June 23, 2005
Why UBCs remain the MIAs of the metal recycling wars
By Paul Schaffer
NEW YORK -- More used beverage container deposit programs-with larger fees-are the best way to reinvigorate aluminum can recycling, according to some environmental activists.
An alternate view: Deposit programs reflect an antiquated approach that cripples curbside scrap pickups sponsored by municipalities.
Deposit fee vs. curbside pickup is one of several debates that make it difficult to achieve consensus on how to get aluminum can recycling back up to the 60-percent ratio it once achieved.
"The curbside system would be a lot more efficient, and a lot more convenient, if they took the deposit away and funneled that material to curbside," according to Thomas Mele, president of Connecticut Metal Industries Inc., Monroe, Conn.
Aluminum cans are the most valuable item potentially available to a municipal recycling system, Mele said. The runner-up in value per pound is polyethylene terephthalate (PET) plastic, which also is used to make beverage containers and in some states is included in deposit-fee programs.
"Those two relatively valuable items outstrip glass and newspaper," Mele said. For aluminum, the value per pound as household scrap is 10 times that of paper or glass. "And they're being diverted from the system" of neighborhood recycling pickups, which are provided in many localities by garbage collection agencies or contractors.
Mele said that some communities have cut back curbside recycling due to budget constraints. The frequency of such problems would be less, Mele claims, if municipal programs could capture the streams of aluminum and PET discards to accompany the curbside pickups of paper and glass.
"It would cost nothing to put the pop bottles and the beer cans into the curbside program, which is already expensed. The infrastructure is in place," Mele said. "And the retailers would be delighted to get the stuff out of their stores."
Mele also argues that the nickel deposit payback, at least in Connecticut, is implicitly only 3 cents net. His reasoning is that the program structure actually has a 7-cent set-aside for each can purchased, with 2 cents going to the beverage distributor to cover costs and provide an incentive. That 2 cents quietly gets added into the price charged at the cash register, Mele said, thereby reducing the real benefit of the 5-cent refund.
"Joe Public comes to me with 10 pounds of cans in New Jersey, he leaves with $5. In Connecticut, he puts out a nickel deposit and pays a hidden 2-cent fee. And then he has to get into his SUV and drive to the supermarket and slip them into a machine one at a time to get his own nickel back," he said.
Mele's company processes can scrap and other nonferrous recyclables and also functions as a can scrap brokerage. "The only place we can buy cans (profitably) now is in New Jersey, Pennsylvania and Rhode Island, but it's not worth going to Rhode Island," Mele said.
The pro-and-con arguments for deposit fee vs. curbside pickup are nothing new among recyclers. However, deposit-fee advocates appear to have won a few extra points in the debate recently, on the basis of can recycling statistics for 2004.
California said its hike in deposit fees boosted aluminum can recycling to 75 percent last year from 70 percent in 2003. For small containers, the fee rose to 5 cents from 2.5 cents. California's improved recycling flow was great enough to spearhead the first increase in the national recycling rate since 1997 (AMM, May 30). Based on figures from a consortium of trade associations, including the Institute of Scrap Recycling Industries, the aluminum can recycling rate has risen from 17.4 percent in 1974 to 52.8 percent in 1984, to 65.4 percent in 1994 and to 51.2 percent in 2004.
The Container Recycling Institute (CRI), which favors deposit fees, thinks the associations have overstated the ratio in recent years. However, the institute's alternate timeline is broadly the same: 17.4 percent in 1974, 52.8 percent in 1984, 60.8 percent in 1994 and 45.1 percent last year.
In non-deposit-fee states, where recycled cans are priced by the pound for purchase rather than per container, financially motivated gatherers have faced increasing frustration.
"You're collecting more cans to get a pound-but you're getting the same price as you did almost 30 years ago. It's really not worth it at all (for a peddler or scavenger) to collect cans," said Gary Curtis, president of Wise Recycling LLC, Linthicum, Md.
His company runs scrap processing yards within a corporate group that includes a can stock rolling mill. The 30-year trend that he mentions involves the thickness of aluminum alloy needed to make a beverage container. The relatively thick aluminum cans of 1974 amounted to 22.7 per pound, increasing to 26 cans in 1984, 30.1 cans in 1994 and 33.9 cans currently.
Looking for other historical trends in can recycling arrangements, statewide refundable deposit systems tend to have earlier dates of origin than curbside pickups from residential customers. Of the states that have recycling deposits and refunds, 11 of the 12 created their programs between 1973 and 1987. Hawaii, the latecomer, passed its deposit law in 2002.
On the other hand, the busiest period for setting up curbside recycling pickups, which run in tandem with garbage collection, was after 1988, according to a series of surveys by BioCycle magazine, Emmaus, Pa. However, the magazine's tally peaked in 2000, after which budget crunches caused a net decline in the number of curbside programs.
Wise Recycling's Curtis has a related impression of cutbacks. "From the feedback I get from people, the frequency of recycling pickups has declined in a lot of areas. And many people say it's not worth it to them to separate the different items. It just doesn't make sense to them. They'd rather throw it in the trash," he said.
Curtis takes a cautious view of an alternative to requiring sorted material for curbside recycling. Improved technologies have led some municipalities to opt for a single-stream pickup of recyclables, with aluminum, plastic, paper and glass all getting mixed. The sorting then gets done at materials recovery facilities (MRFs).
Curtis said this can create huge headaches in aluminum recycling because MRFs aren't always able to eliminate plastic contaminants from cans that have gone through single-stream processing. "I personally think that's one of the answers, but the technology has to catch up," he said. "We've seen quality problems from those types of facilities. The cans are shredded once they're taken to a consuming facility and delacquered" of their outer coatings. "If there's plastic, it acts as an accelerant and you can end up melting the metal in your kiln. That causes a lot of production problems. It's very costly."
During the heyday of environmental activism in the 1970s and 1980s, voluntarism was more in evidence, Curtis said. The deposit refunds and per-pound payments were simply an extra incentive to supplement civic spirit.
"For the World War II generation, it was the right thing to do and they wanted to be responsible. A lot of educational programs (were conducted). You had Reynolds, Anheuser-Busch and a lot of large companies that made it convenient. You had thousands of sites that made it easy for people to recycle. Those are no longer there," Curtis said. "When Wise Recycling acquired Reynolds (Metals Co.'s retail can intake program in 1998), we had over 500 convenience centers, which were trailer sites for collecting UBCs. We're down to 40 of those today. We couldn't operate those cost effectively. Anheuser-Busch, too, has ended (its version of) that program.The consumers…don't see the benefit of recycling."
Wise has tried to make it easier for small, local scrap dealers to sell the company modest lots of UBCs. "We've added to the number of vendors who supply loose, flat cans," Curtis said. "They don't have enough volume to bale truckload quantities, so they need a middleman." 
Looking over annual statistics for Wise Recycling, Curtis said that 2004 prices were up slightly more than 20 percent from 2003. One result was that the physical intake of non-beverage aluminum scrap grades rose 26 percent. But for UBCs, the quantity upswing was only 4 percent despite the improved pricing.
"When we first purchased the recycling division (in 1998), we were 70 percent UBCs and 30 percent other scrap. Today, in round numbers, it is exactly the opposite," Curtis said. "We haven't lost UBC volume, but the other items are growing" while UBCs aren't.
Mele's scrap processing and brokerage business, with headquarters in Connecticut and a yard in New Jersey, has evolved in the same direction,diluting an early specialization in can scrap.
"We closed our plant in Connecticut in 1985 when the bottle bill came in," said Mele, who has been in the UBC business for 30 years. "In the '90s we started handling some other stuff (in the New Jersey yard). We saw the volume coming down on cans." Aluminum cans remain about half his yard's volume.
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