Held virtually once again this year, the Northeast Recycling Council’s Spring Conference kicked off on Tuesday with discussion on M&A, packaging and battery disposal. Lynn Rubinstein, Executive Director of NERC opened with welcome remarks and introduced the sponsors, benefactors, sustaining members, and attendees—all those who make these events possible. The first keynote panel focused on mergers and acquisitions in recycling moderated by Chaz Miller, Ex Officio Member of NERC’s Board, who introduced the speakers and pointed out that national waste and recycling companies’ growth through acquisition started in the 1970s and continues through today. Recycling has been the subject of M&A, especially scrap companies, hauling companies, composting, and paper companies. The panel speakers included Doug Usifer, Managing Director of Capstone Partners, Cole Rosengren, Lead Editor of Waste Dive, and Daniel Monahan, Trial Attorney; Defense, Industrials, and Aerospace Section; Antitrust Division for the United States Department of Justice.
Focusing on sectors where they do investing, including waste and recycling, Capstone Partners issued a report on the sector in February that is available on the company website. He said it was an active year for waste and recycling—there was a 65 percent general increase in mergers and acquisitions (236 deals) and the majority of them are public strategic deals. “There were about 35 percent private equity add ons, while the rest make up strategic or private platform deals. The big private haulers have been very active as well as private equities. Private equity comes from private buyers with private capital that can go in and own part of all of the company or they can make an investment in the company, where the company retains the original owner but is recapitalized. A decade ago, there was a lot of debt put on many of the deals, which caused a little trouble, so people are more cautious in retrospect, but we are at a strong point now.” In addition, special purpose acquisition companies have been active, such as Rubicon. The headwinds and tailwinds in the sector are very strong. Many companies are adding the front end and the back end in the process, like a hauler and a waste-to-energy facility. He stressed to be sure to watch how it impacts culture, financial impacts (could be bad for shareholders), and synergies.
Cole Rosengren mentioned that Waste Dive has a running list of M&A on their site that they have been maintaining since fall 2021. He said that the industry is seeing M&A, especially in the Northeast, where it is very active and will only continue; there are a great number of family companies that may be sellers in the future.
Finally, Daniel Monahan stressed that the DOJ gets involved waste industry and start looking major acquisitions and merger deals when they impact interstate commerce. During the last five years, the number of filings has certainly gone up. “We keep track in terms of individual cases, and we now are asked to review more than a dozen or so a year. Not all become major investigations, but many go to a review process. The key thing to remember is our participating in these mergers starts with the value of the deal—$101 million purchase price of the assets. The deal must be valued at this number before companies are required to talk to DOJ. Investigations focus on if the companies do the same thing, competing in an overlap area, service overlap, etc. This will trigger involvement through an HSR filing and an agent will end up being assigned.” Many of the maps today detail service routes and depending on how they are bid out, determines overlap area. The service area of landfills is key, for transfer stations and MRFs, it depends on how the local market operates. Much of the analysis depends on business contracting and how the services are bundled. What are the local customers criteria and how important is it to them?
The second panel of the day discussed packaging and the right to repair. Moderator Brooke Nash, Branch Chief of the Massachusetts Department of Environmental Protection, introduced Kyle Wiens, CEO of iFixit and Camille Herrera, Packaging Development and Sustainability Manager at Driscolls. Kyle Wiens started off by giving attendees an update on how right to repair is going. Currently, Samsung and Microsoft are on board for it, so they are starting to make progress.He pointed out that the public has been misled with warranty voided stickers, which are illegal; people absolutely have the right to attempt to fix their electronic devices. He has also seen challenges with fires during the disposal process. He points out that the solution to fire problem and disposal problem is to educate consumers on switching to products that are repairable and that last longer than just a few years. “Other countries also looking at right to repair bills. The European Union has consistently voted for right to repair. Our State level says if you are going to have right to repair, you need to make tools available. We also got close with a bill in Washington state but it didn’t progress. A wheelchair right to repair bill passed in Colorado in March, which is helpful on the path for electronic wheelchairs and other electronics. We are still working hard on getting legislation passed.”
Camille Herrera then talked about designing for recycle-ready PET thermoforms. She spoke about understanding current thermoforming packaging. Why is the PET clamshell the ubiquitous berry packaging? Because it protects them with the right compress package, vents, clear, recycled material (contains 50 percent recycled content from postconsumer beverage bottles), recyclable. She covered why PET beverage bottles were getting recycled, but PET clamshells were not. “Bottles use BOPP (biaxially oriented polypropylene) labels that are washable and less adhesive, while PETs have absorbent pads, paper labels, non-washable label adhesives, low intrinsic viscosity (the measure of how brutal and how flexible the material is). There is also a problem with paper labels with non-washable adhesives (loose paper labels sink with the PET, causing contamination, non-washable adhesive means adhesive stays on PET flakes, causing contamination. One solution could be BOPP labels with washable adhesive, which separates more easily from PET flakes and the BOPP labels float to surface. Absorbent pads are also a problem because the pads are polyethylene and cellulose a mixed material, once the cellulose gets wet it sinks, contaminating the PET flakes stream. Driscoll is solution testing absorbent pads that float and perform to the same functional standard, designing for the lowest common denominator of behavior—assuming consumers won’t take pad out.” They are also looking at developing adhesive that are water-soluble or washes and floats off PET. Driscolls goal is to have 25 percent post-consumer thermoforms by 2025.
The last discussion of the day involved the sustainability of batteries and emerging strategies. Moderator Mia Roethlein, Environmental Analyst V at the Vermont Department of Environmental Conservation, introduced the speakers, including Mitchell Colbert, Head of Social and Environmental Impact at Vessel, Rob Latham at Call2Recycle, Ashlee Barker, Senior Manager, Special Waste, Bureau of Recycling and Sustainability at the NYC Department of Sanitation, and Max Hickey, Business Development Associate for Li-cycle. Covering topics such as biggest barriers they are facing today, consumer habits, proper disposal and takeback methods and other trends they are seeing, Mitchell Colbert talked about the upcoming concerns the in the areas of cannabis e-waste. He stressed that regulations weren’t always written with environment rules in mind. “For example, in Colorado, there are overly strict rules, especially with batteries as hazardous waste. There needs to be scaling up to give more operators access to recycling methods for this material and product producers need to think about the material that will be going into the design process and what materials will be more valued. One of the big concerns is cannabis residue and the need to be licensed to deal with the waste. Another problem is on the cartridge and battery side and the design of the product. The preferred design is to detach the battery.” He said to work with dispensary partners, have disposal boxes available in order to make sure they are properly disposed of. They are not just waste you can just throw anywhere; there is a real education component to this.
Rob Latham said that for safety and consumer habits, the most important thing is prevention first and the need to make it easy to educate people on where to take batteries at the end of life. “The program that we just launched in March is designed for the e-bike industry. These batteries are very energy intensive and can be dangerous but knowing how to identify one can be critical. Collectors need to go through training before they can start collecting and transporting. We’ve done a lot of education campaigns as well, especially with the e-bike program. We work through manufacturers and retailers to educate consumers on how to handle the batteries at the end of life. For retailers, we provide stickers that can go on batteries for when the time comes, they can take it to where they bought it or closest drop off station. Working toward a circular supply chain is certainly exciting people because they can see full circle.”
Ashlee Barker agreed and pointed out that awareness and access are the most important issues. “There is a need and want to do the right thing, but many do not know what they are supposed to do. They are not aware of the dangers of wrongly disposing of something. We need educate the public. In New York City, we have multiple programs that handle the HHW for batteries. We repeat this fact often, on the website, talking about handling and recycling, social media pages, etc. We are always messaging about things that can happen and when it happens so people are aware of what can happen when not disposed of properly.”
Max Hickey pointed out that batteries are everywhere now, so we have to figure out what to do with them. Batteries on small wireless headphones are extremely challenging as well as electric vehicles. “Our hope is that when these batteries are collected that they go to a certified collectors. Only 5 percent of lithium-ion batteries are recyclable. When it does end up at the proper facilities, are the batteries broken down properly, including the energy is absorbed during the process. My hope is that the batteries don’t end up in a landfill, don’t cause any damage to environment, or cause a fire.” There are ongoing developments in new batteries, the next generation in terms of size, scale, etc. are EVs, the impact is significant because we have gone from having batteries that are a few ounces to ones that are hundreds of pounds, including batteries in forms of transport and recreation. “Batteries are going to play a critical role in pushing electrification and new standards across the board, as well as converting energy to power.”
Today’s sessions will include discussions on Making Diversity, Equity & Inclusion Part of Your Operations, Agricultural Plastics, and New Strategies for Reusing Old C&D Materials. We look forward to listening to the speakers!
For more information, visit www.nerc.org.