Their View: Oregon newspaper looks at economics of recycling

Published on Thursday, 5 October 2017 21:17
Written by

THE Eugene Register-Guard

Recycling can be likened to a mining operation. Processing costs depend on the purity of the ore - and if the costs exceed the value of the processed material, mining stops. Mining can also become unprofitable when commodity prices fall, when substitute materials become available at a lower price, or when environmental regulations impose added costs. All of these forces are at work in the global recycling industry, threatening to disrupt a materials recovery process that begins with individual consumers.

The problem is especially acute for recycled plastics and mixed paper. China, which buys half the world supply of these recycled materials, is setting new standards for their purity, saying that by the end of the year it will reject any scrap shipments that include more than a small percentage of contaminants such as food residue. ...

The Association of Plastic Recyclers is opposing China’s new standards before the World Trade Organization, arguing that they are a form of protectionism. The trade group also claims that the volume of contaminants in recycled material has already declined. The association says China can achieve its goal of avoiding acting as a dumping ground for foreign garbage in other ways.

But environmental concerns may mask the real reason for China’s new stance: Low oil and fiber prices have made plastics and paper recycling less profitable, forcing processors to demand higher-quality feedstocks.

Economics has always been the Achilles’ heel of recycling. Some commodities, such as scrap metal (especially aluminum) and cardboard, can just about always be recycled for a profit. Others, such as glass, can seldom be recycled without some form of subsidy. Demand for still others, including plastics and paper, varies widely. In 2008, for instance, the price of recycled PET - the type of plastic used to make water bottles - crashed to $20 per ton from $370. If the prices of recycled commodities don’t cover the cost to collecting, sorting, shipping and processing them, recycling programs have to be subsidized or abandoned.

Recycling, however, is powered by broader forces - not just economic, but also environmental and social. It embodies a large element of civic virtue: People feel good about putting a detergent jug into the recycling bin instead of the garbage can. It serves a variety of environmental goals, including extending the life of landfills and reducing the energy consumption and greenhouse gas production associated with the manufacture of new materials. It sustains an industry that employed 150,000 Americans in 2015.

But all of these benefits depend on someone, somewhere, being able to make a profit from recycled materials. China’s decision to reject materials of lower quality means that other markets - preferably domestic ones - must be developed, or the quality of recyclables flowing from American households must be improved.

Both responses should be pursued. It’s easy to believe that many have grown careless about what goes into the recycling bin. That carelessness could lead recycling programs to be curtailed, subsidized through higher garbage hauling rates, or abandoned altogether. The future of recycling depends at least partly on people paying attention, and sending only high-quality ore to the mining operation.

Posted in New Britain Herald, Editorials on Thursday, 5 October 2017 21:17. Updated: Thursday, 5 October 2017 21:19.