Where Does It Go? - Paper and Plastics I

By George Stubbs, Co-Chair, Zero Waste Melrose

Recycling is dead? Don’t tell that to the Northeast Recycling Council (NERC). The group, whose members are mostly municipal and regional recycling authorities in 11 northeastern states (but civic groups and private companies are invited), goes beyond the anecdotes to study the issues, and what it’s finding should provide encouragement for recyclers and recycling program managers.

NERC has released a handful of recent reports that look at where certain categories of recyclables are going. The reports find that, contrary to the hysterical headlines and some public opinion, there’s significant and growing capacity for some key materials. There are some caveats and challenges, but the bottom line is that there is reason to hope that recycling can come back stronger than ever.

On March 31, NERC hosted a webinar titled “Recycling End Markets: What’s Up, What’s Down,” to probe the state of recycling in the Northeast. Far from presenting a comprehensive review, NERC Executive Director Lynn Rubinstein nonetheless provided a window into the state of the business for operators of materials recycling facilities (MRFs--the next stop after recyclables are picked up from your curb), and then provided some information on new capacity in the works for plastics and paper.

There’s no way around it: MRFs are struggling. Their costs to process a ton of recyclable materials have skyrocketed over the past two years to the point where those costs are very much higher than what the MRF operators can sell the sorted and baled materials for on the market. 

The March issue of Resource Recycling magazine reported that North America’s big five waste haulers and MRF operators--Waste Management, Republic Services, Waste Connections, Advanced Disposal Services, and Casella Waste Systems--all recently reported losses in their recycling operations for the fourth quarter and full year of 2019. For them, recycling accounts for anywhere from 2% to 6% of their overall business, so the pain is somewhat attenuated.

Still, they don’t like losses, and they are passing along the costs to their customers in the form of service fees. The 15 Northeast-located MRFs surveyed by NERC, however, are not operated by private-sector companies (with one exception). That means their pain is greater, and they are certainly looking to pass along the costs.

Municipal officials will need to be ready for this onslaught in restructured collection and disposal contracts--and state governments are going to have to step in and help out. What the public needs to know is whether recycling is still viable.

Zero Waste Melrose has been arguing for some time now that it is. Indeed, it’s vital--to conserving natural resources and sustaining a valuable source for commodity production materials to industrial markets, among other things. That’s where the recently released NERC reports provide some positive news.

For its new report on capacity expansion in the plastics recycling market, NERC verified reports in the media of new or expanding recycling facilities and found that companies are planning to develop 15 new recycling plants and expand another 10 facilities. 

The vast majority of these projects are not in the Northeast, or the Midwest for that matter. Two projects each are planned in Pennsylvania and Ohio. The rest are on the West Coast (six in California) and in the South. Geography matters in recycling, as transportation of materials to reprocessors is a major cost of doing business.

Also, virtually all of this new capacity will focus on processing plastic film--bags, wrappings, etc. This is not the plastic we put in our curbside bins, but it is the plastic that we have been returning to retailers, like Whole Foods, that will accept it. There is a market for plastic film, so Zero Waste Melrose strongly encourages the recycling of plastic bags, the wrapping around paper towels, ziploc bags, deflated air pillows, and other types of plastic film.

As for expanded capacity to recycle paper, NERC found a total of 23 projects in North America in the works, with five capable of serving the Northeast. Twenty-one of these projects will focus on OCC--the recycling industry’s term for cardboard--while two will handle aseptic packaging.

Rubinstein said during the webinar that this new capacity amounts to more than enough capacity to handle what’s currently collected. A lot of these projects are new or expanded pulp and paper mills that will use the recovered materials to make pulp. A lot of these facilities are owned by Chinese companies, which will send the pulp back to China for paper production.

Maybe the most encouraging news of all reported by NERC was the number of “post-MRF” companies that are using post-consumer feedstock in their products. WIthin the 11-state NERC region, a recent NERC report found, there were 73 such companies using post-consumer paper (seven in Massachusetts), 58 using numbers 1, 2, and 5 plastics (five in Massachusetts), 18 using glass (none in Massachusetts), and five using aluminum (again, none in Massachusetts; steel-making is more a Midwest thing). 

Rubinstein noted that the majority of these businesses report a need for more post-consumer materials. She says that, after the report was published, she received calls from several of these companies saying that their business had increased.

So, while buffeted and bruised, recycling is far from dead. And it looks like a good number of forward-thinking business leaders are doing their part to put in place the infrastructure of the “circular economy” that we desperately need to conserve resources and protect the environment.