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Recology’s recycling prices

The company’s prices before and after National Sword. National Sword is a policy in China that has banned the importation of certain types of solid waste, as well as set strict contamination limits on recyclable materials.

Mixed paper: $17-$20/ton ($135-$140/ton*)

Cardboard (mixed): $70-$80/ton ($190-$200/ton*)

Mixed plastics #3-7: $10-$60/ton, $60/ton in May 2019 ($100-$140/ton*)

*pre-National Sword

Staying local: Recology’s glass and metal resale

Glass: Sold to Strategic Materials in Fairfield

Aluminum: Sold to Anheuser Busch in Fairfield

Tin: Sold to Alco Iron & Metal in Vallejo

If you were thinking about getting into the recycling business, now is not a good time.

North Bay refuse companies say recent restrictions imposed by a primary buyer of recycables, China, on the types and quality of plastic and paper it will purchase is taking a bite out of their bottom lines.

China’s National Sword policy, announced in January of last year, declared it would no longer accept mixed paper recycling, which can be anything from newspaper to office paper, as well as certain plastics due to contamination.

In the fallout of the refusal, some companies say they plan to raise rates on customers and have even sent recyclable material to landfills because it is less expensive.

Marin Sanitary Service collects, sorts and resells recyclable cardboard, glass and plastics from commercial business, mutlifamily dwellings and single-family residences in central Marin.

“For mixed paper in 2017, we were getting on average $125 a bale,” said Kim Scheibly of Marin Sanitary. “At the end of 2018, we were getting $28 a bale.”

She said those estimates come from markets, mostly in Asia, where her company can continue to sell mixed paper.

Recology handles recycled materials from locations including across Sonoma and Marin counties. Its Santa Rosa recycling facility receives around 300 tons daily. Prior to the changes in Chinese policy, Recology sold mixed paper mainly to China for between $135 to $140 per ton, a number that currently sits at about $17 to $20 per ton, said Celia Furber, department manager for Recology Sonoma Marin’s Waste Zero Department. It's the company’s education and outreach arm, responsible for meeting and exceeding waste-diversion goals.

Also, China has also insisted material have 1% or less contamination, which Furber said is unrealistic.

“It’s forced the whole world to look at their recycling programs and really reeducate their customers about making sure they put clean material in the recycling bin,” she said.

A large range of plastics have also been impacted, Furber said. Plastic comes in a variety of grades and for plastic 3-7, which can include squeezable condiments bottles, plastic bags and other materials, the Chinese market for that material has dried up. This forces recyclers like Recology to seek other markets, mostly in Asia.

Whereas those plastic grades sold for between $100 to $140 a ton historically, Furber said those rates have plummeted to $10 to $60 per ton.

The drops and fluctuations in price are largely due to too much supply and not enough demand.

“Everybody is dog eat dog trying to get their material into what they consider a new place,” now that China is no longer an option, said Janet Hanks, a waste broker who works with Marin Sanitary. She noted Europe, Australia Japan and elsewhere are dealing with the same problem as the U.S., also causing prices to drop.

The solution for companies is not as simple as finding new markets for the affected materials. Hanks said U.S. paper mills which could handle the excess mixed paper have mostly shuttered in recent decades because of Chinese competition and other issues like bad odors and excessive water use. Buyers send recycled material to paper mills which break it down into a pulp, cleaning and bleaching it to be made into new paper.

Looking abroad, Hanks said “even if the mill capacity was there, the port capacity isn’t there in a lot of these countries.” She added “There are no other countries even if you combine the rest of Southeast Asia that can take as much material as China.”

Recology’s recycling prices

The company’s prices before and after National Sword. National Sword is a policy in China that has banned the importation of certain types of solid waste, as well as set strict contamination limits on recyclable materials.

Mixed paper: $17-$20/ton ($135-$140/ton*)

Cardboard (mixed): $70-$80/ton ($190-$200/ton*)

Mixed plastics #3-7: $10-$60/ton, $60/ton in May 2019 ($100-$140/ton*)

*pre-National Sword

Staying local: Recology’s glass and metal resale

Glass: Sold to Strategic Materials in Fairfield

Aluminum: Sold to Anheuser Busch in Fairfield

Tin: Sold to Alco Iron & Metal in Vallejo

The decision on paper in particular has also upended established shipping practices, Hanks said. “The sea ship lines technically use waste paper as a way to get empty containers back to China,” she said. “All they really wanted to do was cover the cost of shipping containers back to China… Now China is not buying so these ship lines had to reroute a lot of their calls.”

The global problem is having a large local impact, even down to rate payers in some parts of the North Bay. Tim Dewey-Mattia at Napa Recycling said his company, which in some cases has barely broken even on mixed paper because of the changes, expects to raise rates in the near future.

“The monetary increase depends on the service level,” which is based on bin sizes, he wrote in an email. Residential and commercial customers will see a 12% increase Aug. 1 then 6%–10% increases annually for the next three years, he said.

Furber of Recology said her company has yet to raise rates for its service, but the option “is not completely off the table.”

Dewey-Mattia said his company is spending $4 million for better sorting and related technology. “Our systems were built for newspaper,” he said, noting the declining market share of newsprint in a digitally driven age. “It’s changed to cardboard and plastic.”

He added that the Chinese policy had caused some operators to send otherwise recyclable material to landfills, something his company had not yet begun to do. Furber of Recology said her company has not done this either.

Scheibly of Marin Sanitary said her company had sent some mixed rigid plastics, like blister packs and plastic wrapping around products, to landfills in 2018 because the transport fees combined with the lower prices they could get for the material would translate into a loss.

“In many cases for certain companies that are not located close to the ports, the transportation cost is much higher than the product value,” said Johnny Duong of East Bay-based California Waste Solutions. He said proximity to the Port of Oakland where Bay Area recycling gets shipped from has helped his company avoid the landfill option, illustrating the significant costs of trucking materials from the North Bay.

Not all materials have been affected, however. Furber at Recology said certain plastics like beverage containers, laundry detergent and shampoo bottles haven’t been affected by the Chinese policy.

She said cardboard is still sought after by China and typically remains clean relative to paper, but the margins are still not what they used to be. Prior to National Sword cardboard went for $190 to $200 per ton and now moves for $70 $80 per ton, Furber noted.

Company representatives said glass and metal largely stay domestic if not local and those prices had not been affected.

The less than 1% contamination standard set by China may be lofty, but Tim Dewey-Mattia said there are other ways of working with homes and businesses who initially separate recycling to increase the quality of the material they receive.

“We’ve been trying to do more outreach to our residential and commercial customers,” he said. Recology and Marin Sanitary are competitors but have also worked together in the past to educate ratepayers about what can and cannot be recycled.

Furber at Recology said community outreach like billboards, flyers and more have increased the tonnage of recycling they receive, but contamination rates have remained at a frustratingly high level of 20%.

The difficulty now faced by companies like Recology is that recycling is no longer enough, and the burden remains on them to clean and sort material that can only get to a low level of contamination if consumers pitch in even more.

“Over all people are recycling more, which is good,” Furber said. “But are they doing it better? It’s hard to say.”

Staff Writer Chase DiFeliciantonio covers technology, banking, law, accounting, and the cannabis industry. Reach him at chase.d@busjrnl.com or 707-521-4257.