The biggest problem with recycling, in the western world, is that recycling is largely no longer profitable. Often times, this lack of profitability means that recycling programs are being dialed back and or shuttered, with the resources ending up in landfills. In fact, according to the New York Times, there are hundreds of towns and cities across the U.S. that have canceled recycling programs, limited the types of materials they accept or agreed to huge price increases, in the last two years alone.
Let’s discover why.
The Many Costs of Recycling
According to Better Meets Reality, the following costs affect current recycling profitability:
1. Collection costs
2. Transport costs
3. Sorting costs
4. Cleaning costs
5. Costs to maintain recycling facilities
6. Costs to support necessary industry jobs
7. Costs involved in making the new product
Zebulon Parsons, President of Bricolage Dynamics, states that these costs fall within something that is referred to as an industry supply chain. Generally speaking, Zebulon illustrated that the most common supply chain for recyclables, in the US, looks as follows:
According to Parsons, each step of the supply chain steps come with their inherent color-coded costs such as labor, transport, maintenance and facility costs, all of which drive up the price of the finished recycled material.
Ultimately, if recycled materials cost more to procure, then companies that use these materials, in their manufacturing processes, will simply buy the new, virgin equivalent. Think recycled plastic pellets vs. virgin plastic pellets.
This begs the question, if the collection is free, how are all these processing costs being paid for? Some would argue, the costs are covered through the final sale of the materials as well as tax dollars.
Do Material Sales and Tax Dollars Cover the Process Costs?
Nowadays, the most common answer is, No.
Material sales are lagging in the United States. One of the biggest contributing factors to this is that the US lost one of its largest recycling buyers, China, in 2018. Concurrently, many domestic municipalities and businesses involved in the industry have been using outdated processes and old tech, that were never upgraded, due to the sale of these dirty, unsorted recyclables to China, according to The Washington Post. Essentially, China stopped buying and the US was left with an archaic, domestic industry that cannot find enough buyers for dirty, comingled recyclables.
In regards to tax dollars, many municipalities have been campaigning for tax increases for years in order to fund better recycling programs, with relatively little success. The truth of the matter is, the average tax dollars spent on recycling have long been outweighed by the processing costs.
With little to no revenue stemming from material collections, compounded by not being able to sell the final product, recyclables are left to go to the landfill. As a result many programs across the western world have dialed back with some shutting down.
How to Improve the Current State of Recycling
Bricolage Dynamics, a recycling innovation company based in Greenville, SC, proposes the following changes be made to benefit and secure the future of the recycling industry:
1. Increase supply chain visibility for participating households
2. Increase privatization in the recycling industry
3. Create local buyers for local recycling materials
4. Separate recycling at the home level instead of at a processing facility
5. Reduce the supply chain steps from the household to the end buyer
6. Charge households exactly what it costs to perform the service well
7. Allow households to elect whether or not they use the service
8. Provide a variety of cost effective, residential recycling collection options
Can Recycling be Free?
No, recycling cannot be free and programs that offer free collection and drop off do more damage than good. On a national scale, free collections perpetuate an archaic expectation that facilitating the greater good comes at relatively no cost to the individual. This notion can be the death of recycling services that charge households to participate, in spite of the fact these very services may be promoting higher recycling rates and more robust business models.
Ultimately, if you want to have something done well and if you want something that is here to stay, you either have to do it yourself or pay for it to be done the right way.