Renewlogy, which converts scrap plastic to fuel and petrochemicals, is setting up a new facility in Chester, Nova Scotia, where head of operations, Justin Nelson, was at the Recracker, which starts the breakdown of plastic scrap into fuel, on May 24.
American trash haulers and recyclers are becoming more prudent about how they collect and sort scrap after China stopped accepting most U.S. scrap exports earlier this year.
The move has upended the U.S. recycling industry: Prices for recyclables are plunging, a glut of paper and plastic is accumulating in warehouses and some material is being sent to landfills.
As a result, some recyclers have focused on producing cleaner loads of paper, plastic and corrugated cardboard, which can fetch higher prices. And cities and trash haulers are seeking alternative ways to manage such waste, while an abundance of hard-to-recycle plastics has revived some companies’ use of the stuff to produce fuel.
“We got lazy,” said Robert Render, commercial manager for Orlando, Fla.-based Ravago Recycling Group. “That mentality has to change.”
Residential recyclables are typically harvested in single pick-ups and separated at processing centers. The practice can lead to contamination during collection and sorting, especially for paper—something recyclers are trying to reduce.
Oakland, N.J., in February began collecting paper and cardboard one week and plastic, cans and other materials the next. Now the town is earning $10 a ton for its cleaner loads of paper and paying $3.50 a ton to have other mixed recyclables sorted. The strategy reduced Oakland’s recycling costs from the $30 a ton it had been paying to a processing company before changing its collection system.
“It took a little while for people to get used to it,” Oakland’s recycling coordinator Eugene MacMahon said of the dual-sort system. “The garbage men had to leave a lot of stuff on the curb.”
China, the biggest customer of U.S. scrap material, for years accepted loads of recyclables with as much as a fifth spoiled or trash. China’s willingness to buy low-quality scrap provided little incentive for U.S. processors and collectors to weed out trash and other contaminants from the recyclable paper, plastic and cans.
Now, China is rejecting shipments with contaminants above 0.5%, a level that most U.S. recyclers have difficulty meeting with conventional recycling and sorting methods. A month-long moratorium has been lifted, but other issues with inspections are effectively keeping U.S. recyclable shipments from leaving for Chinese shores.
Some processors are trying to win back Chinese buyers or attract new customers with cleaner, segregated loads of paper and plastic that can fetch higher prices.
Cal-Waste Recovery Systems, near Sacramento, is processing 30% less scrap each hour to give its machinery and workers more time to separate paper and catch contaminants. At the lower speed, the company can separate newsprint and office paper that is fetching $70 a ton overseas from less-valuable paper such as magazines and catalogs. But about 35% of the paper the company collects is being diverted to residual piles that have no value in the current market for recycled paper. The company is paying paper processors as much as $16 a ton to have it hauled away.
“We’re not necessarily finding homes for everything like we did before,” Cal-Waste President Dave Vaccarezza said.
Allan Co., a trash hauler and recycler near Los Angeles, slowed its sorting equipment by 20% and hired more people to manually pick waste from conveyor lines. Chief Executive Jason Young said the process produces cleaner loads of cardboard that can be sold to China, albeit at a greater expense. Mixed paper isn’t profitable to sort meticulously, he said.
Processors also are looking for new buyers for mixed plastic, an amalgam of discarded packaging of different plastic grades that is difficult to recycle and often contaminated with food waste. China ended up disposing of much of the mixed plastic it used to accept, prompting officials there to ban its import.
Some companies see an opportunity in converting mixed plastics, which they can buy cheaply or get at no cost, into diesel, gasoline and industrial chemicals in airless reactors. Nina Bellucci Butler, chief executive of recycling consultancy More Recycling in North Carolina, said converting plastic to oil is profitable again, with oil prices around $70 a barrel.
Shredded plastic waste at the Renewlogy plant, referred to as ‘ReClaim,’ is ready to be processed into ReFuel at the Nova Scotia facility.
The market glut is providing a windfall of mixed plastic for Renewlogy, a Salt Lake City company that converts scrap plastic to diesel and petrochemicals by melting it in reactors without air, said founder Priyanka Bakaya. Lower production costs from continuous operations, coupled with growing production volumes, mean that a $5-million Renewlogy reactor can make money even if oil prices fall as low as $30 a barrel, Ms. Bakaya said. She wants to build dozens of reactors in coming years near recyclable-processing centers with abundant supplies of low-value mixed plastic.
A Renewlogy worker showed a sample of the company’s final product, called ‘ReFuel,’ a renewable fuel source processed form shredded plastics.
Ohio-based RES Polyflow LLC expects to convert 100,000 tons of mixed plastic annually into 16 million gallons of diesel and naphtha—a petrochemical used to make new plastic—at a plant opening next year in Ashley, Ind. Oil company BP PLC in March agreed to buy products from the plant.
“We see ourselves as a new market for the recycling industry,” said Michael Dungan, RES Polyflow’s director of sales and marketing.