Recycling – The Economics Are Getting Better

The economics of recycling continue to grow stronger, as the economy begins its long climb back to recovery. A recent report by Canaccord Genuity, 2 August 2010, http://www.green-energy-news.com/Resources/green-is-the-color-of-money.pdf, points out several trends supporting recycling as a vital part of the global economic recovery, beyond providing a better environment for us all.

 The key economic trends supporting this are:

-      Recycling Today Makes Economic Sense. In many cases, it is more profitable to use recycled materials than original source materials due to the higher cost of transporting the raw materials to a production or refining facility and then the energy to convert it into a usable form. Whereas, reusing previously consumed materials back into the production cycle usually results in shorter transport distances, due to the reclamation centers being closer to the production facilities and the process of refining the materials has already been done. PCR HDPE is a prime example of this trend, with the growth of single stream curbside recycling, adding to the feedstock available to manufacturers of HDPE products.

-      Higher Energy Prices – Converting previously used HDPE plastic into resin uses 90% less energy than virgin resin to produce.

-      Emerging Markets Demand For Recycled Materials – due to the high cost of producing virgin materials such as aluminum, steel and plastics, it is cheaper for emerging countries such as China to import recycled material, despite the additional shipping costs than to produce these materials with capital intensive new production/refining facilities, especially as oil prices go up and natural resources become scarcer.

-      There is a growing recognition that the World’s Natural Resources Are Scarce, Finite, and Costly to Acquire. As resources become more difficult to find or expensive to acquire from natural sources in remote countries, it makes more sense to recycle materials already available locally as previously used products. In previous generations, most resources seemed to be infinite in their supply, but now people as a whole realize that we can’t keep using without replenishing or recycling.

-      Natural Resource Security concerns will encourage recycling. This aspect is especially true as China has recently limited export of precious metals. This reduction in supply has severely hampered Japan’s effort to produce certain products from a reliable supply chain.

-      Rising Concerns Over Environmental Pollution. Lastly, but by no means less important, forward thinking people are concerned about the environmental costs associated with always producing from virgin materials. If the plastic that has been thrown in landfills for the past several decades could be easily recovered, there may not be a need to produce virgin materials at all. In the cases of oil-based plastic resins and most metals, they have virtually an endless recycling lifecycle.

 In the next set of blog articles, we will provide more specific information on how PCR HDPE contributes to this economic growth in these trend areas.

 We welcome any other topics you wish to see or your comments on our posts.

 Need more information? Envision Plastics Vice President, Tamsin Ettefagh will be happy to discuss your comments or concerns in greater depth. Contact her at 336/342-4749 Ext 225.

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