Metals News
Decline in recycling demand means less money for Arizona cities
industry news
Sep 21,2015

By  Paul Ploumis 18 Sep 2015  Last updated at  20:10:13 GMT

TEMPE (Scrap Monster): Mike Kean’s family has been in the recycling business in various ways since 1977, when his company was founded in Chandler by his father, Jim Kean.

Initially, the company operated a plant that manufactured cellulose products from recycled paper. By the late 1980s, it expanded into one of the Valley’s first materials recycling plants, where thousands of tons of recyclables are sorted and packaged each week, then sent off to markets in various parts of the country or world. What can’t be used is sent to landfills.

Mike Kean, today the general manager, worked with several Valley cities in the late 1980s and early 1990s as they began pilot recycling programs that eventually grew into today’s curbside recycling services.

Today, however, enthusiasm for converting trash into reusable goods has been muted by economic reality.

The biggest factor affecting recycling today is the depressed market for recycled commodities, Kean said.

The drop in oil prices has reduced the demand for plastics. The demand for American paper and cardboard in China has dropped, trading at a little more than $400 a metric ton earlier this year, compared with $1,000 a ton five years ago, the Washington Post reported earlier this summer.

The digital age has meant people do not use paper and newsprint as much as they once did. Glass can be costly to handle because it breaks and is difficult to sort, Kean said.

All of this, coupled with an abundance of remaining landfill space and relatively low costs for disposing of regular trash, has added up to a major disincentive for cities to pursue more aggressive recycling programs.

“Realistically, depending on the commodities markets, there are only certain types of material that hold value,’’ Kean said. “Currently, we’re at about 15- or 20-year lows. Over the last eight to 10 months, it’s been very drastic. The glory days, where these guys (cities) were making millions of dollars in revenue, that tide seems to be changing and it feels different this time.’’

Most of the Valley city officials interviewed by The Republic said recycling programs weren’t started simply as money makers for cities, but because it was the right thing to do for the environment. Beyond that, any revenue from recycled materials is a boost to the overall sanitation operation.

“With recycling it helps us manage our solid waste disposal costs,’’ said Mariano Reyes, spokesman for Mesa’s Environmental Management and Sustainability department. Without recycling, “for every ton of material that we collect from the black trash barrel, we have to pay to dispose of it. With recycling, we’re able to receive some revenue that helps to minimize the overall costs.’’

Chuck Hamstra, Phoenix’s deputy public works director, said the city continues to pursue new recycling ideas “when it makes economic sense.’’

“We recycle a lot more now than we used to. Part of that is the changes in technology that help us to sort better,’’ he said. But he conceded that with the city’s landfill disposal rate at about $25 a ton — low compared to many coastal cities in the United States — new recycling programs need to prove they are in the best financial, as well as environmental, interest of city residents.

Compared with five years ago, the drop in revenue for Valley cities from recyclables they collect has been stark.

Mesa, for example, generated $1.4 million in revenue in 2010-11. In the 2014-15 fiscal year, the city tallied $514,540 in revenue. Glendale has seen its recycling revenue drop from $2.3 million in 2010-11 to $1.8 million in 2014-15. In Scottsdale, it was more than $1.1 million in 2010-11 and about $423,000 in 2014-15.

For many cities, the poor economics of recycling also has been aggravated by the materials themselves, Kean said.

Recycled material generally is counted and paid by the ton. But the weight of recycled goods has changed significantly.

Plastic bottles are lighter than they were 15 years ago. Paper and newsprint for years added a majority of weight to a recycling bin, but there isn’t as much of those materials today. Tin cans are lighter, and things that once were packaged in cans or glass bottles now are packaged in lighter-weight plastics or foil pouches. Much of the recyclable glass, which adds weight, breaks in transport or at sorting facilities and is discarded. And today, lightweight cardboard shipping or food boxes fill much of the blue barrel space.

The result, Kean said, is that households may actually be recycling as much or more than they once did, but the weight of the recycled materials is actually less. This too is reflected in data reviewed by The Republic in several cities.

Peoria, for example, recycled 15,581 tons of materials in the 2014-15 fiscal year, which ended June 30, according to city records. Five years ago, the amount was 16,068 tons. Scottsdale saw the same trend, with 28,522 in 2010-11 compared with 25,434 in 2014-15.


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