The Waste Dive Outlook on 2022

In an increasingly unpredictable world and an ever-changing industry, it can be hard to guess what’s coming next. Instead, Waste Dive’s editors are continuing the annual tradition of sharing the questions that are on our minds heading into a new year.

From M&A to recycling policy to workforce issues and much more, we’ll be tracking many themes throughout 2022. We invite you to share your thoughts on these questions, or questions of your own, via email at waste.dive.editors@industrydive.com.

Can anything affect the outsized amount of M&A and private equity investment in 2022?

Acquisitions are a fact of life for the modern U.S. waste industry, dating back to the high-flying wave of agglomeration its first public companies led in the 1970s and continuing over multiple cycles since. Most recently, the Trump administration’s tax cuts and speculation that Democrats could make tax changes of their own are among the factors that may be fueling a new wave of activity. The pandemic has played its own role by exacerbating the evergreen issues smaller operators face around labor, capital requirements, succession planning and overall fatigue from the stress of running a business.

Yet all waves must crest sometime. Could 2022 mark that shift, or will it go down as just another year in a string of big deals? The U.S. Department of Justice showed greater scrutiny of recent large transactions by Waste Management and Republic Services, but analysts believe large players still have plenty of room to maneuver. Financial factors could change, such as rising interest rates, but that may not be enough to dampen activity either.

Private equity-backed investments in waste and recycling companies are also increasingly common, sparking bidding battles and building up companies to become acquisition targets or candidates for initial public offerings. ESG-driven transactions are similarly gaining attention, leading to intriguing bets on companies or market areas that previously had less interest.

Fourth-quarter results are still pending, but estimates indicate public companies may have spent as much $3.46 billion on acquisitions last year. Whether or not that turns out to be the peak of this M&A roller coaster, 2022 is likely to be an interesting ride.

The pandemic has exacerbated an already-tight labor market and given workers new leverage. How will waste employers convince more people to join and remain in the industry?

Waste and recycling has long been a tough industry in which to hire and retain workers, who face hard, dirty and sometimes dangerous conditions. Industry employers say they can only take full advantage of growth opportunities as fast as they can fill jobs.

Finding enough CDL drivers and helpers to keep collection going has been a persistent challenge, especially as the booming e-commerce sector attracts more of those skilled individuals. Today, the industry’s pitch is further complicated in an economy in which workers of all types are quitting and changing jobs at record rates as they seek better pay, benefits, conditions and flexibility in the "Great Resignation." With inflation rising, so too must wages increase, as companies have acknowledged. The recent shifts in the labor market will require further adaptations to what one union representative described as a “wage, benefits and respect shortage.”

In addition to offering pay increases or signing or retention bonuses, some of the industry’s largest employers are trying to attract workers with novel benefits including education and training programs.

While companies are looking at automation to address high turnover in unattractive roles, this year’s labor challenges (already worsened by the omicron variant) could prompt the industry to increase its recruitment among underrepresented groups, such as women or formerly incarcerated individuals. Many companies have made diversity, equity and inclusion pledges in the past few years, but critics call for more transparent updates on their progress and long-term implementation efforts. Time will tell how these efforts actually affect the makeup of the industry's workforce, especially in senior leadership positions.

Will the momentum around state recycling policy continue to grow, and possibly influence federal discussions?

2021 brought significant new state waste and recycling laws such as a rare update to Connecticut’s bottle bill and the country’s first extended producer responsibility (EPR) for packaging laws, in Maine and Oregon. Numerous other bills aimed at reducing reliance on virgin plastic, increasing postconsumer plastic content in packaging and banning single-use plastics also passed.

When one state passes such a bill, other legislators take detailed notes. This year, Colorado is expected to introduce EPR legislation after more than a year of studying other state programs, and numerous other states plan to introduce or reintroduce EPR bills. Advocacy group Beyond Plastics has created a draft model EPR bill meant to help with the process. Meanwhile, Massachusetts, Vermont, New Hampshire and others are working to update or introduce bottle bill laws, and advocates also plan to introduce a federal bottle bill similar to the one outlined in the Break Free From Plastic Pollution Act.

Single-use plastics will remain a target for state legislation, too. Washington, Virginia and Colorado were among the states last year to ban certain single-use plastics, and advocacy groups like Environment America have said they plan to support additional bills in 2022 to do so in Connecticut, Texas, Illinois and other states. Bills targeting PFAS in packaging are expected to pop up in several states, including Rhode Island.

Meanwhile, a working group of state recycling officials in the Northeastern U.S. is drafting model legislation for minimum postconsumer recycled plastic content standards in items such as trash bags and beverage containers, using laws in Oregon, California and New Jersey as examples.

Labeling is another hot topic advocates expect to tackle in 2022, after California passed a law that no longer allows manufacturers to deem packaging recyclable unless it goes through the state’s detailed approval process. Advocates are pushing for a federal version of that bill too.

How will the Biden administration’s efforts on climate change influence the national waste and recycling discussion?

President Joe Biden has repeatedly said addressing climate change is a priority for his administration, but we don’t yet have the full picture of how this might affect day-to-day operations in landfills, recycling facilities and other industry sectors.

The U.S. EPA is expected to offer more details on its circular economy goals, most notably how it plans to approach source reduction – a waste management approach many critics felt was erroneously left out of its National Recycling Strategy. Further reports and data on federal reuse strategies, plastics, food waste and more, plus a recycling measurement guide, are in the works.

The Federal Trade Commission is also expected to review its guide on environmental marketing claims, known as the “Green Guides,” in 2022. The updated report could shed light on the ongoing debate over what materials should be deemed recyclable. This information will be valuable to recyclers, as well as for lawmakers at the state and federal levels who have expressed interest in “truth in labeling” laws, that would dictate whether a product’s recyclability claim is accurate.

The administration has also supported additional funding for recycling infrastructure and other needs. About $350 million in recycling-related funding from the Infrastructure Investment and Jobs Act is expected to start becoming available by the end of the year, but further funding some hoped to get in the Build Back Better bill isn’t looking promising due to a stalemate in the Senate. Meanwhile, Congress is slowly moving numerous waste and recycling bills forward, which may offer more opportunities for funding if any of them reach the finish line.

How will environmental justice conversations and actions continue to evolve, especially around PFAS and landfill emissions? Are the stakes getting higher?

Recycling and waste operations will need to make environmental justice considerations a priority in 2022 and beyond, especially as lawmaking and advocacy on the topic move forward at the grassroots, state and federal level, according to fenceline community advocates and EPA officials.

Experts have repeatedly said that facility operators must not wait for direction from new regulations to build community relationships. In one of the latest examples, public input is now a required part of the permitting process in New Jersey and some expect that requirement to become commonplace in other states.

Concerns over PFAS-containing items in landfills are a notable part of the EJ conversation, including how PFAS could show up in leachate runoff or emissions from combustion facilities. The EPA has not given a definitive answer on preferred PFAS destruction or disposal methods, but it anticipates releasing more research data in 2022 that could help give disposal facility operators and others a better sense of how they must move forward. However, the agency likely won’t update its guidance until later in 2023. This spring, the EPA plans to seek public comment on its proposed rulemaking to designate PFOA and PFOS hazardous substances, and it may do the same for certain other PFAS.

Activists have also targeted chemical recycling facilities for further environmental justice action through federal legislation, with the aim of temporarily halting permits for new plastics facilities in order to study the environmental impacts on fenceline communities.

The climate case for keeping organics out of disposal sites is clear. Will collection and processing infrastructure scale up to meet the moment?

As the climate crisis comes into increasing focus, landfill emissions are in the crosshairs. Investment in biogas projects at these sites saw a notable uptick last year, as such systems can play a key role in addressing greenhouse gas (GHG) emissions from waste and financial returns are increasingly favorable. Some of the greatest financial and environmental benefits in this area can come from reducing waste generation or facilitating the recovery of edible food — as a recently revised methodology for the EPA’s 2030 food waste goal noted — but some level of collection is still viewed as necessary. So far, the U.S. has yet to substantially scale up its organics collection and processing infrastructure.

To date, drivers for collecting and processing more food waste have come from state and local governments or private-sector ESG initiatives. 2022 is bringing another round of new or expanded policies in states including California, Connecticut, Massachusetts and New York. California’s SB 1383 policy may prove to be the largest test yet for organics collection in the U.S., as jurisdictions and haulers throughout the state work to reverse long-standing landfill disposal trends.

While many of the industry’s largest companies offer solutions in these markets, organics barely get a mention in their financial reports. Multiple large private companies in markets without such government policies still have limited or no organics operations. Meanwhile, anaerobic digestion companies are growing and investing in projects around the country; composters are on the rise (including a proliferation of small-scale operators) and local governments are trying to get creative with their own solutions.

It will be telling to see where organics recycling fits into the waste industry’s business discussions. Will companies remain agnostic about organics going to landfills with gas-capture systems, or can 2022 offer new lessons about how to scale up this form of recycling in an effective and profitable way?

How will cities innovate while they’re straining to keep basic services going?

As more cities pursue ambitious GHG emissions-reduction targets, they can serve as important proving grounds for cleaner technologies and waste-diversion programs. In the past two years, pandemic costs and the more immediate challenges of providing consistent collection services have no doubt impeded innovation. But 2022 could see pent up ideas come to light: Fresh municipal leadership, new policies, shifting contracts and an influx of flexible federal funds could all be sources of change.

New mayors in major cities such as New York and Boston have expressed support for expanding access to organics recycling. And Seattle intends to update its solid waste plan this year to reflect goals of “producing and using less.” More broadly, numerous cities, including Nashville, are considering pay-as-you-throw models. Some cities also have ongoing incubators or grant programs promoting circular solutions.

Municipalities will also continue to leverage American Rescue Plan funds. Although sector stakeholders are competing with an array of eligible interests, cities have the potential to use the money for everything from waste and recycling infrastructure improvements to projects at landfills to electrifying fleets.

How will reduction and reuse fit into evolving business or government goals?

The EPA and others have long talked about "reduce" and "reuse" as top of the recycling hierarchy, yet those two approaches are often overshadowed. The National Recycling Strategy puts renewed focus on the issue, stating a clear goal “to build a circular economy for all," and the agency indicated it will issue new guidance on source reduction and materials reuse.

Numerous major cities are behind on reaching their stated zero-waste targets, and manufacturers and other companies across industries continue to pursue goals of their own. Big banks and investment funds are increasingly eager to show engagement on the ESG trend, creating new funding opportunities for climate-tech startups, including those focused on systems or products for waste reduction and reuse.

One of the main catalysts for reuse businesses in 2022 could be state EPR legislation focused on packaging. Packaging manufacturers and buyers alike acknowledge their increasing awareness and interest in moving to more circular systems, but they note that the profit incentive won’t be there until EPR laws kick in and reuse options become more cost-effective than their disposable counterparts.

So too are there potential cost-saving incentives for embracing reduction, whether from grocers reducing food waste or via right-to-repair laws that could benefit consumers. While some in the reuse space seek to partner with traditional haulers, it remains to be seen how well a greater shift to lowering consumption and reducing waste at the source will work with the industry’s existing model.

The U.S. waste and recycling industry is at a clear inflection point after multiple years of sustained M&A activity and particularly challenging factors influencing multigenerational, family-run companies to call it quits. Experts agree this wave of deals is bound to subside eventually — just not yet.

“The last five years have been extremely elevated, and so at some point we’re going to cool off," said Hamzah Mazari, a managing director at investment firm Jefferies, "but we don’t think it’s going to be 2022.”

Acquisitions have always been a core element of the industry's competitive strategy, though longtime observers see this latest round as unique for several reasons.

Low interest rates are making it cheaper for buyers to offer competitive valuations that a growing number of multigenerational family operators have decided are too good to turn down. This comes as these private companies are struggling with the compounding pressures of pandemic fatigue, labor challenges, chip shortages for new equipment, other supply chain constraints and increasingly stiff competition for post-collection infrastructure. 

"The business has become more complicated," said Mazari. “If you were on the fence to sell, you probably are a seller right now.”

Official 2021 data won't come out until fourth-quarter earnings results get released next month, but Stifel has estimated a potential M&A spend of nearly $3.46 billion among the top publicly traded companies — including a gradual return of activity by Waste Management. Even when excluding the $4.6 billion Waste Management-Advanced Disposal Services transaction in 2020 and other major mergers between public companies, spending within the last five years likely rivals any prior periods in the sector, Stifel Managing Director Michael E. Hoffman said.

Viewed another way, Mazari said that M&A spending by public companies from 2016 to 2020 was around $14 billion (including the Waste Management-Advanced deal), versus $6 billion between 2011 and 2015 and $4 billion between 2006 and 2010. This data excludes stock-based public company deals, as well as spending led by private companies and increasingly active private equity firms.

Historical precedent

While this latest era of M&A may be larger than others in terms of dollar amounts, longtime industry observers note it's generally more targeted — and often more successful — than past iterations.

When the North American waste industry's first major companies began to gain scale in the 1970s — led by names such as Browning-Ferris Industries (BFI), Waste Management, SCA Services and Laidlaw — their "roll-up" acquisition strategy was sometimes more focused on gaining scale than maximum efficiency. Waste Age magazine started using the term agglomerate (defined as "clustered or growing together but not coherent") to describe these players in 1972, and accounts of the period show just how active it was.

"BFI executives jetted into cities as close to Houston as Lake Charles, Louisiana, and as distant as Thunder Bay, Ontario. Local haulers and landfill operators were offered big salaries if they agreed to sell out and stay on board under the flag of the continental chain," states the 1993 book "Giants of Garbage," written by Harold Crooks. "The response was spectacular, and during late 1969 and 1970 BFI penetrated twenty different urban markets, buying firms in each."

New federal waste regulations and other factors prompted further consolidation well into the 1980s. The industry also saw other large players emerge to try to capitalize on the success of their predecessors. By the 1990s there were roughly twice as many publicly traded waste companies as there are today, though that list soon began to shrink.

“There was an absolutely massive consolidation that occurred, gaining steam starting in the mid-1990s and then basically blowing up in 2000, where USA Waste took over Waste Management, and there was this series of accounting issues," said Leone Young, an industry consultant, Waste360 columnist and former managing director at Citigroup. Young noted the blockbuster 1999 BFI-Allied Waste transaction as another prime example. “Both of those deals ended up very problematic, taking a long time ultimately to be resolved."

After that, major public deals became less frequent but also yielded better outcomes. Republic Services' 2008 purchase of Allied was described by the Wall Street Journal as "successful from the start." Waste Connections' 2016 purchase of Progressive Waste Solutions and the 2020 Waste-Advanced deal were considered similarly favorable by analysts.

Young, as well as Stifel's Hoffman, said the industry has come a long way from its roll-up years, and today's top players are much more disciplined. Hoffman said the public companies have regularly outperformed the stock market in recent years. Many private companies have also followed suit in how they grow and run their businesses, creating a more stable sector.

“The industry has learned how to be a best-in-class business," said Hoffman. “The buyers are buying better-managed companies," and public companies have learned how to improve their sustainable growth rate and conversion of free cash flow.

Another difference in this latest cycle is the larger presence of private equity investors and waste companies with their backing. Last year alone saw the announcement of high-profile equity deals involving Covanta, WIN Waste Innovations, LRS and GreenWaste, along with many smaller transactions.

Private equity interest in the waste industry has also created new pathways to growth, as seen with GFL Environmental going through a series of equity deals that helped fuel rapid expansion before its 2020 initial public offering. Yet Mazari noted that aside from Macquarie (a one-time GFL backer), for the most part, large equity funds "haven’t gotten that aggressive yet" in waste. They tend to be more focused on other sectors, like energy and transportation, that have a greater number of large acquisition targets.

Why now

Some of the momentum behind this latest round of M&A has been attributed to economic factors such as the 2017 Trump tax cuts and unsuccessful Democratic tax increase efforts in 2021, but one of the main reasons may also be the most obvious.

"I don’t think we should underestimate how difficult it has been to run a waste company during the pandemic. Some owners may decide to sell in response to those challenges," said Solid Waste Association of North America CEO David Biderman. He pointed to National Sword's recycling effects as another major factor. “The past five years have been uniquely challenging for solid waste companies.”

Stories abound of businesses facing staffing issues and company leaders having to get back behind the wheel of a collection truck, plus expensive requirements or expectations around technology and environmental initiatives in certain markets. The past year has even seen the sale of widely respected and long-running family businesses such as E.L. Harvey & Sons in Massachusetts, Peoria Disposal Company in Illinois and Willimantic Waste Paper in Connecticut.

"There have always been a group of private companies that were long-held family companies that I just would never have put as sellers in previous cycles," said Young, speaking broadly. “The generational issue probably could be hitting more and more companies."

While details are often limited around any deals, analysts and industry sources say they're hearing multiple examples of company leaders not having natural successors who want to take over the business.

Combined with a seeming decline in the cycle of serial entrepreneurs who build and sell numerous waste companies over their careers, this wave of M&A could be leading to a greater level of industry consolidation. Hoffman said anecdotally it's becoming more common to see deals involving companies with approximately $20 million to $100 million in revenue, versus the usual array of smaller tuck-ins, and fewer operators are using the proceeds to reenter the industry.

“I think the era of the restarting is going to be far more muted than in history," he said. “This feels like 'we’re exiting,' not 'we’re monetizing.'”

And while the industry is still seeing new and growing competitors — particularly on the collection side, where the barrier to entry is lower — the increasing concentration of key assets among the top companies may make it harder to get a foothold.

“It’s more challenging to compete with the integrated competitors as a startup than it was 15 years ago because they have a greater percentage of the disposal capacity, which gives them more pricing power," said Biderman.

What's next

In taking a broader view of what may be coming next, analysts said it's useful to remember this acquisition activity is also part of a trend beyond just the municipal solid waste industry.

According to Effram Kaplan, a managing director and head of business and industrial services investment banking at Brown Gibbons Lang & Co., consolidation in the larger industrial services landscape is only in its first few innings. Kaplan has previously estimated the environmental services and specialty waste segment is particularly fragmented, with no company managing more than 5% of the workforce.

As seen with Republic's acquisition of ACV Enviro, along with GFL's diversification beyond solid waste and other examples, some industry players may increasingly look to expand their plans into the broader environmental services sector. One reason may be that traditional consolidation opportunities are more limited than before. Such acquisition targets also tend to trade at a lower multiple and have more near-term growth potential than the "incredibly consistent" but more incremental pace of solid waste, said Kaplan.

"From a strategic perspective, it’s harder to consolidate in the solid waste space," he said. "They’re searching for better ways and more aggressive ways to grow, whether it be margin — through other tangential markets or services with similar customers — or just higher growth-rate opportunities.”

Such moves may also be advantageous from a regulatory standpoint, as they could potentially prove easier to get through the federal antitrust review process. Analysts say the U.S. Department of Justice has become even more nuanced in its review of industry transactions over the years, as most recently seen with the divestiture requirements for the Waste-Advanced deal and Republic's 2021 purchase of Santek Waste Services. 

Analysts do still believe at least one more mega-deal between could be feasible from a regulatory standpoint (with divestitures likely, depending on the combination of solid waste players), but in the meantime, they expect the list of publicly traded companies is more likely to grow before it contracts. Either way, this still leaves ample opportunity for the acquisition of midsize and large companies to come. Transactions can happen anywhere, but regions with longtime family businesses or high population growth rates may be particularly active.

“I think by the time we get to the middle of the year, the activity level will be enough that guidance will be raised based on M&A alone," said Hoffman.

When asked what, if anything, could slow this momentum, these analysts and advisors suggested factors could include a normalization of the labor market and supply chain situation or a notable change in the overall economy. Even if interest rates go up as expected, and potentially affect deal economics, Mazari described that scenario as a possible upside for sellers looking to invest their proceeds.

“It's really hard to see activity slowing down," said Kaplan. "If anything, we’re being surprised on the upside already in the first month of the year how active the market is."

All aspects of labor — including how to best hire and retain workers, balance costs, and plan for the evolution of low-skill tasks by adopting new tech — will continue to be top of mind in waste collection this year, according to industry observers and stakeholders.

A spike in COVID-19 cases at the start of 2022 emphasized the tenuous labor situation, which goes beyond the industry. The number of open U.S. jobs reached recent heights in the latter half of 2021, exceeding 11 million at times. Sanitation agencies and companies are vying for workers in an economy altered by the pandemic, while planning for automation to address aspects of waste collection that are forever changed.

Direct labor costs, plus third-party costs like maintenance work, are the single greatest input cost for these employers, noted Noah Kaye, a senior research analyst at Oppenheimer & Co. "Perpetual shortages" of workers have plagued the industry for years, Kaye said. But this past year the rate of inflation accelerated. "We would expect going into 2022 that labor inflation will remain elevated, and the key dynamic that investors are monitoring is the extent to which price can offset those inflationary costs," he said.

In Kaye's view, employers' key levers in dealing with labor inflation are to provide wages, benefits and flexibility that inspire better worker retention, and to invest in automation in fleets and at facilities. Stakeholders on both the employee and employer sides echoed those sentiments.

New year, persistent pipeline and pay issues

On the West Coast, for instance, the year began with the continuation of a month-long collection worker strike in the San Diego area against employer Republic Services, which ultimately extended to the Seattle area before reaching a resolution on Jan. 17.

In that strike, one of the key concerns was inflation-adjusted wages, according to Chuck Stiles, director of the Solid Waste and Recycling Division of the Teamsters union. Nationally, Teamsters is under the new leadership of President Sean O'Brien as of November. O'Brien previously led the Boston area Teamsters Union Local 25, which was behind a multi-month strike against Republic Services in Massachusetts in 2019.

“We have a new administration taking over in D.C. It'll be a much more militant movement going forward,” Stiles said. “I think we have to be militant in these days and times. These workers deserve more.”

Broadly speaking, good healthcare coverage is another top concern for the union – a priority only heightened by the pandemic’s perils. Teamsters is also seeking to have Martin Luther King Jr. Day as a paid holiday in all contracts going forward, Stiles said. King's birthday has particular significance to the solid waste industry because King was in Memphis, Tennessee, for a sanitation workers strike when he was killed in 1968.

But benefits aside, pay remains paramount.

Mark Mutton is CEO of Inflection Poynt, an Illinois-based recruiting firm that works with the waste and recycling industry, along with trucking and armored delivery. It lists WM, Republic Services, LRS and Rumpke Waste & Recycling among its clients, and Mutton believes his firm has helped place more than 1,000 waste and recycling workers since he founded the company in 2018.

“Number one is wages,” said Mutton of the top influences employers can have on candidates, even if companies sometimes like to think otherwise. Conversely, Mutton warned against one trend that multiple companies and cities have used amid worker shortages: offering signing bonuses. Bad idea, he said, because they are very short-term incentives and have a negative impact on the morale of existing employees.

The second-most important factor in attracting candidates, Mutton believes, is meaning behind the job. "The drivers and mechanics need to understand that they have a greater purpose than a paycheck," Mutton said, given the essential nature of their work. Accordingly, waste is a relatively recession-proof industry, "so that's a major selling point as well," particularly coming off pandemic-driven layoffs in many different industries.

Likewise, Kaye highlighted the possibility for waste workers to have more flexible scheduling arrangements such as a four-day work week. Kirk Sander, vice president of safety and standards at the National Waste & Recycling Association (NWRA), noted the appeal of being able to go home at night, unlike the lifestyle of some over-the-road truckers. 

The industry continues to compete with driver-dependent e-commerce or delivery companies like Amazon or UPS. Mutton said his firm is just starting to see some employers stand up their own in-house driver training programs to make training more accessible to potential candidates who don't live in close proximity to trucking schools. Mutton said there's also an emerging trend of employers cutting previous requirements that candidates have a commercial driver license and driving experience, in favor of taking candidates who are eager to learn and obtain a CDL.

The NWRA pointed to two main national initiatives it has been engaged on that could potentially expand worker pipelines. The first is a 90-day sprint to gauge interest on developing apprenticeship programs through the Biden administration’s Trucking Action Plan announced in December. Sander said NWRA is working with the Employment and Training Administration at the U.S. Department of Labor to determine how to tap into these opportunities to get more drivers. Secondly, NWRA is following implications of new entry-level driver requirements from the Federal Motor Carrier Safety Administration.

Ongoing tech developments

The costs and challenges with labor are giving way to further momentum on automation. That transition will continue to happen gradually, Sander believes.

During WM's early February earnings call, the company said it's aiming to eliminate between 5,000 and 7,000 jobs through attrition in the next four years as it invests more in automation, including in MRFs and collection. The coming years could see at least 3,000 more rear-load trucks replaced by automated side-loaders.

According to a 10-year industry trends outlook for 2022 from investment firm Stifel, analysts believe that a "digital connection to all stakeholders has become table stakes," and new tech and AI developments will replace low-skill, repetitive tasks and help "deal with labor pool constraints."

At the same time, the fuel powering the trucks themselves is changing too. Stifel estimates about 30% of solid waste fleets have converted to compressed natural gas (CNG), with electric being the next horizon for conversion. 

Energy Vision, an alternative fuels-focused nonprofit research institute, released its "The Refuse Revolution" report in December covering a wide range of vehicle types being made available to refuse fleets beyond CNG and battery electric. The list includes hybrid electric or hydraulic hybrid vehicles, fossil natural gas, renewable natural gas made from organic wastes, hydrogen, and dimethyl ether.

As has been the case in recent years, experts believe the uptake of battery electric options will continue to be a slow burn; 2022 doesn't necessarily mark a tipping point. Former New York City sanitation commissioner Brendan Sexton wrote in a foreword to the report that while battery electric truck pilots are exciting, "they do not yet have the operational track record of success necessary for widespread adoption" in addition to coming with a cost premium.

The U.S.-focused report goes on to estimate that there are fewer than 50 fully electric refuse trucks on the road, and their cost is close to $500,000 versus diesel's $300,000. "The small sample size and limited publicly available data leave questions about the power, torque, and reliability of this technology for the refuse sector," the report states.

Oppenheimer’s Kaye also called out production constraints for electric vehicles broadly, and noted that EV makers aren’t prioritizing refuse trucks in such an environment. "The most likely outcome for this year is that we see ongoing healthy adoption of CNG with piloting on the EV side," with inflection points in the latter technology's adoption curve still one to two years out.

When President Joe Biden was sworn into office last year, he announced ambitious climate goals intending to reduce greenhouse gas emissions, prioritize environmental justice efforts and support recycling infrastructure projects. One year into his term, the administration has promised new actions that could have effects on the waste and recycling sector, especially within the U.S. EPA. 

However, only a few have hard and fast 2022 deadlines. Below is a timeline of new rules, research, reports and other actions the administration has promised to deliver sometime this year. See something that’s missing from this timeline? Let us know at waste.dive.editors@industrydive.com.

Last year’s state legislative season was packed with high-profile bills meant to tackle some of recycling’s biggest pain points: low recycling rates, stretched funding for infrastructure and education, fluctuating commodity prices and the proliferation of single-use plastics. 2022 brings many of the same bills, but legislators hope to catch some momentum from 2021's successes.

Recycling packaging legislation had a "breakthrough" in 2021, said Susan Collins, president of the Container Recycling Institute, during a webinar on bottle bill legislation last month. 

Anja Malawi Brandon, a plastic policy analyst for the Ocean Conservancy, also believes the public is more eager for changes to recycling programs than in years past.

“I expect the number of bills to grow this year as the public gets more and more frustrated with single-use packaging and is demanding action at the state level," she said.

Movement on federal recycling bills is uncertain, so many experts are focusing on what measures they think state legislatures can pass this year. Extended producer responsibility programs for packaging are top of mind for many in the industry. More brands have recently voiced support for certain EPR models after years of resistance, but stakeholder opinions differ over how much control producers or municipalities should have in implementing such programs and how effective they might be in curbing pollution and improving recycling systems. Container deposit bills, also called bottle bills, will likely face legislative hurdles in several states this year due to competing interests among the beverage industry, MRFs and environmentalists.

States are expected to move a variety of bills banning certain single-use plastics. Environmental groups say these laws are needed to reduce pollution, but the plastics industry says they unfairly target needed products. Experts also think more mandatory minimum recycled content bills could get introduced, especially after the success of New Jersey’s recent passage of its law, which establishes recycled content requirements starting in 2024 for certain packaging and bans polystyrene packing peanuts.

Here are some of the highlights of the state legislative season so far. Got updates? Reach out to waste.dive.editors@industrydive.com.

EPR for packaging is still the policy to watch

Implementing EPR for packaging is a top state recycling policy strategy in 2022. Some policymakers say the success of new EPR for packaging bills in Maine and Oregon last year could help push new bills over the finish line, even in states that unsuccessfully introduced similar legislation in 2021. So far this year, more than eight states have introduced or have plans to introduce such legislation. Last year, more than a dozen states offered up EPR for packaging proposals. 

Bills this year present a spectrum of different EPR approaches. Some direct producers to take more operational responsibility — and give them more decision-making power over how to implement the program — while others propose more of a municipal-control model with reimbursements to local recycling programs for operational costs related to managing packaging at its end of life.

EPR can be complex, but Jeff Mauk, executive director for the National Caucus of Environmental Legislators (NCEL), said legislators are starting to get a deeper understanding of how different EPR models work and what it could mean for their constituents’ recycling systems, thus they may be more receptive to introducing or voting in favor of such legislation than in years past. They’re also coordinating with each other more frequently and sharing proposed bill language, he said.

In December, NCEL led a policy strategy session for lawmakers, which Mauk said resulted in conversations on how to implement “bold and ambitious” EPR policies that can be adapted by other states “and perhaps the federal government as well,” he added in a statement announcing the session. The session built on the launch last year of an EPR for Packaging Network, an NCEL-facilitated group of lawmakers who have introduced or plan to introduce EPR legislation.

State legislatures will likely borrow from each other’s bill language more and more in the coming years, said Sydney Harris, policy and programs manager at the nonprofit Product Stewardship Institute. “There’s the sense [from legislators] that EPR seems more feasible now, and they can easily take these bills, sometimes even off the shelf, and can tweak it to do a version that works for [their] state,” she said.

Recycling industry groups such as NWRA have said they prefer EPR programs that help improve end markets for recycled commodities and allow state and local governments to retain control over their recycling programs. In some states, MRFs and haulers have voiced concerns that new EPR laws could disrupt their longtime contractual relationships.

Colorado will soon introduce a bipartisan EPR bill which is modeled directly on New York’s EPR proposal, according to Kate Bailey, policy and research director for nonprofit recycler Eco-Cycle, who is monitoring the bill’s development. 

The bill would create a producer funded and operated EPR system for certain packaging, and the bill will also likely include "some recycled content components," she said. The Colorado Department of Public Health and the Environment spent the last year studying other states' EPR strategies, and Bailey said bill sponsors solicited comments through an “extensive stakeholder process” to fit the bill to Colorado's unique recycling needs. 

In New York, EPR is being approached from two different strategies. One is through bill S.1185C, sponsored by state Sen. Todd Kaminsky. He first introduced the bill last year, but it was not able to gather broad enough support.

New York Gov. Kathy Hochul is also pursuing EPR legislation by including it in her executive budget, calling for the program to start as early as 2026. As in Kaminsky’s bill, producers would either have to comply with the EPR law individually or join a producer responsibility organization (PRO). Producers would propose details of how they would cover program costs and reimburse municipalities or other participating service providers. 

However, during a hearing last Wednesday hosted by the Manhattan Solid Waste Advisory Board, several groups voiced concerns that the bill’s PRO model gives too much power to large corporations that don’t have incentives to reduce pollution.

More states also aim to gain traction on bills they’ve introduced in years past, such as in Maryland, where Del. Brooke Lierman is again introducing her EPR bill, HB 307, with state Sen. Malcolm Augustine leading the companion bill, SB 292. A version of this bill failed to pass in 2021. 

The bill would require producers of certain packaging products to submit a “stewardship plan” to the Maryland Department of Environment by April 1, 2024, and they would be prohibited from selling those products without approval by October 2024. The bill also leaves open the possibility for PROs to consider establishing a deposit return system to increase recycling rates. In a statement, Lierman touted the EPR program’s ability to create “a way that producers, local governments, and sustainability advocates can all work together" to reduce waste and beef up recycling systems.

Other states with active EPR for packaging plans include the following:

• Hawaii: HB 2399, led by Rep. Nicole Lowen, would require producers of some “fast-moving consumer goods” to register with the state Department of Health and pay an annual fee based on the volume of packaging the producer puts into the market each year. The bill also calls for reducing the volume of packaging waste sent to landfills by 50% and the volume sent to power plants that burn municipal solid waste as a fuel by 80%. Lowen, who introduced a similar bill last year, said EPR is one way to stop "treating the Earth as both a boundless source of virgin resources and as a bottomless landfill.” 
• Illinois: HB 4258, led by Rep. Dagmara Avelar, would direct the state Environmental Protection Agency to select and contract with a packaging stewardship organization to operate the statewide program. Producers of some packaging would not be allowed to sell or distribute its items in the state without approval, and participating municipalities would be reimbursed by the stewardship organization for managing certain packaging. Avelar said the bill was created using feedback from “a diverse group of stakeholders.”
• Kentucky: HB 108, from Rep. Jeffery Donohue and Rep. Mary Lou Marzian, would create the Kentucky Packaging Stewardship Program and require producers to be responsible for end-of-life management of certain packaging, including the costs of disposal and recycling. The bill also would set waste reduction targets and minimum recycled content standards, and it calls for a state waste characterization study.
• Massachusetts: H878 for packaging and paper products, led by Rep. Michael Day, would require most producers to join a PRO and create a plan for administering the EPR program and using funds for recycling infrastructure, public education, or other efforts. The state's Department of Environmental Protection would oversee the program.
• New Jersey: A1444, introduced by Assembly members James Kennedy and Raj Mukherji, would require producers to “remain responsible for managing and facilitating the collection, transportation, reuse, and recycling or disposal of all discarded packaging products in the state.” Producers would also need to increase the amount of postconsumer recycled content in their packaging products over time until single-use packaging contains at least 75% postconsumer content by Jan. 1, 2027. Sen. Bob Smith leads a parallel bill in the Senate.
• Vermont: S. 236, led by Sen. Christoper Bray and Sen. Virginia Lyons, would address paper and packaging as well as single-use food serviceware. Starting Jan. 1, 2025, producers would be held responsible for the collection and recycling of certain packaging and would need to be part of an approved stewardship organization and meet certain other requirements to sell their packaging items in the state. The stewardship organization would be responsible for coming up with the plan for how to run the program and make reimbursements. 

Despite a strong start for those 2022 EPR efforts, two other state bills quickly died after failing to make it out of committee.

One is Washington’s RENEW Act, SB 5697, Senator Mona Das’s EPR bill that also would have required producers achieve recycling and reuse targets and use recycled content in new products and packaging.  

The bill's many components, plus waste industry opposition, were contributing factors to why the bill couldn’t make traction, said Heather Trim, executive director of Zero Waste Washington, which had named the bill as its top priority early in the legislative season. “We knew it was a big lift,” she said.

Meanwhile, several EPR proposals in Virginia, including HB 647, failed to pass out of subcommittee due to concerns over costs, though a state recycling task force could further examine the issue, the Virginia Mercury reported.

Bottle bill battles continue

Though EPR is capturing plenty of lawmaker bandwidth, several states are working to advance updates to existing state container deposit systems or to launch brand-new programs. During a bottle bill seminar in January hosted by the Container Recycling Institute, supporters from Massachusetts and Vermont expressed optimism that they might be able to push forward improvements after years of roadblocks. 

Connecticut passed a rare update to its bottle bill last year, signaling that momentum could help move other states’ updates forward, said Susan Collins, president of CRI. Many bottle bills were written decades ago and don’t cover the variety of beverages available today. Market and recycling infrastructure woes have spurred bottle bill proponents to push for modernizing the system to capture more materials, she said.

In Massachusetts, S.2149, led by Sen. Cynthia Stone Creem, would raise the deposit value from 5 cents to 10 cents and would expand the covered container list to include almost all beverage bottles and cans up to 3 liters. 

The state redemption rate is “a tragedy” at 43%, said Kirstie Pecci, director of the Zero Waste Project at the Boston-based Conservation Law Foundation, during the CRI webinar. Massachusetts has struggled to modernize its container deposit system for years, she said, but recent action from groups such as the newly-formed, bipartisan Zero Waste Caucus — a group of legislators interested in recycling and waste legislation — is one factor that helped the bill gain broader support. 

Supporters in Vermont are working to pass H. 175, sponsored by Rep. James McCullough. The bill would significantly expand the state’s bottle bill by covering almost all beverages, including water, wine, sports drinks and hard cider. The bill also aims to increase handling fees for non-commingled containers in redemption centers. It passed the House last April and could soon be considered in the Senate.

Paul Burns, executive director for the Vermont Public Interest Research Group, said strong support will be needed in the Senate to help avoid a veto if the bill passes. Vermont Governor Phil Scott is close with the waste industry, particularly with major state hauler Casella Waste Systems, which historically has opposed the bill, he said during the webinar.

In Iowa, lawmakers have proposed updating the state's bottle bill to increase handling fees from 1 cent to 2 cents, a move supported by redemption centers but opposed by grocers, the Iowa Capital Dispatch reports.

Meanwhile, New Hampshire aims to create a brand-new beverage container deposit recycling program with Rep. Timothy Egan’s H.B.1652. The bill would cover most kinds of beverages in glass, plastic and aluminum containers, establishing a 10-cent deposit value. Egan told local news site Ink Link that the bill would help increase recycling and curb trash, particularly garbage he says is dumped in more rural areas of the state, but the bill faces opposition from the New Hampshire Grocers Association and others who believe a new bottle bill would be disruptive and bad for business.

Singling out single-use bans

The “big bills” that tackle fundamental changes to state waste and recycling systems, like EPR and bottle bills, can be tough to pass because they require legislative heavy lifting as well as buy-in from a broad variety of stakeholders across the entire value chain, Trim of Zero Waste Washington said. For a possibly lighter lift, some states are chipping away at waste issues through common bills like plastics bans.

Environment America and other advocacy groups have named single-use plastic bans among their ongoing state legislative priorities, and a variety of states have bills on the books targeting single-use items the bills say are likely to cause pollution or cannot be easily recycled. However, some plastic producers oppose such legislation, saying it unfairly targets their industry, while groups like the Association of Plastic Recyclers favors bills that boost recycling infrastructure over bills with specific plastic resin bans, saying bans don’t solve long-term recycling problems.

• Colorado: The state is expected to introduce a “skip the stuff” bill directing restaurants to provide plastic food service ware only upon request, the Colorado Sun reported. 
• California: AB 1690 aims to reduce litter caused by single-use vape pens and cigarette filters by transitioning sales toward reusable/chargeable models.
• Hawaii: HB1645 would require hotels and some other types of lodging to replace “single-use toiletries” with bulk dispensers. The bill is similar to one that passed in New York last year.  
• Rhode Island: H 7063 would ban food service establishments from providing food or beverages in packaging made with polystyrene foam. 
• Rhode Island: H 7065 aims for a single-use plastic bag ban, but the Providence Journal reports that this repeatedly-introduced bill has yet to gain traction since it was first introduced in 2013.

Other bills to watch

• Purchasing recycled-content products: California’s AB 661 would require the state to purchase products made with recycled materials, if such products are available, “without regard to cost.”
• Recyclable products: Another California bill, SB 54 , would require all single-use disposable packaging, including food service packaging, to be recyclable or compostable by January 2032. This bill was tabled last year, but is moving again after being passed out of committee in January.
• Chemical recycling: Kentucky’s chemical recycling bill would classify chemical recycling facilities, sometimes called advanced recycling facilities, as manufacturers instead of waste disposal facilities. Versions of this bill, which the American Chemistry Council has backed in each state, passed in Virginia and numerous other states in the last few years. A version of this bill has also shown up in the West Virginia state legislature this year,  according to the Charleston Gazette-Mail.