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As Vermont Mandate Takes Hold, Market for Recyclables Hits a Trough

As Mandates Increase, the Market for Resale Has Dried Up

  • A Casella recycling truck drives onto the Thetford Academy campus to pick up zero-sort recycling.

  • Casella employee Darrin Bray uses a rake to get the last few pieces of zero-sort material out of a dumpster at Thetford Academy last week. Bray picks up recyclables once a week at the school.

  • The aluminum chute at the Hartford Solid Waste/Recycling Transfer Center in Hartford.

  • On his day off from working at the recyling center, Tom Mabey, of Hartford, sorts his own recycling at the Hartford Solid Waste/Recycling Transfer Center last week.



Valley News Staff Writer
Sunday, March 27, 2016

Thetford — Who’s going to pay for recycling in the Upper Valley?

The answer used to be, in large part, the markets — public organizations and for-profit companies both worked to suss out the best way to separate cardboard, plastics, and various metals so that those materials could be sold to other profit-driven companies as raw materials for new products.

The model has helped divert thousands of tons of materials from the region’s landfills and brightened the promise of an earth-friendly future.

But now, for a variety of reasons that aren’t likely to change anytime soon, those markets have dried up — there is less demand and more supply of many recyclable materials than at any time in recent memory.

That makes recycling more costly, particularly in Vermont, where a universal recycling law, parts of which took effect last year, is being put to the test.

Take Thetford, a community of about 1,100 households spread out over 44 square miles along the Connecticut River. In small rural communities like Thetford, the relatively low population density make recycling and trash collection particularly inefficient, and therefore costly.

Despite this, Thetford has tried to take a leadership role in recycling statewide, according to Diana Kimball-Anderson, the town’s recycling coordinator.

“In general, the citizens of Thetford tend to be much more interested in the environmental impact of recycling,” than many towns in the state, she said. “By and large, they agree to make life a little more uncomfortable. It’s more work, but it’s better for the environment.”

That green ethic plays itself out in a variety of ways. Unlike most Vermont communities, Thetford doesn’t take advantage of zero-sort recycling options that allow consumers to mix recyclable materials into a single stream. Instead, residents separate their products by hand.

Unlike many communities, Thetford takes the time to seek out the best place for each waste stream — traditionally, plastics were picked up by a hauler from Massachusetts, metals went to Claremont, and glass was ground up and used as aggregate to promote water and air circulation in the Lebanon landfill.

But Kimball-Anderson said the system is in the process of getting much more costly — glass pickup costs went from $1,000 to $6,000 this year, while the cost to lease the bins increased from $12,500 to $45,750.

Market Down, Prices Up

Thetford’s massive cost increases aren’t occurring in a vacuum, said Joe Fusco, vice president of Casella, the largest solid waste hauler in the state.

The average revenue Casella takes in per ton of recycled material has dropped by more than half — 60 percent — over the past five years

That’s just one sign of how, in recent years, the prices of recyclable materials have receded like a tide, global and inexorable and difficult to understand for those in the industry who only know they are suddenly in danger of being left high and dry.

With China’s economy nearing recession-level sluggishness, people there are building less, which means they’re less likely to buy recyclable materials from the U.S. The worldwide supply of petroleum is up, which means it’s less expensive to make new petroleum-based plastic products than it is to recycle. And the U.S. dollar is very strong in international markets, making it more difficult to turn a profit when exporting raw materials like recycled goods out of the country.

In Williston, one of two Materials Recovery Facilities in Vermont that are equipped to handle single stream, the impact of these forces is clear. The Chittendon Solid Waste District spends about $2 million a year operating a handful of drop off centers and the facility. In 2011, the facility sold recyclable material for an average of $131 per ton — by 2015, that had gone down to less than $91. During the same four-year period, the facility increased the tipping fees — the amount haulers and municipalities pay to drop off a truckload of material — from $0 per ton to $21 per ton, an effort to offset the lost revenue.

The increased costs from those global market forces trickle down through the system, to the largest suppliers and processors of recyclable materials, and then on to the haulers who transport truckloads of materials to those hubs from relatively remote areas.

The haulers then pass those costs on to their clients, whether that means an individual consumer who pays for curbside service, or the municipalities that pay for recycling services with taxpayer dollars.

In Lyme, for example, the solid waste collection and disposal budget increased from about $76,000 in 2013 to $87,000 in 2015. This year, it increased another $14,000.

“The cost of recycling seems to go up weekly,” wrote Selectwoman Susan Mackenzie, in an emailed response to a question from the Valley News.

A Hitch in History

Josh Kelly, materials management section chief for the Agency of Natural Resources, oversees implementation of Vermont’s new law. known as Act 148, which is intended to spur more infrastructure development for recyling and goose the public into more active recycling habits.

Last year the law began mandating household recycling of many materials; it also requires haulers to pick up recyclables.

Kelly said the current downturn is just one twist in a much larger journey, beginning when early adopters began pushing recycling in the 1970s, and continuing in the ‘80s and ‘90s, as Vermont developed an increasingly robust infrastructure and industry to divert items from the landfill.

On July 1, 2016, leaf, yard and clean wood debris will be banned from entering the landfill, and haulers must begin offering leaf and yard debris collection.

The focus of the law is increasingly shifting toward organics — beginning in July, those that generate a half-ton or more of food waste each week will be required to recycle and by 2020, all food scraps will be banned from the landfill.

To recycling visionaries, this all serves a future in which Vermont recycles every bit of every recyclable material — a statewide closed-loop system in which every commodity can be plowed back into the earth or the economy.

With this in mind, companies are still developing new ways to use the raw materials — making bridges out of plastic bags, decorative landscape mulch out of glass, and patio decks out of reused tires.

Maintaining momentum has traditionally consisted of encouraging investment into the recycling industry, and harnessing that financial power to move mountains of materials to productive outlets.

The most tangible success of the last few decades has been building an enormous infrastructure, including fleets of trucks like those operated by Casella; more than 200 drop off locations (including transfer stations); and massive amounts of specialized equipment that process material, as in Williston.

But last year, a state-commissioned report on Act 148 found the infrastructure is not up to the task of implementing the law. The report found that $45 million would need to be spent on trucks, containers, transfer stations, processing facilities and other equipment to fully implement the law.

But just when it has become more important than ever to have a robust recycling infrastructure, the collapse of the market seems to have stalled — or even reversed — that forward progress.

In February, the Central Vermont Solid Waste Management District, which serves member towns including Bradford, Chelsea, Fairlee and Tunbridge, voted to suspend plans for a new facility.

“The market has tanked. There is not an end in sight at this point., No one is predicting a rebound,” said Leesa Stewart, the district’s general manager. “The impact here is that it’s making us reluctant to expand our facilities because at this point, we don’t see the facilities as profit-making, so any expansion would have to be funded with taxpayer dollars,” she said.

Stewart said the district’s board had pushed to create the facility because its existing facility in Barre has been seeing increased demand. “Sometimes I go over there and I’m up to my shoulders in electronic waste,” she said. “There’s increased demand for services. We’re reaching capacity.”

But the project was suspended partly because towns feeling the squeeze of increased recycling costs indicated they weren’t willing to commit to a 30-year bond to pay for a new facility. Moving forward, she said, would have been likely to result in some of the towns withdrawing from the district to avoid those costs.

An Unseen Reversal

Not only is forward momentum being stalled, but there are also worrying signs that the entire infrastructure could unravel, as the lack of profitability drives out one entrepreneurial interest at a time.

The scrap materials industry is a competitive game — full of independent spirits who sniff out the best streams of materials, and unload them at the best possible price.

The base of that system rests on the shoulders of people like Kenny Rogers, a resident of White River Junction who, along with his wife, runs a salvage company named Sanford and Sons from their rental home on Latham Works Lane.

Rogers likes to go on long drives through the Upper Valley’s rural countryside — not only to enjoy cruising on the back roads, but to scout for an opportunity, like a broken-down vehicle rusting away in someone’s driveway that someone might be looking to get rid of.

He’s built up an extensive network of contacts around the region, which help him to get a good price for the various components of a car — $10 for a battery, $8 for a tire — that can be recycled or reused. When the markets were up, it was a good source of revenue for him.

For example, Rogers said, many catalytic converters have a small amount of high-grade platinum in it. In the good times, he would sell the convertor to the first middleman in a four-person chain. He got about $100 at his end, and the final owner would pay about $300 for it before using specialized equipment to melt it down and extract the platinum from it.

But these days, Rogers said, when he’s lucky to get $40 for the same convertor, his scrap business is essentially sidelined. He doesn’t do nearly as much scrap work as he used to, because the money isn’t there. A non-profit in Sharon gave him a call recently, asking him to pick up a truckload of siding.

“After gas, I made $3,” he said.

Others who have traditionally padded their earnings with recyclable materials are also doing less of it these days.

“People don’t have to worry about their copper being stolen. It’s not worth it anymore,” said Richard Katzman, who was until recently the general manager at Recycling Services Inc., a scrap metal yard in Claremont.

“We used to buy copper for over $3 a pound. Now it’s under $2 a pound,” he said.

With everything bought at Recycling Services, it’s the same. Three tons of metal used to bring $500, but now it’s $100. A car worth $350 now brings $50. Steel has gone from 90 cents to 25 cents for 10 pounds.

Because of this, the number of individuals bringing in metal has dropped by about three quarters. They used to account for 40 percent of the business’s metal, but now it’s more like 15 percent, with the balance coming from industrial sources.

The effects have shuttered doors all up and down the scrap metal food chain — in February, Schnitzer Northeast, a national company and a major scrap metals recycler in the region, closed its Claremont location, laying off an estimated seven employees.

And every time the bad markets close a business, that leaves one fewer option for the businesses that remain.

Jody Whelton is the company administrator at Naughton & Son Recycling, a company with 16 employees in Bradford, N.H., that serves the Sunapee region.

They move all sorts of materials for all sorts of customers, including residential pickup, but a lot of their business model is built around construction materials — high volumes of heavy building waste coming from construction and demolition sites.

As the market has foundered, Whelton said, the amount of materials the company recycles has dropped.

Four years ago, 26 percent of the materials Naughton handled was recyclable. Last year, it was down to 12 percent.

The more recycling costs, the fewer clients want it, she said.

“At the end of the day, most of us, our pocketbooks tell us what to do,” said Whelton.

As the infrastructure shrinks, Naughton’s options are narrowing. A local lumber company that used to take clean waste wood has stopped. A recycling center in Hooksett that used to take their glass and plastic closed down.

“Little pieces get pulled away from you, and you don’t know what to do with the stuff,” Whelton said. “We’re doing the best we can.”

A loss of infrastructure is also what caused Thetford’s trucking fees to go up by more than $30,000 this year. Previously, Kimball-Anderson said, the Massachusetts hauler charged $265 to pick up a load of two bins of recyclable materials and bring them back to Massachusetts. Now, that company will no longer serve the area, and she said the only other hauler that will — Casella — charges $490 to bring the same two bins to a transfer station in White River Junction.

Impact Uncertain

Despite the downed market and reports from companies like Naughton, the jury is out on whether the amount of materials being recycled has actually gone down.

Kelly thinks that, in Vermont, recycling has gone up. Data on the amount of recyclable material collected in 2015 has not yet been released by the state, but the Agency of Natural Resources’ Solid Waste Program also tracks how much material is landfilled, and those numbers look good.

In 2014, bolstered by what many suspect was a post-recession wave of consumerism, the number of tons of landfill garbage generated by Vermonters increased dramatically, from about 393,000 tons in 2013, to 421,000 tons in 2014. In 2015, the number is 4 percent lower, about 405,000 tons.

Kelly hopes that this is a response to Act 148’s increased requirements for haulers and consumers.

Stewart said that the Central Vermont Solid Waste Management District has seen an increase in landfill waste and an increase in recyclable materials, which she chalks up to post-recession, pent-up demand from consumers.

A New Paradigm

After decades of being subsidized by relatively robust markets, the prolonged downturn has some, including Fusco, saying that there should be a fundamental shift in how Vermont views the concept of recycling.

A recycling infrastructure that is built on the free market will only be as successful as the market allows. To build an infrastructure that consistently achieves the mandates set out in Act 148, the system needs to unhinge itself from those market forces, becoming a public-funded service, they said.

Recycling is not free, said Fusco, and the price tag will depend on revenues from the markets, and from public sources.

Stewart expressed hope that there could be a legislative fix, in which the state could raise and direct funds toward the infrastructure — she pointed to a proposed bill in the House Committee on Natural Resources and Energy that would raise an estimated $12 million toward the infrastructure gap by imposing a solid waste franchise tax, as an example of a step toward a solution.

“In Vermont, its often the case that when you want something, you have to cobble it together over time,” she said.

Kelly said that, regardless of where the money comes from, it’s important to keep one thing in perspective — while disposing of recyclable materials in 2016 is more expensive than it was a few years ago, it’s still less expensive than the alternative of burying those same materials in a landfill.

In Lebanon, the tipping fee for a ton of trash is about $69; in Vermont’s landfill in Coventry, the fee is $90 for towns outside of the local district, and $116 for those inside the district — all significantly higher than the current $21 tipping fee charged for single-stream recyclable materials in Chittenden.

“Somewhere along the chain, someone’s getting paid for that bale of cardboard, that aluminum, that plastic,” he said. “There are still people paying for these bales. They just don’t pay as much.”

With the passage of Vermont’s universal recycling law, the meal is on the table, but it remains to be see who among the stakeholders — end users, municipalities, private industry and the state — will reach for the check.

Kelly said that ultimately, someone will, because he believes public opinion will require continued advancement of recycling in Vermont, which in 1972 was one of the first states to pass a bottle deposit law to encourage recyling of beer and soda cans and bottles.

“People in Vermont are recyclers by nature. They love to recycle,” Kelly said, “and often are pretty upset when they can’t.”

Matt Hongoltz-Hetling can be reached at mhonghet@vnews.com or 603-727-3211.