Columbus-area recycling programs are seeing much less cash from the sale of recyclable material due to ripple effects from recent Chinese government restrictions curtailing imports of certain recyclables.
Last year, the Bartholomew County Solid Waste Management District saw revenue from the sale of recyclable material fall to $192,603 from $227,971 in 2017, a 15.5 percent drop, according to the district’s annual report.
Previously, revenue had more than doubled from 2015 and 2017. The county processed 2,611 tons of recyclable material last year — more than 10 times the weight of the Statue of Liberty.
The city of Columbus, for its part, has not fared as well, pulling in a total of $11,512 from the sale of nearly 2,152 tons of recyclable material from its curbside pickup program since February 2015, according to city data. The city hasn’t received a penny since September 2017, when the formula in the city’s recycling contract resulted in zero funding being returned to the program.
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“It’s not about getting revenue back,” said Bryan Burton, director of Columbus Department of Public Works, which oversees the city’s recycling program. “We’ve saved more than ($11,512) in disposal fees. That’s the main thing.”
In January 2015, the city agreed to a three-year contract with Ray’s Trash Service, Clayton, to transfer and process all the recyclable material from the city’s curbside pickup program.
Under the terms of the agreement, the city delivers the recyclable material to a transfer station that Ray’s rents at Nugent Sand Co. From there, Ray’s takes the material to its Indianapolis sorting facility, where items are sorted, cleaned and packaged into bales of similar material and sold on the open market, according to Calvin Davidson, general manager of Ray’s Trash Service. Ray’s does not charge the city any disposal fees.
In exchange for the exclusive rights to the city’s recyclable material, Ray’s pays the city a portion of the profits from the sale of the material.
The city’s cut is derived from a mathematical formula based on the average market value of each type of material and the costs associated with processing and selling the material. Currently, by the time Ray’s sorts the material, bales it up and ships it to a customer, it is “not a money-making venture,” Davidson said.
“Our offer to the city was that we’d pay (the city for recyclable material) when it’s above the water line, but we wouldn’t charge when it was below the water line,” he said.
The city chose Ray’s over Best Way Disposal, which would have charged the city $50 per ton to take the material and offered no share of the profits, and Rumpke Waste Inc., which would have charged $29.75 per ton and given the city half of the profits. In January 2018, the city extended its contract with Ray’s through January 2021.
“In a lot of people’s minds, recycling is free,” Burton said. “But there is a huge cost to recycling. You still have equipment and manpower. Even though we don’t see any revenue, we’re saving thousands of dollars in disposal fees. Ray’s came in at $0 cost for disposal. If the market was up, we’d get a small payback. But if the market is down, we don’’t see a payback, but we wouldn’t have to pay them either.”
Mary Ferdon, executive director of administration and community development for the city of Columbus, said city officials discussed the lack of revenue before extending the contract.
“We were disappointed because it had seemed like a win-win,” she said. “We don’t pay any money, and then we would get some money back. The market for recycling just isn’t what it used to be.”
If Ray’s begins to turn a profit again, the city will start seeing revenue again, Ferdon said.
County profits
From 2016 to 2018, Bartholomew County made approximately $551,898 from the sale of recyclable material, according to county figures. The city made $6,167.76.
Over the same period, the county made, on average, $91 per ton, while the city has made just $1.25 per ton. The county processed 2,611 tons of recyclable material last year. The city collected 2,151.96 tons.
Burton, however, cautioned against comparing Bartholomew County with Columbus. For instance, many Columbus residents choose to recycle items at county recycling facilities, he said.
“The two programs are completely different,” he said. “The county has a drop-off program. They get the material and they sell it. They do make money off of what they sell. Our program is basically a collection program. We’re not in the market to sell the material. We’re in the market to collect the material. We’re not in competition with the county. We both want to encourage recycling.”
Heather Siesel, director of the Bartholomew County Solid Waste Management District, said the county collects recyclables at its recycling center, the landfill and its Commercial Cardboard and Office Paper Program. Currently, the county picks up commercial office paper and cardboard from around 238 businesses, she said.
Last year, the county collected 1,652 tons of recyclables from its commercial pickup program, representing approximately 63 percent of all the recyclables processed by the county, according to the district’s annual report.
“We have way more programs than what the city has,” Siesel said. “It’s not apples to apples by any means.”
China’s impact on imports
Local officials said the steep drop in revenue has been caused by shifts in the global flow of recyclable material. They point to China, the world’s largest importer of recyclable material, as part of the issue.
On Jan. 1, 2018, the Chinese government imposed sweeping bans on 24 categories of solid waste — including unsorted paper and mixed plastics. The bans were part of a government effort to safeguard its “environmental interests and people’s health” and crack down on what Chinese officials called “foreign garbage,” according to the notification of the bans that Chinese officials sent the World Trade Organization in July 2017.
China, however, will still accept certain recyclable material provided that have a contamination rate of less than 0.5 percent. In the recycling industry, contamination can mean that the material is dirty or that bales contain an incorrect mix of materials, like aluminum cans mixed into a bale of soda pop bottles.
The restrictions caught the global recycling industry off guard, causing companies to scramble to find customers for the material that China would no longer accept, according to Adina Renee Adler, assistant vice president for international affairs at the Institute for Scrap Recycling Industries, an industry trade group that represents some 13,000 recycling companies.
“(China) didn’t give us a whole lot of time to get ready for the changes,” she said. “You’ve got a scramble to try to find new customers. But it takes time to transition. That’s why a lot of communities have had to landfill what would otherwise recyclable materials. If you own a business and your largest customer buys a big chunk of your product, you’re going to develop a business model that fits your customer’s needs. A lot of the infrastructure in the industry was developed for selling to China.”
In 2016, China imported 28.4 million tons of recovered paper and 7.3 million tons of plastic scrap — roughly half of the world’s supply, according to data compiled by the Institute of Scrap Recycling Industries. The U.S., for its part, was the world’s largest supplier of many types of recyclable material in 2016, exporting around 19.7 million tons of recovered paper and 1.6 million tons of plastic scrap, much of which was sent to China.
After the bans took effect in 2018, U.S. exports of recyclable material to China fell 38 percent, according to Institute of Scrap Recycling Industries.
In 2017, $2.8 million in plastic scrap was sent from Indiana to China, according to the U.S. Census Bureau, which compiles U.S. merchandise trade data. Last year, that figure plummeted to $141,259. However, overall U.S. exports of recyclable material increased 13 percent last year, with India, South Korea, Taiwan and Germany picking up the slack, the Institute of Scrap Recycling Industries reported.
One of the major consequences of the ban is that it has increased the domestic supply of recyclable material, which has driven down prices, according to Davidson. Essentially, companies that exported to China were sitting on millions of tons of recyclable material that they could no longer sell to China, so they set their sights on the U.S. market.
“It didn’t directly affect me when people started crying about China,” Davidson said. “But the people who did sell to China have now started marketing their materials domestically and have flooded the market.”
Siesel said cardboard was selling at $65 per ton and loose paper was $35 per ton last month. In February 2018, cardboard was going for $90 per ton, and loose paper sold for $30 per ton.
“The market for all recyclables is down primarily because the flow of recyclables is different than what it used to be even a year ago,” she said. “We’re still taking things in, and things are still going out. But the end users are different.”
However, it’s not all “gloom and doom” in the recycling industry, according to Davidson, who added that the demand for milk jugs, soda pop bottles and basic recyclable plastics “are not a problem.” The issue with China, he said, was that “China has no interest in our trashy stuff. They will buy good, clean stuff.”
“I never thought that when I decided to become a garbage man that I would be sitting here in the Midwest thinking about the global economy,” he said.
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“If you’ve ever torn open a winter coat or comforter — that stringy stuff inside, that’s pop bottles,” said Calvin Davidson, general manager of Ray’s Trash Service. “About a third of carpets in the U.S. homes is made from (recycled) pop bottles.”
“The cardboard we pull from Columbus, we take to our Eaton mill," said Pat Coppedge, procurement representative at West Rock in Indianapolis. "They make partition paper out of it. That’s the partition you would see if you bought a case wine or a case of dishes.”
"We sell to intermediate molders," said Scott Sanders, general manger of KW Plastics, an Alabama-based company that processes much of the plastic recycled in Bartholomew County. "The ultimate customer is going to be your Proctor and Gambles, Cloroxes and Unilevers. All the big brands are asking for recyclable materials."
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For the Bartholomew County recycling operation, visit: bcswmd.com/recyclingcenter.php/
For Columbus curbside recycling, visit:
columbus.in.gov/public-works/columbus-recycles/
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