Tag Archives: recyclers

dark days for recyclers


I hate open things up on such a down note but I just finished reading a series of articles dating back a few weeks that discuss the dismal state of the recycling industry, and I can’t help but reiterate a bit.  The recycling industry is in the midst of an economic ‘perfect storm’ which is being driven by two significant shifts in the global marketplace.  The principle cause is, not surprisingly, the current economic slow-down which has drastically reduced consumer demand for manufactured goods, including those made from recycled materials.  The situation is further compounded by the extreme drop in prices for many raw material commodities over the last few months which have made virgin materials far cheaper than they where just a few months ago.    This has been especially visible in the market for plastics which because they are derived from petroleum have been subject to the steep dive in oil prices from nearly $140 a barrel over the summer to around $40 today.

So just another victim of the bad economy – why is this significant? Because such a severe drop in demand for recycled materials means that the many thousands of tons of material that are being collected and separated on a daily basis, stand the chance of being sent to the landfill if their vendors and handlers can’t find something to do with them.  Furthermore some of these recyclers my look to scale down the amount of material they collect in order to stem rising inventories. That is if they don’t close down all together. The current situation seems almost hard to believe considering the nearly opposite state of affairs a year ago.


In 2008 we saw one of the greatest booms in the recycling industry in decades, mid-2008 marking an all time high for many material markets.  This was paralleled by an even more extreme spike in the cost of virgin materials, which made recycled materials a competitive alternative for many manufacturers.  This resulted in the added bonus of such manufacturers seeking out new and improved ways to incorporate recycled material into their products, pushing better technology, efficiency, and even improving consumer education.  Now it looks like a lot of that progress is under threat, as many producers scale back production, revert back to virgin material, and leave recyclers to retreat the industry due to a simple lack of solvency.

Recycling has always had its skeptics, so it’s painful for many ardent supporters to see things in such a desperate state.  But it should be recognized that the market for recycled materials must be willing to withstand the same volatility as any other commodity-based market, a point well taken by most of the surviving large-scale recyclers.  In other words, this is merely a cyclical phase for recycling, from which it will undoubtedly rebound. Regardless, one would still hope that this could be achieved without adversely affecting the existing recycling infrastructure, which is already being diminished.  Maintaining pure and reliable ‘streams’ or sources of recycled materials has always been the greatest challenge for the industry, because such infrastructure is clearly expensive to establish where it does not already exist.  Virgin materials are produced from well established supply chains, all the way down the the extraction of raw materials they are refined from.  Sure, these industries are also affected by the same economic turmoil that is hurting recycling, but the main difference is one of perception.  If the demand for virgin paper or plastic slows, the surplus created is not automatically considered waste.  It is a lot easier to ignore the potential value of something considered ‘garbage’ than it is to disregard a newly produced, not yet utilized commodity product.


This stands to some reason.  After all most recycled materials do lack in quality and performance characteristics when compared to they’re virgin counterparts.  However this does not mean that there are not still innumerable potential uses for these materials that have yet to be developed.  The success of new products that incorporate recycled sources is the greatest testament to the validity of the industry, and is even more important in the face of current adversity.  Additionally there are new business models emerging that may also hold value in preserving the future of the industry. One of the more interesting examples is demonstrated by Coca-Cola Company’s recent construction of the largest bottle-to-bottle recycling facility in the world.  This shows an unprecedented amount of investment by an actual manufacturer into the waste-stream, reaffirming the long-term strategy of viewing consumer waste as a valuable resource.  While this is a seemingly straight forward approach, there are still other models that illustrate more innovative strategy.  TerraCycle the NJ-based company that first began by re-using discarded plastic bottles to package their eco-friendly gardening products, has now expanded there business to include numerous products, upcycled directly from post-consumer packaging collected out of the waste stream.  This innovative approach capitalizes on the standardized attributes of much consumer packaging by repurposing as new products without spending the energy and capital that would be necessary to reprocess it into all together new forms.

There is of course no one solution to the current challenges facing the recycling industry.  It will undoubtedly be a combination of approaches that will endure the current problems and keep the industry going forward.  Hopefully some of these new, and reinvented companies will inspire others to take on the challenge of capturing the value inherit to our consumer waste-stream.  It is there for the taking, economy permiting.