Why the Recycling Market Must Adapt to Survive

A lot of plastic worth not much money these days. (Photo: Spencer Platt/Getty Images)

Many people in the green world have a love/hate relationship with recycling and worry about whether it really does any good. Matt recently wrote about how people are carefully separating their glass bottles, only to have them crushed and sent to the landfill. Some worry that it's just a feel-good exercise that might even increase waste. In a review of "Junkyard Planet" by Adam Minter, I wrote about how he considers recycling to be the worst of the 3Rs.

He describes one recent study where participants were given a task that involved cutting up paper (ostensibly to test scissors). Those who had a recycling bin beside their desk used twice as much paper as those who just had a trash bin. In other words, the recycling option actually increased consumption ... Minter writes: “I encourage people to think about what it means to recycle, and make smart choices as a consumer before you buy that thing you’ll eventually toss out. Recycling is a morally complicated act.”

It's a financially complicated act too. According to a recent article by David Gelles in the New York Times, the market for recycled plastic is drying up, thanks to the collapse of oil prices. That's because virgin plastic is made from cheaper fossil fuels, so recycled plastic now is worth half of what it was worth a year ago. Cities that used to make money from recycling are now paying to have the stuff taken away for incineration or to be dumped in the landfill. Gelles quotes an industry leader:

“Recycling is in a crisis,” said David P. Steiner, chief executive of Waste Management. “It used to be that all players in the recycling ecosystem were able to make a profit. That’s not the case anymore.”

After reading the article in the Times, I sent a note to Minter asking for his opinion. Minter is an Asia-based columnist at Bloomberg View, and according to his blog, he has been covering global recycling for more than a decade. He knows a lot about junk:

He sent a long and thoughtful response that I repeat in sections here:

The crisis has been coming for a while as the recycling market changes.

There’s no question that the commodities slump has had a harsh impact on recyclers. But it’s important to recognize that the slump also serves to highlight many problems that high prices allowed the industry to ignore for far too long. For example, much of the U.S. municipal recycling infrastructure is designed to sort two-dimensional recyclables such as newsprint and office paper. But as we all know, newsprint is in significant decline. As a result, so are the profits that many recyclers were accustomed to deriving from it. Meanwhile, the recycling stream is becoming dominated more and more by three-dimensional recyclables like detergent containers and water bottles. Technology exists to sort them, but it’s expensive and requires rethinking business models, and that’s something better done when you’re making money, not losing it. Alas, recyclers are human, and many assumed — incorrectly! — that the waste stream would remain static, and high commodity prices weren’t cyclical but rather permanent. The other problem is that recycling has become lighter — meaning, for the sake of cost and material savings, cans and bottles are becoming thinner and lighter. That’s good for the environment, but bad for recyclers who demand more, not less, to be profitable.

This was noted in an earlier post on TreeHugger, how the bottle manufacturers have been making bottles with much less plastic; now the bottles are so light that they're harder to separate. (They used to stay put when compressed air was used to separate paper from plastic.) The recyclers are handling the same number of pieces but getting less material out of the deal.

China is changing

At the same time, many recyclers simply assumed that the Chinese markets for their goods were permanent, and failed to anticipate or heed warnings from China that it was no longer interested in importing low-quality U.S. recyclables. When the door slammed shut on those exports in 2012 (during “operation Green Fence”), many U.S. recyclers were left with nowhere to go with their product. Had they made better quality bales of recyclables, that might not have been a problem (long-term, they’ll need U.S. manufacturers who want their recyclables).
bottle bench
Does a bottle really want to be a bench?. (Photo: Screen capture, America Recycles)

Plastics are changing

The NYT article focused on plastics, which is understandable. It’s hard for recyclers to compete with virgin producers — right now. But ironically, plastics is the recycling sector that’s receiving the most R&D; right now, and there are some really incredible innovations in the pipeline to help sort plastics from the other recyclables in your bin, as well as some interesting technologies to help transform old plastics into new. It’s always dicey to bet on innovation, but I’d be very surprised if technology didn’t improve the plastics recycling yield over the next decade. I think it’s all but inevitable.

This is good to hear; recycling has got well beyond the "I want to be a bench" phase. We also have to do better here by using less of it in the first place. TreeHugger's Margaret Badore made a video about how we got to where we are on the disposable bottle issue:

We're doing better than we think

Finally, Minter looks at what we're recycling and how we're doing. I thought the 34 percent recycling rate quoted in the New York Times article was a sign of failure, given that it was just slightly over double what it was in 1990, but in fact much has changed, and it's actually pretty good.

Ultimately, I think Americans need to stop thinking about recycling in terms of how much is being diverted from landfills. A recycling rate of 34% in 2006 is not the same as a recycling rate of 34% in 2016. The current 34%, in fact, is really impressive, considering that our trash and recycling is becoming substantially lighter due to the use of plastics and thinner packaging. In effect, we’re running faster to stand still.

But maybe we're thinking about it all wrong.

If we really want to measure the impact of recycling, I think a carbon-based model is the best route. So, instead of saying, we diverted 34% from landfills, we instead say “We saved X tons of CO2 by opting to recycle instead of landfilling or X tons of CO2 instead of incinerating.” The advantages are several, including the obvious boon of avoiding environmentally unsound recycling practices. (Why divert from the landfill if there’s no net CO2 benefit? Maybe keeping it out of the landfill is reason enough, but having that kind of data helps us make better decisions.) Doing so will require complicated and expensive life cycle assessments of products in our waste stream. But long-term, it’ll help everyone make much better, informed choices about recycling.

Even if you've never thought about it before, Minter's insights make the topic interesting. To learn more, I highly recommend "Junkyard Planet."