Recycling is a vital environmental practice, but it presents financial challenges for municipalities, include rising costs of collection, sorting, and processing, as well as the impact of contamination and market volatility.
To address these challenges, municipalities can implement strategies such as public-private partnerships, grant funding, community engagement, and leveraging federal funding opportunities.
This article explores the economic realities behind recycling, the influence of global commodity markets on program viability, and strategies for achieving long-term sustainability. Raftelis provides expert guidance, from cost-of-service analysis to grant funding opportunities, helping municipalities ensure both economic and environmental success.
For years, the U.S. and other countries relied on global demand—particularly from China—to process recyclables like paper, plastics, and metals. In 2018, China’s National Sword policy banned the import of contaminated recyclables, disrupting this reliance and forcing municipalities to find alternative solutions. As a result, some found it more cost-effective to landfill recyclables than to process them, underscoring the volatility of international markets.
The table below shows how recycling commodity prices (price/ton) in the southwest market (Los Angeles) have fluctuated over time due to major global events such as China’s policy change and the COVID-19 pandemic:
June 2017 | Jan 2018 | June 2018 | March 2019 | June 2019 | June 2024 | |
Corrugated Containers (OCC) | $175 | China | $95 | COVID | $20 | $105 |
Mixed Paper | $90 | $5 | $0 | $65 | ||
PET | $21.58 | $22.86 | $22 | $14.75 | ||
Natural HDPE | $25 | $36 | $25 | $30 | ||
Alumunim Cans | $65 | $76 | $53 | $80 | ||
Mixed Glass | -$30 | -$25 | -$20 | -$25 |
Despite some recovery, market fluctuations continue to challenge recycling programs, especially for lower-value commodities. To ensure long-term stability, municipalities must invest in domestic recycling infrastructure. While the initial investment is high, it reduces reliance on international markets, lowers transportation costs, creates local jobs, and provides greater control over material processing. Raftelis has been instrumental in helping jurisdictions develop financial plans and feasibility studies to build resilient recycling systems.
Recycling is vital for sustainability but presents financial challenges, particularly after China’s National Sword policy. Raftelis helps municipalities manage these costs through cost-of-service and financial planning studies, where we examine:
Municipalities need to implement innovative strategies to maintain the financial health of their recycling programs. Raftelis can assist with the following approaches:
Federal funding opportunities, such as the Solid Waste Infrastructure for Recycling (SWIFR), administered by the EPA, offer critical financial support for municipalities that are upgrading their recycling systems. SWIFR provides annual grants, while additional federal resources for sustainable waste management are being made available through the Inflation Reduction Act and the Bipartisan Infrastructure Law.
Municipalities aiming to modernize their recycling facilities or adopt new sorting technologies should explore these funding resources. Raftelis assists with the grant application process, from eligibility assessments to financial planning and implementation. By leveraging federal funds, municipalities can create sustainable recycling programs that are both financially and environmentally resilient.
Recycling is key to environmental sustainability, but its financial viability depends on effectively managing market volatility, rising operational costs, and contamination. By investing in local infrastructure, forming public-private partnerships, and utilizing federal funding programs like SWIFR and the IRA, municipalities can create recycling programs that are both economically sustainable and environmentally beneficial.
Raftelis is committed to helping municipalities achieve this balance. With expertise in cost-of-service analysis, grant funding assistance, community outreach, and strategic planning, we help ensure a community’s long-term success in its recycling and waste management programs. Let us help your community build a financially sustainable future in recycling while meeting its environmental goals. For more information, reach out to mmccarthy@raftelis.com.