Recycling has played an important economic role throughout history, of course. Ancient Romans recycled waste from their landfills for use in buildings. American steelmakers imported hundreds of thousands of tons of scrap steel from Europe to sustain the 19th-century railroad boom. During World War II, the U.S. government famously turned to scrap drives to alleviate shortages of raw materials.
Nowadays, recycled material is integral to almost every aspect of the consumer economy. Even leaving the environmental benefits aside, companies prefer such inputs because they save money and energy. About 40% of the world’s raw-material needs are now met via recycling. More than half of all U.S. steel is made from scrap, while the average aluminum beverage can contains 73% recycled material. Manufacturers, paper mills, even glass makers increasingly depend on such content to make cheap and reliable goods.
Not all recycling is equal, however. The cans, bottles and packaging that land in a home recycling bin tend to be dirtier than what’s sorted at commercial sites like offices, retailers and restaurants. They’re also more expensive to collect (think trucks stopping at hundreds of households rather than a few businesses), and to sort into commodity-grade packages. That’s why, pre-coronavirus, commercial generation of recyclables accounted for well more than half of the total U.S. market.
The problem is that during the pandemic, many of those commercial sources aren’t operating thanks to shelter-in-place orders. Making matters worse, can-deposit programs at recycling centers (many of which are located in supermarkets) and other commercial aggregators are either closed or significantly curtailing operations.
The impact of this supply shock has been immediate. In normal times, California recycles about 20 million cans a day. Now, that figure is down by 80%, making it harder for can manufacturers to make new products from their usual mix of raw materials, even as demand for canned goods has soared during the pandemic. A representative of Greif Inc., a major U.S. packaging manufacturer, recently noted that shortages of old cartons and cardboard are causing “almost unimaginable” problems in the company’s supply chain. In mid-April, Greif had to raise prices on the recycled paperboard products used in e-commerce, partly due to the surging cost of recycled fiber.
To read the full story, visit https://www.bloomberg.com/opinion/articles/2020-05-05/supply-chains-are-buckling-as-coronavirus-hurts-recycling.
Author: Adam Minter, Bloomberg Opinion
Photo: Ross Kinnaird, Getty