RECYCLING OPTIONS ARE SHRINKING
As closures mount, remaining locations struggle to survive, keep up with demand
As recycling redemption centers continue to close around the state, the remaining Bay Area locations are struggling to keep up with demand, leaving residents looking to cash in on recyclables with a dwindling number of options.
The value of plastic, glass and aluminum has decreased, forcing many redemption centers to shut their doors, despite a state subsidy program designed to help them weather market downturns. That puts pressure on the existing centers, which are struggling to meet the demand with little funds.
“It’s a lot busier,” said Robert Holcomb, owner of Recycle It in Martinez, following the closure of another recycling center nearby and a slew of centers in Contra Costa County.
However, Holcomb’s center is not benefiting from the increased demand. Rather, he has to hire more people to keep the center running, but the value of scrap
materials — where many recycling centers make their profits — is so bad, he said, that it is difficult to support the operation.
California is one of 10 states that charges customers a deposit — the California Redemption Value — when they buy bottles and cans. Recyclers can claim those refunds at recycling redemption centers, which then sell the recyclables to processing centers for the value of the CRV and a possible scrap price. The scrap value has been in a downward slide.
For example, as the price of oil has dropped, so too has the cost of plastic, making recycled plastic products less competitive with new products and lowering the scrap value of the recyclables. The price of plastic has fallen from $400 a ton 18 months ago to about $190 today, according to Mark Oldfield of the state’s recycling program, Cal-Recycle.
Downward slide
The recycling struggle is due to both local and global challenges. As recycling centers face high operating costs in the Bay Area, because of increased minimum wages and high real estate costs, commodities prices have plummeted worldwide.
Paper has been in a downward slide for several years, and aluminum prices have fallen because of oversupply and lower demand from China, which has been one of the largest buyers of recycled materials from the United States.
Fred Arjo, owner of Martin’s Recycling in Gilroy, said his company’s profits started taking a hit from the reduced scrap prices about eight or nine months ago.
“We are struggling to stay in the business,” Arjo said. “Even the customers are complaining because the prices are down.”
The price of scrap metal has depreciated so dramatically that his company doesn’t even take it anymore.
Samantha Miskell, a sales manager for A&S Metals, which has locations in Gilroy and throughout the Central Valley, said its centers, too, have seen an influx of bottles and cans in recent months because of the closure of so many other local recycling companies, but the company has taken a hit from the reduced scrap prices, especially for glass bottles.
By law, recycling centers are obligated to ship redeemed material to a certified processor. Although there are many processors throughout the region that can take plastic and aluminum bottles and cans, there is only one processor in the Bay Area, Strategic Material Inc., which takes clean, sorted glass, leaving no competition for recyclers’ glass prices, Miskell said. SMI also moved from San Leandro to Fairfield, driving up trucking costs for some Bay Area recyclers.
Recycling centers are increasingly dependent on the state’s subsidy program, but critics say the payouts are too slow to arrive and the subsidies aren’t adjusted quickly enough to reflect changing market conditions. CalRecycle bases subsidies on a 12-month average of scrap value from a previous year, which does not keep up with real-time changes in scrap value prices, according to a report from nonprofit Container Recycling Institute.
That causes a problem for busy centers like Concord Recycling Center, which often buys $15,000 worth of recyclables from residents in a day.
“The system is antiquated,” said Mike Jennings, manager of the Concord Recycling Center.
Hundreds of California recycling centers have shuttered in the past year, many because of financial hardship. Ontario-based RePlanet, one of the largest private recycling center operators in California, closed 191 recycling centers and laid off 278 employees at the beginning of 2016. The company cited higher operating costs and “unprecedented declines” in prices of plastic and aluminum as the reason for the closures.
California has had an average of 2,100 recycling centers in recent years, but in the past year, that dropped to an existing 1,773. The decline is having an impact on consumers.
Mike Lavino, a local resident who regularly recycles bottles and cans at the Martinez Recycle It center, said there are often long wait times at the center now that other centers around Contra Costa County have closed.
“This is the only place in town,” he said. “There is just no money in it anymore.”
Advocates worry that the decline in recycling centers will particularly affect people who rely on the centers for income.
Glass King Recyclers, better known as Alliance, in West Oakland, has faced pressure to close from neighbors wary of the crowds it draws. The cost of operating amid fines from the city and legal fees prompted the owners to agree to close the center, but as the deadline approaches, its owners, community groups and even the American Civil Liberties Union are urging the Oakland City Council to let the center continue operating until it can find a different site.
In need of overhaul?
“(Alliance) serves the neighborhood, especially very low-income people,” said Dan Radoff, who runs a recycling program to benefit schools and has worked with the center. “This allows them to make an honest living by going out and collecting bottles and cans.”
Radoff pointed out that the decline in recycling centers could hurt the state’s goal to recycle more, marked by a recent legislative bill that calls for 75 percent recycling, composting or reduction of waste by 2020.
Many suggest the decades-old state recycling program needs an overhaul.
Steve Weissman, a lecturer at the Goldman School of Public Policy at UC Berkeley, said that since the prices of scrap materials change quite often, it is crucial for the long-term success of recycling efforts to have more consistency in options for redeeming deposits on cans, bottles and scrap metal.
“Policies that could help maintain that stability and predictability of the market could be an important factor to help balance out issues like fluctuating prices,” Weissman said.