As garbage collection rates are set to rise minimally in Petaluma, a dynamic change in the global recycling market could lead to more noticeable jumps in the future if the industry doesn’t stabilize.
On July 1, Recology Sonoma Marin collection rates are expected to increase by 4.22 percent citywide. The biggest jump will be felt by commercial customers, while the highest surge for residential areas is $2.31 per month for customers using 90 to 96-gallon bins. The rates were approved by the city council this month.
Increases are determined annually based on changes to the Refuse Rate Index (RRI), which looks at percentage changes in operating costs. Around 70 percent of those costs are labor and disposal fees, although the largest change for 2017 was in fuel, seeing an index percentage change of nearly 16 percent.
“We don’t like any percent, but in the realm of increases that’s pretty low,” said Dan St. John, director of Petaluma’s Public Works and Utilities Department.
Geopolitics, however, could play a role in future rate increases locally. A recent move by China to reduce imported pollutants has sent waves through recycling markets around the world, and industry officials are being forced to adapt while asking more of customers in order to curb costs.
On Jan. 1, under the National Sword policy announced last summer, the Chinese government began enforcing strict standards on imports of most recyclables, banning 24 different kinds of solid waste, including mixed paper and most plastics, and imposed stringent contamination standards that are a fraction of their previous levels.
Celia Furber, Recology Sonoma Marin’s Waste Zero Manager, said China went from accepting 5 percent contamination to 0.5 percent, and this month they’re not accepting any imports at all.
Prior to the new policy, China accounted for 60 percent of international recycling demand. As the country looks inward to satisfy its need for recycled materials, the global market price for affected commodities has dropped by as much as 95 percent in just one year.
One example Furber gave was mixed paper, which sold for $100 a ton in March 2017. In March 2018, it was going for $5 a ton.
Many trash collectors in other parts of the country have been forced to send recycled material to landfills as they scramble to find new markets for export. Some have elected to eliminate recycling programs altogether.
Recology Sonoma Marin’s material recovery facility in Santa Rosa has already begun to feel the effects, but Furber made it clear that diverting recycled materials to landfills is not an option. If Recology can’t handle it, she said they’ll seek out other processing plants around the region to get the job done.
The company has identified markets outside of China, including Indonesia, North Korea, Vietnam and India. Recology has also slowed its processing line at the Santa Rosa facility to meet stricter standards, but that’s also led to a decline in productivity.
“It is a little backed up,” Furber said. “But we were able to find other markets and are continuing to explore Southeast Asia. They’re just not (purchasing) as much material as China.”
The importance of established markets is paramount for the U.S. waste industry since recycling is rarely done by collectors themselves. Recycling pickup is a free service that allows collectors to earn revenue by selling materials to manufacturers around the world. Now, thanks to the market void created by China, waste companies are facing losses if they can’t find a destination for it.