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06 Apr 2016 
Unlike some recent content proclaiming how the recycling industry is normally struggling, the recycling industry continues to be an enormous financial driver in america. In 2014, the recycling sector employed more than 1.1 million people, generated over $236 billion in gross annual revenues and saved municipal budgets over $3 billion in avoided landfill disposal charges.

That said, due double screw extruder to the way many municipal recycling agreements have been structured traditionally, the recycling industry is facing a potential turmoil.

Most contracts allow the municipality to drop off a truckload of recyclables, cardboard namely, paper, aluminum, rigid glass and plastics, in the recycling company at no cost. In addition, it really is expected how the municipality will also share in revenue gained in the sale of the recyclables following the recycling company offers covered its processing costs.

In good times when there's strong demand for most commodities, everyone wins. Nevertheless, when the there is a lack of a market for a particular commodity, while the rest of the item types maintain solid marketplaces even, the economics from the recycling company could be threatened.

In this scenario, the municipality benefits because even without the earned income for its recyclables still, it still saves cash by recycling since it avoids the alternative cost of sending the material to some landfill. The recycling company, however, must incur the increased loss of selling the commodity for under the processing costs, or worse, the expense of sending the item to landfill when there is no market.

The expense of processing any commodity in a recycling facility is about $75 per ton. This includes the expense of advanced machinery that separates each materials and the labor to perform the machinery.

The good news is the fact that near-term and historical average price for recycled cardboard, paper aluminum and rigid plastics is above the processing cost and therefore profitable to recycle.

The awful news is the fact that recycled glass, on the other hand, currently lacks a robust end-market. Consequently, the recycling of cup results in a substantial reduction for the recycling company and often erases any earnings earned from the recycling company. And since cup weighs a lot more than any other kind of packaging, it represents a disproportionately large portion by fat, about 20 percent, of the material coming to recycling facilities.

Municipalities and recycling companies should redefine recycling agreements to value each item type individually to be able to talk about in the true costs and great things about the recycling market.

Let's take a look at how this might work: Utilizing the three-year average market price for recycled goods illustrated within the graph below, the municipality and recycling company could have a revenue share of 50/50 on the value of a commodity above the $75 handling cost. In the case of cardboard, each ton would earn a income of $50 per ton, to be break up from the municipality and recycling company. Paper would earn a revenue of $5 per lot, to be split from the municipality and recycling company. PET plastic (beverage bottles) would gain a profit of $150 per lot, to be split from the municipality and recycling company.

HDPE plastic would earn a revenue of $250 per lot, to be split from the municipality and recycling company. Aluminium would make a income of $1,325 per lot, to be break up with the municipality and recycling company - all good news for our environment, recycling companies and municipalities.

Comes the critical part where transparent economics now, good public plan and corporate and business responsibility are key. Goods such as glass which are recyclable theoretically, but whose marketplaces pay significantly less than the cost to procedure them, should be approved in the municipal recycling program still, but with one essential condition: The municipality should identify who will pay the difference between the cost to procedure cup and what the market is ready to pay.

The first option would be for the municipality to choose to hide the expenses, but that would eliminate any profit earned from recycling paper, cardboard, rigid plastics and aluminum. Additionally, why if the burden fall on taxpayers?

The second option, which would be more equitable, is for municipalities to put the responsibility on the glass industry to either develop robust markets for recycled glass that, as with other commodities used in consumer goods, pay above processing costs or the municipality should expect the glass industry to reimburse the municipality and the recycling company for the cost of processing glass.

There's some positive momentum when it comes to recycling glass. Recycling companies such as Sioneer and Momentum Recycling will work to build up brand-new markets for recycled cup. The Durst Organization, one of the largest real estate companies in NY, is certainly leading an initiative to utilize recycled glass instead of fly ash, a major ingredient in concrete utilized by the building sector.

As promising just, there are a number of opportunities to replace glass as a packaging commodity with larger valued commodities for the recycling industry such as Family pet plastic and aluminum. For instance, Gotham, a ongoing company located in NEW YORK, provides restaurants with wine stored in light weight aluminum kegs, enabling restaurants to pour wine by the cup on faucet instead of from a bottle.

Over one thousand restaurants now offer wine on tap nationwide. A number of beer companies have begun packaging beer in plastic or aluminum bottles also. This originally was conceived to provide sports stadiums using a safer option to cup containers. The Can Van, a ongoing company in San Francisco, is working with craft brewers to bundle their beers in light weight aluminum cans, probably the most valuable commodity to recycle.

In order to properly structure municipal recycling contracts in a manner that maximizes revenue for municipalities and profitability for recycling companies, municipalities should redefine what this means to categorize a product or package as recyclable.

Yes, recyclable should imply that a product used in a product or package can be recycled into another marketable product, but it also should mean that the market worth of that product pays a lot more than the price to procedure it in the recycling facility. This updated definition will make sure that there are no concealed costs that the taxpayer or the recycling company is usually burdened with.

At the same time, it'll highlight the products and packaging which are recyclable truly, providing the consumers with optimum transparency, responsible companies using the credit they deserve and municipalities the chance to maximize the economics of the waste and recycling plan.

If we are able to framework municipal recycling contracts properly, then we will see a recycling industry that is profitable and able to continue its impressive background of fabricating local jobs, building shareholder value, preserving our normal resources and earning cash for municipalities.
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