Plastic recycling in California is struggling to the point where it is almost entirely not profitable. This is costing our tax payers and our environment a lot. To combat this, Californians Against Waste is working on two bills to boost our in-state plastic recycling and reduce greenhouse gas emission and plastic pollution statewide.
Two years ago, crude oil cost over $100 per barrel. But, beginning in June of 2014, prices began to fall, and they continued falling until they reached the floor of $33 per barrel in January of this year. Prices hadn't been that low since November of 2002.
While the drop in oil prices was a relief to many Americans, the drop in crude oil prices comes at a large environmental cost: Less plastic is recycled and more plastic is produced.
Plastic is a product of petroleum, and as oil prices fall, plastic productions costs fall as well. Product manufacturers can order new plastic for far less money than buying recycled plastic products that cost more money because of the recycling process.
Recyclers all across the country are suffering the effects of these low oil prices. David Steiner, the CEO of Waste Management, the largest recycler in North America, recently said in an interview on CNBC, "When you look at our recycling business over the last 3 years when we really saw the downturn, it sort of fluctuated from slightly profitable to slightly unprofitable." Mr. Steiner says that Waste Management went from a profit margin of about 8% to less than 1%.
Tara Hemmer, a Waste Management Area Vice President said, "We're approaching a scenario where our commodities prices, right now in the outbound, don't really cover our processing cost."
To make matters worse, in California, the plastic we collect for recycling is mostly shipped overseas to China and other countries even though we have many in-state companies capable of recycling plastic. Why aren't these companies recycling our plastic? The market doesn't reward in-state plastic recycling.
Creating a business environment that encourages plastic recycling can pay dividends. If California increased in-state plastic recycling to just 50% from the 10% we're at now, our state would add 3,500 to 4,000 jobs. Incentivizing in-state plastic recycling also helps our environment significantly because using recycled plastic over making new plastic reduces greenhouse gas emissions by 60%-70%.