What's Next For Your Recycling Program?
Has your recycling program been slashed by the national sword? Not sure what happened? For those of you who have only known a marketplace in which Chinese recyclers were a huge presence, hopefully a little history and perspective can help you parry the impacts of the national sword and defend critical parts of your recycling program.
Recycling in 2017 became a victim of its own success, particularly the CSR aspects of recycling. Those aspects of recycling have been riding a perfect wave of factors for a while. But like any long-time surfer will tell you, eventually even the most perfect wave crashes. So for those of you who weren’t there to see this wave forming, let me offer some perspective about how it was built in the hope that it might help you to navigate our current situation.
On a Political Front
Recycling saw unprecedented success in the 90’s and early 2000’s. To understand why, remember that recycling is a manufacturing process. In its early days, it saw widespread acceptance from both liberal politicians who supported its environmental benefits and conservative politicians who supported its pro-business supply-and-demand driven aspects. That gave many local environmental advocates, some of whom at the time were more accustomed to fighting than winning, unprecedented success. Anxious to build on that success, folks pushed for ever-increasing recycling goals, hoping that those ambitious goals would drive the development of a recycling infrastructure that did not yet sufficiently exist to support those goals.
On the Corporate Side
As a brand, recycling has had a very positive image for decades, one with which many manufacturers rushed to align themselves as part of their CSR efforts.
Those two forces aligned to create a strong support for recycling. Unfortunately, it was not done by doing the heavy lifting of domestic market development, or changing consumer behavior, or incorporating recycled-content into products. As a result, rather than having a balanced supply-and-demand to drive recycling, advocates relied on things like guilt-cycling (getting folks to participate in recycling collection, not because there was a strong demand for the product but rather because folks were made to feel guilty about the alternatives). Or, too often, it was done by wish-cycling, stretching the definitions of what is recyclable (product brand-owners did so in order for their products could be branded as recyclable and advocates did so so that they did not have to challenge the validity of their lofty goals).
Into this forming wave, enter China in the early 2000s. They were a market with huge manufacturing goals (and resulting huge appetite for feedstock), inexpensive labor to sort contaminated recyclables, and a willingness to accept the waste that came along with heavily-contaminated wish-cycling driven or guilt-cycling driven feedstocks. Their mills would historically take the stuff that domestic American and European mills would not. Thus, rather than recycling programs having to face their guilt-cycling or wish-cycling limitations, Chinese markets let those forces continue unabated, sometimes even undermining other market development efforts. And because the end-market was “away,” it was too easy for American and European programs to avoid auditing these programs; and too easy to turn a blind eye to growing contamination issues.
But those Chinese dynamics have been changing over the years. As their economy rose, incomes started to rise and labor became not as cheap. And with lingering impacts from the Great Recession across several large world economies, and other factors (I will leave it to economists to debate how much of each factor was an impact), that white hot Chinese manufacturing engine at times sputtered and cooled off (leading to abrupt changes in supply and demand). And China started to pay real attention to its growing environmental issues, and building its own domestic market for recyclables. All those factors came to a head in 2017. China said “no more” and the government implemented fairly sudden (at least for those who were not reading the tea leaves and hearing the message that constantly ratcheting Chinese regulations were signaling) and draconian standards about what it would accept into the country. It was a collective ice-bucket challenge to decades of wish-cycling and guilt-cycling that left many American and European recycling programs scrambling.
So where do we go from here?
The biggest issue for now will be quality. Programs that don’t clean up their recycling, and remove contaminants will struggle to find outlets long-term. For some, that might require consumer re-education. For others, it might require MRF upgrades. For others it might require a difficult look at what is acceptable within certain recycling mixes.
Another big issue will be to defend recycling from inevitable attacks by separating individual materials or specific collection systems from the overall term “recycling.” Recycling as a concept still makes as much sense as ever. Recycling markets for many materials will be fine. The price may drop, but I believe there will continue to be markets for higher value recyclables like aluminum, steel and clean cardboard. Recycling as a concept is not as damaged as some headlines will lead you to believe. What will suffer will be the markets for low quality materials that have for many years been riding the coattails of high-value recyclables (as will markets in which too many of those low value items are commingled with the high value ones). And so too will some processes in which the cost of the process outweighs the value of the material collected. Recycling is not broken, but we may need to rethink how or whether we collect certain materials from certain locations. Some things may be better targets for waste reduction.
Also, expect that we may have to do the heavy lifting of market development. Brand owners may need to do more work to develop end-markets and closed loop-supply chains if they want to continue to brand certain materials as “recyclable.” And to meet lofty recycling goals, advocates may have to do more of the market development they were doing in the 90s.
Most importantly, don’t panic. We have been here before. Despite price drops, I have seen prices this low or lower, and for much longer in my career at times when recycling was still thriving. We have done market development before. We have had to clean recycling to higher standards before. Recycling may be harder now. Maybe we can’t click our heels three times, wish real hard and magically have high diversion rates. But we have done all this before and had successful programs to show for it.