The Economic Side of Plastics Recycling

Continuing our blog regarding the recent report by Canaccord Genuity, http://www.green-energy-news.com/Resources/green-is-the-color-of-money.pdf, what makes economic sense in recycling?

 Let’s face it, unless recycling makes economic sense, businesses won’t do it, no matter how much the leadership and employees want to save the planet. So, what are some of the critical factors in determining the economic sense of recycling with PCR HDPE (we’ll cover energy savings in a separate blog article)?

Virgin HDPE versus PCR HDPE

If you had to make a choice between versatility or price for your feedstock supply, which would you choose? What if you could have both, depending on your use of HDPE? PCR HDPE can be your economical choice for several uses.

 If you produce products that are buried (pipe, conduit, pots, etc.), why worry about the appearance. Go for a supply that is not color specific and available cheaper than virgin produced HDPE.

 If you have color requirements, why pay for the colorant to be added to your virgin product supply when it can be provided to you in the exact color you need? A recycler gets all colors of the rainbow from their feedstock. With the right technology, these colors can come right back into your supply chain, eliminating the costs of adding colorants to your products by up to 75%.

Reducing Reliance on Foreign Oil

As a supply chain issue, HDPE is basically a by-product of refined oil. With the price of oil becoming more and more expensive these days, the recycled HDPE becomes more economical to reclaim and reuse, as recycling programs have become more effective and pervasive. The supply has become so much in demand, the Chinese pay to ship our plastic to them, so that they don’t have to make it or buy it from virgin sources. They certainly wouldn’t ship it across the ocean, if it didn’t make economic sense. In an interesting approach, they took advantage of empty containers coming back to China (after shipping their products here to the US & North America) and said let’s be practical about it and buy plastic scrap from curbside collection systems to use in our country. As a byproduct, now PCR supply prices have risen to be more competitive with virgin produced HDPE, thereby making it more economically attractive to recycle than dump.

 Which brings us to local economics.

Recycling Is Locally Economical

In remote areas or cities close to lots of open area, landfill disposal will tend to be more economical, as the cost of collecting and sorting recyclables will be greater. But in cities such as San Francisco or New York that have to either use expensive land (if the local residents allow them to) for landfills or transport the waste to other locations such as Kentucky or West Virginia, the transport costs become high enough to encourage more recycling. These municipalities have become more focused on government mandated recycling programs. This has increased the supply of recyclable materials, but doesn’t necessarily make it cheaper, until a reclaimer pays them more than it costs to ship the waste to far off places.

 A beneficial aspect of this is creating jobs in either KY or WV to operate the landfills or create jobs in CA or NY to recycle plastics. Our expectation is that the jobs in NY will be more plentiful, more meaningful and longer term, as our society becomes more proficient in reducing waste by recycling and creating products that can be recycled easier.  Recycling creates 6 new jobs for every landfill job created.

The Economic Sense of Recycling

So, to recap:

–      PCR HDPE is a cheaper supply source than virgin HDPE
–      PCR HDPE reduces our dependence on foreign oil
–      PCR HDPE’s carbon footprint is much smaller than virgin HDPE
–      PCR HPDE creates jobs in the local economy, where more people are

 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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