It's true that some news reports state that certain recycled materials are all just being dumped as general waste. First, let’s better understand the background of the current disruption in recycling markets.
In 2013, China implemented Operation Green Fence, a policy in which incoming loads of scrap material were intensively inspected, and therefore enforcing Article 12 that was issued in April 2011. As a result of this, the recycling industry had to evaluate and improve its recycling practices and adjust to the new market conditions.
In 2017, China let the world know that it would be making additional changes to its policies to prohibit the entry of foreign waste in an effort to improve environmental conditions in China, and, specifically, reduce the unlawful disposal of waste from both domestic and foreign sources. These changes were an effort to bring about more stringent regulations and enforcement against illegal commerce conducted by unlicensed brokers, traders and others, who combine municipal solid waste (regular garbage) with paper and/or plastic recyclables destined for China.
So, starting in January 2018, China banned the import of 23 different types of wastes. The two types of banned imported wastes that specifically impacted the recycling market were mixed paper and mixed plastics. Then, in March 2018, China imposed a contamination level of 0.5% for incoming recyclable materials when an internationally recognized set of specifications for paper contamination is between 3%-5%. This is an even more challenging specification to meet.
In the United States, the industry trend has been toward single stream recycling, where all recyclables are placed in one large cart. Unfortunately, this process has increased the contamination in the recycling stream to 25%-30% or more. To get to the 0.5% specification that China imposed is just about impossible with the current technology and processing systems in place.
Here in Palm Beach County, the Solid Waste Authority of Palm Beach County (SWA) uses a dual stream, or two bin, recycling program. The yellow bin is for paper and cardboard; the blue bin is for plastic, glass and metal food containers. By separating the recyclables in this manner, our contamination level is about 8%-9%, which still presents a challenge as far as meeting the lower contamination standard.
As the uncertainty of the market hit in January 2018, we did have to stockpile mixed plastics and find alternative methods of disposing of paper. While we did not landfill any recycled material, we made a decision to recover the energy and we sent a small number of bales of mixed plastic and bales of mixed paper to our Renewable Energy Facility 2 to maintain a safe inventory level at the Recovered Materials Processing Facility.
At this same time, single stream recycling facilities from around the country were in a much different situation. They may not have had a waste to energy option and may have had to landfill their recyclables. This is where many of the most alarming news stories came from. The hardest hit areas seemed to be on the western coast of the US.
Since the China import ban occurred, the SWA has explored all options to sell our recyclable commodities both domestically and internationally. As a dual stream system, our material is preferred. And, with the falling pricing, both the domestic and international markets are looking for good material at good prices to maximize their supply at minimum costs. Through our brokers, we have been successful in opening several non-China Asian markets, including Vietnam, and those in South America. The low pricing has also opened opportunities in India. On the domestic side, we have been able to secure an agreement with a major paper mill that establishes a minimum and maximum price for our mixed paper. This agreement provides for the guaranteed movement of this paper product for 12 months, which stabilizes our movement and minimizes our pricing risk.
More recently, there has historically been an oversupply of glass in Florida. Most recycling programs in the state pay to have the glass taken away. Some programs have, or are considering, dropping glass from their recycling program completely. Our glass has been taken by a company on the west coast of Florida at no cost to us. They further process it by washing and color separating, it is then sold to other companies for various products including glass bottles, jars, etc., fiberglass insulation, sand blasting grit and other applications. There was a period of several months in 2018 when this company could not take our glass material. During that time, we landfilled some and modified our processing equipment to produce a gravel like material that our landfill operations personnel used in the course of building roads and for drainage on the landfill. In early 2019, the company resumed taking our material.
China’s ban on accepting mixed plastics, which contain multiple different grades and types of plastic containers, has caused a major oversupply in the US and the value has dropped to $0. We have literally been giving mixed plastics away. However, the movement is slow. When our storage space is full and there are safety concerns, we have again diverted a small amount of recyclable material to our waste to energy facility where it is converted into electricity and sold to FPL. Our revenue for this material averages approximately $20 per ton. We are fortunate that the waste to energy facilities give us the opportunity to recover the energy from this material and generate revenue.
There is no doubt that the Chinese ban has had a major negative impact on the recycling industry worldwide and has caused unprecedented problems. So far, the impact to our system here in Palm Beach County has been much less than on he majority of counties in the state. The material sent to waste to energy facilities during these two periods is less than 0.4% of our annual bale inventory weight.
We appreciate and share concerns regarding the challenges faced by the recycling industry and are committed to doing everything reasonably possible to maintain our program and meet the expectations of our residents.