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Why recycling is in the dumps.

For years recycling advocates said the only thing standing in their way was lack of supply - not demand. Now the tables are completely turned, and all across the country, recyclers are swamped in material they can't get rid of. Baled plastic collected at curbsides is piling up in warehouses, scrap yards and, yes, even landfills, because markets haven't kept pace with exploding municipal collection programs.

"There's an overabundance of supply and a sense of crisis that goes beyond plummeting prices," says Jason Stanton, president of Envirothene Inc., a recycler in Chino, Calif. "If prices get so low that waste collectors' fixed costs aren't covered, they'll stop collecting, and the whole plastics recycling infrastructure could fade away. The plastics industry isn't paying attention to creating recycle markets, and that's extremely shortsighted."

Waste haulers say substantial amounts of post-consumer plastic are being either stockpiled or discarded. "Recycling is the laughing-stock of the plastics industry," says Marty Forman, owner of Poly-Anna Plastic Products in Milwaukee. Forman, a recycler himself, is unhappy because his 100% post-consumer recycled product is being priced out of reach of municipal contracts by products made with relatively clean, easy-to-handle post-industrial material such as scrap beverage crates. This is happening, according to reports from many sources, even though municipal contracts often specifically require use of post-consumer - not industrial - waste. "Truckloads of material are moving through the loopholes in the market," Forman says.

Virgin HDPE resin prices, especially for off-spec, are as low as 16 [cents]/lb, while authentic post-consumer recycle (PCR) costs from the mid-20s to upper 30s. And recycle is slower and harder to run and causes more machine wear. Recyclers themselves are said to be "downblending" curbside material with off-spec virgin or industrial scrap to offer a more cost-competitive product.

And still the supply of recycle increases as new curbside programs and recycling plants start up (see PT, Oct. '91, p. 87). This year there will be capacity available to recycle some 570 million lb of HDPE and 463 million lb of PET, estimates Gerry Claes, director of environmental programs at Graham Packaging in York, Pa. This is up from an estimated 100 million lb of HDPE capacity in 1989 and 160 million lb of PET (see PT, July '90, p. 109).

Applications haven't kept pace. "In HDPE bottles, there's really only Procter & Gamble, Lever Bros., and some motor oil companies" doing major recycling, says Envirothene marketing manager Caroline Renny. "The household products industry could be doing a lot but isn't doing much." With other potential uses of PCR, like municipal waste bins and park benches where PCR content is contractually mandated, the contracts are awarded to the lowest bidder, who thereby often cannot afford to use recycle and still make money on the contract.

So far, many of the symptoms of recycling's growing crisis have been kept out of the public eye:

* Landfilling and incineration of curbside plastics.

* Recyclers with big inventories, shutdowns and moratoriums on buying.

* End products that misrepresent recycle content.

FROM CURBSIDE TO LANDFILL

Starting about six months ago, waste haulers say, low-value curbside materials like commingled bales of bottles and film began quietly disappearing into landfills. PLASTICS TECHNOLOGY was told of plastics landfilled in the following locations and many more:

* In Southern California: Municipal curbside-collection programs in Imperial Beach and Chula Vista, managed by Canadian-based Laidlaw Waste Systems, originally took all rigid plastics. But waste haulers could market only the PET soda bottles and natural and colored HDPE, so the rest backed up in scrap yards. Finally last July, about 50,000 lb were quietly landfilled. Recyclers involved say they had stored it for months and couldn't give it away. West Coast brokers add that they only sell PET and HDPE nowadays to export markets, primarily in the Philippines. "Domestic markets are dead. If we didn't have the Pacific Rim, we wouldn't have any markets at all," says Nick Candela, a plastic scrap broker at waste handler CR&R Recycling in San Diego.

* In Texas: In Dallas, which has pilot mixed-plastic collection and supermarket drop-off programs, some 40% of the material is said to be going to landfill because of contamination, inadequate demand for mixed plastics, and low tipping fees that make landfilling relatively affordable. William Toby, Dallas-area manager of Recycle America (a Waste Management Inc. affiliate), says he can sell HDPE and PET bottle waste, "But unfortunately, mixed plastics aren't cost-effective" to recycle.

* In Pennsylvania: Curbside recycling is mandatory for communities with over 5000 people, and Philadelphia recycled 1.6 million lb of natural HDPE last year, along with 400,000 lb of colored HDPE and 1.2 million lb of PET. But this is only about 70% of the plastic collected, say sources at the Waste Management Inc. transfer stations that handle the city's recyclables. The other 30% of low-grade mixed plastics is landfilled.

* In New York State: Some 400,000 lb of curbside mixed plastics were incinerated in November and December at a cost of $100/ton, after being stored and brokered several times because it couldn't be disposed of any other way, say recyclers involved.

* In Minnesota: A sanitation collection service in the town of Stillwater has 30,000 lb of curbside plastics in storage since November. The hauler hasn't room for any more and says it will soon have to incinerate the collected materials. Tipping fees there are $80-120/ton to landfill vs. $67/ton to incinerate. Several other communities are said to be landfilling collected plastics.

* In Washington State: Five truckloads from a supermarket bag dropoff program had to be landfilled because of excessive contamination with shrinkwrap and consequently no market.

* In Florida, Iowa, Wisconsin and other states: Recyclers tell similar stories of curbside collection and dropoff programs with "throw" (i.e., landfill or incineration) rates from 40% to 70% of the plastic collected.

PILE-UPS AND SHUTDOWNS

Many recyclers have amassed huge inventories of unprocessed municipal plastics, and some have been forced into temporary shutdowns of a month or more. Atlanta-based Mindis Recycling Inc., which announced plans for the biggest plastics recycling plant in the country, though not yet operating, probably has the biggest stockpile around - 17 million lb under one roof - eclipsing the 12 million lb of material collected by the short-lived Dow Chemical/Domtar joint venture two years ago. Six months ago, Mindis said it would build a 200-million-lb/yr recycling plant in a 50/50 joint venture with Sonoco Products Co. of Hartsville, S.C. Sonoco sources say the first of five washing lines from M.A. Industries, Peachtree City, Ga., will start up in May, somewhat behind the original schedule (PT, Aug. '91, p. 104; Oct. '91, p. 89).

Meanwhile, Mindis brokers higher-value natural HDPE and PET and stores lower-value colored HDPE and film. The price of colored HDPE fell to 1-2 [cents]/lb in Eastern states recently, down from 6-8 [cents], reportedly as the result of Du Pont's sale of some 10 million lb of colored HDPE flake processed by its Plastics Recycling Alliance (PRA) in Chadds Ford, Pa.

Other recyclers with big inventories of unprocessed curbside plastics include Graham Recycling, with about 1.7 million lb of baled bottles; Union Carbide Chemicals & Plastics Corp.'s recycling start-up in Bound Brook, N.J., with about 5 million lb of baled bottles and film; Envirothene with 3 million lb of baled bottles (and a moratorium on buying more last December); and North American Recycling Corp. in Fort Edward, N.Y., with about 400,000 lb. North American had to renegotiate its county contracts: in November, the firm paid the county $40/ton for loose bottles; in December and January, it took bottles for free only; and this month it has to charge $40/ton to accept the county's bottles.

At United Resource Recovery Co. in Findlay, Ohio, general manager Hank Traweek says he "curtailed buying in the last three months by about 75%" to work off inventory. And Orion/Pacific Inc. in Odessa, Texas, stopped buying baled bottles five months ago and shut down its processing lines for 60 days.

Even previously high-value curbside PET bottles have been hard to sell of late, except to Asian markets. Mel Weiss of Weisco Recycling, a large recycle broker in Castro Valley, Calif., says he's "sitting on 200-500 tons of PET stored in different yards, and all my suppliers are mad at me." Weisco put a deal together to supply a million lb/month of post-consumer PET bottles to two fiber companies. After three months, the customers switched in December to using clean industrial scrap. "They still call it recycled, and all they have to do is grind it up and run it," says Weiss. "There's too many people lying about using |recycled' materials."

Several municipal collection programs, unable to market mixed plastics, are scaling back their collections. For example, Chula Vista and Imperial Beach, Calif., now collect only narrow-neck bottles, not mixed rigid plastics, after their 50,000-lb landfill debacle noted above. Recycle America's Toby says he's trying to convert seven city programs to collecting only natural HDPE and PET bottles - "and we may soon have to discontinue collecting green PET," he admits.

Southwestern markets for natural HDPE are holding up because of a new recycling operation from Phillips 66 Co. in Tulsa, Okla., and interest by Formosa Plastics Inc. for possible recycling at Port Comfort, Texas, where a Formosa affiliate is building a large-scale film and bag-making plant (see p. 81). Meanwhile, on the East Coast, the Plastics Recycling Alliance in Philadelphia and Wellman Inc. in Shrewsbury, N.J., both stopped buying HDPE bottles last month, recyclers say, because of low demand.

HOW GREEN IS GREEN?

Recyclers complain that even municipal contracts designed to create markets for curbside materials can backfire if the municipalities don't properly police the end products supposedly produced with the waste collected. The result can be endless bickering and lawsuits.

For example, a recent hotly contested municipal contract for large waste containers on the West Coast and an on-going contract for playground landscaping timbers in the Midwest mandate use of locally collected post-consumer plastics. Although the winning bidders emphatically deny it, competitors and even some present and former employees claim that little, if any, of the collected plastics ended up in the bins or timbers. In one case, questions were raised of whether locally sourced bottle flake was really used in the rotomolded bins. In the other case, the plastic timber supplier allegedly faced prohibitively high costs of hauling the municipal plastics waste from where it was collected to the recycling facility in another state. He is said to have brokered much of the municipal waste to other buyers and used cheaper industrial scrap instead. And so the griping goes, as recyclers, once allies, now fight each other for markets and swim in unwanted raw material.

NOT ALL DOOM AND GLOOM

A down market for PCR hasn't dampened some resin companies' recycling plans, however. Occidental Chemical Corp., which announced six months ago that it would construct a recycling plant in the Dallas area for up to 40 million lb/yr of mixed bottles, has put out machinery bids and says the new plant should start up in the first quarter of 1993.

Three other resin companies have scheduled official recycling plant openings this month: Union Carbide's Bound Brook plant is to be up and running its Sorema PE film and rigid HDPE washing units and two Sorema pelletizing extruders. Carbide says it took in some 16.5 million lb of PET and HDPE last year, brokered away about two-thirds of it after sorting, and is now ready to process the remainder.

Quantum Chemical Corp. has had its new John Brown line running in Heath, Ohio, since December, and says it will reach a recycling rate of 32 million lb/yr by midyear, 80% of the announced full capacity. And Phillips 66 Co. started its 18-million-lb/yr line in January in Tulsa, Okla.

HOPE IN LEGISLATION

"Recycling is an industry in its infancy, and it's not surprising that we have some mismatches of supply and demand," says Graham's Claes. Indeed, the glut of supply applies equally to other recyclables like glass, paper and aluminum, not just plastic. New markets will be spurred, recyclers hope, by legislative initiatives currently under consideration in many states. Wisconsin passed a law mandating 10% PCR in plastic containers sold in the state. Other pending legislation could require recycled contents as high as 50% by the year 2000. "But if recycling markets aren't legislated," says North American Recycling president Tom Tomaszek, "they won't happen."
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Industry News
Author:Schut, Jan H.
Publication:Plastics Technology
Date:Feb 1, 1992
Words:2087
Previous Article:Mild '92 forecast for PE and PVC prices.
Next Article:New heavyweight entry in HDPE bags.
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