Recycling Plastic: The True Cost Of Saving The Planet

Plastic recycling is an expensive process. The global restructuring of the scrap market has been a disaster for the industry, with the low value of scrap and high costs of recycling, coupled with low oil prices, meaning that recycling plastic now costs more than manufacturing virgin plastic. The price of plastic recycling is also sensitive to transportation distances, with higher prices needed for transport over longer distances. The national average price for corrugated containers (PS 11) is currently $76 per ton, while sorted, baled aluminium cans (UBCs) are 53.31 cents per pound.

The cost of recycling plastic is higher than manufacturing virgin plastic

Plastic recycling requires a $500/ton product price to earn a 10% IRR off of c$1,000/Tpa of up-front capex. This is a significant cost, especially when compared to the cost of manufacturing virgin plastic. The cost of recycling plastic has also been increasing over time, with prices for most recycled plastics continuing to rise.

The labour intensity of plastic recycling is another factor that contributes to the high cost. Plastic recycling facilities often have to transport plastic waste over long distances, which increases the cost. The process of recycling plastic is also more complex and time-consuming than manufacturing virgin plastic.

Additionally, the quality of recycled plastic degrades over time. Even highly-recyclable #1 (PETE) or #2 (HDPE) plastics will degrade in quality with each processing cycle, with processing limits of just two to three cycles before they are no longer usable. This means that recycled plastic cannot be used indefinitely, further increasing the cost of recycling compared to manufacturing virgin plastic.

The high cost of recycling plastic has led to decreased recycling rates, as many localities have resorted to incineration or landfill for scrap materials that are less valuable or cannot be processed. This is a concerning trend, as it undermines efforts to reduce plastic waste and promote sustainability.

The price of recycled plastic is rising

The cost of recycling plastic is high, and the low value of scrap means that recycling plastic now costs more than manufacturing virgin plastic. The price of recycled plastic is sensitive to transportation distances, with higher prices needed for transport over longer distances.

Mechanical recycling of plastics involves aggregating plastic waste into bales, transporting it to a recycling facility, and then shredding it. This process requires a $500/ton product price to earn a 10% IRR off of c$1,000/Tpa of upfront capex.

The cost of recycling plastic depends on the distance it needs to be transported

The economics of plastic recycling are sensitive to transportation distances. For example, one model allows for plastic waste to be moved up to 50 miles, but higher prices are needed for transport over longer distances. This is a significant factor in the overall cost of recycling plastic, as it adds to the already high costs of the process.

The price of plastic recycling is also influenced by the type of plastic being recycled. For example, the national average price for corrugated containers (PS 11) is $76 per ton, while sorted residential papers (PS 56) are $43 per ton. These prices can fluctuate over time, with some materials increasing or decreasing in price month-over-month.

Overall, the cost of recycling plastic depends on a variety of factors, including the distance it needs to be transported, the labour intensity of the process, the global market conditions, and the type of plastic being recycled. These factors can significantly impact the overall cost of recycling plastic, making it a complex and costly process.

The cost of recycling plastic depends on the type of plastic

Additionally, the global restructuring of the scrap market has negatively impacted the cost of recycling plastic. The low value of scrap and high costs of recycling, coupled with low oil prices, mean that recycling plastic now costs more than manufacturing virgin plastic. This has resulted in increased recycling costs and lower recycling rates, as some localities have resorted to incineration or landfill for scrap materials that are less valuable or cannot be processed.

Furthermore, even highly-recyclable plastics such as #1 (PETE) or #2 (HDPE) will degrade in quality over time, with processing limits of just two to three cycles before they are no longer usable. This further increases the cost of recycling plastic, as more material needs to be processed to produce the same amount of recycled product.

The cost of recycling plastic depends on the type of facility used

The cost of recycling plastic is also dependent on the distance it needs to be transported. For example, one model allows for plastic waste to be moved up to 50 miles, but higher prices are needed for transport over longer distances.

The cost of recycling plastic is also influenced by the global restructuring of the scrap market, which has resulted in increased recycling costs and lower recycling rates. The low value of scrap and high costs of recycling, coupled with low oil prices, means that recycling plastic now costs more than manufacturing virgin plastic.

The type of plastic also affects the cost of recycling. For example, the national average price for corrugated containers (PS 11) is $76 per ton, while mixed paper (PS 54) is $32 per ton.

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