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March 26, 2020 12:39 PM

Post-industrial plastics recyclers seek public attention

Steve Toloken
Plastics News Staff
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    Resource Material Handling & Recycling Inc.
    Workers processing scrap at Resource Material Handling & Recycling Inc. CEO Josh Jones is advocating help for the post industrial plastics recycling industry.

    Nashville, Tenn. — While there's a lot of discussion around challenges in recycling consumer packaging like plastic bottles, companies on the industrial side of the recycling ledger say their sector also faces difficulties.

    Some of them are calling for things like stronger mandates on using recycled content or other incentives to help level the playing field for recycled materials.

    Josh Jones, president and CEO of North Carolina-based Resource Material Handling and Recycling Inc., for example, said in a recent social media post that China's 2018 ban on accepting U.S.-recycled materials and the resin industry "pumping up" production of low-cost virgin plastics put the recycled market in a "dire situation."

    While he's not pushing a specific policy agenda, he raised the idea of more drastic action.

    "If you put a 20 percent tax on virgin resins, you automatically make recycled resin a player and an economical decision," Jones said.

    He says low prices for recycled resin risks causing manufacturing plants to decide it's more cost-effective to landfill their waste instead of selling it to a recycling firm.

    Josh Jones

    "Companies are gradually making the more economical choice to send all their scrap to landfills," he said.

    Jones and other post-industrial plastic recycling companies spoke in interviews at the Plastics Recycling Conference and Trade Show, held Feb. 17-19 in Nashville.

    Jones said the very tight market conditions began about a year ago and are actually causing his Statesville, N.C.-based company to close its second plant, in Middlefield, Ohio, eliminating 15 jobs there.

    "You have to look at your business and change with the market trends [but] I'm shutting down a pretty decent-sized plant," he said.

    Many of the presentations and panels at the Nashville conference focused on challenges with recycling consumer packaging and using post-consumer resin in new products.

    But post-industrial recycling companies on the floor of the show's exhibit hall also are calling for more attention to their sector.

    Jorge Alvarez, with Alandro Plastic Resources in Brownsville, Texas, said he'd like to see more direction from regulators like the Environmental Protection Agency or the Texas Commission on Environmental Quality to encourage companies to recycle their scrap materials.

    Steve Toloken

    Jorge Alvarez is with Alandro Plastic Resources in Brownsville, Texas

    "People believe that these manufacturers are being governed by the EPA or the TCEQ in our case, but a manufacturer has full authority to just throw their scrap away in the landfill," he said. "There's no attention to that at all."

    Alvarez said his company focuses on getting scrap materials from factories nearby, including the maquiladora operations just across the border in Mexico, and either reprocess it or compound it at the Brownsville facility.

    He urged more consideration around design for recyclability when companies like automakers develop a new product.

    If they may choose new materials that are not widely used in the market, it can take one or two years for the scrap from that new product to be available in sufficient volumes to have value in the wider recycling markets, Alvarez said. In the meantime, those products are more likely to go to a landfill, he said.

    "Why not use something that's already out there instead of creating a whole new product that's not recyclable from the get-go," Alvarez said. "There's no connection between the recycler and the OEM.

    "I think there needs to be more attention on what the manufacturer is landfilling," he said.

    Cost is a major factor, with low virgin resin prices and low disposal costs making manufacturing plants less likely to recycle their scrap, said Jeremy Berger, CEO at Windsor, Ontario-based post-industrial plastics and metals recycler Green Processing Co. Inc.

    Plastics News photo by Jeremy Carroll
    Jeremy Berger, CEO of recycler Green Processing Company Inc., said more recycled content from larger companies would boost demand for recycled plastic.

    Berger, whose company also has plants in Alabama, Ohio and Texas, said demand for some plastics they recycle, such as high molecular weight HDPE from dunnage trays, is the lowest it's been in 20 years.

    "We're getting a lot of customers that are saying to us, in order to save a penny or two, it's not worth exploring a recycled product," Berger said.

    He said he understands the thinking, even if it's bad for his business and the environment, with sending resources to the landfill that could otherwise be reused.

    "I don't necessarily disagree. If I had the choice between a used car and a new car, and the new car is 2 percent more, I'll take the new car," he said. "Unless there's that larger delta [between recycled and virgin prices], there's really no financial incentives."

    He said the price difference between virgin and recycled generally should be about 30 percent for recycling to be on more solid ground.

    Berger, who was interviewed jointly with Jones at the Nashville conference, said his company is adding equipment and processing capacity. But he said he's aware of other companies besides Jones' that have had to shut down some operations.

    He believes more recycled content demand from larger companies would help.

    "With the larger Tier 1s and OEMs, you have $50 billion companies that have the power to make certain changes," Berger said.

    The head of the Association of Plastic Recyclers, which was one of the organizers of the Nashville event, agreed that post-industrial recycling is also challenging now, even if post-consumer markets sometimes get more attention in news reports and in government policy debates.

    "That's certainly the visible focus narrative these days, on consumer behavior … but frankly dealing with post-industrial material is as big an issue as dealing with post-consumer material," said APR President and CEO Steve Alexander.

    He said APR members do both post-consumer and post-industrial recycling. While post-consumer markets tend to have more issues with sortation and contamination than industrial scrap recycling, both have similar challenges around pricing, product design and markets, he said.

    Jones said he agrees both are important but is advocating for more attention on what manufacturing companies throw away that feeds post-industrial markets. He said he's getting more politically active on the issue.

    For example, he said he had a meeting scheduled with aides to Sen. Rob Portman, R-Ohio, to share concerns.

    Portman introduced legislation in November in Washington that would set up federal grants to support recycling education, and one of his staffers spoke on a panel at the Nashville event.

    "Post-consumer is a big issue, but post-industrial is a major, major waste contributor and it's only going to get bigger," Jones said. "The way things are headed, recycled plastic is going to be next to worthless."

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