At the end of 2018 and throughout 2019 we included an article “The New Economics of Recycling” with our rate increase letters to help provide you with valuable information about the drastic changes happening in the recycle market. Last quarter, we also provided a reprint of a guest opinion “Recycling is Alive and Well in Boulder County,” that was published by the Daily Camera in April and contributed by Darla Arians, Boulder County Resource Conservation Division Manager and Judy Wong, Eco-Cycle Board President.
While recycling is not dead, this guest article does not address the whole economic side of the story. The Boulder County Recycle Center, owned by Boulder County and operated by Eco-Cycle, is doing a great job of finding markets for the material that it is processing (not an easy job). They also continue to invest in equipment upgrades to improve efficiencies and help make the quality of processed material that the international and domestic mills now require. But the revenue side of the business, with escalating processing costs and soft global demand, is in a very difficult position.
As was highlighted in both previous newsletter articles, China is now only taking a small percentage of the United States’ fiber materials and enacted much stricter specifications for allowed contamination (.5%). While other countries such as India, Vietnam, Malaysia and Indonesia have been importing more recyclables, they are unable to handle the volume of our fiber and plastic materials China once did and many have adopted China’s much more stringent contamination rules. This has created a lot of materials for US mills to try and absorb and with the laws of supply and demand, over supply creates lower demand and ultimately a lower market value for the materials. The current value of cardboard (the primary revenue stream for the Boulder County Recycle Center) has dropped to a 25-year low and many other materials have dropped significantly as well, with some materials having little or even a negative value.
Recycling is still the right thing to do for many reasons including saving energy, conservation of natural resources, protection of our environment, creating jobs and combating climate change; but the idea that recycling is free is a fallacy that we have been taught for too long. It is time to connect everyone with the real cost of providing recycle and compost services. The collapse in the value of our recyclables has put a spotlight on how we pay for recycle collection services.
When facilities like the Boulder County Recycle Center no longer have the revenue that they had become accustomed to from the sale of recyclable materials and higher operating costs to further clean contaminants from the recycle stream to make materials marketable, they had no other choice but to begin charging and charging significantly more to the entities delivering material to them, both private and public. This in turn has necessitated those entities providing collection services to pass on their higher recycling costs to homeowners and businesses. The tipping fees being charged by the Boulder County Recycle are adjusted monthly and have no correlation to the consumer price index. Please see the charts below that detail the significant change in tipping fee pricing that we have incurred at the Boulder County Recycle Center since January of 2018.
Residential (Negative sign indicates charge to the hauler)
Commercial (Negative sign indicates charge to the hauler)
As you can see, the amount we are being charged to drop off your single stream materials has increased drastically in the last 21 months. Our collection rates for many years have been based on being paid a small amount per ton or not being charged to drop off the materials, i.e. the absence of a tipping fee. Those times have now changed. The fee we are now being charged to drop off residential single stream recyclables is significantly higher than our landfill tipping fee.
A second fallacy is the idea that if a resident has less trash, and recycles and composts more, they should pay less. When in fact a resident that recycles and composts more, costs more to collect, not less. Residentially, the cost is the same for the physical collection of trash, recycle or compost; the difference is in the tipping fee for each material. The tipping fees for single stream recyclables and compostables are now significantly higher than landfill tipping fees we pay in Colorado. Colorado continues to have one of the lowest on average landfill tipping fees in the nation, further exacerbating the collection cost difference between the three materials. The collapsed recycle market translates to higher collection rates for residents and businesses.
No one has a crystal ball that will tell us when markets will change or how long the market collapse will last. Depending on who you talk to, some say it is a short-term slump, and some say we are in for a long haul to recovery. With fewer and fewer countries willing to take our recyclables, we must develop our own infrastructure to reuse our discarded materials. This is not going to happen overnight, and we must create our own domestic recycling markets. New incentives may be needed to attract new end markets for recyclables.
This is not a time to abandon recycling, but a time to reform recycling. Residents and business must be encouraged to sort the recyclables correctly to help reduce the front-end contamination problems and make the recycling process more efficient. To solve our market problems, we must invest in our future and find homes for our own materials in our own country. We as a county will work through this, but there is no short-term fix. We must learn how to produce less waste and embrace other avenues of sustainability such as packaging innovation and reduction and find ways to re-use our own waste.