Californians recycle bottles and cans at twice the rate of the rest of the US. But hundreds of the state’s recycling centers are closing. More than 300 of the state’s 2,100 recycling centers have been shut down in the past year and a half as prices for scrap materials have plummeted, according to Mike Oldfield, CalRecycle’s communications director. This past January alone, 191 centers were closed by rePLanet, the state’s biggest private operator. A year of “unprecedented declines” in the price of scrap plastic and aluminum, coupled with a cut in state subsidies for recyclers, meant that those centers were “no longer sustainable,” the company said.
Oil and natural gas provide the building blocks of most plastics. So as oil prices have sunk to less than half of what they were two years ago, the price of new plastic has gone down as well. When prices were high, recycling programs could be moneymakers, and local governments or the private contractors they hired covered the cost of collecting the bottles and cans by selling the scrap.
New plastic is typically cheaper than recycled — there are other benefits to using recycled plastic, such as good PR — but a dip in oil and gas prices makes it even cheaper. This in turn brings down the commodity price for recycled. Five years ago, a ton of recycled polyethylene plastic — the stuff typically used in soft-drink bottles — went for more than $500. Now it’s worth about $200.
“Lower prices at the gas pump are not good for recycling,” said Chris Doherty, a spokesperson for the National Waste and Recycling Association, which represents private recycling companies. “With the price of oil being down, the cost of recycled plastic as a commodity is way down as well.”
That dramatic decrease has been a particular problem in California, where an ambitious state-subsidized recycling program has led to about 4 out of 5 drink bottles being recycled — double the national average, according to the California-based Container Recycling Institute. The state pays recycling centers subsidies meant to lessen the shock of falling scrap prices, and CalRecycle bases the subsidies on a 12-month average of scrap prices, according to state law.
The processing payments went down at the end of 2015, spurring rePlanet’s closures, but Oldfield said the subsidies have gone back up since then and are set to rise again in July.
To read the full story, visit https://news.vice.com/article/cheap-oil-and-california-recycling-centers.