California has approved Emergency Regulations this week aimed at increasing incentive payments to the State’s Beverage Container Recycling Infrastructure that has seen more than 37% of centers close since peak recycling in 2013 and recycling rates drop to a nine-year low of 77.4%.
California’s intricate network of beverage container recycling centers supports the most successful beverage container recycling program in the United States. However, faced with decreasing scrap values and outdated regulatory formulas, California’s recycling centers are facing a closure crisis.
California’s State Legislature has been debating a permanent fix to the crisis for the last two years but has yet to pass legislation to update the program.
This fall, following the close of the second legislative session without action on California’s Bottle Bill, the California Department of Resources Recycling and Recovery (CalRecycle), exercised its administrative authority over to propose emergency regulations to increase state payments, called processing payments, to recycling centers.
Processing payments are intended to protect recycling centers from changes in the scrap materials market. One component of the processing payment calculation is a “reasonable financial return” (RFR) for recycling centers. CalRecycle’s emergency regulations adjust what would have been a negative RFR – amounting to zero revenue for centers – to an 11.5% RFR for urban centers and a 16.6% RFR for rural centers.
The adjustment comes in light of newly released biannual data from CalRecycle demonstrating that California’s beverage container recycling rate has dropped four percentage points between fiscal year 15-16 and fiscal year 16-17, to reach a near-decade low of 77.4%. The drop in recycling equates to an additional 1.6 million beverage containers being littered or landfilled every day.
If all goes according to plan, the increased payments to recycling centers in 2018 will help struggling centers stay open, prevent California’s recycling rate from sliding even further, and allow our State Legislature a third bite at the apple of permanent reform when members return to the State Capitol in January 2018.