Is Single Stream the Answer?

(from Maine Townsman, March 2010)
by Victor Horton, Executive Director, Maine Resource Recovery Association

Over the last few years, there have been many articles in the local and national media regarding single-stream, or no-sort, recycling. Under the proper circumstances the benefits can be many but in other situations it may be the wrong decision. Let’s look at what single sort can mean for your community from both an economic and an environmental angle.

MRRA has not taken a position either for or against single stream recycling. Our purpose is to make sure that all factors are considered.

Many factors affect your solid waste and recycling costs: collection, warehouse and storage requirements, processing equipment and staff, freight expenses, material revenues, tipping fees and avoided costs. Each of these factors will come into play when you conduct a thorough analysis of your options.

Collection

Do you offer your residents curbside service? This really is not a recycling expense, but rather an expense of providing a convenience service. Many communities, especially in more rural areas, do not provide this service. In those cases, residents either contract with a private hauler for this service or take their recyclables to a drop-off location on their own. The same rationale can apply to their garbage (MSW) equally. The choice to provide municipally paid pick up is just that – a choice – and quite an expensive one. Whether the municipality or the resident does the hiring, the service will probably run in the range of $2 to $4 per stop. Should this expense fall entirely on the property taxpayer or should those who generate the material pay for this service?

Storage and Hauling

Another expense of collection is how to consolidate the material for processing and/or hauling. If you do not offer curbside collection, then a transfer station and/or recycling center is often needed to provide a drop off location. Even with curbside collection, a transfer station or recycling center could be of benefit. Some towns have formed cooperative entities, similar to hospital or school districts, for this purpose. Others have the hauler take material directly to disposal sites.

Transfer stations require land, equipment and staff but can greatly reduce the cost and environmental impact of hauling by reducing the number of trips needed for final disposal and offering you some degree of control over what is tipped on your dime. Whether your hauler takes it directly or you have it hauled from the transfer station you are paying for the freight one way or another. Conversely, a recycling center that bales & stores truckload quantities of recyclables may be able to retain more of the value of the materials, since most mills cover the freight cost from the center to their facility.

Tipping Fees and Avoided Costs

Once trash is picked up and delivered to the final disposal site, such as a landfill or incinerator, what does it cost to dispose or “tip” the material? When your garbage arrives at the landfill/incinerator you incur a fee which can range from $50 to over $100 per ton. This is the single largest expense of solid waste management, approaching 50%, or more, of your solid waste budget. The cost of hauling that material to the disposal site can also be significant. One of the major benefits of recycling is that every ton recycled avoids these tipping fees and freight costs. This is known as avoided cost and is the primary benefit of single stream.

By reducing the sorting burden, residents generally will recycle more material. How much more? Studies vary and many factors can have an impact. A 15% increase in the number of tons recycled is a good estimate for planning. Higher percentages can be realized by further changes in programs; such as starting pay-per-bag or pay-as-you-throw (PAYT), adding significantly to the list of items accepted, or changing from drop-off to curbside collection. These changes all have their own effects. The challenge is to gauge the results from any one or more of the various program modifications. A 15 percent increase could result in significant avoided cost savings and should be considered valuable.

Buildings, Equipment and Staff

The larger a community or group of towns working together, the more it can make sense to operate a transfer station and full service recycling center. This is why large cities have material recovery facilities or MRFs (pronounced “murfs”). When you have large numbers of residents creating tens or hundreds of thousands of tons of recyclables, you can justify spending many millions on plant, equipment and payroll.

Recently, a group of Maine communities invested $3.7 million to convert a two-sort MRF to single-sort. They process about 30,000 tons of material a year. Larger MRFs can cost several multiples of this. But for the vast majority of smaller, rural communities far from large population centers, even 10,000 people generating 1,000 tons a year of recyclables can justify a local or regional recycling center.

One scenario: Borrowing $500,000 on a USDA low-interest loan over 30 years would cost $25,000 to $30,000 per year and would pay for an adequate building with quality equipment. Add staff and miscellaneous other expenses and you could be looking at maybe $100,000 per year for a per ton cost of $100. The larger the center and the more tons processed, the better the efficiency and cost per ton should be. Capital, operation and marketing expenses for a large central Maine facility which has large efficiencies of scale is in the $60 per ton range.

Material Revenue

Long-term historical data covering 16-plus years shows recyclables to be worth about $70 per ton, on average. Like the stock market, this number will vary wildly at times and move over a wide range. We’ve seen corrugated cardboard and newspaper anywhere from $10 to $200 per ton! It has swung that far and back again in a matter of a few months time. HDPE #2 Natural (plastic milk bottles) have been anywhere from $100 to $900 per ton. Planning on any single price point is difficult if not impossible. It is best to be extremely conservative when budgeting as a means of avoiding major problems if prices stay low for any extended period. Using the $70 historical average; we would recommend using $50 for budgeting, giving you a $20 cushion.

The Bottom Line

In the end, it should cost between $60 and $120 per ton, maybe more when efficiencies are lacking, to process and market your recyclables to the mills. This results in operating margins of +$10 to -$50 per ton. Add in the avoided costs saved of $50 to $100 per ton and the real return on recycling comes to $0 to $110 per ton. From data supplied from one facility, the cost to operate is closer to $80 per ton. Many out-of-state MRFs post higher operation costs.

MRFs typically offer more than one pricing structure. A cost-sharing approach is where the operation costs are taken out and then revenue paid on the balance or at a locked-in price which varies from a few years to more long term periods. Averages for recycling cost sharing show prices may be between $35 in a great market and negative $75 in a poor market. These are extremes and generally do not move this drastically up or down. Some of the current offerings are in the $0 to negative $30 range.

There are several deals being offered to towns for their recycling. Some are definitely better than others. If a proposal seems too good to be true it may need a second look. Some of the early deals offered by the waste-to-energy facilities in Maine involved tipping fees at less than $20 per ton. Those deals were short-lived and could not be sustained.

The Environment: Resources & Greenhouse Gases

The cost of hauling uncompressed or minimally compressed light loads over long distances can be higher. Where populations are dense so hauling distance is short this is minimized. Un-baled material might be hauled to a processing center at 6-12 tons a load. Here it gets sorted and baled before going on to the mill. On this trip the weight might be 20-23 tons. Minimizing that first light haul reduces costs and environmental impacts associated with additional truck miles traveled. Increased tons collected for recycling do reduce pollution and resource waste so there is a balance to be considered.

Conclusion

Every situation is different. Cookie cutter solutions won’t apply. It is incumbent upon every municipal leader considering changes to analyze their unique conditions. Your results will vary. Do a thorough study based on full cost accounting to determine what results are reasonable to expect in your community.

The challenge that municipal officials face in making decisions regarding single-stream recycling and managing MSW is that these systems are more than just a service; decisions involve long-term infrastructure and public education. For instance, once you eliminate sorting of recyclables, it will be very difficult to go back. A “Let’s try it for awhile” approach is not realistic. Any changes to your system should be carefully considered, as they will be long-term.

(MRRA is willing and able to provide technical assistance with this process. Recycling does pay. Doing it the best way will take careful study.)