Recycling has been a growing and dynamic movement in North America, for more than three decades. In our early curbside recycling programs, we required customers to sort their recyclables into separate bins. For example, many communities provided three bins: one for newspaper, a second for mixed paper, and a third for glass and metal containers. Since then we’ve been leaders in helping the recycling industry evolve into a more efficient and productive system.
For example, we learned quickly that more people recycle when it’s more convenient, so we replaced hand-carried bins with wheeled carts. As the recycling mindset grew more mainstream, we grew our vision to recycle more by transitioning to single stream recycling. And, we backed that vision with a $1 billion-plus investment in collection and processing infrastructure to support expected growth.
It worked. Today, our recycling tons have increased 88 percent since 2007. This growth, however, has created a more complex industry that brings new challenges and opportunities. To manage and seize both, Waste Management once again is looking forward and leading where change is needed.
A Global Marketplace
The explosive growth in recycling tons soon increased their trading in global commodity markets. Today, Waste Management exports a third of the paper we collect to four continents. While this global market has supported recycling growth, it also means that market conditions – both positive and negative – are a business reality that we must constantly manage. For the fourth consecutive year, commodity prices declined in 2015 driven by global market conditions that included:
- The Chinese economy – which purchases 29 percent of the traditional material recovery facility (MRF) and paper we manage – has slowed from its GDP growth of 12 to 14 percent to 6 to 7 percent.
- A strong U.S. dollar that has resulted in a depressed price for our commodities because feedstock can be bought from other countries for less.
- A weak market for plastic, which is essentially a petroleum product, with pricing that has fallen with declining oil prices; as a result, plastics manufacturers can purchase virgin resin at bargain prices.
The persistent decline in commodity markets has resulted in the need to manage our business as efficiently as possible, largely by closing or selling 30 underperforming facilities. During 2015, we also continued to work closely with our customers and other partner organizations to improve the quality of recyclables collected at the curb to avoid costly interruptions to our system from unsuitable materials. Read more about those efforts on in our Consumer Education section.