Texas has a new Recycling Market Development Plan (RMDP) that officials believe will lead to a significant improvement in recycling efforts in the Lone Star State. The plan allegedly goes further than the recently announced EPA plan to boost residential recycling rates to 50% over the next few years. But in the end, the Texas plan completely misses the boat.
As things currently stand, industrial recycling is a lucrative business. For example, Tennessee-based Seraphim Plastics employs a profitable business model that allows them to collect industrial plastic waste and recycle it in seven states. The company is active in Tennessee, Arkansas, Indiana, Ohio, Kentucky, Michigan, and Missouri.
On the other hand, residential recycling has been a bust for decades. Very few municipalities make any money at it. One by one, municipalities are shutting down their recycling programs because the programs cost too much to operate. It is clear that the disconnect between industrial and residential recycling is very real. Unfortunately, it is not addressed in either the Texas or EPA plans.
1. Dealing with Municipal Solid Waste
Texas’ report reveals that the Lone Star State recycled nearly thirteen million tons of municipal solid waste (MSW) in 2019 at an estimated value of $821 million. Another 6.9 million tons of industrial waste, with approximately $1.4 billion, was also recycled. Notice the disparities?
Texas recycled nearly twice the amount of MSW but received about $200 million less for their efforts. What does that tell you about the profitability of recycling MSW?
Most of the MSW materials recycled in 2019 were things like paper, cardboard, glass, and plastic. But therein lies the rub. Texas municipalities made less money because they had to spend so much on sorting those materials. The Texas report does not address that problem adequately.
2. Investment and Education
As is almost always the case with government, recommendations offered in the report are based primarily in two things: investment and education. When the government says ‘investment’, that means spending tax dollars. Texas wants to spend a ton of money on improving recycling infrastructure in the state.
As for education, they believe that being more proactive about MSW education will encourage more people to recycle. Bear in mind that MSW is largely residential waste. So Texas wants to spend more money educating homeowners on the benefits, processes, etc. of recycling.
Better infrastructure and consumer education are all well and good. But neither one solves the fundamental problem: residential recycling is too expensive. It is too costly to manually sort household recyclables in an industrial setting. So either homeowners have to separate and clean materials themselves, or the fundamental problem that keeps residential recycling from being profitable will never be solved.
3. Why Industrial Recycling Works
Seraphim Plastics makes industrial recycling work because they do two key things. First, they only accept plastics for which there is a sufficient resale market. They do not bother with materials they cannot turn into cash. Second, they require that loads be separated prior to pick up. If they pick up a load of scrap plastic from an injection mold manufacturer, that load will only contain scraps from their injection mold machines.
Because there is no sorting or cleaning involved, Seraphim can utilize a very efficient process that doesn’t cost a whole lot of money. This allows them to turn around and sell plastic regrind at competitive prices. As for recycling MSW, the combination of expensive labor and mixed material doesn’t make it worthwhile. Unfortunately, no amount of investment or education is going to change that. Too bad so many people in policymaking decisions miss the boat on this.