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Oahu’s Recycling Businesses In Crisis As Global Prices Drop

Business

The owner of RRR Recycling that handles Honolulu’s blue recycling bins says he’s had to close over half of his locations since around 2017. The president of Reynolds Recycling said his company has had to do the same in recent years.

Despite serving as the largest recycling facilities on Oahu, RRR Recycling and Reynolds Recycling are in a crisis, and there are implications for residents who turn in their recyclables for redemption income or reuse.

In Hawaii, cans, plastics and other recyclables are collected, sorted and shipped around the world to the highest bidder. But global prices have stagnated at best and plummeted at worst. Meanwhile, the costs of shipping and labor continue to increase.

Reynolds Recycling President Terry Telfer argues that’s why recycling companies need more government subsides to stay in business.

“In the past, Reynolds has reduced its locations. We can't really get any smaller and yet survive,” he said. “Unlike most businesses, when your costs go up, you can raise your prices. In the recycling industry, we don't have that.”

Both Reynolds and RRR Recycling are part of the statewide HI-5 program through which the state pays the companies a handling fee for each item recycled.

Initially, in 2005, Honolulu recycling facilities received about 2 to 3 cents for each aluminum can and plastic container processed and 4 cents per bottle.

In July, following a 2017 consultant's study that examined the HI-5 program, the state increased the handling fees. The recycling businesses now receive 3 cents for aluminum cans, 3.5 cents for plastic bottles and 7 cents for glass bottles.

In hindsight, RRR Recycling owner Dominic Henriques said, the increases may have come too late.

“We're making the same money or less, as 2005,” he said. “As of this past July, that was our first increase in the handling fees for the state program. So you try to tell me if there's any businesses out there that haven't raised their rates in 15 years.”

Another challenge is China’s new policies. Where once it accepted most of the state’s recyclables, China began limiting the amount of materials it would accept about two years ago because it said too much of the material was contaminated.

Materials are considered contaminated if it’s dirty. For example, if there’s leftover food in a pizza box or if items that can’t be recycled are mixed in with acceptable material, it's deemed contaminated.

To sell the items sorted in Honolulu’s blue bins, Henriques now has to turn to smaller markets like Korea that pay less for recycled items.

Before China started cutting back, Henriques said he could get about $120 a ton for paper. Now, the average is negative $15 a ton — meaning the cost of shipping outweighs the price China is willing to pay for the recyclables.

Jennifer Milholen, waste reduction coordinator at Kokua Foundation, a nonprofit environmental group, said aluminum is the best material economically and environmentally to recycle.

“If we’re looking at the costs of extractions, costs of transport and the impacts, environmental, social, economic, then actually it makes more sense to have more aluminum,” she said.

Telfer said Reynolds makes about $960 a ton for aluminum. But even that may not be enough.

Henriques believes that for recycling to continue, the mentality that it's a business needs to change.

“It’s not a for-profit thing anymore,” he said. “It’s the right thing to do. It’s a public service.”

KNOWING HOW TO RECYCLE

If recycling is to work, people need to to learn what goes in the blue bins and what doesn’t, Milholen said.

“We want to recycle everything. So they just throw everything in, hoping for the best, assuming someone down the production line will get it to the right place,” she said.

“But the reality is, in our sorting lines here on the island, there's multiple millions of pieces going through every single day, and they're doing the best they can, but a lot of contamination is still getting in and not being taken out.”

Henriques said he often sees non-recyclable plastic bags thrown in the blue bins and even clothes, water hoses, big sheets of metal and bowling balls.

“We get a lot of that kind of stuff, like things that I think people want recycled, but are too lazy or don’t know where to go to find the proper place to do it,” he said. “We get a lot of random stuff.”

Henriques is also concerned because RRR Recycling’s contract with the city will expire at the end of this year, and he’s not sure Honolulu will renew it.

“We’ve had the blue bin contract from the very beginning, over eight years,” he said. “The city is trying to work on building their own recycling facility so that’s something that’s in the works.”

A spokesperson from Honolulu’s Department of Environmental Services said the city will be issuing a request for proposals to develop a new mixed recycling contract this year -- just as RRR Recycling’s current contract expires. The department is considering having a contractor operate on city property next to H-Power, the waste-to-energy incinerator.

From her vantage point, Milholen advocates for changing the way recycling works in Hawaii.

“We have to fix what’s broken,” she said. “I don’t think people realize, when they get statistics about how little is being recycled, how much of that is because the right things are not being put into the bin.”

That's why Milholen thinks there needs to be better education on what goes in which bin. Kokua Foundation wants the city to reallocate money for an education specialist, analyze what education methods work and start a media campaign to get the word out.

She also suggests the government work on policy initiatives to simplify the recycling process -- such as requiring plastics to have clearer labeling on which items can be recycled.

In Honolulu, plastics that are marked “1” or “2” are the only ones that should be thrown in the blue bins, but that's not explained on the carts.

Milholen also wants to see the kinds of plastics allowed into Hawaii limited to those that can be recycled, although it's unclear if any state has tried this approach.

Ultimately, however, she said while recycling is always better than throwing items away, it's reusing and reducing that are the very best ways to help the environment.

 

This article was originally published on hawaiipublicradio.org