March/April 2008
Recycling is part of the solution to climate change, but the energy used to process and transport scrap also contributes to the problem. To be greener, save money, and prepare for potential regulation, scrap recyclers are making changes.
By Marc Hequet
Global warming, climate change, carbon neutrality, greenhouse gases, cap-and-trade systems...it's enough to make your head spin. Even if you've watched An Inconvenient Truth, you still might be unclear on why the globe is warming and, more important, what any one person or company can do about it.
It all starts with fossil fuels—coal, petroleum, natural gas, and so on. They provide 85 percent of the energy the United States consumes, according to the U.S. Energy Information Administration (Washington, D.C.). The consumption of fossil fuels produces carbon dioxide, the most prevalent of the human-generated "greenhouse" gases, which trap heat in the atmosphere, warming the planet.
Scientists are nearly unanimous in their conclusion that human activity has caused an increase in greenhouse gases that has warmed the planet to what, if left unchecked, will be dangerous levels with potentially disastrous results. In response, politicians around the world are proposing regulations to cut greenhouse gas emissions in an effort to avoid the worst consequences.
Recycling is one way to reduce emissions. As this industry has long known, recycling uses less energy than creating goods out of virgin materials, and less energy means less emissions. But it also takes energy to process and transport scrap. Regulations that limit carbon dioxide emissions could affect the scrap industry and potentially change the way companies operate. These changes might be expensive, but if they increase energy efficiency, they also could save money in the long run. Scrap companies are looking ahead to how they can minimize their carbon emissions to prepare for future regulation and make a climate-friendly industry even friendlier.
The Role of Recycling
Scientists have concluded that since about 1850, industrial activity has poured so much heat-trapping carbon dioxide into the atmosphere that the planet will be up to 10 degrees warmer by 2100. The consequences, they predict, will be rising sea levels displacing millions of people, severe droughts, floods, and hurricanes that are more devastating than ever. Global farm production may fall, air and water quality diminish, and diseases spread.
The hope is that cutting greenhouse gas emissions will keep levels below the predicted danger zone and avert disaster. The United States historically has been the top carbon dioxide emitter, producing 25 percent of the world's CO2 annually. (Experts believe China took the top spot in 2007.) More than three-quarters of U.S. greenhouse gases come from transportation, electricity generation, and industrial activity—including scrap processing. To emit less, the country will need to use less energy, use alternative energy sources, remove more greenhouse gases from the atmosphere, develop ways to keep them from entering the atmosphere, or some combination of the above.
As the world looks for ways to save energy, recycling will take center stage as one proven approach. "Recycling in itself is inherently a sustainable process," says Scott Miller, chief corporate counsel for environment, health, and safety at Sims Group (New York). "It reduces the need for virgin materials and their associated energy requirements." The numbers are dramatic. Compared with manufacturing from virgin materials, aluminum recycling uses 95 percent less energy; copper recycling, 85 percent less; plastic recycling, 80 percent less; iron and steel recycling, 74 percent less; and paper recycling, 64 percent less, according to the U.S. Environmental Protection Agency (Washington, D.C.).
Media attention to climate change will draw more attention to the benefits of recycling, creating a chance for this industry to shine. Interest in climate change "is a huge opportunity if you take advantage of it" to showcase the energy-saving benefits of recycling and of using recycled materials, says tire recycler Troy Hess, vice president of Mahantango Enterprises (Liverpool, Pa.). For him, he says, it's an opportunity "to show people what you can do with a tire." For example, tire shred can substitute for aggregate in road construction. It weighs just one-third as much as the same volume of aggregate, he says, so transporting it is cheaper and produces fewer emissions. When rubber is incorporated into asphalt, the road surface lasts longer, Hess says, saving energy and emissions through less frequent replacement. And rubberized asphalt is quieter, reducing the need for—and the energy expenditure of—sound barrier construction.
In other words, recycling can protect the climate both directly and indirectly. As that message gets out, it will encourage more people to recycle, leading to greater volumes of material in the scrapyard.
Recycling's Carbon Costs
Recycling is one tool for mitigating climate change, and scrap processing is an essential part of the recycling process. But as scrap companies well know, it takes energy to prepare scrap for recycling and transport it from the seller to the processor to the consumer. Nearly every shredder, baler, shear, material handler, truck, train, ship, and barge operates on gasoline, diesel, natural gas, or electricity, generating carbon dioxide emissions in the process. A company's total emissions are its "carbon footprint." That term will take on increasing importance as the United States and individual states begin to regulate carbon dioxide emissions. (For more on measuring a carbon footprint, see Put Your Best Foot Forward)
No federal law yet requires companies to measure their carbon footprint or cut their emissions, but the momentum for such regulation is building. At the international level, the United States is the only major nation that declined to ratify the Kyoto Protocol, part of a United Nations treaty that set emissions reduction goals for individual countries. The Bush administration has agreed to negotiate a new treaty to replace Kyoto by 2009, though there's no guarantee it will contain emissions goals.
More than 45 hearings in the current Congress have addressed climate change issues, and members of Congress have introduced just as many bills on the subject, a handful of which propose to cut emissions in one or more economic sectors through mandates, taxes, or market-based incentives. Some bills would establish a "cap-and-trade" system, in which companies that cut emissions below mandatory caps could sell their excess emissions capacity as "carbon credits." Five regions are developing multistate agreements to reduce emissions. A landmark California law aims to cut the state's greenhouse gas emissions 25 percent by 2020. (The California Climate Action Registry, www.climateregistry.org, is a potential model for what federal regulation might look like.) New Jersey and Florida lawmakers are considering similar legislation.
"Regardless of how you feel about the science, the political realities are pretty certain," says Eric Harris, ReMA's associate counsel and director of governmental and international affairs. "The political ship has sailed." He anticipates national emissions caps as early as 2010. To meet the caps, major emitting companies will need to reduce their energy use, buy carbon credits, or switch to alternative energy sources that emit less or no carbon dioxide, such as wind- or nuclear-powered electrical generators or biodiesel fuels. And the stakes are high, Harris says. "How companies respond to a carbon-reduced market will likely either make, save, or cost them money."
Starting Now
Even if regulation is years away, scrap companies have other good reasons to cut their carbon dioxide emissions from energy use. "If you reduce your energy needs, you reduce your energy costs, you reduce your operating costs, and you make yourself a potentially more profitable organization," Sims' Miller says.
In that way, being green can be good business, but it also goes further, says David Borsuk, manager of industrial marketing and quality control at Sadoff & Rudoy Industries (Fond du Lac, Wis.). It means "being responsible to our community, to our employees, and to everyone else we interact with," he explains. "We have a responsibility both as a citizen of our community and as a citizen of the world."
At electronics recycler WeRecycle! (Wallingford, Conn.), "our business model is to be an environmentally responsible company, a green company," says Chief Operating Officer Gina Chiarella, "and then being able to substantiate it. When customers come in, we show them what we've done," such as create a smaller carbon footprint. "It is important to us to look at our own processes and our impact on the environment," Chiarella reasons, "because if we aren't responsible ourselves, how can our customers believe in us?"
Borsuk, Chiarella, Hess, and Miller are part of ReMA's new climate change task force, which is developing recommendations on how the scrap industry as a whole can further address the issue. Their companies and others also are forging ahead on their own to investigate and implement carbon-saving strategies such as the following:
- Sims announced in 2007 that its Roseville, Calif., scrap processing facility, Sims Recycling Solutions, will purchase all its electricity from Roseville's renewable energy program.
- WeRecycle! is studying ways to minimize its energy use by altering its trucks' routes, packing trucks to hold more material, changing from propane-burning to electric-powered forklifts, and installing motion-sensor lighting, among other efforts.
- ARE-Energy (Roanoke, Va.) recently completed a yearlong trial of operating a 5,000-hp shredder at its sister company, Cycle Systems (Lynchburg, Va.), on B-85 biodiesel fuel.
- Consulting firm First Environment (Boonton, N.J.) achieved carbon neutrality—a net level of zero carbon dioxide emissions—in 2006 by reducing its energy use, switching to renewable energy sources, and purchasing carbon credits.
- Equipment manufacturer Caterpillar (Peoria, Ill.) is investing more than $2 billion over 10 years to develop reduced-emissions engines.
- Paper manufacturer and recycler Weyerhaeuser Co. (Federal Way, Wash.), also on the ReMA task force, plans to reduce its greenhouse gas emissions 40 percent by 2020—a goal it says is the most aggressive in its industry.
- Sadoff & Rudoy is monitoring the energy use of electrical and diesel-powered equipment at its six locations in Wisconsin and one in Nebraska, looking for ways to improve energy efficiency and reduce emissions. "I don't know how expensive it's going to be" to replace less-efficient equipment, Borsuk says. "That's why we make the analysis. While there may be front-end costs, there may be long-term savings."
It won't always be a smooth transition. Tire recycler Hess recalls changes in truck-emissions standards a few years ago that required retrofits for trucks. Some of those trucks didn't run so well afterward, he says. And companies naturally will want to tout their environmental achievements. Evidence or outside certification can help defend against claims of "greenwashing"—putting an environmental spin on something that's doing more harm than good.
| Put Your Best Foot Forward
What volume of carbon dioxide and other greenhouse gases does your company emit annually? That number is your carbon footprint, and it's something you'll want—and eventually need—to know. "The hardest part is just learning what it is," says consultant B. Tod Delaney, president and owner of First Environment (Boonton, N.J.). "Actually developing your carbon footprint and keeping records for it is something of an administrative problem if you don't have the right records," but a tracking system is "fairly easily put in place." Measurement tools typically divide greenhouse gas emissions into three categories. Scope 1 emissions are those a company generates directly, such as by consuming fuel in gasoline, diesel, or other fuel-burning equipment. Scope 2 emissions are created indirectly by the utilities that supply electricity, heat, or steam to the company. Scope 3 emissions are all other indirect emissions from outsourced functions, transportation in vehicles the company does not own, waste disposal, and so on." To get started tracking your company's carbon footprint, dig out a year's worth of utility and fuel bills—they'll list the amount of energy consumed, which should cover all your Scope 1 and Scope 2 emissions. Then decide what further energy-consuming activities—including outsourced, upstream, and downstream operations—should be part of your Scope 3 calculations. Several organizations offer formulas or spreadsheets to help convert energy-use data into emissions data. The World Resources Institute's Greenhouse Gas Protocol, for instance, calls itself "the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions." The site (www.ghgprotocol.org) offers downloadable spreadsheets and other resources. Companies that have implemented ISRI’s Recycling Industry Operating Standard may be better positioned to generate and manage the information needed to calculate a carbon footprint, says David Wagger, ReMA's director of environmental management. RIOS is designed to help companies document and assess their performance on a wide range of measures, thus they could adapt it to track carbon dioxide emissions and the success of measures taken to reduce them, he says. Delaney, whose firm is assisting ReMA's climate-change task force, estimates it might cost a small company $10,000 to $20,000 in staff time and perhaps tracking software to calculate a carbon footprint. The biggest operations could spend $50,000 to $100,000, he says. Though carbon footprinting is not yet required of U.S. companies, it's a mechanism to track energy use and find ways to use energy more efficiently, "getting more value with less material," says Margaret Flaherty, senior managing director of the World Business Council for Sustainable Development (Geneva). "That's just smart business." |
Venturing Into The Unknown
The path toward climate protection isn't straightforward. Some think alternative fuels are the answer; others believe less consumption is the key. And experts warn of unintended consequences—actions taken to protect the climate that might actually make things worse. For example, scientists are studying whether growing and processing crops into biodiesel or ethanol fuels uses more energy than it produces and, if so, how to make those processes more efficient.
Climate protection activities could have unexpected effects on the scrap industry as well. For example, as part of its climate-change strategy, Caterpillar is touting its parts-remanufacturing business, Cat Reman, which rebuilds heavy-equipment components. Cat Reman grew 67 percent from 2001 to 2006, and the company is working toward 182-percent growth by 2010. More remanufactured equipment means a delay in such equipment being scrapped, though.
Hess describes another set of uncertainties that might result from climate-change regulation. The European Union had proposed mandating tires with lower rolling resistance because they increase vehicles' fuel efficiency. Lower-resistance tires, which have thinner tread, wear out faster, the tire industry told the U.S. Senate, which considered a similar requirement in 2007. That would result in more scrap tires. A scrap-tire surplus might lower tire prices—but because it's a regional business, it might not. Moreover, some regional U.S. markets for recycled-tire products are stronger than others. Rising supplies and falling prices might help develop low-demand markets because the recycled-rubber product would cost less—or it might result in more tires going to landfills. In other words, stay loose. Things are going to change in ways that are all but impossible to predict.
Call to Action
The public sees considerable urgency in the climate crisis: In the United States, 62 percent of people believe life on Earth faces major disruptions unless society "takes immediate and drastic action to reduce global warming," according to a 2007 poll by Yale University (New Haven, Conn.), Gallup (Washington, D.C.), and the Clear Vision Institute (Plainfield, Vt.).
The good news for the United States is that the country can make significant cuts in greenhouse gas emissions without hurting its economy or demanding big lifestyle changes, according to a 2007 study by the Conference Board (New York) and McKinsey & Co. (New York). Coordinated, deliberate action can cut projected 2030 emissions by one-third to one-half with existing and emerging technologies, the study reports. The United States is already making some small progress. U.S. greenhouse gas emissions dropped 1.5 percent in 2006—only the third decline since 1990, according to the U.S. EPA.
The good news for the scrap recycling industry is that it's already part of the solution. The coming years will bring more opportunities to "showcase our industry to the world," predicts Sims' Miller, "and to be a good neighbor" by acting locally and globally to combat climate change.
Marc Hequet is a writer based in Minneapolis.
Recycling is part of the solution to climate change, but the energy used to process and transport scrap also contributes to the problem. To be greener, save money, and prepare for potential regulation, scrap recyclers are making changes.