FROM DAILY FINANCE

Recyclable Material: The U.S.'s Most Controversial Export?

By JONATHAN BERR
Posted 5:40 PM 04/22/10 Green
Has our recyclable waste become one of the U.S.'s biggest exports?

It's definitely starting to seem that way. About 25% of all scrap material collected in the U.S. is exported, according to Jerry Powell, who owns three recycling publications including Resource Recycling. Statistics from the U.S. Department of Commerce show that U.S. companies exported $6.8 billion worth of waste, scrap paper and paperboard in 2009, up from $5.2 billion in 2005. Scrap plastics rose from $452.6 million to $827.6 million, while sales of aluminum rose to $2.02 billion from $1.36 billion. One of the U.S.'s biggest customers for recyclable material is China.

"The vast majority of the worth in recycling has been offshore," Powell says, adding that many ships that ship goods to the U.S. return to China with recyclables in their hulls. "They need our raw materials. Huge volumes go to China."

The Environmental Protection Agency seems happy to offload America's recyclable refuse. The agency says it supports legitimate, environmentally-sound recycling practices regardless of where they take place. "Whether materials are recycled domestically or abroad is primarily a function of market demand for specific materials and the existence of recycling operations that are capable of handling specific materials," the agency said in a statement.

E-Wastelands

Environmentalists, however, aren't so accepting of the U.S.'s willingness to ship its discarded goods to shady companies overseas. The recycling of electronics, in particular, has become a problem of growing proportions. About 80% of electronics that Americans send off to recycling plants (known as e-waste) is processed overseas. In 2008, the Government Accountability Office scolded the EPA for allowing the export of discarded electronics to developing countries "where unsafe recycling practices can cause health and environmental problems."

Last month, the watchdog group Basel Action Network accused a Massachusetts company of illegally sending a shipload of computer monitors and other toxic materials to Indonesia. And, in one part of Ghana, hundreds of millions of tons of e-waste is dumped each year. The area has become the world's biggest e-waste dump and has been nicknamed "Sodom and Gomorrah" because the water is among the most polluted on the globe, according to PBS's Frontline.

The e-waste situation is only getting worse as consumer electronic devices become obsolete as quickly as they get introduced to the market. About 400 million devices are discarded annually in the U.S., according to environmental experts. Many devices are just too difficult to re-purpose because they were never designed to be recycled. The glass used in monitors contains lead, while the plastics contain chemicals such as flame retardants that make them too contaminated to be reused.

"Certainly, the amount of e-waste is increasing," says Lauren Roman of the Basel Action Network. "It is the fastest-growing part of the solid waste stream."

The Business of Recycling

Recycling isn't all bad, of course. After all, it is a much more environmentally-friendly approach than just trashing everything. It also helps local governments and taxpayers save money. Trash disposal costs towns money because of tipping fees, which average $35 a ton, that are assessed by landfill operators. And thanks to recycling efforts, those fees are down. The amount of municipal solid waste going to landfills dropped by about 7 million tons from 1990 to 2008.

Meanwhile, local governments actually earn money from recycled goods. After the newspapers and plastic bottles that you've separated and put on the curb are collected, they are sent to a material handling center. These facilities are owned by private haulers such as Waste Management or the local governments themselves. They then sell the materials they collect to customers in both the U.S. and overseas who use it to make new materials that may be recycled many more times.

For some companies, buying the U.S.'s unwanted paper, scraps and other goods has translated into big profits. Take Nine Dragons Paper, the largest container-board maker in China. Its founder, Zhang Yin, got her start shipping waste paper from Los Angeles to China in 1990 and is now one of the wealthiest people in that country.

"It's driven by economics," says Bob Garino, the director of commodities at the Institute of Scrap Recycling Industries (ISRI). "[Scrap] is a raw material. It's a commodity. It's a resource ... It saves a lot of money and it's cheaper than virgin material."

"There is a real competition for resources out there," says Ed Skernolis, vice president of recycling at Keep America Beautiful. "The markets have become more sophisticated over the past."