The Journal Gazette
Sunday, November 25, 2018 1:00 am

China's move puts strain on recyclers

Country no longer buying imports, leading to higher US customer costs

RON SHAWGO | For The Journal Gazette

China's refusal to buy imported recyclables has forced some Indiana communities to reconsider recycling options.

Towns and cities are addressing the problem in different ways. Johnson County, south of Indianapolis, has closed its recycling drop-off sites. Republic Services doubled its cost to Indianapolis customers to $99 a year.

Markle, which straddles the Huntington-Wells county line, approved a measure Wednesday to equally share the expense with recycler Waste Management if processing costs rise above $30 per ton.

Fort Wayne is still making money on recycling, although revenue is down, a city official said.

It all stems from a policy shift by China, long the world's leading buyer of recyclables. At the beginning of the year it enacted an antipollution program that closed its doors to loads of wastepaper, metals or plastic unless they're 99.5 percent pure, the Associated Press reported. That's an unattainable standard at U.S. single-stream recycling processing plants designed to churn out bales of paper or plastic that are, at best, 97 percent free of contaminants such as foam cups and food waste.

The resulting glut of recyclables has caused prices to plummet from levels already depressed by other economic forces, including lower prices for oil, a key ingredient in plastics.

The three largest publicly traded residential waste-hauling and recycling companies in North America – Waste Management, Republic Services and Waste Connections – reported steep drops in recycling revenues in their second-quarter financial results. Houston-based Waste Management reported its average price for recyclables was down 43 percent from the previous year.

“That really, I'm sure, hit a lot of communities pretty hard,” Carolyn Hamilton, Markle clerk-treasurer, said of China's move.

Republic Services' recycling center in Fort Wayne hasn't been as affected as some other Republic businesses, said Shane Stevens, site manager. Most of the West and East Coast recyclables that went to China are now coming to the Midwest. That flooded the market, driving prices down, Stevens said.

“It drives plastic prices down. It drives paper prices down. The price of cardboard right now is lower than it has been since 2000, that I can remember,” he said.

Kirkwood, Missouri, announced plans this summer to end curbside recycling after a St. Louis-area processing facility shut down. Officials in Rock Hill, South Carolina, were surprised to learn that recyclables collected at curbside were being dumped because of a lack of markets. Lack of markets led officials to suspend recycling programs in Gouldsboro, Maine; DeBary, Florida; Franklin, New Hampshire; and Adrian Township, Michigan. Programs have been scaled back in Flagstaff, Arizona; La Crosse, Wisconsin; and Kankakee, Illinois.

Other communities are maintaining recycling programs but taking a financial hit as regional processors have raised rates to offset losses. Richland, Washington, is now paying $122 a ton for Waste Management to take its recycling; last year, the city was paid $16 a ton for the materials. Stamford, Connecticut, received $95,000 for recyclables last year; the city's new contract requires it to pay $700,000.

Fort Wayne pays Republic to process recyclables and gets 75 percent of what they are sold for, said Frank Suarez, city spokesman.

City revenue from recyclable commodities is down about 35 percent from last year, Suarez said. Using one month as an example, revenue dropped from $54,943 in August 2017 to $35,756 this year.

The city's recycling effort is hurt by contamination, Suarez added. People are still putting yard waste and objects such as greasy pizza boxes in their curbside bins. While recycle prices are down, it's still cheaper than landfill disposal and saves landfill space, Suarez said.

“So, anything we can do to prolong the life of the landfill is good for the whole community and even outside our community,” he said.

About 10.5 percent of what people put in their recycle bins goes to the landfill, Stevens said. Christmas lights, clothes, shoes, dog chains, auto parts and large plastic lawn furniture are among non-recyclable items found in the bins, he said.

Eighty-three percent of city residents recycle, which is paid through a $12 monthly user fee found on a household's City Utilities bill.

With the market glut, mills that buy from processing centers have gotten picky, selecting only the best material, Stevens said.

“So, we have extra people that do nothing but make sure our quality control and material is clean enough so that when it goes to the mill we have no rejection,” he said. That means paying more people to process the same amount of material as last year, he said.

Allyson Mitchell, executive director of the Indiana Recycling Coalition, sees a silver lining for the state. Indiana is lucky in that it has recycling processors and an end market for the commodities, she said.

“So, it's a matter of connecting all of those dots and doing it efficiently,” Mitchell said. “And that's the challenge in Indiana right now for recycling.”

Everyone is scrambling to find new end markets, and that's where Indiana needs to step it up, Mitchell said. She points to Pratt Industries in Valparaiso, which processes bales of cardboard to manufacture corrugated boxes, as an example.

“So, this is an excellent opportunity for Indiana to turn this global recycling crisis into an opportunity,” she said. “A win for the state of Indiana.”

The Associated Press contributed to this story.

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