A greener na­tion puts re­cy­clers, cities in the red

The Washington Post Sunday - - FRONT PAGE - BY AARON C. DAVIS

Tucked in the woods 30 miles north of Washington is a plant packed with energy-guz­zling ma­chines that can make even an en­vi­ron­men­tal­ist’s heart sing — gi­ant con­veyor belts, sorters and crush­ers sav­ing a thou­sand tons of pa­per, plas­tic and other re­cy­clables from reach­ing land­fills each day.

The 24-hour op­er­a­tion is a sign that af­ter three decades of try­ing, a cul­ture of curb­side re­cy­cling has be­come in­grained in cities and coun­ties across the coun­try. Happy Val­ley, how­ever, it is not.

Once a prof­itable busi­ness for cities and pri­vate em­ploy­ers alike, re­cy­cling in re­cent years has be­come a money-suck­ing en­ter­prise. The Dis­trict, Bal­ti­more and many coun­ties in be­tween are con­tribut­ing mil­lions an­nu­ally to prop up one of the na­tion’s busiest fa­cil­i­ties here in Elkridge, Md. — but it is still los­ing money. In fact,

al­most ev­ery fa­cil­ity like it in the coun­try is run­ning in the red. And Waste Man­age­ment and other re­cy­clers say that more than 2,000 mu­nic­i­pal­i­ties are pay­ing to dis­pose of their re­cy­clables in­stead of the other way around.

In short, the busi­ness of Amer­i­can re­cy­cling has stalled. And in­dus­try lead­ers warn that the sit­u­a­tion is worse than it ap­pears.

“If peo­ple feel that re­cy­cling is im­por­tant — and I think they do, in­creas­ingly— then we are talk­ing about a na­tion­wide cri­sis,” said David Steiner, chief ex­ec­u­tive of Waste Man­age­ment, the na­tion’s largest re­cy­cler that owns the Elkridge plant and 50 oth­ers.

The Hous­ton-based com­pany’s re­cy­cling di­vi­sion posted a loss of nearly $16 mil­lion in the first quar­ter of the year. In re­cent months, it has shut nearly one in 10 of its big­gest re­cy­cling fa­cil­i­ties. An even larger per­cent­age of its plants may go dark in the next 12 months, Steiner said.

The prob­lems of re­cy­cling in Amer­ica are both global and lo­cal. A storm of fall­ing oil prices, a strong dol­lar and a weak­ened econ­omy in China have sent prices for Amer­i­can re­cy­clables plum­met­ing world­wide.

En­vi­ron­men­tal­ists and other die-hard con­ser­va­tion ad­vo­cates ques­tion if the in­dus­try is over­stat­ing a cycli­cal slump.

“If you look at the long-term trends, there is no doubt that the mar­kets for most re­cy­clables have ma­tured and that the eco­nom­ics of re­cy­cling, although it varies, has gen­er­ally been mov­ing in the right di­rec­tion,” said Eric A. Gold­stein, a lawyer with the Nat­u­ral Re­sources De­fense Coun­cil who tracks solid waste and re­cy­cling in New York.

“And that’s with­out fac­tor­ing in the ex­ter­nal im­pact of land­fill­ing or any­thing else,” headded. “There aren’t a lot of peo­ple say­ing, ‘Send more ma­te­rial to land­fills.’ ”

Still, the num­bers speak for them­selves: a three-year trend of shrink­ing prof­its and ris­ing costs for U.S. mu­nic­i­pal­i­ties— and lit­tle ev­i­dence that they are a blip.

Try­ing to en­cour­age con­ser­va­tion, pro­gres­sive law­mak­ers and en­vi­ron­men­tal­ists have made mat­ters worse. By push­ing to in­crease re­cy­cling rates with big­ger and big­ger bins — while de­mand- ing al­most no sort­ing by con­sumers — the re­cy­cling stream has be­come in­creas­ingly pol­luted and less valu­able, im­per­il­ing the eco­nom­ics of the whole sys­tem.

“We kind of got ev­ery­one think­ing that re­cy­cling was free,” said Bill Moore, a lead­ing in­dus­try con­sul­tant on pa­per re­cy­cling who is based in At­lanta. “It’s never re­ally been free, and in fact, it’s get­ting more ex­pen­sive.”

The prob­lem with blue bins

Many of the prob­lems fac­ing the in­dus­try can be traced to the curb­side blue bin — and the old say­ing that if it sounds too good to be true, it just might be. Any­one who has ever tossed a can into a bin knows what’s sup­posed to hap­pen: Any­thing re­cy­clable can go in, and then some­how, mag­i­cally, it’s all sep­a­rated and reused.

The idea orig­i­nated in Cal­i­for­nia in the 1990s. En­vi­ron­men­tal ad­vo­cates be­lieved that the only way to in­crease par­tic­i­pa­tion in re­cy­cling pro­grams was to make it eas­ier. Sort­ing took time and was messy. No one liked it. So-called Ma­te­rial Re­cov­ery Fa­cil­i­ties, or MRFs, were cre­ated to do what con­sumers wouldn’t.

With con­vey­ers, spin­ning fly­wheels, mag­nets and con­trap­tions that look like gi­ant Erec­tor Sets, com­pa­nies found that they could re­cy­cle al­most ev­ery­thing at once. Light­weight news­pa­per and card­board were sent tum­bling up­ward, as if in a clothes dryer. Glass, plas­tic and me­tal fell into a se­ries of belts and screens. Au­to­ma­tion was adopted to sort, bale and send to man­u­fac­tur­ers all those tons of pa­per, bot­tles and cans.

From the start, it was hard to ar­gue that glass should have been al­lowed in the curb­side mix. It’s the heav­i­est of re­cy­clables but has al­ways been of mar­ginal value as a com­mod­ity. In the rough-and­tum­ble sort­ing fa­cil­i­ties, a large share of it breaks and con­tam­i­nates valu­able bales of pa­per, plas­tic and other ma­te­ri­als.

To­day, more than a third of all glass sent to re­cy­cling fa­cil­i­ties ends up crushed. It is trucked to land­fills as daily cover to bury the smell and trap gases. The rest has al­most no value to re­cy­clers and can of­ten cost them to haul away.

In re­cent years, the prob­lem of con­tam­i­na­tion has spread be­yond glass. The prob­lem was ex­ac­er­bated when mu­nic­i­pal­i­ties be­gan in­creas­ing the size of bins, be­liev­ing that big­ger was bet­ter to keep more ma­te­rial from land­fills.

Con­sumers have in­deed been fill­ing the big­ger bins, but of­ten with as much garbage as re­cy­clable ma­te­rial.

With the ex­tra room, res­i­dents stopped break­ing down card­board boxes. Be­cause a full ship­ping box some­times fits in­side, even with foam and plas­tic wrap at­tached, all of it more fre­quently shows up at sort­ing fa­cil­i­ties.

Res­i­dents have also be­gun ex­per­i­ment­ing, per­haps with good in­ten­tions, toss­ing into re­cy­cling bins al­most any­thing rub­ber, me­tal or plas­tic: gar­den hoses, clothes hang­ers, shop­ping bags, shoes, Christ­mas lights.

That was ex­actly the case last year, when the Dis­trict re­placed res­i­dents’ 32-gallon bins with ones that are 50 per­cent larger.

“Residue jumped a ton,” said Hal­lie Clemm, deputy ad­min­is­tra­tor for

the city’s solid waste man­age­ment di­vi­sion. In fact, so much non­re­cy­clable ma­te­rial was be­ing stuffed into the bins that af­ter an au­dit by Waste Man­age­ment last fall, the share of the city’s profit for selling re­cy­clables plum­meted by more than 50 per­cent.

That has driven up the city’s pro­cess­ing price for re­cy­clables to al­most $63 a ton — 24 per­cent higher than if it trucked all of its re­cy­cling ma­te­rial, along with its trash, to a Vir­ginia in­cin­er­a­tor.

The D.C. Coun­cil re­cently ap­proved a pay­ment of $1.2 mil­lion to Waste Man­age­ment for the con­tract year that ended in May. In 2011, the city made a profit of $389,000.

Lit­tle de­mand for newsprint

A large part of the prob­lem for re­cy­clers is fall­ing global com­mod­ity prices — a phe­nom­e­non largely out of re­cy­clers’ hands. But the neg­a­tive im­pact of that trend is am­pli­fied by the con­tents of most re­cy­cling bins, be­cause the com­pos­ite of what Amer­i­cans try to re­use has changed dra­mat­i­cally over the past decade.

Dwin­dling have been the once prof­itable old news­pa­pers, thick plas­tic bot­tles and alu­minum cans that could be easily baled and reused.

With oil prices driv­ing up trans­porta­tion costs, man­u­fac­tur­ers have en­gaged in a race to make pack­ag­ing more light­weight. Cof­fee cans dis­ap­peared in fa­vor of vac­uum-packed alu­minum bags; some tuna cans went the same way. Tin cans and plas­tic wa­ter bot­tles be­came thin­ner, too: The amount of plas­tic that once came from 22 bot­tles now re­quires 36.

There was an even more pro­nounced drop in newsprint. Long a lu­cra­tive re­cy­cling com­mod­ity, it’s not a key com­mod­ity mar­ket. In its place is some­thing known as mixed residential pa­per: the junk mail, flat­tened ce­real boxes and other pa­per items that these days can out­weigh news­pa­per in a one­ton bale.

One bright spot has been an in­crease in card­board. An­a­lysts say that with more peo­ple buy­ing items through online mer­chants, card­board can ac­count for up to 15 per­cent of cities’ re­cy­clable loads— morethan dou­ble that of a decade ago.

The de­mand for that pa­per and card­board, how­ever, re­mains at a near-decade low. In China, con­tainer­board, a com­mon pack­ag­ing prod­uct from re­cy­cled Amer­i­can pa­per, is trad­ing at just over $400 a met­ric ton, down from nearly $1,000 in 2010. China also needs less re­cy­cled newsprint; the last pa­per mill in Shang­hai closed this year.

With less de­mand, Chi­nese com­pa­nies have be­come pick­ier about the qual­ity.

Last week in Elkridge, an in­spec­tor from a Chi­nese com­pany stud­ied bales of pa­per be­ing loaded into ship­ping con­tain­ers bound for the port of Bal­ti­more and, even­tu­ally, Asia.

If the in­spec­tor found more than five non­pa­per items pro­trud­ing from any one side of the bale, it was re­jected, forc­ing work­ers to break down the ma­te­rial and send it all back through the pro­cess­ing fa­cil­ity.

The light­weight vac­uum packs for food and pa­per-thin plas­tic bot­tles are in­creas­ingly part of the prob­lem. They are so light that they get blown up­ward with the pa­per.

“We’ve seen eco­nomic down­turns in the value of ma­te­rial in the past, but what’s dif­fer­ent now is that the ma­te­rial mix has changed,” said Patty Moore, head of Cal­i­for­nia-based Moore Re­cy­cling As­so­ci­ates, which spe­cial­izes in plas­tic re­cy­cling. “The prob­lem is, to get the same value out of your scrap, you have to shove a whole lot more ma­te­rial through the fa­cil­ity. That was fine when scrap val­ues were high, but when they dropped, we re­al­ized it’s ex­pen­sive to push all of this light­weight stuff through, and we’re in trou­ble.”

Brent Bell, Waste Man­age­ment’s vice pres­i­dent for re­cy­cling, said the com­pany has yet to see mu­nic­i­pal­i­ties aban­don re­cy­cling, and the com­pany is main­tain­ing its abil­ity to re­cy­cle what­ever cities send their way. But it is down­siz­ing its op­er­a­tion and ex­pect­ing lit­tle in­crease in re­cy­cling rates na­tion­wide.

Last week, the En­vi­ron­men­tal Pro­tec­tion Agency an­nounced a na­tion­wide tally for re­cy­cling in 2013 that showed over all re­cy­cling had con­tracted for a sec­ond straight year, to 34.3 per­cent of the waste stream.

With those trends, Bell said the com­pany is be­gin­ning tough dis­cus­sions with cities about what it sees as a long-term eco­nomic re­al­ity: Cities must bear more of the fi­nan­cial im­pact of fall­ing com­mod­ity prices. That’s the only way, Bell said, for re­cy­clers like his com­pany to in­vest in the busi­ness.

Steiner, Waste Man­age­ment’s chief ex­ec­u­tive, went fur­ther. “We want to help our cus­tomers, but we are a for-profit busi­ness. We won’t stay in the in­dus­try if we can’t make a profit,” he said.

Clemm, the Dis­trict’s re­cy­cling chief, said small ef­forts can be­gin turn the tide. The Dis­trict must be­gin by get­ting more garbage out of its re­cy­cling stream.

“Res­i­dents have a way to in­flu­ence this by mak­ing sure they are re­cy­cling right,” she said.

Another pos­si­bil­ity is to fol­low the urg­ings of the en­vi­ron­men­tal com­mu­nity by ex­pand­ing re­cy­cling pro­grams to in­clude com­post­ing — the banana peels and grass clip­pings de­grad­ing in land­fills that by some es­ti­mates have be­come the na­tion’s third-big­gest source of meth­ane gas con­tribut­ing to global warm­ing.

There are also a few en­cour­ag­ing signs down­stream in the re­cy­cling mar­ket. A re­cy­cled-plas­tics com­pany in Troy, Ala., pro­cesses more than 500 mil­lion pounds of re­cy­cled ma­te­rial an­nu­ally from plas­tic bot­tles — and with 450 em­ploy­ees, the com­pany is grow­ing. In the Mid­west, another com­pany opened two ad­di­tional fa­cil­i­ties this month to feed an In­di­ana pa­per mill that churns out 100 per­cent re­cy­cled card­board.

Turn­ing a profit on the ini­tial, dirty task of sort­ing and pro­cess­ing the na­tion’s re­cy­clables, howto ever, may take a larger over­haul, said Patty Moore. Gov­ern­ments may need to set stan­dards or even con­sider tak­ing over part of the process to bet­ter en­cour­age in­vest­ment and en­sure that prof­its re­main a public ben­e­fit.

“If we’re go­ing to be se­ri­ous about sec­ondary-ma­te­ri­als man­age­ment, we’re re­ally go­ing to have to ad­dress it as a state or prefer­ably na­tional level,” she said. “We need to har­mo­nize what we’re do­ing and make it work in a way that we’re not spend­ing all this money and spin­ning our wheels.”

RICKY CAR­I­OTI/THE WASHINGTON POST

Bales of re­cy­clable items are stacked at theWasteMan­age­ment fa­cil­ity in Elkridge, Md. Pa­per prod­ucts are sent to China.

RICKY CAR­I­OTI/THE WASHINGTON POST

A worker at theWasteMan­age­ment fa­cil­ity in Elkridge, Md., walks past bales of pa­per items. De­mand for card­board and other pa­per is at a near-decade low.

RICKY CAR­I­OTI/THE WASHINGTON POST

Work­ers sort re­cy­clables at the WasteMan­age­ment plant in Elkridge, Md.

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