Recycling: Taking Back the Market in the U.S.

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Figure 1

Caryn Sykes, Industry Analyst, Environmental Technologies

Practically unheard of 30 years ago, recycling has become standard practice in most metropolitan areas. According to the National Recycling Coalition, annual revenues from recycling in the U.S. top $236 million, larger than the waste management and mining industries combined. Recycling has become one alternative as landfills continue to fill nationwide. Within the next 10 years, nine states and Washington D.C. are expected to exhaust their landfill capacity. Additionally, as the rate of consumption in the U.S. continues to grow, and more and more communities object to the establishment of new landfills within their boundaries, recycling is expected to become increasingly important to solving municipal solid waste management issues.

According to the EPA, of the 230 million tons of municipal solid waste generated in 1999, the breakdown of its composition was as follows (see also, Figure 1):

• Paper: 38.1%
• Yard Waste: 12.1%
• Food Waste: 10.9%
• Plastics: 10.5%
• Metals: 7.8%
• Rubber, Leather, and Textiles: 6.6%
• Glass: 5.5%
• Wood: 5.3%
• Other: 3.2%

 

Figure 2

Recycling Collection Recycling Processing Recycling Mfg. Reuse & Remfg. Establishments 9247 12,051 8,047 26,716 Average Number of Employees 3 13 94 6 Average Revenues 213,530 3,464,767 22,168,563 530,863 *per establishment

Most of those categories are recyclable materials or contain a large portion that can be recycled. According to the EPA, in 1999, approximately 28 percent of waste was recycled, a number which is slowly increasing. Currently, the major recyclable materials are recycled at these rates:

• Paper: 42%
• Plastic soft drink bottles: 40%
• Aluminum cans: 55%
• Steel packaging: 57%
• Major appliances: 52%

With only around 50 percent of most major recyclables being recycled there is still a great deal of market potential. Additionally, more and new materials are being kept out of landfills and recycled or reused. For example, in Massachusetts, a site recently opened up that accepts mattresses and furniture for recycling, retaining steel to be recycled that in the past was destined to sit in landfills. Additionally, electronics manufacturers are under increasing pressure to manufacture items that are recyclable.

However, there are still several barriers to recycling reaching its full market potential. One is the lack of a market for some types of recyclables, such as plastic, which has proven to be a difficult material to work with in manufacturing new products. Additionally, the market for products made from recycled materials has not been strong. Many consumers are deterred by higher prices in some cases, and lack of education about the use of recycled materials in products. Additionally, lack of education and resources in rural areas prevents many community recycling programs from developing.

Currently, the recycling industry is highly fragmented, with large numbers of local and regional players, and no vertical integration. The National Recycling Coalition classifies the recycling industry into different categories. Recycling collection, recycling processing, recycling manufacturing, and reuse and remanufacturing. Figure 2 shows the average number of employees and average revenues for the four different categories. Overwhelmingly, the largest participants in the market are the recycling manufacturing companies, with the largest number of employees and revenues per establishment, and most likely holding a larger, more regional or national presence. Collection, processing, and reuse/remanufacturing businesses, on the other hand, are smaller, and tend to be more locally based. Additionally, steps of the process are controlled by different businesses, as generally one company handles collection, another handles processing, which is then sold to manufacturers or reuse/remanufacturers. Although the recycling industry is a still a growing market, it is one headed for maturity. The large numbers of smaller players can be expected to consolidate in order to capture more market share.

Although recycling has yet to prove the magic pill for municipal solid waste problems it had been hoped to be, it is still a very important component of waste management programs, and an important industry for local and national economies. It is still a growing market with a great deal of potential, as consumers are educated about the benefits of recycling, and incentives for both recycling materials, and manufacturing products from recycled materials continue to help the industry grow.

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