In the 1990’s, United States’ recycling programs expanded dramatically to divert more material from landfills while at the same time China’s appetite for recyclable materials kept growing to help feed their economic engine.
The recycling industry became very successful at landfill diversion, conserving natural resources and reducing greenhouse gas emissions by collecting, sorting, hauling and marketing recyclables to their end markets. For years, China had been the largest purchaser of recyclable materials collected in the United States. According to the Institute of Scrap Recycling Industries, a trade association known as the “Voice of the Recycling Industry”, 31% of the United States’ recovered material, worth $5.6 billion, was exported to China in 2017.
As US cities and counties zealously expanded recycling programs, more and more trash became part of the bales of recyclables that we exported to China, up to 20% or more of the total weight according to one industry expert1. Although China’s official contamination threshold was well below 20%, this regulation was not enforced, and contaminated material poured into the Country.
Over the past year China has taken many steps to limit the volume of recyclable materials coming into their country including import bans on certain recyclable materials, imposing strict quality standards on contamination levels and developing a long-term plan to create a domestic recycling industry and infrastructure to recover their own recyclable materials and stop importing. This has had a significant impact on US recycling and the rest of the world. The new normal is that China and now other countries don’t want foreign garbage inundating their ports and mills anymore.
Is it China’s fault or our own fault? ….. depends on your perspective. China shed a light on the United States’ sloppy recycling practices and exposed the fact that waste diversion does not necessarily equal recycling. We need to recycle to create a new product that is valued in the marketplace without using virgin materials, not to blindly divert materials in the name of recycling. We have become wishful and aspirational in our recycling by setting out items for collection that we believe or wish are recyclable, even though they are not. US mills have long complained about the quality of materials they purchase from our domestic material recovery facilities (MRFs) and now the pressure to reduce contamination is not just coming from China.
A Brief History
- China’s widely publicized crackdown on importing certain materials recovered through recycling was announced in February 2017. Initially this “National Sword” program focused on halting smuggling operations using illegal permits to import scrap materials and scrutinizing bales of low grade plastics for contamination and paper with high moisture content. By the spring of 2017, it became evident this program would be used to access the overall quality of all material loads imported into the county, legally or illegally.
- In July 2017, China announces a ban on all imports of recovered mixed paper and post-consumer plastics, textiles and scrap metal by the end of 2017. At the same time, they issued a policy document describing a big picture plan to stop importing recovered materials that can be recovered domestically.
- In November 2017, China announces a new quality standard for material limiting contamination to just 0.5%. This standard would apply to all paper and paperboard materials, even those not banned such as newspaper (ONP) and cardboard (OCC) effective March 2018.
- In January 2018, many US exporters to China were now trying to ship materials to southeast Asia, i.e., Vietnam, Malaysia and Taiwan to find a home for our materials.
- By August 2018, Chinese buyers had not been issued permits to buy any import materials since May, so the fallout was now affecting municipal programs and material recovery facilities in the US.
- In August 2018, Taiwan and Vietnam made announcements to heavily limit recycling imports than were now overwhelming their ports and manufacturing facilities.
- In August of 2018, China announced a 25% tariff on all US imports of cardboard (OCC) and other recovered fiber and plastic in retaliation for the latest US tariff proposals on China.
How have all these changes impacted United States’ recycling?
- Higher processing costs to meet the new quality standards: Material recovery facilities must slow down their sorting lines and add more sorters to manually remove more contaminants from the material stream. This has lowered MRF efficiency and increased their processing costs.
- Higher tipping fees charged, and/or lower rebates paid for source separated material by material processing facilities: In many markets the tipping fee for single-stream recyclables drop-off is now higher than the areas landfill tipping fees.
- Lower revenues from the sale of materials due to depressed commodity prices: The loss of our export market to China has led to less demand and oversupply which in turn has led to lower revenues on some materials, negative pricing on others and overall lower revenue to single-stream processing facilities.
- Increase in monthly recycle collection fees to both commercial and residential customers: When collection programs, both private and public, must pay more and/or receive less to have their recycle materials processed, these costs are being passed onto consumers in the form of higher collection rates and lower rebates.
- Higher capital improvement costs: To meet the new higher quality standards, some material recovery facility owners and operators must install more costly sorting equipment such as optical sorters or robotic sorters to make their materials marketable.
- Unavailability of markets and storage: The inability of our domestic market and other foreign markets to absorb materials previously sent to China has disrupted the supply chain. Some recycled materials lack viable end markets, so they are being eliminated from recycling programs or are being landfilled until a market solution is created. Some materials are being temporarily stockpiled for those who have storage space, in hopes of finding a market in the future and for facilities without storage capacity, there is no choice but to landfill materials that have no market. Currently the most problematic materials to find economically viable end markets for are glass, mixed paper and plastics # 3-7.
How have these changes impacted local recycling?
To date there have not been any changes to programs in the local area. Both Boulder County and Boulder County’s Recycle Center operator, Eco-Cycle have done a great job of processing and marketing local materials during difficult times. Eco-Cycle has been able to find markets for all materials even when others have not. The facility model does not produce a mixed paper product, but rather a sorted office paper product which still has a strong market value. They have not been plagued with the revenue loss or lack of market for paper that some other facilities have. Thanks to the efforts of local residents and businesses, the Boulder County Recycle Center boasts a contamination rate of less than 10% or less than half of the national average of 20% to 25%. Boulder County and our local communities are also fortunate to have Momentum Recycling located in Broomfield to process their glass materials and Coors Bottling in Golden to buy the glass cullet created for the manufacturing of new bottles. Many other markets and areas of the country do not have the advantage we do for our glass.
The Boulder County Recycle Center has not been immune to the higher processing costs and lower revenues from commodity pricing. As a result, the County has been increasing the tipping fee it charges for residential single-stream material. Western Disposal was not charged a tipping fee from January – March 2018. The the tipping fee charge increased to $5.00 per ton in April and May 2018, to $10.00 per ton in June 2018,and in July and August 2018 it increased to $15.00 per ton. The commercial single-stream tipping has remained at $0.00 all of 2018 (January to August).
Consumers in the United States, largely unaware of these new regulations and developments, expect the materials they put in the recycle carts to be recycled and have come to expect the recycling service should be free.
The recycling industry must face the new normal for the recycling economics by working together to recycle correctly, improve the processing and capabilities of our material recovery facilities, find and develop domestic markets to use our recovered materials and engage in the conversation to make clear that recycling is not free.
The new recycling economy is not the cyclical pattern that we have seen in the past, this is the new normal. Recycling is the right thing to do, but it will require new actions to make our recovered materials marketable and to create new markets. We can no longer continue as if its business as usual and we must make fundamental changes as an industry. These necessary changes include:
- Investment in domestic manufacturing infrastructure that can utilize our recycled plastic, fiber materials and scrap metal. We need to become self-sufficient and not rely on the rest of the world to take our discards.
- Development of new domestic markets for our materials which will increase their value and help change the new economics of recycling.
- Increase education at all levels so that materials delivered to our material recovery facilities are as free of contaminants as possible. Focus our efforts to reduce contamination on the core recyclable materials and not add new materials that don’t have developed markets. Diversion does not equal recycling.
- Make sure we are producing high quality recyclables from our material recovery facilities, so they are desired by both domestic and international markets.
- Communicate with our generators, customers both commercial and residential and our recycling partners with transparency about the economic realities of recycling and why their actions and help are so important.
This is an industry and global wide issue and not a local issue ……. Everyone is now feeling the pain of the new recycling economy.
1 Tita, Bob, Recycling, Once Embraced by Businesses and Environmentalists, Now Under Siege, The Wall Street Journal, May 2018
2 Other sources used to compile this information include: Waste Advantage Magazine, Recycle.com, National Waste & Recycling Association, Resource Recycling, Waste Dive and Waste 360, China’s Scrap Trade Policy (2018, September 4) Retrieved from http://www.isri.org/advocacy-compliance/china