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WASTED: The untold story about recycling … and the potential collapse of the $200 billion U.S. recycling industry

By Mitch Hedlund
July, 12, 2015

If you care about the environment, U.S. jobs, the economy, sustainable manufacturing, waste in oceans, corporate social responsibility, municipal public works, exports or U.S. investments … I ask you to take a moment to read this blog in its entirety.  

We are in an environmental and economic crisis right now with the potential threat of the U.S. recycling industry collapsing.  The purpose of this blog is to shed a more accurate light on what’s leading to this pivotal moment in U.S. recycling … and to introduce solutions which can stop the crisis.

In recent news it’s been reported that the $200+billion recycling industry* (*US EPA) — an industry which supports hundreds of thousands of jobs in the U.S. and is identified as the top action society can do to protect the environment and to prevent waste from entering oceans — isn’t profitable and is starting to collapse.

In fact, Waste Management, the largest U.S. recycling hauler (and the owner of some of the major landfills in the U.S.) has already shut down 10% of their recycling plants this year and laid off employees, with reportedly more to follow.

WM-CEO-statement-closing-plantsThe reason has been blamed on a number of half-truths which unfortunately paint a misleading picture, making it appear as if shutting down recycling in the U.S. and laying off hundreds of thousands of employees nationwide is inevitable.  

Note:  Declaring that the recycling industry is a ‘fatal’ victim of outside market influences or sorting systems, and responding by shutting down recycling plants without attempting to implement readily available and proven solutions that can make recycling more profitable, is the highly concerning message which is coming from the major haulers in the recycling industry.  

The fact is, there are society-wide solutions that are already beginning to make recycling efficient, profitable, marketable, and the materials affordable and desirable by manufacturers, and therefore helping the industry weather occasional downturns in virgin commodity pricing.   The following solutions are simple and inexpensive to implement. And they are created by non-profit organizations with the specific intent to make recycling profitable for haulers, processors and municipalities and make the materials consistently demanded by manufacturers (while expediting environmental progress along the way).  Here are the simple solutions that are proving to resolve the issues:

  •   society-wide standardized labels for recycling bins (www.recycleacrossamerica.org),
  •   the How2Recycle label on packaging (www.How2Recycle.info) and
  •   the celebrity-led national “Let’s recycle right!” PSA campaign to introduce the standardized labels and to help people know how to recycle right and know why recycling properly is critical for manufacturing, the economy, the environment and to help prevent waste from going into the oceans each year. (www.letsrecycleright.org – coming soon)

So let’s look at the top 4 reasons for the U.S. recycling crisis as told by the executives from the recycling industry, but let’s look at the statements from another perspective:  

1)  The trend toward Mixed Recycling (aka Single Sort) is contaminating the recycling system and making recycling unprofitable.

The untold story:  Although the sorting method of Mixed Recycling (aka Single Sort) is not ideal, especially for the permeable recyclables such as paper and cardboard which are the unfortunate victim of stray noodles coming from the soup cans that are also thrown in the Mixed Recycling bin, Mixed Recycling when done properly by the public is not something that would collapse the entire industry, as recent interviews would have you believe.  Don’t misunderstand this to mean that we’re supportive of Mixed Recycling as a sorting method.  We’re not, due to the degradation of paper and cardboard materials as a result of throwing all types of recyclables in one bin together.  But Mixed Recycling is not the culprit for an unprofitable industry.

So what’s the real issue?  Recycling hasn’t been consistently profitable because the cost is so exorbitant to try to remove the millions of tons of other contamination (garbage i.e., dirty diapers, food waste, batteries, hypodermic needles, plastic wrappers, left shoes, stray plastic bags, etc) that is haphazardly thrown in recycling bins every day as a result of the general public’s overall confusion, apathy and skepticism about recycling.  Messaging about recycling and the instructions on recycling bins looks completely different in homes, in every workplace, in every school, in every public area, in every store, in every airport, at every park, etc. … literally everywhere throughout the U.S. instructions on recycling bins are completely different.   This does not convey a sense of importance, nor does it help society recycle properly.  In fact the confusion leads the public to not only make mistakes, but many people also become apathetic and skeptical about recycling.  In fact, many people become so skeptical that they think the recycling is all going to the landfill anyway and then they throw in their food waste, their styrofoam coffee cup and a dirty diaper.  The other people who really want to recycle, often hope that what they put in the recycling bin will magically become recycled, even if they aren’t sure if it’s recyclable.

2)  The public is lazy and doesn’t care about recycling, that’s why recycling is highly contaminated.

The untold story:  This isn’t true, we’re witnessing everyday that the public actually wants to recycle properly and do the right thing.  The contamination issue is truly the symptom of the disjointed way recycling has been presented to the public (again, I encourage you to look at the inconsistent or lack of messaging nationally about recycling and the confusion of messaging on every bin).   To prove this, each time I present at conferences I ask the audience, “please raise your hand if you are frequently confused about how to and what to recycle when you approach a recycling bin.”  In every instance, every hand in the room goes up … and I ask the audience to look around the room at the number of hands raised.  If the public is universally confused and skeptical, how can the industry expect the public to recycle right.

Essentially the costly contamination that is crippling the economics of recycling and next-life manufacturing, is either knowingly or not-knowingly self-inflicted from the recycling industry and municipalities themselves.  But fortunately it is easily solvable and the systemic impact of these minor fixes are profound for all.

3)  Recycling is collapsing because of the decline in virgin commodity pricing, such as the current low oil prices or changes in currency values.

The untold story:  The recycled commodity market is vulnerable to virgin commodity pricing because the costs of trying to remove the contamination is so exorbitant and have driven up the costs of the recyclables to the point where the margins are minimal. Then couple that with unpredictable quality and quantities due to the contamination and that problematic combination reduces the ability for manufacturers to purchase and use the recycled materials.  All of that is the perfect storm for making recycling markets susceptible to occasional changes in the virgin material pricing and currency fluctuations.  Again, the contamination issue is a completely solvable issue, and once resolved it will allow the recycled commodity markets to be profitable and to stabilize, which will begin to allow the industry to weather the occasional drops in virgin pricing, such as the low current oil prices.   

4)  Financial incentives, increasing public tax on landfill waste, or having government subsidized recycling will make recycling in the U.S. possible and profitable. 

The untold story:   Financial incentives, higher taxes, penalties or subsidizing the cost of recycling alone will not fix the contamination issue and it will not make the recycled commodities more desirable for manufacturers to use.  The only thing that will make recycling profitable and a valuable and reliable commodity for manufacturers to use, is to prevent the contamination at the source (at the bin) to improve the quality of the materials collected and improve the economics for the industry and the manufacturers.  Again, this is completely and easily solvable.

Critical Considerations  

Are there hidden motives for the confusion in recycling and the potential collapse in U.S. recycling? 

The untold story:  There is an undeniable conflict of interest in the recycling industry with some of the largest recycling haulers also owning major landfills – because these haulers/landfill owners make money on ‘tipping fees’ when smaller haulers pay to dump their trash or unsellable contaminated recyclables in the major recycling hauler’s landfills.  With the large haulers/landfill owners declaring recycling unprofitable and not wanting to discuss implementing solutions to improve the profitability of recycling, it makes one question whether they profit from the public’s confusion at the bin and if they will make a financial windfall in tipping fee revenues at their landfills if recycling collapses in the U.S.

But why now?  In the past couple of years, China, who is one of the largest purchasers of U.S. recycled commodities began halting much of the purchases of U.S. recycling due to high levels of contamination.  Therefore, some of the major recycling haulers/landfill owners not only lost revenues from China’s decision, but these major haulers/landfill owners also had to begin dumping their unsellable materials in their own landfills (without generating tipping fee revenues).

So the question is this:  if China didn’t take this bold move to stop purchasing the large amounts of U.S. recycling that they had been plagued with contamination, and if the major haulers/landfill owners didn’t haven’t to put their own unsold bales of contaminated recyclables in their own landfills without earning tipping fees, would they be declaring a crisis in recycling right now?   Or would it be business as usual?

However, we understand – the hauler/landfill owners go where the revenues are consistent and predictable on behalf of their business and shareholders; but our message to them is this …  “don’t throw the baby out with the bathwater”.

We ask that they not to cast away the deep investment they’ve already made in recycling and in U.S. jobs – don’t throw away what it can truly do for: their bottom-line, their shareholders, their reputation, manufacturers, society and the environment. Although a sad analogy, it doesn’t have to be Sophie’s choice … recycling has the ability to be the more profitable, palatable, responsible and evergreen (longterm) plan for their business.  We ask these haulers/landfill owners to not be more loyal to what will eventually be the phonebook, the yellow pages and the print classified ads part of their business — when society and industries are already starting to evolve out of that model.

What about waste-to-energy that some of these haulers are invested in?  Incinerating valuable recyclable materials and calling it waste-to-energy … is the equivalent of using cash versus using wood for building a fire.   The short term and long term investment strategy should be to maximize and capitalize on the existing recycling infrastructure to divert the highly valuable recyclable materials away from landfills and incinerators … but this time prevent the contamination issue at the bin.

 Solving the crisis is simple.

Shutting down recycling plants is a hasty decision that is unnecessary when simple, commonsense, low cost and proven solutions can be implemented.

The crippling contamination issue that comes from the public’s confusion and skepticism is completely solvable with society-wide standardized solutions, such as standardized labels on recycling bins. The standardized labels continue to be adopted by some of the most notable brands in the world and the standardized labels are proving to increase recycling levels 50-100% and significantly decrease contamination levels.

Additionally, in a independent focus group with 1,000 U.S. consumers, the standardized labels won in every category: appeal, comprehensiveness, ease, effectiveness and thereby helped people recycle right and recycle more than any other labels.    NYT-1-sent-quote-transp

The standardized labels also went through a year long vetting process nationally and globally and are identified as a ‘systemically world changing solution’ by Ashoka Innovators for the Public.

To accommodate the various and diverse sorting requirements set forth by haulers and municipalities, a standardized label has been designed for nearly every type of sorting need in the U.S.   We also understand there are nuances to each geographic, hauler or municipality market for what might be recyclable or not, and we made provisions for those as needed on the standardized labels.  But the standardized elements remain – and the society-wide standardized labeling system works!

Another solution to make recycling right easier for the public:   The How2Recycle label displayed on packaging helps consumers know how to recycle each type of packaging properly.  The standardized labels on bins and the standardized labels on packaging are highly effective and both help the public recycle properly.  Here’s an example of one of the How2Recycle labels for plastic bottles:

The national “Let’s recycle right!” PSA campaign introduces the standardized label solutions and educates the public why recycling properly is critical for: the environment, the economy, the manufacturers, and the oceans.  And helps the public know how to recycle right with national recycling tips.

 Solving Problems by Standardizing Systems isn’t a New Concept

Other standardizations implemented throughout history have reduced costly confusion and redundancy and made industries profitable and thrive. It’s time to apply the same logic to the recycling industry.

These current recycling stories in the news are a classic example of when standardizations are needed in an industry. Throughout history there have been examples of industries that have suffered greatly as a result of confusion, mistakes, redundancy and inefficiencies; and when standardizations were put in place, the industries thrived.

Standardized Time:  For instance, take the standardization of time in the 1880s in the U.S. and what it did for the train industry that initiated the standardized time zones to resolve the confusion, inefficiencies and economic shortcomings of their industry — and it worked!  It stopped the issues that came from thousands of different times in communities across the U.S. and allowed other industries to be born, such as: mass communication, satellites, computer technologies, space travel, etc.  None of this would have been possible without standardized time.

Standardized Nutrition Labels:  Take the standardized nutrition label and what it did for consumer decisions, food production, marketing, health, etc.

Standardized Traffic Signs:  And how about the standardized stop sign and what it does for road safety, transportation costs, distribution, fatality rates, economics in transport and safety, etc.

The recycling industry is long overdue to have society-wide standardizations implemented to remedy the public confusion around recycling, so that recycling and next-life manufacturing can become profitable, thriving and the primary source of commodities for manufacturers.

A request to municipalities and haulers …

So where is the actual point of failure and how can we move forward?  The problem actually begins before the recycling bins are ever put in place.   Since the recycling industry, including municipalities, have historically not worked together to deliver society-wide messaging for the society-wide need for people to recycle properly, the profitability of their recycling processing and the ability for manufacturers to be able to use recycled materials have suffered.

Here’s an analogy:  Imagine if every business, every household, every community had to design their own stop signs for the intersection nearest them.  How effective would that be for road safety?  It would be chaos. 

Well that is exactly what we have with recycling.  Chaos.  Because every hauler, city, county, state, business, school, university, airport, sports stadium, corporation, employer, park, shop, restaurant, mall, etc. is putting out a different looking instruction on every recycling bin – there are literally millions of different looking labels on bins.  So even when the public goes home, they’re confused, apathetic and skeptical about recycling.  So in goes the dirty diaper, the food waste, the garden hose, the plastic bags and wrap, etc. – and subsequently there goes the profitability and viability of recycling.   

The standardized labels were designed specifically for the recycling industry and municipalities to use on bins and share with their customers and businesses and residents in their communities.   We did this so that the public could begin seeing a consistent and comprehensive set of instructions at the recycling bin and begin to know that recycling right is critical.

However interestingly, it has been adopted more quickly by great global brands such as Disney, Bank of America, NBC Universal, Hallmark, Kohler, SanDisk, Aol, Kiehl’s, Whole Foods (NA) and thousands of other businesses, schools, universities and households  – because society is understanding that a fragmented approach to a society-wide problem isn’t the answer.  The standardized labels are proving to be so successful, the movement has been growing virally.  But it’s time now for the haulers and municipalities to understand what’s at risk if we don’t all come together on this issue.

Recycling (including composting and managing electronic recycling responsibly) is necessary for our continued existence on this planet and it has every ability to become a valuable societal norm …. but the general public (the miners of these commodities) need and deserve solutions to make it easier for them to recycle properly.

Therefore we ask municipalities and recycling haulers large and small, and their shareholders who have already invested heavily in the recycling infrastructure and in creating jobs, to join the society-wide standardized labels movement.  These simple solutions have been created by non-profit organizations specifically to make your businesses and communities’ investments in recycling become more profitable.

Please click here to send us an email with your comments, questions and support.

info@recycleacrossamerica.org

Thank you!

Mitch Hedlund

Founder and Executive Director – Recycle Across America, a 501(c)(3) nonprofit organization