In the wake of California’s largest recycler closing more than one-third of its recycling centers throughout the state, the Container Recycling Institute is calling on CalRecycle to work with the state legislature to adjust the payment amounts for beverage container redemption centers.
About 19 percent of all US beverage container recycling — both by businesses and individuals — occurs in California, according to the Container Recycling Institute.
Last month, rePlanet said that at the end of January it closed 191 beverage container redemption and recycling centers and laid off 278 employees because of reduced state payments and dramatic declines in commodity pricing. Last year, various companies including rePlanet closed another 200 redemption centers closed throughout the state.
Prior to shuttering the recycling centers, rePlanet said it had several meetings with CalRecycle to resolve issues surrounding the state’s beverage container recycling fund, which is “critical” to rePlanet’s recycling program success.
The recycling fund collects deposits paid for bottles and other covered containers and then pays out when bottles get redeemed. But it relies on bottles not being redeemed because the surplus funds pay for statewide recycling programs, among other initiatives. Because bottles are recycled at such a high rate, recycling programs are paying out more redemption money and thus keeping less of this money from the fund to support their operations.
Additionally, declining commodity prices are reducing revenues for all types of recyclers nationwide. PET plastic scrap prices have steadily declined from a peak of $500 per ton in 2011 to roughly $200 today, a decline of 60 percent. Aluminum prices are 40 percent off their peak price of $1,900 per ton in 2011 to $1,135 per ton recently, while glass prices have fallen only slightly.
Changes to processing payments have not kept pace with the rapid decline in scrap values, says Susan V. Collins, president of the Container Recycling Institute.
“One would expect state payments to go up when scrap prices go down, but the state payments per ton have declined,” Collins says. “We are asking that CalRecycle ensure that their system works for all consumers, not just those close to the dwindling number of recycling centers.”
It’s not that simple, says CalRecycle.
Spokesman Mark Oldfield explains that the “processing payments” — these are designed to reimburse the recycler when the cost of recycling is not covered by the commodity price of the material being recycled — is based on a 12-month rolling average of scrap values. It’s mandated by state law and adjusted quarterly.
As of April 1, the payments for glass, PET and HDPE will all increase, “reflecting more of those lower scrap values in the 12-month period” of January through December 2015, Oldfield said in an interview with Environmental Leader.
Glass is rising from $101.07 per ton in the January to March period to $101.77 as of April 1; PET is rising from $165.96 per ton to $198.37; and HDPE is rising from $183.01 per ton to $220.70.
“As far as immediately changing the processing payments, we can’t,” Oldfield explains. “We’re bound by statute.”
Oldfield says beverage container recycling center reforms are needed but it’s going to take more than just adjusting the processing payments.
“We’re staring at a structural deficit in the program, with more money going out than coming in,” he explains. “We have to look at reforming the program and that would include processing payments but it has to be looked at holistically.
“Clearly the closure of a large number of recycling centers all at once has a very negative affect on consumers in those areas and we’ve been working with industry stakeholders to come up with solutions to this,” Oldfield says.
While falling commodity prices plays a major role — and CalRecycle — can’t control commodity prices — that state agency can work with organizations that want to open new recycling centers and help speed up that process, Oldfield says. CalRecycle also recently help a workshop to look at where recycling centers can realize cost savings and how the industry can better weather the ups and downs of commodity prices. The agency will “continue to hold these discussions” about how to make the recycling industry more sustainable, he adds.
“The steady and precipitous decline that has happened as a result of the global economic situation is troubling,” Oldfield says. “Ideally we get more recycling centers up and running and hopefully commodity prices will come up.”