NWRA Update Friday 515
-
Upload
michael-timpane -
Category
Documents
-
view
19 -
download
2
Transcript of NWRA Update Friday 515
![Page 1: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/1.jpg)
1
THE COSTS AND ECONOMICS OF RECYCLING & DIVERSION
Michael R. TimpaneVice President
Cost of Recycling WebinarMay 14, 2015
![Page 2: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/2.jpg)
22
Providing
solutions in
sustainability,
resource
management
and waste
recovery for
clients and
their supply
chains
![Page 3: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/3.jpg)
33
-Recycling Value Chain- Concepts in the Cost of Recycling
Basic Look at Cost Terms in in Recycling Program Costs In Recycling
Processing Costs
Macro Economic Look at Different Recycling Questions
TODAY’S AGENDA
01 02 03 04
![Page 4: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/4.jpg)
44
• Voter Demand
• Environmental Mitigation
• Landfill cost
• Zero Waste/Diversion
mandates
• Customer Demand/competitive advantage
• Avoid Regulatory risk
• NGO pressure• Sustainability
Concerns• Protect 1 way
packaging
• Response to Environmental Concerns
• Price
• Thrifty/Conservation
• Product Feature
Markets/Manufacturers
Brands
Retailers
Consumers
Municipalities
MRF
Re-processors
Haulers
Converters
• Material cost savings• Reliable Supply & Quality• Customer Specification
RecyclingValue Chain
DemandMotivations
• Material cost savings• Supply & Quality• Customer Specifications
![Page 5: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/5.jpg)
55
• Service Providers
• Revenue from both inbound and
outbound customers
• Pay for Play
• Less powerful position
Markets/Manufacturers
Municipalities
MRF
Re-processors
Haulers
RecyclingValue Chain
DemandMotivations
Recycling should be free
advantage of inelastic demand
Take more materials
More and tougher quality specs
Minimize my riskMarket risk is on
you
Long-term contract terms with dynamic material streams
No long term contracts
![Page 6: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/6.jpg)
66
“Valuing” Recycling Today
“(the) local curbside collection program is only the beginning of a recycling loop. At present, the cost of collecting and processing recyclable materials far outweighs their value as a commodity that can be sold back to industry.
![Page 7: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/7.jpg)
77
“Valuing” Recycling Today?
“(the) local curbside collection program is only the beginning of a recycling loop. At present, the cost of collecting and processing recyclable materials far outweighs their value as a commodity that can be sold back to industry. Unless consumers buy recycled products, the markets for the material they put out at the curb” will not grow.
HBR- 1993
![Page 8: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/8.jpg)
8
Average*** Single Stream Collection vs. Garbage Costs
Garbage CollectionRoute Truck Cost $850 ($100 for 8.5 Hrs)Route Truck Yield 10 Tons Can be up to 13 TonsCost Per Ton $85
Single StreamCollectionRoute Truck Cost $850 ($100 for 8.5 Hrs)Route Ratio 1.25
25% More RoutesTotal Route Cost $1,063Route Truck Yield 9 Tons Can be up to 11 tonsCost Per Ton $118
Pass-by’s
can also
be minimize
d through
proper
periodiciti
y
![Page 9: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/9.jpg)
9
+
Truck Capital Cost for Capturing Single Stream
![Page 10: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/10.jpg)
10
Cart Capital Cost for Capturing Single Stream
$40-60 per Cart for 96 gallon
![Page 11: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/11.jpg)
11
CONCEPTS IN RECYCLING REVENUE (TS)
Blended Value, Average Value, Average Commodity Value, Average Market
Value
$76.44- 4 year
slide
![Page 12: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/12.jpg)
12
CONCEPTS IN RECYCLING REVENUE (TS)
Blended Value, Average Value, Average Commodity Value, Average Market
Value
1994
1995
1998
2001
2006
2007
2008
2009
2010
2012
2013
2014
2015
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$ per Ton
![Page 13: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/13.jpg)
13
RESID
UE
CONCEPTS IN RECYCLING COST
Tons Received Tons Sold
Work, transformation, heat, unusable materials, contamination
![Page 14: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/14.jpg)
14
4,800 TPM- 70% Participation Single Stream
$/Tons Processed 100,000 Households
Reported Range ($45-65T) 70% of 100% 80% of 100% 90% of 100% 95% of 100%
$55.00 70% 80% 90% 95%
Tons Sold $78.57 $68.75 $61.11 $57.89
4800 $353,571 $309,375 $275,000 $260,526
Yield 3,360 3,840 4,320 4,560
Cost for Capturing Recyclables
![Page 15: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/15.jpg)
15
Cost for Capturing Recyclables
20,250 TPM Mixed Waste Processing$/Tons Processed 100,000 Households
Reported Range ($35-60T)
40% of 40%
50% of 40% 60% of 40% 65% of
40%
$47.50 16% 20% 24% 26%
Tons Sold $296.88 $237.50 $197.92 $182.69
20,250 $961,875 $961,875 $961,875 $961,875
Yield 3,240 4,050 4,860 5,265
![Page 16: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/16.jpg)
16
Residue
Non-
recyclables
Unavailable
recyclables
Contaminants and
hazardous materials
CONCEPTS IN RECYCLING COST
![Page 17: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/17.jpg)
17
CONCEPTS IN RECYCLING COST
2007 2012 2014-20155%
7%
9%
11%
13%
15%
17%
8%
13%
16%
Average Residue at Single Stream MRFs
Sources: 2007 Comparative Study on Public vs. Private MRFs, 2012 GAA study on Wisconsin-Area MRFs, ISRI Moore Presentation April 2015
![Page 18: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/18.jpg)
18
CONCEPTS IN RECYCLING COST
Year
Percent
Residue
Total ImpactComparative $/T (Current
LF $/T)
Avg. MRF/Yr.
2007 8%$82,320,00
0$3.92
$131,292
2012 13%$133,770,0
00$6.37
$213,349
2014-2015
16%$164,640,0
00$7.84
$262,584
![Page 19: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/19.jpg)
1919
SENSITIVITY TO RECOVERY: SYSTEM COST – SS & MWP
![Page 20: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/20.jpg)
20
ECONOMIC DEFINITIONS
![Page 21: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/21.jpg)
21
-8%
-6%
-4%
-2%
0%
2%
4%
6%
Evolving Packaging Stream – 2012 vs. 1990 Baseline
Increasing prevalenceDeclining prevalence
Ch
an
ge
from
19
90
-2
01
2
Flexible packaging is now displacing both traditional packaging as well as rigid plastics.
![Page 22: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/22.jpg)
22
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
RRS, 2014
Recycling Rate Relative to Packaging Stream 2
01
2 R
ecy
clin
g R
ate
Most not collected thru curbside
Core Commodities
Increasing prevalenceDeclining prevalence
![Page 23: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/23.jpg)
23
• Enerkem• Abengoa• Fulcrum • Fiberight • Navitus• ZWE &
Anaerobic Digestion• Approved
projects Hawaii to Maine
THE PROMISE: TAPPING THE ENERGY POTENTIAL OF THE ORGANIC FRACTION
Issues are scale and throughput
![Page 24: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/24.jpg)
24
HISTORICAL ECONOMIC RISKS- Ceiling of Recovery
![Page 25: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/25.jpg)
25
Mixed Waste Processing Facilities (MWP)- Economics depends on the Purpose of its Deployment
Primary Means of Recycling (Savings
on collection costs)
• Savings on collection costs
• Household maximization of utility
• Recovery rate
Preparation of Fuels and energy
feedstocks
• Historical RDF • Compacted Fuel
Pellets• Gasification,
sacharrization, production of fuels and natural gas
MRF of Last Resort
• Residual MRF• Multiple options
deployed prior• High tip fee, high
diversion goals
![Page 26: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/26.jpg)
26
ONE BIN VS. SINGLE STREAM: Case: Primary Means of Recycling vs. Single Stream• Ranges, not real numbers• Assumptions must be local• Best operating practices• No green waste• Costs applied to recycling tons only• Costs include capital
![Page 27: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/27.jpg)
27
One Bin vs. Two Bin $ Revenue Yield3 yr. Average $100 T through Nov 2014
One Bin (Recycling Portion)$/Inbound Ton $60 T 60% * $100
Two Bin (Single Stream)
$/Inbound Ton $85 T 85% *$100
Yield Difference ($25) T
![Page 28: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/28.jpg)
28
One Bin vs. Two Bin DisposalOne Bin (Recycling Portion)
T&D Residuals ($45T x 40%)
$18.50/Ton $/T Disposed $33-65 Range
Two Bin (Single Stream Recycling portion)T&D Residuals ($45T x 15%)
$6.75/Ton $T Disposed $33-65 Range
![Page 29: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/29.jpg)
29
One Bin vs. Two Bin Processing- $/T ReceivedOne Bin (Recycling Portion)
Tons Recovered
$/Inbound Ton $45 Ton $T Received $40-60 Range
$/Recovered Ton
$75 Ton Cost per ton recovered at 60%
Two Bin (Recycling portion)Tons Recovered
$/Recovered Ton $62 Ton $T Received $50-60 Range
![Page 30: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/30.jpg)
30
Category $/T Single Stream
Rev. from Commodities
$74
Disposal ($6.75)
Collection Cost
($118)
Processing Cost
($55)
NET PROGRAM COST $100
Single Stream- Net Costs
At 65% $107 for One Bin
![Page 31: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/31.jpg)
31
Considerations Single Stream
One Bin
Higher Tonnages, Higher Quality XSecondary Processing required for Organics- net cost
X
Mixed Paper may not be available or marketable
X
More upside/less downside from Commodities
X
ECONOMICS: SINGLE STREAM COMPARES FAVORABLY WITH ONE BIN
![Page 32: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/32.jpg)
32
Mixed Waste as Diversion StrategyMICRO-ECONOMIC FRAMEWORK
![Page 33: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/33.jpg)
33
An Investor’s View of Recycling Cost/Benefits
“As demand for recycling grows, a waste company must demonstrate economic profits throughout a commodity cycle before it can claim recycling as a true moat-building competitive advantage.”
Economic Moat
Creation
Switching Costs
Intangible Assets
Cost Advantage
Efficient Scale
Network Effect
![Page 34: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/34.jpg)
34
Investor’s View of Recycling Cost/Benefits to an Integrated Waste Company“Growth in recycling has not enhanced industry-wide
profitability”
“Moat” -access and control landfill of the disposal asset diminished- No competitive advantage - Loss of pricing power, lack of pricing discipline- Recycling actually increases the cost of overall system execution
![Page 35: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/35.jpg)
35
Investor’s View of Current Recycling
• Number of MRFs were down 3% in 2014- mid-640 range to ~620
• Pipeline of Greenfield conventional MRF “lowest in years”
• Expectation is more closures this year with consolidation and unprofitability (up to 10%)
• No new large providers or consolidators on
• Recyclable volume reported by public companies is down in the first quarter
![Page 36: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/36.jpg)
36
Externalities: Recycling Value Chain - Critical Link in the Circular Economy
• U.S. one-way consumption not sustainable - >4#/day
• Modeled on nature. When materials are recycled, energy consumption lowers, productivity optimizes, and stability accrues
• Keep products, components and materials at their highest utility at all times.
• Putting monetary value and costs for execution difficult. Today they are absorbed as social costs.
Lyle, McDonough, Braungart, et.al – ‘Cradle to Cradle, Industrial Ecology, Biomimicry, Blue Economy, Natural Capitalism…”
![Page 37: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/37.jpg)
37
CircularEconomyIn Theory
“Sustainable Consumption”
“Sustainable Production”
c
![Page 38: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/38.jpg)
38
Managing Externalities: Policy-Maker’s View of Cost/Value of Recycling“”Avg. ton of material diverted to recycling …from region solid
wastes has an estimated environmental value of $220T.“- Metro Portland, 2009.”• Properly engineered
residential recycling programs costs(collection, disposal and administration) = net cost to C+LF
• True value of recycling has tangible benefits to the environment today
• Other models have pointed out recently (advanced LCA’s) that there may be some corrections to some of the premises used.
![Page 39: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/39.jpg)
39
A Policy-Maker’s View of Cost/Value of Recycling
.”
c
![Page 40: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/40.jpg)
40
A Policy-Maker’s View of Cost/Value of Recycling
.”
Recycling Program Net Costs Today
Externalities or Social Cost Mitigation
• Stabilizing consumption• Lowering pollution costs• Saving natural resources• GHG savings• Future Generation gains from
robust system
![Page 41: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/41.jpg)
41
Tons Processe
d
PROCESSING DIVERSION CURVE 2009 COUNCIL OF U.S. MAYORS
Requires add’l secondary processing
![Page 42: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/42.jpg)
42
1. Multiple “stacking” of collection/ processing technologies, i.e. – MWPF unders to
Anaerobic Digester
– Solid waste composting with pre-MRF
– Food waste separation and processing
2. High regulatory costs including mandatory separation, heavy outreach, and local enforcement
42
LIMITS TO RECOVERY (RECYCLABLES): PROCESSING DIVERSION CURVE
![Page 43: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/43.jpg)
43
LIMITS TO RECOVERY
![Page 44: NWRA Update Friday 515](https://reader030.fdocuments.in/reader030/viewer/2022020106/55cff162bb61eb48328b4646/html5/thumbnails/44.jpg)
44
Altamonte Springs
Thurston, WA
Montgomery Co, MD Average
Paper 29% 17% 26% 24%
Film 7% 6% 8% 7%
Plastic 9% 7% 7% 8%
Metal 3% 5% 4% 4%
Glass 3% 4% 3% 3%Recyclables 51% 39% 47% 46%
Food 7% 24% 21% 17%
Wood 3% 2% 3% 2%
Other Organics 8% 6% 2% 5%Organics 17% 32% 26% 25%
Other 29% 24% 25% 26%
Special Wastes 3% 5% 3% 4%Non-Recyclables 32% 29% 27% 29%
LIMITS TO RECOVERY THREE US CITIES