MWMA Market Trends By Brett Rosenberg
October 31, 2005
Frank Giordiano, the executive director of the Camden County (NJ) Pollution Control Financing Authority, provided an overview of some of the implications the recently passed energy bill holds for waste-to-energy (WTE) facilities and renewable energy credits (RECs).
Of particular note in the recently enacted Energy Policy Act of 2005, according to Giordiano, is the mandate that the federal government must buy 7.5 percent of its energy from renewable sources. WTE facilities, including those that municipalities own, are eligible for this option. The act provides renewable energy tax credits for new WTE facilities and existing facilities that expand. Related to the Energy Policy Act of 2005, Giordiano said that there is still no national standard for renewable energy credits as they apply to WTEs and other municipal combustors. He urged MWMA members to contact Congress, saying that “the generator ought to get credit for the [energy] savings…not the purchaser.”
Giordiano also pressed the issue of solid waste transfer stations currently sited along railroad sidings. He noted that many of these facilities, especially in the northeast U.S., undermine local efforts to maintain environmental quality and improve public health by claiming to be exempt from most local and state regulations. According to Giordiano, such facilities also undercut competition through not abiding by the same strict rules with which other waste transfer facilities must adhere. The U.S. Conference of Mayors has official policy that urges Congress to restore local authority over solid waste facilities at rail sites.
Andy Rivinus of the Weyerhaeuser Company spoke on behalf of the American Forest & Paper Association (AF&PA) about the markets for recycled paper products.
With regard to current recycling and recovery rates in the U.S., Rivinus cited several notable statistics, considering that over the last 25 years, recycling has been a core component in American life. In 2003, for the first time, 50 percent of the paper consumed in the United States was recovered for recycling. According to Rivinus, “this impressive achievement is thanks to significant investments by the industry, along with the efforts of millions of Americans who recycle at home, school and work everyday.” Municipalities also contribute substantially to these efforts, Rivinus said. In 2004, U.S. recovery of paper and paperboard increased to a record high 50.3 million tons.
Paper recycling provides important environmental benefits. Last year, according to Rivinus, paper recovery exceeded landfilling by more than 12 million tons. Every ton of paper recovered for recycling saves 3.3 cubic yards of landfill space, which also cuts expenses for municipalities that operate landfills. Additionally recycling paper conserves forests and the ecological services they provide.
Rivinus spoke also of increasing international demand for U.S. recovered paper exports. He noted that soaring export demand has had a significant impact on the paper industry. The share of U.S. recovered paper supply going to exports has risen from 16 percent in 1997 to approximately 28percent in 2004. U.S. exports of recovered paper are projected to increase significantly during the next five years; an increase that could squeeze domestic supply unless recovery increases. In order to keep up with domestic and overseas demand, an increase in the amount of paper being recovered for recycling has become a necessity.
In order to satisfy the international demand for recovered paper products, Rivinus described the AF&PA’s goal of recovering 55 percent of the paper consumed in the U.S. annually by 2012, up from 50 percent today. To reach that goal, programs exist within AF&PA and its members to reduce the amount of landfilled paper; additionally, partnerships between the AF&PA, environmental groups like Keep America Beautiful, businesses, schools, and the EPA are working to bring even more attention to recycling efforts.
Brenda Pulley, Vice President of Corporate Affairs at Novelis, Inc., spoke of economic, energy and environmental trends in the recycled aluminum industry.
In the U.S., aluminum recycling rates are high, but declining. $1 billion worth of aluminum cans are landfilled annually. Pulley reinforced her point, saying that “the money saved from recycling the aluminum cans thrown away every year could fund 10,000 Habitat for Humanity houses.”
In North America, demand continues to exceed the supply of scrap aluminum, which can be recycled again and again without noticeable loss of the material’s quality. Two important factors, however, limit recycling rates, according to Pulley. First, there are limited aluminum smelters sited in the U.S.; most new plants are overseas. Second, consumer convenience plays a substantial role in the availability of reusable aluminum. Programs like deposit refunds, advertising campaigns, and California’s container refund value all influence consumer behavior, but they are not reaching every market.
While international demand for aluminum products remains high, U.S. exports of scrap aluminum are limited. Currently, countries like China are taking advantage of the weak U.S. dollar to undercut the availability of domestic supply.
On the energy and environmental front, Pulley noted that recycling aluminum essentially creates an aluminum “energy bank” because of the energy saved compared to mining and manufacturing new aluminum products. To put that in perspective, recycling 40 cans saves the equivalent of one gallon in gasoline. The energy saved by recycling one ton of aluminum could fuel a car that gets 35 mpg for 82,250 miles.
The U.S. Conference of Mayors sponsors the Cans for Cash City Recycling Challenge, a national contest that rewards cities for recycling aluminum beverage cans. The campaign has been extremely successful in getting cities to ramp up community-wide recycling programs.