Markets and Marketability

Overcoming the barriers to accessing recycling markets

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At a recent solid waste management conference, GBB observed a hole in its programming—reflective of the conversation writ large—markets. MARKETS! This is a BIG issue and one that we think is worthy of serious consideration. The industry has worked for decades on recycling collection, and it has made a significant investment in its collection infrastructure and communicated its successes through diversion rates. However, having markets (local or otherwise) is integral to the success of recycling, and indeed it is not recycling without them, but the barriers to marketability are tangible, too, and overcoming them is just as important.

As an industry, solid waste management professionals in the US have zeroed in on recycling collection program expansion, while keeping marketability on the periphery and relying on exports. However, tides which have benefitted us in the past are changing quickly—international channels for our recyclables are closing or narrowing—and program expansion despite contamination reduction is perceived now, more than ever, as a major challenge. We do not wish to find ourselves in a situation where we are not able to capitalize on the good infrastructure we have already put into place and further threaten our waste management economy that employs over half a million US workers (www.bls.gov/oes/current/naics3_562000.htm). The nature of GBB’s offices being in Virginia means that by “our industry,” we mean the US waste management industry, but the US is not alone in its pain, as many countries in Europe, too, have relied on exporting collected materials to recycling and manufacturing centers around the world. We (in this case, “we” means our global industry) are all feeling the pinch.

With the absence of a magic switch to power on a solution overnight, how could we approach rebuilding the local market for recyclables? The answer is multifold and will involve efforts in tandem, including education efforts, programmatic updates, building the demand, and strategic partnerships to build the infrastructure for a more localized recycling market. Just like any diagnosis involves a good hard look at the symptoms, we consider some of the barriers to markets and marketability below.

Managing municipal solid waste is more than landfilling: publicity, education, engineering, long-term planning, and landfill gas waste-to-energy are specialties needed in today’s complex environment. We’ve created a handy infographic featuring 6 tips to improve landfill management and achieve excellence in operations.  6 Tips for Excellence in Landfill Operations. Download it now!

MRF Challenges
The marketability of a recycling stream should be considered from the moment of generation where education efforts should take effect, throughout the collection, transfer, and sorting process so that when the stream ultimately leaves the materials recovery facility (MRF), it is ready to head to the market for maximum value. However, most MRF operators have expressed discontent over the loss of markets, and subsequent lost revenue, due to decreased marketability and lack of markets.

There are several consequences to the MRF operators due to changes in the markets and looking to reduce costs to help with the lost revenue. First, many of the commodity markets that are still open now demand a much cleaner commodity bale, requiring MRFs to remove more contaminants and out-throws from the commodity streams. Unless these out-throws are recovered elsewhere, these materials that previously ended up in the commodity bales are now part of the residue stream and result in a lower throughput of commodities to garner revenue. Since there is a cost to dispose of the residue, an increase in residue means additional monies are needed for disposal in an already difficult market. In addition to the materials removed prior to baling, there are also non-program materials that are placed in the recycling bin that are removed during the system process that also emerge as residue. Frequently, MRF operators blame the municipalities for improper education and for failing to properly monitor and regulate the incoming single-stream materials. This also is an issue, but it is not the entire reason for the increases in MRF residue (see the “Education” section below).

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When we are talking about MRF residue, it is all materials that are not recovered as a commodity and are sent to a landfill or another disposal. Most MRFs in North America claim to have upwards of 20% in the residue (or more) go to disposal after processing at the MRF. However, the Recycling Partnership has performed characterization studies (https://recyclingpartnership.org/wp-content/uploads/2018/05/Start-at-the-Cart-Resource-Recycling.pdf) (or consolidated data from other studies) and has found that generally, less than 20% of incoming single-stream material is residue. So, which is it? Well, the problem lies in the idea that the term “residue” is being used to describe two separate things. The Recycling Partnership describes residue as actual waste materials in the single-stream such as diapers, food waste, and non-recyclable fiber or composites. This level of contaminants is similar to what GBB has found in several single-stream composition studies. As stated, MRFs generally refer to all material that is sent to disposal as “residue,” which includes contaminants but may also consist of difficult to recover recyclables or materials that are technically recyclable but are difficult to market, or even program recyclables that ended up in the wrong spot in the MRF sorting process.

Reducing the MRF residue to reduce the overall costs of processing recyclables is possible, and should be seriously considered for all MRF owners and operators. One way is to improve the functionality and efficiency of the MRF equipment itself. By doing so, recyclable materials are not “missed” as often and will tend to end up in the area of the MRF specifically intended for recovery of that particular item. This could include updating worn parts and other maintenance or refurbishing and replacing some older/outdated equipment to help improve efficiencies.

Managing municipal solid waste is more than landfilling: publicity, education, engineering, long-term planning, and landfill gas waste-to-energy are specialties needed in today’s complex environment. We’ve created a handy infographic featuring 6 tips to improve landfill management and achieve excellence in operations. 6 Tips for Excellence in Landfill Operations. Download it now!  

Given the option between the garbage bin and the recycling bin, the recycling educator’s hope is that the individual will choose the correct recycling bin—single-stream or otherwise—for the material in hand. It is for that moment of waste generation that the field of recycling education has developed best management practices and resources available to the industry at the local, state, and federal levels. But the implementation of and access to recycling education is an ongoing challenge, and the changing nature of the markets only complicates things further. The industry’s overall move to single-stream recycling in the past several decades has served us well in that it has significantly improved recycling participation rates—after all, it is much easier to throw everything into one large cart than it is to sort materials into multiple recycling bins—however, education requirements are not diminished by the reduction in bins. We still find ourselves struggling with residues and contamination in our recycling streams which reduce marketability; so, the need for education still exists. A continued effort is necessary to simplify the message—to make it clearer and more concise—to help people understand that harmful residue and contaminants have no place in the recycling bin.

Educating program participants on which materials are truly recoverable in a MRF for recycling, which are not, and why, is key to keeping costs down further along the sorting and processing cycle, as well as to ensure that processors actually want to buy the final baled commodities. What can actually be marketed within our wastestreams is important and considering this will need to take a front seat. Regardless of where a given processor is located—whether it is here in the US, or abroad in China or other countries that have recently expanded their processing capacities—baled commodities are much more valuable when free of residue and contaminants.

Stopping both garbage as well as non-recyclable “recyclables” from entering bins and carts, like plastic film and polystyrene, and supplementing these restrictions with information on where and how to dispose, or recycle alternatively, is beneficial. Such education and outreach campaigns can also focus on prioritizing materials that have the most lucrative markets, such as metal cans and corrugated cardboard. Either government or private contractors can lead these education and outreach campaigns, but they are most successful when both parties are working together and agree on the message and messaging strategy.

Purchasing Power
In addition to reducing residue and contamination, one of the most important considerations of building or strengthening markets for recyclable commodities is a demand for the materials or consumer goods that are produced from the recycled commodities in the first place. Without this demand, manufacturers continue to use raw or virgin materials that may have lower upfront costs. Just like the adage, “you vote with your dollar,” both governments and the private sector can use their purchasing power to help stimulate the demand—and therefore the market—for recycled commodities.

Purchasing power can be extremely influential, especially at the scale of government and large companies whose procurement decisions can literally shape entire markets. Many guidelines now exist to implement sustainable purchasing, and it is even better if there is a local component to the sustainable purchasing strategy. Locally-based procurement helps keep economic benefits within a community, strengthening economic resilience, and it can enhance overall sustainability as well as reduce emissions due to transporting materials shorter distances.

Another element to building markets, particularly locally and regionally, is to create them through partnerships of various kinds. The public and private sectors working together is truly the missing link domestically. These sectors must communicate with one another to identify local and regional commodities and match these resources with the needs of the private sector, creating synergies in the local/regional/domestic market to utilize these recycled commodities. Sometimes, if there is a manufacturing base in your community, this sector can use recycled materials directly as inputs; other times, all that is needed is a small tweak to their operations to make use of a different type of material that the community might produce. Creativity is key.

Public-Private Partnerships (P3s) can also take the form of infrastructure development, in which some or all of the investment risk is borne by the private party, making overall development more feasible for the public entity. These P3s could be backed by investors and incubators who understand the complicated nature of resource management, how it can scale, and its intersection with manufacturing, agriculture, and other industries and public services. This could be something relatively small, like making upgrades to a local MRF or transfer station, or something larger like building an entire facility or campus to sort and process materials, such as the Sustainable Business Park model taking shape in Kent County, MI (www.reimaginetrash.org/vision/), or establishing a public activity that could spin off as a private company down the line. Public entities can also greatly benefit by working across jurisdictions with other local or regional governments (and perhaps companies) to achieve the economy of scale that may be necessary to make things happen, say, in cooperatively investing in recycling infrastructure.

The future of recycling is dependent upon local market development AND cleaning up our recycling streams; they are not mutually exclusive endeavors and the pointing of fingers for whose job it is to “fix” the situation revolves securely on an axis in all directions. The question is not which must come first—markets OR marketability—that argument is moot because the answer is both…now. MSW_bug_web

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