Understanding Avoided Disposal Fees

Photo by Marcell Viragh on Unsplash

Landfill fees are an important driver of recycling and composting collection programs from a micro economic perspective.  I was able to develop many parts of my recycling and composting collection programs over many years in part through avoided landfill fees.  By starting a recycling or composting program that first targeted items that were a large component of the waste stream, I was able to avoid the cost of disposing of those items.  That avoided disposal savings gave me a pocket of money within my budget that I could reinvest into additional recycling or composting infrastructure.  That additional infrastructure led to additional diversion which created additional opportunities for reinvestment.  That cycle of continued incremental process improvement allowed programs to grow with little or no additional ongoing funding.  

But the key phrase in that prior paragraph is “in part.”  Although avoided disposal fees are an important financial justification on a microeconomic level for many collection programs, avoided landfill disposal fees have nothing to do with how recycling or composting works on a macroeconomic level.  As such, they cannot be the only focus of your recycling or composting program.  There is a constant balance between quantity and quality.

A farmer or landscaper could care less what your landfill charges you to get rid of your trash.  They care that the compost they are using as a soil amendment, made from your old food waste, or old landscaping waste, is sufficiently free of contaminants, sufficiently full of nutrients, and of sufficient structure that it provides the soil tilth and soil health benefits that will cause their crops to flourish.  That mean’s giving your composter clean enough feedstocks that they can make that high quality finished compost.  A paper mill doesn’t give a rat’s behind about your trash disposal fees.  They care about making and selling their finished product, whether that product is corrugated cardboard, or toilet paper or xerographic copy paper, or whatever.  And to do so, they need quality scrap paper feedstocks at a reasonable price.  If you can provide them with your scrap paper of sufficient quality, at a price less than they can obtain virgin tree pulp (or woody shrub pulp), they will use your scrap paper and save you the cost of otherwise throwing that used paper away.  But if you don’t provide them with sufficient quality scrap paper, they don’t care if your waste hauler charges you $400,000 per ton for trash because you are not providing the paper mill with a product the can use to make a product they can sell.  The same thing goes for all recycled commodities whether plastic, glass, metal, circuit boards, paint, etc.

Look at the recent collapse of international paper markets after the Chinese national sword (market prices which have thankfully bounced back a few years afterwards).  I did not see any headlines that said “recycling is broken only in areas with low landfill tip fees but is fine in places with high trash tip fees like Europe, the Northeastern US and island nations like Japan.”  Instead, I saw a steady litany of “recycling is dead” articles everywhere questioning the very foundation of recycling collection.  How could that be true if high landfill fees were what drives recycling?  While those articles were appearing, and while recycling programs were in turmoil all over the place, landfill fees in some of those places had never been higher.  

The issue that really drives collection is the relative value of the commodity collected for recycling (or composting) vs the value (or cost) of all the other options.  That is why so many of us encourage recycling to be captured for its highest and best use.  It’s not just philosophical, it’s financial.  Take high grade white printing and writing paper.  If you can capture that for recycling as high-grade mixed ledger paper (and sometimes there are legitimate logistical reasons why you can’t), it is typically worth $50 – $100/ton more than if you capture it as low grade mixed paper.  In many markets, that’s greater than the delta between recycling it vs. throwing it into the landfill.  The quality of the recyclables and compostables we collect matters! 

For too long we have relied exclusively on landfill tip fees to drive recycling.  There has been a hope that rising landfill fees alone will drive more recycling.  There have been efforts to ensure recycling remains “free” regardless of the quality of what is collected.  And it’s true that when we make trash expensive and make recycling “free,” it leads to more stuff being put in the recycling and compost bins.  But when we focus just on avoiding trash, and don’t focus on the quality of what we collect, too much of what ends up in the recycling and composting bins is trash that contaminates the recycling or compost and just has to be thrown away by someone else.  That’s not recycling.  It’s not diversion, and for my zero-waste minded friends, it is certainly not zero waste.  It merely makes it more expensive for mills to use your recycled feedstocks and composters to use your organic wastes if they have to pay a portion of your trash bill for you.

There are some folks doing important work trying to educate residents about recycling quality.  But the issue is far more than education.  We need to change our entire focus of what drives our recycling programs.  We need to focus on collecting things to the highest and best use (value) that the logistics will allow, not just focus on keeping stuff out of a hole in the ground.  That will lead to the biggest financial differential between trash and recycling, and it is that differential, the combination of revenues and avoided disposal fees that we can reinvest to grow our programs.  But if all we do is focus on the cost of trash, will our recycling and composting programs do anything more than create neatly separated piles of trash?

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Roger Guzowski
Roger Guzowski
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