generating waste to add to the millions of tons of material that’s already out there. That makes the recovery and re-processing of this material all the more critical.
The title of this article is “Recycling Still Matters.” That’s an understatement. Recycling is a necessary, but not sufficient, part of the solution to our waste generation problem. It remains essential, and it is essential that innovators, investors, and entrepreneurs step forward to build up our nation’s collection and re-processing infrastructure. And it’s essential that municipalities maintain their recycling systems so that they are ready to go when that resurgent infrastructure is in place. A circular economy is long overdue.
