Hawaii County Gets Picky About Recyclables It Accepts, Citing Global Market Forces

Oct 16, 2019

Starting Wednesday, Hawaii County will no longer accept some traditionally recyclable materials at its collection sites. The change comes as global market forces roil the recycling industry.

Although many local governments offer the service for free, recycling is actually a for-profit enterprise. Municipalities collect the recyclables and then contract with a private company to sell those materials to a processor.

In recent decades, most of that waste ended up in Asia, where lax environmental rules and cheap labor made recycling much less expensive. But that all changed in 2017, when China announced it would no longer accept what it deemed “foreign waste.”

That change threw the global recycling industry into chaos. When China stopped accepting foreign recyclables, much of the market for those materials dried up. Rather than producing a valuable commodity, recyclers had to start paying to dispose of paper, plastics, and bottles.

Cities across North America have been feeling the effects. At the annual meeting of the U.S. Conference of Mayors in June, El Paso Mayor Dee Margo said it now costs his city $232 to recycle one ton of material. That same ton costs only $26 to send to a landfill. Margo said El Paso spends $4 per household every month to maintain the city’s recycling program.

Those market forces are now forcing changes in Hawaii. As of Wednesday, Hawaii County will stop accepting some materials at its collection stations. Greg Goodale, chief of the county’s Solid Waste Division, said the county’s recycling contractor is now losing money on newspaper, plastics, and mixed paper.

“Traditional buyers of these materials just aren’t taking these materials. Our contractor was having to pay a lot of money to these guys to essentially take the material. So it was kind of a big loss for them,” Goodale said in an interview.

Hawaii County contracts with Keaau-based Business Services Hawaii to package and sell recyclables collected by the county. The company did not respond to multiple requests for comment.

Goodale said that in light of the ongoing market disruptions, Hawaii County was essentially subsidizing a program that was operating at a loss. Business Services Hawaii approached the county about modifying the contract. But according to Goodale, the county could not legally alter the price in the original contract, so it opted to stop accepting certain recyclables.

This is hardly a unique problem. Even giant conglomerates like Waste Management Inc. have seen a significant disruption to their operations. Susan Robinson, director of sustainability policy at Waste Management, said the company has had to redirect its stream of recyclable material to other Southeast Asian countries, India, Mexico and Europe.

Waste Management deals predominantly in paper, so redirecting its plastic stream was not a problem. But Robinson said the sheer volume of paper it handles will require the construction of new recycling mills.  

The world’s reliance on China as a destination for recycling arose for one main reason: cost. Robinson says that the true cost of recycling has been masked by China for years.

“We have not in the past truly accounted for the cost of recycling. We’ve tried to encourage people to recycle, so we haven't talked about the cost and have hidden some of that by either subsidizing through garbage or by the commodity offsetting those costs,” Robinson said.

That era now appears to be permanently over. Other developing nations are following China’s lead, and even new domestic mills won’t bring a return to the type of low-cost recycling China provided.

Wealthier cities may be able to afford those higher costs, but for many smaller communities, the expense may be difficult to swallow.

Back on Hawaii Island, recycling manager Goodale says the county is already anticipating higher expenses when the current contract comes up for bid.

“Our expectation is that those costs are going to go up significantly or we may find that nobody even wants to submit a bid for materials where they can't find a buyer.”

The county will continue to accept corrugated cardboard, brown paper bags, glass bottles, and small metal cans. The change will not affect the state of Hawaii’s HI-5 program.