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Fewer places to recycle highlight flawed program

California lawmakers on Aug. 31 passed legislation that could breathe life back into the state’s withering recycling industry which even those who run the program admit is stumbling.

Around since 1986, the 5- to 10-cent fee charged for a bottle or can was set up to give consumers incentive to return them, reducing the impact on landfills.

But it is not working. The biggest concern with the CRV (California Refund Value) program is the percentage of recyclables being turned in keeps dropping. It was 68% in 2021 after peaking in 2013 at nearly 85%.

One reason for the decline is there are fewer places to return the recyclables. Ten years ago there were 55 recycling centers in the four-county North Bay. Today there are 19. In the state, the numbers have dropped from 2,441 in 2012 to 1,262 in 2022.

Last month, the Press Democrat reported Brogard in Windsor would end its operation Aug. 26 after 19 years. The scrap metal site at the same location, West Coast Metals, is still open.

“We're not really happy about it because we have been a service to the community for so long,” owner Linda Gardner told the newspaper, “but just dollar-wise, we cannot keep open losing money every month.”

Ken Hawes, general manager of VALCORE Recycling in Vallejo, echoed those sentiments to the North Bay Business Journal.

“When minimum wage goes up we can’t raise prices because essentially we are not selling anything, so it’s really hard.”

Recycling, or buyback centers as they are also referred to, are the establishments that pay people for aluminum, glass and plastic that are part of the state’s CRV program. Every qualifying beverage container comes with an added nickel or dime fee paid by the consumer to the store. That money is then passed onto the state.

People can redeem that cash at a buyback center or surrender the money via curbside recycling or the trash.

Change could be coming

Because people are not turning in their recycling CalRecycle’s coffers are filling up with fees paid at the point of purchase, with the surplus weighing in at $635 million.

SB 1013 is designed to spend down that pot of cash, by making it easier for people to redeem CRV items with more locations and more items that qualify.

The bill awaiting Gov. Gavin Newsom's signature or veto by Sept. 30 would create more opportunities for people to redeem the beverage deposit.

The bill for the first time would put wine and liquor in the CRV program by adding a 10-cent fee to those bottles, as well as a 25-cent per item fee for a box, bladder, or pouch containing wine or distilled spirits.

The bill includes $4 million to establish a grant program for “collection of empty glass beverage containers from restaurants and on-sale retail licensed establishments.” Another $1 million grant would be established to transport those bottles by rail to a glass processing facility for recycling.

It sets up "convenience zones" through the state as determined by the Department of Resources Recycling and Recovery. Within each zone there must be at least one certified recycling center that accepts all types of empty beverage containers and pays the refund value.

In the bill is another $10 million in grants for beverage container litter reduction programs and recycling programs.

Those who try to cheat the system will face higher penalties. Civil fines will go from $1,000 to $5,000, while intentional or negligent violations will double to $10,000.

Issues at the state level

“Though we recycled 18.5 billion beverage containers last year, we need to recycle more, and reforms are necessary to increase opportunities for redemption, convenience and overall access to the program for all Californians,” said Lance Klug, spokesman for CalRecycle, the more commonly known name for the department that oversees the CRV program.

“Recycling centers have not closed as a result of a single cause. Since the Beverage Container Recycling and Litter Reduction Act passed 36 years ago, market fluctuations and consumer behavior changes have challenged the old models of beverage container recycling centers,” Klug said.

While the state is supposed to help recycling centers stay afloat with subsides, Klug acknowledged the market for recyclables and costs of doing business have outpaced that support. Subsides haven't matched the decline in the money centers get for bulk materials they collect such as plastic. And there are the normal costs of doing business, such as mandatory minimum wage and sick leave companies must pay.

The economic challenges of running a recycling center are hardly new. In August 2019, the state’s largest recycler, rePlanet, closed its nearly 300 outlets.

At the time the company said, “With the continued reduction in state fees, the depressed pricing of recycled aluminum and PET (polyethylene terephthalate) plastic and the rise in operating costs resulting from minimum wage increases and required health and workers compensation insurance, the company has concluded that operation of these recycling centers and supporting operations is no longer sustainable.”

Year Units sold Units recycled Recycling rate
2021 27,416,825,090 26,292,957,795 68%
2020 26,292,957,795 18,001,783,575 68%
2019 24,567,820,141 18,467,356,541 75%
2018 24,594,716,919 18,588,304,236 76%
2017 24,427,254,965 18,439,299,226 75%
2016 23,083,353,256 18,415,970,248 80%
California beverage container recycling rate (Source: CalRecycle)

Recyclers’ struggles

Plastic water bottles are the main product people bring to American Canyon Redemption Center. This is one of seven types of plastic in the CRV program.

Like most buyback centers, the Napa County facility makes its money from administration fees from the state and a fee from those who process the recyclables. Processing fees are based on weight, with each product garnering a different rate per pound.

Owner Angelica Samson said processors pay her $1.33 per pound for plastic water bottles, compared to $1.65 a pound for aluminum.

“You have to be wise, especially with the plastic to see if it is CRV or if it came from another state,” Samson said. “I paid $750 last February as a fine because inspectors said it was not CRV. We don’t earn $750 in a day or even a week.”

In summer she may fill a truck with recyclables two to three times a week, while in winter it is once or twice a week. People consume more beverages in summer.

One thing that keeps Novato Recycling Center open is that it is not a standalone operation. It is an ancillary business to the larger Recology Sonoma Marin, which means it is a small part of the company’s income stream.

Fred Stemmler, general manager of the Marin County-based garbage company that serves the better part of Marin and Sonoma counties, told the Business Journal, buyback centers present a challenging business model because of how they are structured.

“It is not a high margin business and it is a very heavily regulated business. And it is not as simple as one may assume.”

Stemmler said in theory the fees the state pays recycling centers are to cover the cost of operations, but the reality is it’s not enough money. He attributes the closure of so many buyback centers to the fee structure.

The CalRecycle representative acknowledges the current system is not working.

“Recycling centers face significant price fluctuations for their primary source of profit: the plastic, aluminum, and glass they sell. Low-value plastic has replaced high value aluminum as the prominent material type within the Beverage Container Recycling Program, making it more difficult for traditional recycling centers to profit,” Klug said.

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