Recycling For Revenue

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In the capital region, recycling diverts almost 20,000 tonnes of material a year — more than a third of the waste generated in the region — that would otherwise go to the CRD’s Hartland landfill in Saanich. In the land of recycling, “garbage” is definitely in the eye of the beholder.

The rain drizzles down as we pull into the Ellice Recycle works yard at the corner of Bridge and Bay streets in the midst of the region’s “urban mining” district. The yard is in full swing — a compactor crunches material, a chipper buzzes wood into small pieces, heavy equipment clunks and crashes. A towering pile of wood waste waits to be chipped and then barged to Washington State mills to be burned for electricity. A man in a hardhat works his way through a pile of old mattresses, tearing them apart by hand to separate foam from fibre, wood frame from metal springs. I’m on tour with Ellice Recycle general manager Gary Bartlett. His company is one of three-dozen or so local businesses that make up the growing industry that has found its niche mining society’s waste for tomorrow’s new products.

Not that it’s been easy, particularly in the last 18 months. Just like more conventional forms of mining, the industry is dependent on commodity prices, and they’ve been anything but stable in the economic downturn. Prices nosedived in late 2008; aluminum plunged from $1.07 a pound to 32 cents, and the market for most plastics froze.

But the local industry is holding its own, says Bartlett. Commodity prices always fluctuate but the industry benefits “from a well-educated population who want to do the right thing.” Recycling can only grow in a world that’s running out of landfill space and worried about the waste it generates. And for $120 to $250 a tonne, depending on what needs getting rid of, recyclers like Ellice will happily take it off your hands.

“If you’ve got 50 kilos of something, you’ve got a problem. If you’ve got 50 tonnes, you’ve got an opportunity,” says Bartlett.

In the capital region, recycling diverts almost 20,000 tonnes of material a year — more than a third of the waste generated in the region — that would otherwise go to the CRD’s Hartland landfill. And where does all that recycling end up? Much of it lands in this industrial park off Bay Street, where a number of recycling businesses operate. They sort, wash, weigh, and mash up the detritus of modern living, readying it for resale as raw material for some other product down the line.

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At Ellice’s public yard, the traffic flows in seven days a week, with everyone from commercial haulers to weekend renovators pulling into the dropoff bays. A couple blocks away at Metro Waste Paper Recovery Ltd., mountains of baled plastic containers collected in the blue box program await shipment, some to a Vancouver plastics mill and the rest to China for sorting. Here are yesterday’s newspapers, headed for mills in Canada and the U.S., and the countless glass jars and bottles that pass through our households before becoming road aggregate.
More than 125 different items can be recycled in the CRD, each product with at least a couple of local businesses attached to it doing the recycling. Add in the province’s stewardship strategies for things like pop bottles, used oil, old tires, and dead batteries, and there’s a beehive of business activity going on around garbage.

The volumes are astounding. Metro processes more than 18,000 tonnes of blue box material in a typical year. Just Ellice’s recycling efforts last year reduced total dumping at the landfill by 14 per cent, figures Bartlett. Roughly 3.2 million tires in B.C. are recycled every year, and another 800,000 are burned for energy. The region’s three main bottle depots handled 70 million beverage bottles and cans last year, says D’Arcy Hipwell, who owns and operates all three depots. Local government liquor stores collected another 35 million or so. Hipwell’s new depot on Glanford Avenue is barely six months old and not yet at capacity, but there’s still a five-tonne truck jammed with bottles and cans pulling away from the warehouse at the end of every day.  

Coming Opportunities

“Garbage” is definitely in the eye of the beholder in the land of recycling. A towering pile of compost at Victoria Landscape and Gravel Mart feeds a thriving business launched in 2005 by Kyle Goulet and Matthew Mepham, whose Community Composting service now collects yard waste from 1,500 houses charging each $20 a month. In exchange, homeowners get back 20 litres a month of compost.  

The economic value of B.C.’s recycling sector has yet to be established, says Mairi Welman of the Recycling Council of B.C. But it must be considerable. The CRD spent $4.2 million on recycling in 2008 and another $6.1 million on garbage and landfill operations, almost all of it through contracts with private sector operators, who generate additional revenues by selling the recyclables. Builders, renovators, landscapers, and haulers are also major recyclers, sometimes because a landfill ban gives them no choice, and they can often make a profit selling scrap.

Opportunity abounds. A new recycling program for broken cellphones, toasters, blenders, and other small appliances kicks in this summer, and a long-awaited ban on food waste at Hartland starts in May 2012.

Just don’t expect a business career in recycling to be predictable. Unintended consequences also abound in the industry, and the strong presence of local government is both help and hindrance. Goulet’s business managed to survive a surprise two-year CRD pilot program that collected organic kitchen waste from 4,000 Oak Bay and View Royal households, but he’s not sure that would happen if the region’s larger municipalities launched their own yard-waste collections.

There’s a strong global market for recycled plastics, but not so much when what’s collected is all seven different grades mixed up together, blue-box style. Somebody has to sort those plastics, but local governments typically don’t want to add sorting to their own costs or risk alienating the taxpayers by pressuring the public to do more sorting at the curb. The result: instead of “clean” streams of specific types of plastics feeding a future Vancouver Island plastics mill, a lot of it is baled and sent to China for sorting and remanufacture.

The most dependable money is in metals. In early 2008, steel prices were “higher than any of us had ever seen them, and then higher still,” says Reid Hudson of Steel Pacific. They crashed in the downturn along with the construction industry: recycled steel is used to make rebar for concrete foundations and such. High-quality scrap steel is now back to a respectable $80-100 a tonne.

The downturn also bankrupted one of the world’s biggest buyers of plastic, a Chinese company, and the repercussions are still being felt, even here, where a plastics processer like Metro has to decide whether to sell at a loss or find space to store mountains of the stuff. Anyone who drove past the towering piles of plastic in Metro’s Bridge Street yard in late 2008 would have seen a telling example of what happens when the markets freeze. “It’s like stopping a river — you realize the volume in the stream,” says Bartlett.

Aluminum cans are compacted and sold to a North American aluminum consortium. Wine and non-domestic beer bottles end up crushed and generally used for road aggregate, while domestic beer and cider bottles go back to brewers to be cleaned and refilled.

A business can strike gold when a local government bans something from the landfill. The gypsum from recycled drywall, banned from Hartland in 1991, is now more coveted by manufacturers than virgin material.

But entrepreneurs can also lose their shirts by gambling on some aspect of the “green” industry before the market is there for a recycled product. Witness plastic lumber, which consumers have been slow to embrace.

Still, there are plenty of signs of growth. Construction firms are motivated to kick up their recycling efforts as a way to secure LEED certification, with extra points given if firms hit an 80 per cent waste diversion rate. At the construction site for the new Royal Jubilee Hospital, 87 per cent of waste is being diverted from the landfill, notes Bartlett.

Wood waste from the region will soon be generating heat and hot water for the Delta Ocean Pointe and residents of Dockside Green, says a Vancity media spokeswoman.  The coming food waste ban opens the door for new businesses with ideas for kitchen leftovers. The CRD’s call for bids this summer for recycling contracts opens up opportunities to new players for the first time in eight years.

Recycling Is Not New

From the rag pickers, bone collectors, and scrap yards of yore to a long tradition among breweries of reusing bottles, recycling has been part of our communities since long before the blue box was launched in 1989. “I’ve got a beer ad from 1904 asking people to bring their bottles back,” says Greg D’Avignon, a board member with the Labatt-Molson entity that oversees beer bottle returns, Brewers Distributor Limited.

Reducing manufacturing costs or seeing value in discards were recycling’s initial motivators and are still the primary drivers of the industry, but environmental urgency has added to the mix. The CRD now diverts 37 per cent of its waste, compared to six per cent pre-blue box. Plans call for 60 per cent diversion by 2013 after food waste comes out of the stream, with an additional 30 per cent diversion achieved within seven years by starting to burn garbage to generate electricity, known as waste-to-energy. “It’s going to be very hard to go beyond 60 per cent without looking at waste-to-energy,” says Alan Summers, senior manager with the CRD’s environmental resources department.
The CRD funds all its solid-waste programs through tipping fees at Hartland and the sale of blue-box materials. But markets are unpredictable these days, even for relatively stable materials like old newspapers. CRD contracts with Metro and Steel Pacific had to be reopened in February 2009 to adjust payment so returns to the district from fibre and metal sales were based on actual market prices rather than contracted amounts.

“One of our immediate issues is a lack of paper mills to take recycled paper,” says Will Burrows of the Coast Waste Management Association. “With so many mills down, the closest markets are in the U.S., and most are in China. It means a loss of local jobs and a bigger environmental footprint due to having to ship materials farther.”

Getting it right around recycling is all about convincing consumers to ramp up their efforts while supporting new markets to ensure an end use for whatever is being collected. Giving a little money back to people doesn’t hurt, either, as proven by the 80 per cent average return rate on refundable beverage containers.  

Governments and industry have to be partners in the process, says Carey McIver, manager of solid waste for the Regional District of Nanaimo. She attributes that region’s diversion rate of 64 per cent, one of the highest in Canada, in part to good relationships with local industries affected by the various landfill bans implemented over the years. The district banned commercial food waste in 2005 and will expand that to include residential food waste this fall. “Kudos to the private sector for helping us get here,” says McIver.

Plastic is both a recycling success story and an ongoing sore point. Added 10 years ago as a blue-box item, “post-consumer” plastic had so little value initially that regional governments paid recyclers just to take it off their hands.

Markets have expanded since then, and new businesses have followed. Victoria-based Pacific Mobile Depots Ltd. started collecting unwanted plastics a decade ago with a single dropoff depot and now has a dozen in Greater Victoria and Vancouver.

But ongoing contamination problems and a lackluster public appetite for plastic as a substitute for wood continue to hinder efforts to build a recycled-plastic industry in B.C.

The late Richard Jablonski, who died in February, opened Syntal Products in Central Saanich in the late 1990s with a plan to process HDPE (the plastic used to make milk and laundry detergent jugs) from the region’s blue-box program into plastic lumber. But the blue-box contract went elsewhere and Jablonski’s plant has struggled for years to find an uncontaminated source of HDPE.

John Jansen of Wishbone Site Furnishings anticipates one day a thriving plastic-lumber plant in B.C., but for now, he has to import plastic planks from Quebec for the outdoor furniture he builds in Langley. What happened to Syntal serves as a cautionary tale, he adds.

“Sourcing the plastic was the biggest challenge, but then once you had the supply, you had to keep taking it,” says Jansen, whose company is an investor in Syntal. “That means you need a market. We thought we had it, but we underestimated the need to build that market first.”
Without a long-term source of uncontaminated single-grade plastic and a solid market for recycled goods, businesses put themselves at major risk, says Bob Wolfe, a Connecticut recycling consultant and equipment supplier. He’d like to see governments launching joint ventures with the private sector to make it easier to recycle plastics closer to home and to provide businesses with an uncontaminated supply of “post-consumer” plastics as raw material. “Many companies fail because they don’t have that guaranteed source of plastic. They have no idea of the amount of plastic they will need to be successful.”

The Near Future

D’Arcy Hipwell hopes the provincial government will follow Alberta’s lead and impose a deposit system for milk jugs and cartons and increase the deposit on other beverage containers. Returns in 2009 were down for the first time in Hipwell’s memory, and he thinks increasing the deposit would get more people bringing in empties.  

His controversial downtown bottle depot at the corner of Vancouver and View streets was criticized by neighbouring businesses who don’t like the 300 or so local “binners” who frequent the site. It will move this year to a different downtown location, but Hipwell is keeping that confidential for now.

“People who are homeless used to make up 20 per cent of our downtown business when we opened that depot seven years ago. Now, they’re 80 per cent of it,” says Hipwell. “We get a hard time for that, but mostly those guys are our regular customers and we have no problems with them.”

John Jansen wants local governments to walk the talk and start buying more goods made from recycled plastic. Gary Bartlett worries about markets beyond the control of B.C., Canada, or even North America, “I get commodity reports these days and they’re all about the strike in Greece or conditions in Chile. We really do live in a global world.”

Recyclers hope to improve their profit margins by finding cleaner streams of recycled materials, but they are up against new products that complicate things. Biodegradable plastic sounds like a great idea until you picture the trouble it creates for plastics manufacturers down the line when mixed into the blue-box stream.

Alan Summers expects private recyclers will soon be knocking at the CRD’s door with ideas around how the district should shape its next blue-box contract. “We’re noting that in the request for proposal this spring. You tell us what you believe will work,” says Summers.
With Nanaimo’s impressive record for waste diversion, it’s no surprise that Carey McIver is dreaming big. Her region’s mantra is “zero waste beyond recycling,” and McIver is certain that’s an attainable goal.

“It’s not just about keeping waste out of the landfill,” says McIver. “The more you recycle, the more you reduce greenhouse gases. The composting facility in our region is looking at things like turning food waste into biofuel. Maybe we’ll see our food waste powering our buses one day.”