By Zoe Yuqing Han
BU News Service
BOSTON – The Massachusetts Department of Environmental Protection is pushing forward with a variety of programs to assist cities and towns facing the difficult market and rising costs of recycling.
After losing China as the biggest buyer of recyclables almost two years ago, institutions across Massachusetts are making efforts to keep up with the loss and battle back.
Although a market still exists, the plummet in demand has created a steep slide in prices. Recycling professionals currently working in materials recycling facilities say the market is at the lowest point in more than 30 years, adding the loss of such a huge market like China leaves an incomparable hole that no other markets could possibly fill.
In response, the Massachusetts Department of Environmental Protection is pushing forward with a variety of programs to assist cities and towns facing the difficult market and rising costs.
John Fischer, the deputy division director of solid waste materials management, said the priority is to improve the quality of recyclable stream.
“We feel like accomplishing that is the single best thing we can do collectively to address recycling market challenges,” he said.
Since 2010 China has tightened the contamination rate it accepts from 10% to the current level of 0.5%, while a 2018 report by Casella, a materials recycling facility with operations in the state, found the contamination rate of the recyclables it receives sits around 25%.
To reduce contamination, DEP rolled out the Recycling IQ Kit in 2018, providing funds and tools for cities and towns’ efforts in education and outreach. It also funds staff to inspect the bins for recycling quality and give residents feedback by leaving “oops” tags on recycling carts. Fischer said the program has made some progress – some communities saw a reduction in contamination up to 70% to 80%.
Although it is private businesses’ job to decide where recyclables go, Fischer said the key is to make the stream cleaner, whether the ultimate destination is south Asia, Canada or domestic markets.
Non-recyclables such as plastic bags, food waste and other items mixed in the stream make it harder and more expensive for facilities to process. Not only does that affect the amount of commodity available for sale, it also adds a trash disposal fee for processors who must deal with the unwanted items.
“All of those outlets demand higher quality recyclables,” Fischer said. “Our goal is to get the materials going to our recycling facilities, to be as clean as possible.”
In the last two months, the Recycling Dividend Program started in 2014 under DEP’s Sustainable Materials Recovery Program has distributed two more rounds of grants to eligible municipalities and regional solid waste districts, assisting in covering costs and developing local educational campaigns.
October saw $2.4 million in grants awarded to 262 recipients, while another $3.6 million went to 36 recipients in November.
In order to evaluate the program’s efficiency, Fischer said, DEP keeps track of the number of municipalities meeting the criteria to see if it has encouraged municipalities to implement them. They also stay in close touch with cities and towns to know how the money is spent over time.
According to a press release, over the last year, the program saw an 11% increase in the number of municipalities that qualified and more than 14% in the amount awarded.
Sharing the risks
Chaz Miller, chair of the NERC-NEWMOA Regional Recycling Markets Committee, said low prices are not news in the history of recycling. The market has gone through six collapses and the current one is similar to the one in 1990, where eventually entrepreneurs waded in and reconstructed the system.
The good lesson from all the collapses, however, Miller said, is sharing the risk and having a mechanism built into the contract among municipalities and haulers and the recycling facilities which will balance off market turbulence.
He also said residents should have a stake in the process by paying a fee.
“Recycling is not free, but no surprise, garbage is not free either,” Miller said. “Recycling is simply a subject of public service just as garbage is.”
While garbage collection and disposal utilizes the same cash flow, it is more complicated for recycling, as it involves the revenue coming from selling the recyclables and average market price fluctuations. The solution for that, Miller said, is to charge separately for collection and processing of recyclables.
“It’s a separate truck. It’s a separate crew,” Miller said.
Although they have different responsibilities, haulers, the facilities and municipalities are in the same boat. In order to tackle the challenge, they depend on each other.
By educating and instructing residents, cities and towns reduce contamination, allowing haulers to send a better commodity to the facilities. Based on the quality of the mixed paper, plastic and cardboard, the facilities charge haulers accordingly. For example, cardboard left outside too long or contaminated by spilled liquid, is worthless.
The more desirable the recyclables, the easier it is for the facilities to find an end buyer and the lower the processing fee would be for haulers. Revenue paid by end market to the facilities would also go back to municipalities to cover the original collecting cost.
However, a town’s risk aversion as well as the quality of the recyclables could also determine the processing fee, said Greg Cooper, the division director in Business Compliance and Recycling of DEP.
“You can decide as a municipality that I don’t want to deal with risk at all, so just tell me what the processing fee is. But of course that means you’re giving all the risks to the processor, so he’s going to charge you a very high processing fee,” Cooper said. “Or you can do the other, you can tell him, ‘I’ll take all the risk and then your processing fee will be less.’”
Cooper explained the near-zero processing fee in the past was a result of good market conditions, where revenue was high enough to pay off processing fees for haulers and redistribute the rest between the facilities and municipalities.
If the market is down, Miller noted the risk-bearing element should also require municipalities bear the loss, something that might be passed on to residents.
“It becomes a real conflict at the town meeting level where the people of the town may say, ‘we really want to recycle and we think this is important’, but at the same time, the town is saying, ‘well, how much are you willing to pay in taxes for this’?” said Gretchen Carey, president of MassRecycle. “That’s a tough conversation.”
Carey mentioned specific concerns for Western Massachusetts towns and cities. Because their contracts do not expire until June 2020, they have avoided the conflicts in other communities with haulers and recycling facilities. Now, they might encounter a sudden surge in processing cost from zero to over $140 a ton.
In the new recyclable processing contract for western regions on DEP’s website, local communities pay the contractor, Waste Management, a processing fee, and would get some part of the revenue from selling recyclables. If the average market price is over the processing fee, local communities get all the fee back plus 70% of the difference between the revenue and the fee; if it’s below, then they get all of the revenue.
Cooper from DEP said in the past 25 years, it has always been part of the contract model for Massachusetts to separate processing, which generates a relatively stable fee, and revenue, which is not.
Sometimes the redistribution percentage might change, but it’s up to negotiations between municipalities and the facilities.
The contract stated the current average market price for dual stream is down to $28.30 per ton, compared to the 10-year average from 2009 to 2019 of $75.45 per ton. For the single stream average market value, it is $6.37 versus $53.68.
However, Carey sees hope amid the gloomy markets. She mentioned a summary put together by Northeastern Recycling Council announcing an increase in domestic processing capacity for recycled paper and cardboard. That is aided in part by a new mill that opened in Ohio in October that is expecting to process 180,000 tons of container board in its first year, up to a goal of 396,000 tons a year for the next 10 years.
Miller said cardboard and paper have always been the majority of curbside pickup items. According to the 2018 Casella report, around 64% of items in the recycling bins are paper and cardboard.
Miller also noted the continuing demand from Chinese buyers for raw materials. Although the government put a ban on recyclables, the huge scale of production in China continues to push the need for pulp. Since 2018, one of the biggest paper companies in China, Nine Dragons, has bought four paper mills inside of the U.S. Its aim is to process recycled paper into pulp and ship it back.
To have the demand reflected in a price increase of paper, Miller said it will take at least a year.
This article was originally published in the MetroWest Daily News.