January/February 1988
The Rediscovery of Recycling: What Does It Mean to You?
Remember the onslaught of “Earth Day” publicity beginning in 1970? Ideological purists buried automobiles to drive home their point. Recycling was to be the salvation of the impending solid waste crisis. The force behind recycling waned with the entry of the 80s--but the solid waste crisis continued to build, so recycling interest surfaced again. The interest today is even stronger, the cry for recycling is even louder, and the result may mean new opportunities for you.
By Duane A. Siler and Debra R. Levin
Duane A. Siler is assistant executive director and counsel for the Institute of Scrap Recycling Industries, Washington, D.C. Debra R. Levin is director of environment, trade, and transportation and assistant counsel for the Institute.
Interest in recycling appears to be at an all-time high in the United States. The cries are loud and clear: Public officials, legislators, environmentalists, and citizen groups want government--federal, state, and local--to promote recycling of many materials we now routinely treat as trash. Not since the “Earth Day” era of the early 1970s with its parade of ideological purists has recycling been the subject of so much discussion and advocacy.
But, unlike the 70s version, which produced in only a few cities voluntary recycling programs (many of them short-lived), the new recycling movement has already borne fruit in the form of much-publicized mandatory recycling legislation. This has occurred in several states--most recently, New Jersey--and seems almost certain to spawn similar laws in other states and, perhaps, at the federal level.
Shrinking Landfill Space Provides Stimulus
The resurgent interest in recycling is due, of course, to the growing difficulty of finding acceptable and affordable ways to manage ever-increasing amounts of solid waste. According to a recent study prepared for the U.S. Environmental Protection Agency, an estimated 133 million tons of solid waste were generated in this country in 1984, up from about 100 million tons in 1970. Many landfills, particularly in the Northeast, are packed almost to capacity; others, due to environmental deficiencies, face mandatory closure.
The result is what many observers call a “crisis” in solid waste disposal. In affected areas, the price of putting municipal solid waste in landfills has increased dramatically. At least one Northeast jurisdiction is charging up to $90.00 per ton. In certain areas, disposal has virtually ceased; municipal wastes are being transported out of state or out of the country for disposal. For long-distance hauls, charges have run as high as $100.00 per ton.
Not surprisingly, state legislators and solid waste officials are searching for new ways to manage solid waste. Additional landfills are expensive to construct and difficult to site. Combustion facilities face intense opposition due to unresolved questions about air pollution impacts and ash disposal. Hence, the rediscovery of recycling, a solid waste management technique that can significantly reduce the amount of waste needing to be buried or burned.
New Laws Mandating Recycling Raise Concerns
Recycling legislation--as both enacted and proposed--typically requires local government, at the county and municipal levels, to develop new solid waste management plans with heavy emphasis on recycling. The legislation in most cases includes a requirement that a specified percentage of the enacting state's municipal waste be recycled by a specified date. The most common recycling target appears to be 25 percent, a figure apparently drawn from the New Jersey law. To attain this target, the proposed legislation typically mandates a program of source separation and curbside collection of certain recyclables from household and, sometimes, commercial waste. The targeted recyclables most commonly include aluminum, paper, and glass.
While such mandatory recycling programs generally win praise from the public, they create concern in the scrap industry. From the scrap processor's point of view, mandatory recycling programs hold the potential to disrupt the existing recycling system. Many scrap processors and their consumers question legislators' and planners' ability to intensify the level of recycling without destroying the existing commercial recycling industry. That industry, they point out, has been recycling huge volumes of material for decades, material that would have been solid waste but for their efforts. Many industry members think policymakers do not fully appreciate that, without a healthy scrap recycling industry, the nation's landfills would be inundated with obsolete autos, appliances, batteries, paper, and other commonly recycled materials.
Scrap processors are unsure about government planners' developing markets for recovered materials. Yet these markets are essential if source-separated materials are to be truly recycled, if they are to be used as ingredients in manufacturing processes. Scrap processors repeatedly caution against the separation and collection of aluminum, paper, glass, or other materials in the solid waste stream without demonstrated end uses for the new quantities of segregated materials. For genuine increases in recycling to occur, scrap processors warn, those end uses must be in addition to the existing demand for the volume of recycled materials recovered and processed routinely by the scrap processing industry.
Scrap processors voice concern not only about the impact of mandatory recycling programs on markets, but about the industry's continued ability to function as the formerly bright line between scrap and trash blurs. Historically, the recycling industry has operated apart from the publicly funded or supervised garbage collection and disposal services. The items scrap processors buy and sell are scrap, valuable commodities. Unwanted and abandoned items, by contrast, have been considered trash. The recycling of scrap has been conducted by the private sector as a business. The management of garbage, on the other hand, has been seen as a basic obligation of government under its power and duty to protect public health and safety.
In light of all these concerns, many scrap processors have suggested that, under the prevailing models of recycling legislation, government involvement in the recycling process may be counterproductive. Not only is there potential for existing markets to be overwhelmed; without careful delineation of public vs. private roles, government programs may well lead to monopolization of sources of recyclables or to public funding for recycling operations that could be performed at less cost by the private sector. The result could indeed be serious disruption of the existing recycling system.
Setbacks or Opportunities?
Along with their concerns, some scrap industry members have suggested that government-mandated and -funded recycling programs may present for-profit recyclers with important new opportunities. These opportunities include purchasing, marketing, or otherwise profitably handling metals, paper, glass, and other materials separated from the solid waste stream. These scrap processors point out that the basic purpose of recycling programs is to separate, process, and reuse materials that are familiar to the existing scrap processing industry. Generally speaking, it will be economically efficient for existing recyclers--rather than government or new recycling entities--to handle the processing and marketing of these newly separated materials. Under this analysis, if government proceeds rationally in implementing recycling programs, it will enlist the facilities and expertise of existing commercial recyclers in aid of those programs. This, in turn, could offer scrap processors and recyclers opportunities for profitable new activities that contribute to the public good as well.
Government’s Perspective
There are indications that both lawmakers and government officials responsible for recycling programs recognize the importance of the for-profit recycling industry to the success of mandatory recycling programs. Many of the pending legislative proposals follow the New Jersey statute in directing that county planners "accord priority consideration" to existing recyclers in implementing recycling programs. While the precise effect of these provisions is unclear, they at least appear to reflect an intent to use existing private sector facilities and expertise.
State officials responsible for existing and proposed recycling programs have also expressed a desire to involve existing recyclers. John Reindl, recycling coordinator for the Wisconsin Department of Natural Resources, has administered that state's voluntary recycling program for several years. Looking ahead to the anticipated introduction of mandatory recycling legislation in the Wisconsin legislature, Reindl sees a central role for scrap processors. "I believe the physical capacity to process source-separated recyclables in Wisconsin exists in the private sector," he says. He expresses hope that the existing industry will be in a position to receive, process, and market newly recovered recyclables, without the need for public involvement in the construction or operation of processing facilities.
Reindl concedes that markets must be expanded to support additional recycling, especially for waste paper. However, the main difficulty he foresees for the industry is in the processing of recyclables generated in Wisconsin's small towns and countryside. "My hope," he says, "is that scrap processors will expand their geographical range of operation to rural areas, either through drop-off centers or collection systems for recyclables."
Reindl emphasizes the need for scrap processors to become involved in the planning stages of any mandatory program. He notes that, while the state has tried to work closely with commercial recyclers in its recycling plan, some Wisconsin counties have not sought out scrap processors during recycling planning activities. Industry, he emphasizes, must take the initiative: "Scrap processors must recognize that the motivation for municipalities to avoid landfilling solid waste to the extent possible is very strong. It would really behoove processors to approach local governments and offer assistance before communities get tied down to specific approaches which might not make full use of existing facilities." Among other things, he notes, processors need to acquaint local officials with their facilities and functions. "If processors don't get involved early on, they will find themselves shut out by local government, if only through inadvertence."
In other jurisdictions, there is also a developing recognition of the industry's role--present and future--in government recycling programs. In Connecticut the industry has a high profile, in the view of Department of Environment Protection Recycling Coordinator Lois Hager. She believes the industry's role has changed. "In the past, the industry has played a major role in moving metallic scrap. In recent years, because of economic conditions and the development of federal hazardous waste regulations affecting cars and white goods, Connecticut has had a problem getting rid of metal. The state has no control over either factor."
Connecticut is one of three states with a mandatory recycling law in effect. Hager believes the industry's best opportunity for participation will arise when the state releases its list of designated materials. Paper and scrap metal are expected to be on the list. The result will be that no designated material can be placed in landfills or burned. "If metal and paper are designated, recyclers will have a guaranteed flow."
Hager offered one other observation about the potential for a working relationship to emerge between solid waste managers and the scrap processing industry: "One of the difficulties in dealing with industry is the difference in time perspectives: Solid waste managers are concerned with a long time frame for disposal, and members of industry see a shorter time frame." Business opportunities are likely to belong to the recycler who can adjust to government's perspective.
The country's trendsetter in the area of mandatory recycling is New Jersey's Camden County. Its program had been operating for two years prior to passage of statewide legislation. The Camden County concept is to work first with the private sector. According to Camden County Recycling Coordinator Jack Sworaski, "The scrap processing industry is a pivotal part of the solution to solid waste management."
The county, which operates as a facilitator, is responsible for developing a master plan. Recyclers are explicitly included in the plan. In the county's Recycling Program Guide, recyclable materials are listed along with the recycling companies that handle each particular recyclable. The guide is sent to the recycling coordinator in each town in the county, and each company listed in the guide is sent the name of the recycling coordinators.
To capitalize on the opportunities involved under mandatory recycling legislation, Sworaski recommends that processors get involved in the solid waste planning process, determining how it is structured in a given state and looking at the logic and flow of the landfill operation the state is accustomed to. The clues to intervention will be apparent, he says, to the scrap processor who recognizes that "the most important factors for government are cost-avoidance and an assured market." Government wants to avoid the hauling and tipping expense and to have access to a constant receiver of materials.
Part of the reason solid waste officials seem to prefer multimaterial private recycling facilities over scrap processors' specialization in a single material--be it paper, nonferrous, or iron--Sworaski speculates, is that government does not usually understand that the recycled materials ultimately go to separate markets. Also, the waste management function historically tends to encounter--and is more familiar dealing with--a mixture of materials. Processors need to educate solid waste officials to look at the value of the industry's specialization.
Experience is a good teacher in Camden County. Sworaski is quick to comment that neither the public sector nor the private sector can do it alone.
Perspectives Within the Industry
Scrap processors who have become involved in government-sponsored recycling programs or planning efforts seem cautiously optimistic about the ability of the traditional scrap industry to coexist with the new programs. James L. AuBuchon, senior attorney for Commercial Metals Company, a Dallas-based firm heavily involved in integrated recycling operations, reports that his company has made a conscious effort to participate in the formulation of recycling proposals for Texas. Although legislation is not currently pending in that state's legislature, according to AuBuchon, Texas is "on the brink" of a strong movement toward government-mandated recycling. AuBuchon does not view such legislation as necessarily prejudicial to Texas's for-profit recyclers. "Properly drafted legislation," he says, "could achieve the ends desired by the state [i.e., diverting recyclable municipal waste from landfills] while still providing ample opportunity to our industry." AuBuchon notes, "There is no reason for government to go into the recycling business by buying equipment or constructing facilities that are readily available in the private sector."
Government, AuBuchon suggests, can best spend its limited funds on increasing public awareness of recycling. AuBuchon observes that, while there may not be a single model for all recycling programs, the essential feature of a successful program is likely to be government-industry cooperation. "It is clear that the overriding concept should be that government concentrates on the collection of solid waste and on education in support of recycling, while relying on the existing facilities of the scrap processing industry to efficiently process recovered materials," AuBuchon says. He warns, however, that in Texas, as elsewhere, scrap recyclers must take an active and vigorous part in the development of legislation: "Unless our industry takes the initiative to structure recycling legislation, there will be a vacuum. Government will fill that vacuum, and may in the process be forced into the business of processing and marketing recyclable materials. This would be contrary to the interests of government and be detrimental to the private sector. Our industry would be well-advised to take the reins and lead the action."
In at least one state, industry members have taken the reins, scoring some success in the process. Paper processors in Connecticut, aware of pending recycling legislation in that state, organized the Connecticut Association of Paper Processors (CAPP) in early 1987 to represent recyclers' interests in connection with the legislation. According to Steven Zamkov, CAPP's president, the lawmakers would have entirely ignored paper processors had the industry not intervened. Zamkov, of New Haven's Marcus Paper Company, reports that, as a result of CAPP's efforts, the law as passed requires state and local government to look first to existing private sector recyclers to process source. separated recyclables before undertaking such operations itself.
CAPP's concerns, according to Zamkov, have not ended with passage of the new law.
Implementing regulations, currently being written by the state's Department of Environmental Protection, will be critical to the industry's role, he says. Zamkov's greatest concern is that government will perform a marketing function for newspaper and other waste paper collected under the source-separation program. "Private sector paper processors," he says, "could develop and maintain markets adequate to absorb large additional quantities of paper." He believes the real problem will be if government ignores the opportunity to capitalize on the expertise of the private sector. Governmental intervention, Zamkov Points out, could effectively destroy orderly markets for recovered paper. Despite this possibility, Zamkov is optimistic about the future of commercial paper recycling under laws like Connecticut's: "Such legislation can work to the mutual benefit of industry and the public. There will be additional opportunities for existing recyclers, provided government addresses the implementation of the new programs in consultation with private enterprise."
Other industry members who have worked with solid waste officials on recycling programs echo these views. Barry Schuchman, president of Indianapolis-based Kasle Recycling Metallic Resources Corporation, serves on that city's recycling commission, which has recently approved a new voluntary program. Under the program, the city will establish drop-off points for recyclables at local fire stations. Local scrap dealers who wish to participate will be given an opportunity to spot containers for recyclables at these locations and to receive materials deposited there, in return for a payment to the city. Schuchman believes it will be advantageous to Indianapolis-area scrap processors to have access to these additional materials at favorable prices, but notes that this has been achieved only after 18 months of time-consuming planning by the commission.
Schuchman is also optimistic about what he views as the probable next stage in the Indianapolis program--flow control of combustible municipal wastes to support the city's new waste-to-energy plant--and the possible move to mandatory source separation of recyclables from household waste. "As long as the city continues to communicate and work with the industry," he says, "I don't foresee great problems with source separation." The city, Schuchman notes, has assured local scrap dealers that, under any source-separation program, they will have an opportunity to. purchase separated metals or other materials on an equitable basis. For example, he says, the right to purchase materials may be determined on the basis of periodic competitive bidding. "In any event," he continues, "I believe the city wants nothing to do with the actual processing or marketing of source-separated materials. I think they'd much prefer to look to existing recyclers to obtain those services."
Based on his experience, Schuchman concludes, "The trend toward source separation of recyclables from municipal solid waste can be a very positive one for the scrap processing industry." He notes that not only will such programs generate additional volumes of material for the industry to handle, but points to what he considers another important benefit: "Municipal solid waste recycling can be very good for the scrap industry because it will make the public more aware of the recycling service our industry performs and has performed for many years.
Yet another perspective on the role of the industry in government-sponsored recycling programs is offered by Keith Boeger, director of corporate development for H. Samuels & Co., Inc., Madison, Wisconsin. Located in a community that has had a voluntary recycling program for newspapers since 1969 (which became a mandatory source-separation program in 1987), plus a well-established voluntary drop-off program for glass, Boeger's company has dealt extensively with local government on recycling issues. For a number of years, a division of the company marketed the newspaper collected by the city under a competitive bid contract. Recently, the company began a pilot program whereby it spots specially designed containers to receive color-sorted glass at drop-off points around the city, paying the city an agreed upon per-ton amount for all glass collected.
For about a year, Boeger has been a member of the Dane County Regional Planning Commission's solid waste recycling advisory committee. In this capacity, Boeger says, he has tried to make sure that the committee fully appreciates what the scrap recycling industry can contribute to the recycling process. Without industry participation, he believes, solid waste planners are unlikely to give much consideration to using existing recyclers to market collected recyclables. "We're basically an unknown sector of industry," he says. "Very few people have any idea what we do."
Boeger notes that recycling legislation with mandatory source-separation provisions is under study in the Wisconsin legislature. He expects Wisconsin scrap processors to be very active in the legislative process. Their objectives, he says, will be to make sure that "any legislation makes maximum use of existing recyclers and, where existing operators are unable to provide processing or marketing services, assures a public-private partnership in the development of new facilities."
With respect to future trends, Boeger predicts intense competition in the business of handling recyclables from the municipal solid waste stream. He observes, for example, that in Wisconsin the solid waste collection and disposal industry appears likely to support recycling legislation. From this he infers that solid waste operators perceive important new opportunities to expand their traditional collection and disposal activities to include the processing and marketing of recyclables, possibly including some of the functions traditionally performed by scrap processors. "With statewide source separation," he says, "we anticipate a blurring of the lines between the scrap industry and the waste industry."
But along with the potential for increased competition, Boeger notes, will come new opportunities. "I'm fairly optimistic about the scrap industry's future," he says. Boeger senses a new enthusiasm and excitement in an industry which, he says, "has always thrived on challenge and innovation." Perhaps more importantly, Boeger says, metallics derived from the municipal solid waste stream can, over the longer term, offset a decline in the amounts of industrial scrap available from a shrinking manufacturing sector. In Boeger's view, "the movement toward intensive recycling of solid waste will give small and medium-size companies in our industry a new chance to expand while retaining their identities."
The Verdict: New Opportunities for a Vigilant Industry
A renewed recycling movement is afoot in the United States. Recycling's proponents now include state legislators and solid waste officials, driven by an urgent need to respond to a waste disposal crisis. New laws will almost certainly be adopted in many states in an effort to mandate the reduction and recycling of large amounts of solid waste.
Every time a state legislature takes up a recycling bill, there is serious potential for adverse impact on the existing recycling system. Legislators do not generally appreciate the industry's current role in diverting materials from the solid waste stream. Without active industry involvement in the legislative process, the laws ultimately enacted may make inadequate provision for the development of new markets for newly recovered materials, may result in governmental duplication of existing processing or marketing operations, or may otherwise undermine existing recyclers' ability to continue performing an important public service.
By contrast, recycling laws drafted with adequate input from the scrap processing industry could well present new business opportunities for industry members. To take advantage of those opportunities may require creativity and innovation. Any partnership between a scrap processor and state or local government is likely to be an uneasy one, at least initially. Still, based on the reactions of industry members who have begun to work with government on recycling issues, there is potential for scrap processors to establish themselves as essential and indispensable players in the new recycling movement.
Remember the onslaught of "Earth Day" publicity beginning in 1970? Ideological purists buried automobiles to drive home their point. Recycling was to be the salvation of the impending solid waste crisis. The force behind recycling waned with the entry of the 80s--but the solid waste crisis continued to build, so recycling interest surfaced again. The interest today is even stronger, the cry for recycling is even louder, and the result may mean new opportunities for you.