Napa is raising the rate at which it keeps waste out of the landfill. But like other cities in California, it faces a tougher time finding a high enough price for the recyclables it collects – especially plastic bottles.
City revenue from material sales has fallen by more than a million dollars in two years, from $5.85 million in the 2012-13 fiscal year to $4.82 million in 2014-15. Helping to drive that decline are flagging revenue from the salvage of aluminum cans and plastic bottles, the ubiquitous drink containers made in the billions each year for California alone.
But while the rate and profitability of recycling has dropped in recent years – leading to more containers in landfills and the closure of hundreds of redemption centers – directors of Napa’s recycling program say their effort has withstood the storm better than most, mainly because the service remains as close as the customer’s doorstep.
“To the extent that prices drop, people rely more on curbside programs,” said Kevin Miller, recycling manager for the city of Napa. “The question is, do you bother to redeem the value of bottles and cans yourself? The less opportunity there is, the less convenience there is. People who are environmentally conscious will put them into curbside programs.”
Crashing prices for aluminum, paper, scrap metal and especially crude oil have rocked a recycling industry caught between competition from virgin materials on the one hand and a slowing economy in China – a voracious raw-material consumer – on the other.
With crude oil costs dropping from more than $100 a barrel two years ago to $50 today, numerous plastic recycling operations have shut down, unable to compete on price with the freshly made material.
In the span of a year, the price that Waste Management, the nation’s largest trash-hauling firm, commanded for a bale of recycled bottle-grade plastic collapsed from $230 to $112, according to the New York Times. Scrap prices have plunged since 2014, with aluminum cans dropping 28 percent and plastic bottles 44 percent, Bloomberg Businessweek reported last week, citing data from Resource Recycling Systems.
In January, RePlanet, California’s largest bottle redeemer, closed 191 of its 541 recycling centers, citing the price crashes for plastic and aluminum as well as rising employee costs. (The firm continues to run a branch on Jackson Street in Napa.) Statewide, the number of redemption outlets has fallen by nearly 700 since 2011, to 1,728, said Mark Oldfield, spokesman for the state CalRecycle agency.
The growing dominance of plastic for food packaging – especially at the expense of aluminum, with its easy reuse and more resilient market value – has left the recycling business much more vulnerable to swings in oil prices than when California started its container redemption system more than 30 years ago, according to Oldfield.
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“More and more packaging is a material that doesn’t pay its own way,” he said Tuesday. “Commodity demand and price have gone down and oil prices have also gone down, so virgin plastic is much more competitive with the recycled product – so recycling processors get less money for it and it’s created significant stresses in the industry.”
But while such revenues also have fallen for Napa Recycling, the program’s place as the city’s contracted trash hauler and recycler has insulated it from the worst of the pain, according to city recycling manager Miller.
The program relies not on residents bringing bottles and cans into redemption stations but on the same kind of curbside bins and truck pickup as for refuse and yard waste, removing the headache of longer trips to more distant drop-off stations when nearby ones close.
While material prices have fallen and recycling rates stagnated for over-the-counter collection, Napa Recycling directors described the amount of recyclables, if not revenue, continuing to rise locally.
“As far as curbside recycling, we’ve seen a consistent flow of material,” Napa Recycling and Waste Services general manager Greg Kelley said Monday. “We have seen an increase in (plastic) bottles, mainly because plastic in general has increased in use so much as a preferred container type.”
Meanwhile, Napa’s continued strength in home and commercial construction gives its recycling efforts a way to keep up the volume of raw material even when container collections falter, added Miller.
“It isn’t just about the price, but how much material you ship out,” he said. Since we’ve recovered economically, we’ve had more material shipped than we did in the depths of the recession. Last fiscal year, we made $1.5 million more than we projected from our rollout and drop-box services, because we underestimated construction levels in Napa.
“It’s been a pretty busy year, and that’s reflected in the excess over what we projected; that’s what’s mitigating the downturn on materials (revenue).”
Price swings on recyclable material affect a significant share of Napa Recycling’s revenue, but far from a majority. Sales of scrap to remanufacturers accounted for 19 percent of its income during the 2015-16 year, compared to the 73 percent it earned from waste collection fees paid by homes and businesses.