Why have PCVA’s trash and recycling costs increased since 2019?
China notified the World Trade Organization a year ago of its intent to ban the import of 24 materials, including mixed waste paper and mixed plastics. While the news was met with skepticism at the time, over the past year China followed through with the ban, and the Chinese government implemented additional restrictions including announcing a ban on all recyclables by 2020.
Impacted by basic supply and demand economic principles, recycling commodity markets plummeted due to the global over-supply of recyclables and simultaneous reduced demand, driven by China’s restrictive import policies. These policies are creating challenges for recyclers and cities:
• China’s 0.5% contamination limit elevated quality expectations for all buyers across the globe. It also increased recycling processing costs in Material Recovery Facilities (MRF’s) as recyclers work to remove non-acceptable items.
• Recyclers have a hard time selling paper and plastics and many are carrying large inventories.
• MRF residual rates continue to increase due to the amount of non-recyclable materials from curbside programs. • In short, these factors contribute to increasing the cost of community recycling programs.
In order to curb the effect of the waste management industry, Waste Management in July 2019 began charging a variable “Recyclable Material Offset” (RMO) fee to the Association based on the ability (or inability) to sell the recyclable material that it collected. The PCVA Board of Directors challenged the RMO fees and were able to negotiate a new contract with a cap on the combined trash and recycling costs for the future, and to also delay the RMO fees until 2020. The RMO fee can vary up to $2.50 per home per month, and if the RMO fee exceeds this cap, then Waste Management will lower PCVA’s trash cost down to compensate for the expense. The Board did consider discontinuing the recycling service, however, the trash rates would have been raised significantly more than the association is paying now. Because of the Board’s successful negotiation, PCVA’s total trash removal costs are still quite low in the even with the variable RMO fee.
Recycling has weathered difficult times before. Although this situation is different since it stems from Chinese policy changes changing global market dynamics rather than economic supply and demand trends, our waste management partners expect markets will eventually recover, albeit, the industry will likely look very different. Now more than ever it is imperative to collect materials with long-term market viability: cardboard, paper, aluminum, tin and plastic bottles (water/soda bottles and milk/juice jugs).
What can Pine Creek homeowners do to help the situation?
Keep recycling the right things! A quote in a recent article notes that we should “keep calm and recycle.” Recycling will survive this crisis. It will evolve and may look different in a few years, but recycling will continue. The best thing we can all do is to evaluate and adapt our programs for today’s environment:
• Review your acceptable items list. Does it include only those materials with viable recycling end markets? Are you emphasizing the three rules of Recycle Often. Recycle Right.®? Are you focusing on recycling all your empty plastic bottles, aluminum cans, paper and cardboard?
• Review informative recycling education materials to recycle right. Visit Recycle Often. Recycle Right.com to see all the recycling education resources for residents, businesses, municipalities, multi-family complexes and more.
China notified the World Trade Organization a year ago of its intent to ban the import of 24 materials, including mixed waste paper and mixed plastics. While the news was met with skepticism at the time, over the past year China followed through with the ban, and the Chinese government implemented additional restrictions including announcing a ban on all recyclables by 2020.
Impacted by basic supply and demand economic principles, recycling commodity markets plummeted due to the global over-supply of recyclables and simultaneous reduced demand, driven by China’s restrictive import policies. These policies are creating challenges for recyclers and cities:
• China’s 0.5% contamination limit elevated quality expectations for all buyers across the globe. It also increased recycling processing costs in Material Recovery Facilities (MRF’s) as recyclers work to remove non-acceptable items.
• Recyclers have a hard time selling paper and plastics and many are carrying large inventories.
• MRF residual rates continue to increase due to the amount of non-recyclable materials from curbside programs. • In short, these factors contribute to increasing the cost of community recycling programs.
In order to curb the effect of the waste management industry, Waste Management in July 2019 began charging a variable “Recyclable Material Offset” (RMO) fee to the Association based on the ability (or inability) to sell the recyclable material that it collected. The PCVA Board of Directors challenged the RMO fees and were able to negotiate a new contract with a cap on the combined trash and recycling costs for the future, and to also delay the RMO fees until 2020. The RMO fee can vary up to $2.50 per home per month, and if the RMO fee exceeds this cap, then Waste Management will lower PCVA’s trash cost down to compensate for the expense. The Board did consider discontinuing the recycling service, however, the trash rates would have been raised significantly more than the association is paying now. Because of the Board’s successful negotiation, PCVA’s total trash removal costs are still quite low in the even with the variable RMO fee.
Recycling has weathered difficult times before. Although this situation is different since it stems from Chinese policy changes changing global market dynamics rather than economic supply and demand trends, our waste management partners expect markets will eventually recover, albeit, the industry will likely look very different. Now more than ever it is imperative to collect materials with long-term market viability: cardboard, paper, aluminum, tin and plastic bottles (water/soda bottles and milk/juice jugs).
What can Pine Creek homeowners do to help the situation?
Keep recycling the right things! A quote in a recent article notes that we should “keep calm and recycle.” Recycling will survive this crisis. It will evolve and may look different in a few years, but recycling will continue. The best thing we can all do is to evaluate and adapt our programs for today’s environment:
• Review your acceptable items list. Does it include only those materials with viable recycling end markets? Are you emphasizing the three rules of Recycle Often. Recycle Right.®? Are you focusing on recycling all your empty plastic bottles, aluminum cans, paper and cardboard?
• Review informative recycling education materials to recycle right. Visit Recycle Often. Recycle Right.com to see all the recycling education resources for residents, businesses, municipalities, multi-family complexes and more.
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