Wast-to-value: an analysis

A recurrent theme on this site is the idea that the recycling of waste could be funded through the proceeds of the reclaimed materials and that consequently waste-disposal fees should be abolished. However, this raises the question if recycling is indeed a profitable venture?

The site dorecycling.com argues that recycling could be profitable but argues, among other things, it is important that people separate their waste properly as sorting out waste is quite expensive. Also the article suggests that the cost of energy is an important factor in the profitability of recycling.

Michael Kanellos of Forbes offers another perspective. He argues that commodity prices are a key variable when it comes to making profit from recycling. Let’s say that it takes $10 to reclaim 100kg of a commodity X, then as long as the price of X is in excess of $0.10/kg recycling will be profitable. However, if the price would be lower than the recycling business will lose money.

Commodity prices are caused by the demand – and supply – of said commodity. Low demand means low prices and high demand high prices. However, the cost of waste recycling are rather fixed – if we ignore fluctuations in energy prices. So during periods of low demand profits will be low or even negative.

Nevertheless Ron Gonen of GreenBiz argues that even in times of low commodity prices, local governments can still save money by avoiding the need for landfills. Though the recycling firm might making a loss.

More interestingly is that Gonen states that the cost of recycling a ton* of waste is about $75. This include the machinery and labour required to sort out different types of waste, once more a strong argument for not throwing once’s waste into a single bin.

Also he presents a few figures of the profits of different classes of commodities:

  • $50 per ton of cardboard
  • $5 per ton of paper
  • $150 per ton of PET
  • $250 per ton of HDPE
  • $1,325 per ton of aluminum

Only in case of glass Gonen states that there is no profitable market for recycled glass. Even worse the costs of glass recycling would evaporate the profits from the other commodities.

Consequently he argues that we should either find markets for recycled glass or to discourage the use of glass as a packaging material. Please read his article for some great suggestions.

A few notes regarding orbital space settlements. Due to the abundance of solar power in outer space, energy will be relatively cheap and hence reducing overall costs.

On the other hand, however, large-scale asteroid mining will result in low commodity prices for the next few centuries. Hence this will reduce the profitability of recycling. However, if the population will increase significantly then demand will rise as well, as will commodity prices.

*It is not clear whether Gonen refers to metrical or imperial tons.

5 thoughts on “Wast-to-value: an analysis”

  1. glass could be used in construction without recycling, though this might not deal with most of the glass produced as waste. It could also be blown into decorative objects and so on.
    there should be a cost to producing waste so that people can reduce waste generation

    1. >>there should be a cost to producing waste so that people can reduce waste generation

      I agree in so far that those costs should levied upon the (package) industry rather than on households. Manufacturers have more control of the total flow of waste than individual consumers.

      Also waste-disposal fees are usually “fixed” charges with little or no relation to the amount of waste produced, which are highly regressive relative to income and hence disproportionally hurting the poor.

      1. i think South Korea attempted a progressive charge on waste produced.
        I agree that the charges should be proportionately higher to the manufacturers and packagers than on consumers. Maybe this would help reduce issues of planned obsolesce

          1. which is a better approach.
            i think you get better performance from individuals or companies with a promise for reward than punishment. If i know I can get away with an offence by paying, then I can just budget for it.

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