January 4, 2009
Cape Cod Times
Cape sees market for recyclables in a slump
Provincetown's Sandy Turner remembers when the town had to pay to have their recyclable materials hauled away.
"It was costing us $63,000 a year. It was only the past couple of years that we made money on recycling," said the deputy director of the Provincetown Department of Public Works.
Recycling facts
- According to a recently released survey by the Container Recycling Institute, only one-third of the plastic and glass containers produced annually in America were recycled in 2006. That number is down from 53 percent in 1992.
- On Cape, and statewide, recycling rates for towns plateaued five or more years ago and are only going up a percentage point a year.
- A ton of recycled paper saves 17 trees from being cut and used in paper production.
- Producing recycled paper products takes 80 percent less water, 65 percent less energy and emits 95 percent less air pollution than making it from virgin timber.
- Recycling one ton of paper saves 683 gallons of oil, 7,000 gallons of water, 3.3 cubic yards of landfill space.
- Making aluminum cans from recycled aluminum uses 95 percent less energy and reduces pollution by 95 percent.
- Making glass from recycled glass requires 50 percent less energy and generates 20 percent less air pollution.
Sources: Massachusetts DEP; UMass/Amherst; WasteCap of Massachusetts; Container Recycling Institute; Onondaga Resource Recovery Agency
Like some other Cape towns, Provincetown contracts with a local company that takes their recyclables away.
But the recent collapse of the U.S. and world economies into a deep recession has also sent the market for recyclable materials into a severe slump, which means local towns are getting a lot less money for the metal, paper, glass and plastics they collect.
The state Department of Environmental Protection prohibits communities from putting recyclable materials into landfills, or waste-to-energy incinerators. That means some cash-strapped municipalities might have to add the expense of trucking and paying disposal fees for the recyclable materials to an already overburdened municipal operating budget.
"Could it happen? Absolutely," said Robert Angell, Yarmouth's waste management superintendent. "Hopefully, we start climbing out of this hole a little bit."
What a difference a few months make. The industrial booms in China and India, as well as homegrown need for building supplies and other materials, stoked a red-hot global commodities market in recent years, driving prices higher for recycled paper, cardboard, glass, plastic, and metals.
From January 2004 to August 2008, the price of copper shot from $1 per pound to more than $4 per pound. Thieves were stealing copper off statues, older buildings and construction sites. Some risked, and lost, their lives trying to strip copper wire from electric power substations.
Back in August, paper mills were paying a national average of nearly $120 per ton for baled recycled paper, and recyclers were paying more than 20 cents per pound for plastics. Metals were going for $350 a ton over the summer.
But when the U.S. housing market dried up and the stock market, banks, and mortgage companies went into free-fall, the demand for goods tailed off, and manufacturing around the world, as well as the need for the materials to make and package them, ground to a halt.
Copper fell back to around $1 per pound. The price paid to local towns for scrap metals plummeted by 85 percent to $30 per ton by late September, and to less than $5 a ton for newspaper and cardboard. Plastics dipped to 5 cents per pound.
The bottom line
The financial impact on Cape towns depended whether they had decided to play the commodities market and try to get money for their recyclables or had signed longer-term contracts that traded away the possibility of revenues for the guarantee that their recyclables would get hauled away.
For Yarmouth, the town's solid waste enterprise fund depends in part on the money it gets from the sale of its recyclables, and the new economic reality is a potential nightmare. In a good year for recyclables, Angell said the town could make $180,000 to $190,000. But this past year, only metal recycling made money and that was around $50,000.
Six years ago, Barnstable was paying $5 a ton, plus the cost of transportation, to get rid of its scrap metals. Since then, however, the town put extra effort into sorting and marketing their scrap and, in fiscal year 2008, the sale of recycled metal accounted for $220,000 of the $2.1 million in revenues for their solid waste enterprise fund.
"For FY09, our numbers are down," said Glenn Santos, supervisor at the Barnstable transfer station.
Barnstable's solid waste program was already projected to run a deficit from FY2008 to FY2016 because of the expense of starting up the recycling program.
The strategy of marketing the materials collected at municipal transfer stations has its detractors.
The DEP recommends against it, spokesman Joseph Ferson said.
"I don't think it's a good idea for a town to be playing the market," said Greg Smith, Sandwich director of planning and development. Smith also served as the former Cape Cod Commission planner in charge of solid waste and recycling issues.
Risky business
The commodities market is cyclical, subject to sudden fluctuations, and filled with risk, Smith said. That makes it hard to plan a budget based on anticipated revenues. With communities mandated by state law to recycle, a municipality without anyone willing to buy its recyclables could be stuck paying to get rid of them.
Smith agreed with the DEP's advice that communities should negotiate long-term contracts with haulers that guarantee their glass, plastic, metal and paper will be taken away, but give little or no compensation in return.
"Maybe there's not as much revenue coming in, but they won't have to pay to get rid of materials," Smith said.
Eastham DPW Superintendent Neil Andres took that logic one step further. By practically giving recyclables away, he not only creates stability in his budgeting, he also believes that the approach helps to create a more stable market for those materials.
"Many times in the past, things will get valuable, and the price goes up so high that they have to close the plant (that uses the recyclables)," he said.
Andres said towns need to be focused on what they ultimately want: to get rid of recyclable materials. Towns don't just benefit by selling recyclables. They also benefit by not having to pay to have them transported to a landfill or to the SEMASS Resource Recovery Facility in Rochester. SEMASS incinerates trash to power steam turbines that generate electricity.
Right now, towns are paying just under $40 per ton plus transportation costs at SEMASS. But most towns will be renegotiating their contracts with the waste-to-energy plant within five years, and that price is expected to double.
"To avoid those costs, you have to have long-term, dependable markets for this stuff," Andres said.
By signing multiyear contracts to have their recyclable material taken away, towns can not only avoid the cost of disposal, but make it cheaper and more attractive for manufacturers to succeed in creating products out of the plastics, glass, metals and paper collected at transfer stations.
"If your long-term goal is continuing recycling, then the people who manufacture recycled products need a steady supply," Andres said. "We both have the same goals."
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