Mar 26, 2016 at 04:19 o\clock

recycling is good business even now

Unlike some recent content proclaiming the recycling industry is certainly struggling, the recycling industry continues to be an enormous financial driver in the United States. In 2014, the recycling industry employed a lot more than 1.1 million people, generated over $236 billion in gross annual revenues and kept municipal budgets over $3 billion in avoided landfill disposal fees.

That said, due to the way many municipal recycling contracts have traditionally been structured, the recycling industry is facing a potential problems.

Most contracts allow the municipality to drop off a truckload of recyclables, cardboard namely, paper, aluminum, rigid glass and plastics, on the recycling company at no cost. In addition, it is expected that the municipality will also talk about in revenue gained from the sale of the recyclables after the recycling company offers covered its digesting costs.

In memories when there's strong demand for most commodities, everyone wins. However, when the there's a lack of market for a particular - mixer extruder - commodity, even while all the other item types maintain strong marketplaces, the economics of the recycling company could be threatened.

In this situation, the municipality still benefits because even without the earned income because of its recyclables, it still saves cash by recycling because it avoids the choice cost of mailing the material to some landfill. The recycling company, nevertheless, must incur the increased loss of selling the commodity for under the processing costs, or worse, the expense of sending the product to landfill if there is no market.

The cost of processing any commodity at a recycling facility is about $75 per ton. This includes the expense of advanced machinery that separates each material and the labor to run the machinery.

The good news is that this historical and near-term average price for recycled cardboard, paper aluminum and rigid plastics is above the processing cost and therefore profitable to recycle.

The bad news is that recycled glass, on the other hand, lacks a robust end-market currently. Therefore, the recycling of cup results in a substantial reduction for the recycling company and often erases any revenue earned from the recycling company. And since glass weighs a lot more than any other kind of packaging, it represents a big portion by pounds disproportionately, about 20 percent, from the material coming to recycling facilities.

Municipalities and recycling companies should redefine recycling contracts to worth each commodity type individually in order to talk about in the true costs and great things about the recycling marketplace.

Let's look at how this may work: Utilizing the three-year common selling price for recycled goods illustrated in the graph below, the municipality and recycling company would have a revenue share of 50/50 on the worthiness of a item above the $75 handling cost. In the entire case of cardboard, each ton would earn a income of $50 per lot, to be divide by the municipality and recycling company. Paper would earn a profit of $5 per lot, to be split by the municipality and recycling company. Family pet plastic (beverage containers) would generate a revenue of $150 per lot, to be split by the municipality and recycling company.

HDPE plastic would earn a income of $250 per ton, to be split by the municipality and recycling company. Aluminium would make a income of $1,325 per ton, to be split by the municipality and recycling company - all good news for our environment, municipalities and recycling companies.

Comes the critical component where transparent economics right now, good public policy and corporate responsibility are fundamental. Goods such as glass which are technically recyclable, but whose marketplaces pay less than the price to procedure them considerably, should be approved in the municipal recycling system, but with one essential condition: The municipality should identify who will pay the difference between your cost to procedure cup and what the market is ready to pay.

The first option will be for the municipality to choose to hide the expenses, but that could eliminate any profit earned from recycling cardboard, rigid plastics, aluminum and paper. Additionally, why if the burden fall on taxpayers?

The next option, which will be more equitable, is for municipalities to place the responsibility for the glass industry to either develop robust markets for recycled glass that, much like other commodities used in consumer goods, pay above processing costs or the municipality should expect the glass industry to reimburse the municipality and the recycling company for the expense of processing glass.

There is some positive momentum with regards to recycling glass. Recycling companies such as for example Momentum and Sioneer recycling are working to develop brand-new marketplaces for recycled cup. The Durst Business, one of the largest property companies in New York, can be leading an effort to utilize recycled cup as an alternative to fly ash, a significant ingredient in concrete used by the building sector.

As promising just, there are a number of opportunities to displace glass as a packaging commodity with higher valued commodities for the recycling industry such as for example PET plastic and aluminum. For instance, Gotham, a ongoing company located in NEW YORK, provides restaurants with wine stored in aluminium kegs, allowing restaurants to pour wines from the cup on tap rather than from a container.

Over one thousand restaurants offer wine on tap nationwide right now. A number of beer companies have begun packaging beer in plastic or aluminum bottles also. This originally was conceived to provide sports stadiums having a safer option to glass bottles. The Can Truck, a company in San Francisco, is working with build brewers to bundle their beers in aluminum cans, the most valuable item to recycle.

To be able to properly structure municipal recycling contracts in a way that maximizes income for municipalities and profitability for recycling companies, municipalities should redefine what this means to categorize a package or product as recyclable.

Yes, recyclable should imply that a item used in a package or product could be recycled into another marketable product, but it also should imply that the market value of that item pays more than the cost to procedure it on the recycling facility. This updated description will make sure that there are no hidden costs that this taxpayer or the recycling company is certainly burdened with.

At exactly the same time, it'll highlight the products and packaging that truly are recyclable, providing the consumers with maximum transparency, responsible companies with the credit they deserve and municipalities the chance to increase the economics of their waste and recycling program.

If we are able to properly structure municipal recycling contracts, then we will have a recycling industry that's profitable and able to continue its impressive history of creating local jobs, building shareholder value, preserving our natural resources and earning cash for municipalities.

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