Recycling is big business, but is it profitable?: Page 2 of 2

For example, one recycling company in the WSJ article, Pacific Rim Recycling in Benicia, CA, at first slowed its operations early this year in order to “meet China’s new standard” but the “more intensive sorting process takes too long to process the scrap profitably,” said the article. In February the plant idled and laid off 40 of its 45 employees. Steve Moore, Pacific Rim’s President, told the WSJ, “The cost is impossible. We can’t make money at it. We quit accepting stuff.”

With the pressure still on to make landfills a thing of the past, and all the challenges and environmental consequences of the long and not-so-environmentally friendly process of collecting, sorting, cleaning, bailing, shipping, reprocessing and repelletizing, there must be a better way. Waste-to-energy perhaps? 

Many large cities are being forced to reconsider what they charge residents for “collection” of trash and recyclable materials. For example, the WSJ article noted that Lancaster County recently “more than doubled the charge that residential trash collectors must pay to deposit recyclables at its transfer station. The higher cost is expected to be passed on to residents through a 3% increase in the fees that haulers charge households for trash collection and disposal.” That increase in fees,  in turn, will help “offset a $40-a-ton fee that the waste-management authority will start paying this summer to a company to process the county’s recyclables.”

Let’s face it recycling isn’t an easy—nor the greenest—answer when you get right down to it. It takes a lot of effort, energy and many steps to get recyclable materials from the consumer to a processor who can use recycled material regrind in the products being molded for a customer who wants recycled plastics as part of his brand. 

Recycling has been great for the paper and corrugated industry. While it still takes a number of resources (including fossil fuels and water) to collect and reprocess paper, that commodity is not nearly as labor intensive as plastics. With the value of post-consumer plastic scrap being mostly in the BTUs that plastic can deliver in the form of energy, it makes little sense to recycle most plastic. PET, which seems to be the most widely recycled material with the most benefits, will likely end up being the best bet for recyclers and reprocessors that need to be profitable.

For a different take on the profitability of recycling, read this companion piece: "Unraveling the economics of plastics recycling."

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