- California was recently forced to close nearly 200 container redemption centers and lay off nearly 300 workers due to plummeting commodities’ value. Wide-scale closures, some believe, is tied to the formula the state uses to determine payments to redemption centers, made through its Beverage Container Recycling Fund, which is intended to cover the difference between recovery expense and value of the recovered beverage container. The numbers are based on 12-month-old data, while recycling costs are higher now, said Mark Oldfield, communications director for California's recycling agency, CalRecycle, as reported in Resource Recycling.
- Further, the state cut processing payment for PET by about 6.5%, from $177.40 per ton in December 2015 to the current $165.96. The material has also dropped dramatically in value, costing more to process.
- The average fund deficit is projected to pass $74 million in fiscal years 2016-2017 and 2017-2018, according to CalRecycle. And Oldfield said financial backing for the fund could be cut by 80%. CalRecyle has suggested trying to deal with the deficit by raising the deposit fee from five cents to six cents, lowering payment for redeemed containers, and "eliminating some of the payments from the fund," according to Resource Recycling.
The system to determine payments to redemption centers is apparently behind the curve, which has especially hurt in the past year, with many commodity values dropping 30% to 40% in that timeframe. This is despite a state bill recently signed into law to pump up recycling infrastructure.
"The market today is unlike anything we have ever experienced, and we need to reform the program to account for times like this," Rod Rougelot, rePlanet's president and COO told Resource Recycling.
He said the cut payments for PET "was a significant pain-point for us. Had CalRecycle stayed out in front of this, those 300 centers we had to close would be open today."
Susan Collins, executive director of the Culver City, CA-based Container Recycling Institute is calling for immediate change.
"CalRecycle should assist by educating the legislators about the nature and scope of the problem and advocating for an immediate solution that protects the rights of Californians to have access to redemption centers where they can receive a refund of their deposit," she said, as reported in Resource Recycling.
Oldfield said the department "was working with the industry and stakeholders," and that the state has no authority to change the current system of estimating processing payments based on a 12-month rolling average.