2021 and 2022: Looking back and forward
2021 has been a most unusual year for recycling. Markets were hot, recycling worked well, and lawmakers stepped up their game. What happened last year, what have we learned and what can we expect in this new year?
Let’s start with the markets. Prices for cardboard boxes, blended paper, steel cans, natural and colored HDPE containers and polypropylene containers have reached or approached record highs. Then they fell. The drop in the prices of recyclable materials is normal in the last two months of the year. Demand for recycled paper is declining as manufacturing slows down as finished products meet holiday shoppers. The demand for used containers is also declining, as sales of soft drinks, beer and bottled water plummet with the onset of cold weather.
As always, recycling prices are a function of supply and demand. Recycled paper prices have benefited from increased demand for new retail boxes, increased domestic capacity to manufacture these boxes from old cardboard boxes and mixed papers, and a recovering export market . Plastic recycling prices have benefited from higher oil prices and recycled content targets from consumer products companies.
2022 should continue to see strong markets. Demand and prices remain strong, barring an economic slippage caused by the impact of the latest COVID mutation (s). National capacity to use recycled paper and plastic will increase in 2022. Prices rebounded significantly from the slump from 2017 with Chinese import bans. With one exception (natural HDPE), year-end markets were much stronger than the past two years. We’re not there yet, but we may see prices for recyclables that were normal ten years ago.
On the legislative front, recycling was also hot. Lawmakers haven’t had time to do much on recycling in 2020 due to COVID and budget issues. They had more time in 2021. I’ll focus on three topics: recycled content, extended producer responsibility (EPR) for packaging, and food waste.
Washington and Connecticut have passed recycled content laws. The former focused on plastics, the latter asked its state environmental agency to determine which products required recycled content requirements. I expect similar laws to be introduced and passed in 2022. Glass bottles could also benefit from recycled content laws.
The declining value of natural HDPE is a message that should not be ignored. It hit an all-time high in August and September, peaking at more than a dollar a pound. For a brief period, it was the most valuable recyclable curbside product. Now it’s a little over half of that value. The price increase was driven by voluntary recycled content targets. Because natural HDPE is colorless, it can be dyed any color. It is a perfect material for non-food contact products such as detergents or shampoo. Once these companies achieved their goals, the higher cost became a deterrent.
This drop in prices raises an important point. Recycled content laws or voluntary targets create more “demand”, but they may have a limited impact on prices. At least fourteen states passed recycled content newspaper laws in the 1990s. Demand increased, but prices continued to fluctuate based on national and international economic trends.
Maine and Oregon passed the first EPR packaging laws. They’ve taken a different approach because they have very different waste management systems. No one knows how well these laws will work, as neither state expects this new program to work until 2025 at the earliest. Still, a few states could pass EPR packaging laws in 2022.
Despite the interest shown in EPR packaging, it should be noted that only 33 States have any kind of REP law. Most of these laws cover electronic products and those containing mercury or other hazardous components. EPR packaging laws are very complex. Most states will likely wait and see how these new laws play out.
The recovery of food waste has also received increased attention. In 2021, Maryland joined all seven states with laws requiring food waste collection and limiting their disposal. California, however, has mitigated the impact of its groundbreaking 2016 law. This law set ambitious goals for the diversion of food waste from disposal, including a 50% reduction from 2014 levels by 2020 and 75% by 2025. As one author noted, “the road from good intentions to reality is long and winding.” Due to delays caused by COVID, lack of funding, and inadequate treatment infrastructure, California has extended local government compliance deadlines. California has not reached its 2020 target and will not achieve its 2025 target. Nevertheless, it has a good chance of succeeding with its innovative policy of valuing edible foods.
An issue that received little legislative attention in 2021 will only get worse in 2022. At least one city has suspended its curbside recycling program because it did not have enough drivers. Others have had service delays due to a lack of drivers. This problem will get worse before it gets better. SWANA has some good ideas on how to respond. Their suggestions deserve serious consideration.
2021 has been an exciting year. I especially enjoyed watching the markets get so hot. I am optimistic about the market trends. Let’s consolidate these gains, see more growth in 2022, and remind policymakers that it’s people, not politicians, who recycle.