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       Recylables are piling up in storage buildings, in people’s backyards, and even on floating barges going nowhere, because the market for recycled raw materials has declined precipitously with the worldwide economy. As one expert put it, “When nobody is making nothing, they sure don’t need to make it with recycled materials.”

       Recycled paper, that a year ago sold for $105/ton, is now fetching $20-25/ton. Tin has declined from $325/ton to $5/ton. The prices for recyclable plastic, cardboard, and other materials have experienced similar declines. For some recyclables, there is now essentially no market.

       Cities are facing a quandary. Recycling programs that used to be profit generators have suddenly turned into expenses. Some small towns have suspended their programs, asking residents to stockpile recyclables in their backyards until the market turns, or simply send everything to the landfill because it is cheaper. Recycling companies are facing severe financial issues, with some saying that their income declined 90% in Q4 2008. They have stopped taking materials with weak demand, and they are limiting their total intake because they cannot afford storage fees. Some businesses that previously recycled because of the economic benefit are being put to the test: will they continue if it is only good for the planet and not good for the P&L too?

We should think about...
  • Are we using as much recycled material as possible in our products? The cost difference between recycled and new materials is increasing.
  • Can we reduce the material in our packaging/product so there is less to recycle?
  • Can we push our business to continue recycling, even if there is no financial incentive?
Sources: New York Times 2008; Sacramento Bee 2008
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