WasteExpo Together Online—Focusing on MRFs

WasteExpo Together Online, held September 13-14, contained a comprehensive lineup of sustainability and solid waste sessions. In this month’s edition of Business Report, we focused on the presentations related to material recovery facilities (MRFs), while touching on environmental justice and extended producer responsibility (EPR), two emerging issues that are of rising importance to the solid waste industry.

Negotiating MRF Contracts—Process Fees are Here to Stay

In the session “How Does Your Program Measure Up? Utilizing Data to Negotiate Your Next MRF Contract”, Keysha Burton of The Recycling Partnership discussed four key components and 11 essential elements that should be part of an ideal contract between a municipality (community) and a MRF. The need for clear contracts and good collaboration was noted as 79% of MRFs are privately owned, while the majority of collection is still public—thus, interests are not always fully aligned, but the contracts must be mutually beneficial. Burton listed the four key components: 1) recognizing a range of market conditions, 2) sharing risk and reward, 3) deciding on accepted materials and contamination limits (with flexibility to adjust!), and 4) communication and collaboration. She also stressed that a key decision factor in setting up the RFP is the length of the contract, which depending on the type of public-private partnership or service agreement, was recommended to be between 7 to 10 years at least, as the MRF needs to recover capital costs. Although she covered all 11 essential elements, she noted that two are key and that the rest orbit around them. The first is the processing fee. Although recycled commodity values have recently gone up considerably, she gave a very broad average figure of $64 per ton in blended commodity value to the MRF versus a processing cost of $90 per ton and stressed that the MRF has to be profitable within the contract terms. She noted that process fees are the new normal and here to stay, echoing and underscoring what has been a broad trend among the solid waste companies to institute them within contracts over the past several years. Secondly, deciding on revenue sharing was the next most important element—both parties must have a stake, and the community must be cognizant of the MRF’s need to invest—and the share should be explicit. Additionally, both estimating, specifying and monitoring material mix was noted as very important, along with the need to build in flexibility as the waste stream changes, while spelling out allowed contamination rates and what to do about rejected loads was also stressed. Finally, performance audits and communication were stated as the key to a long-term successful partnership. More information on the remaining essential elements, as well as a wealth of other contracting advice and information can be found in the “Guide to Community Material Recovery Facility Contracts”, available on The Recycling Partnership’s website.

Elements of the MRF of the Future

Andrea Rodriguez-Pinero of FCC Environmental Services and Robert Taylor of Republic Services presented in the “MRF of the Future—Technology and Process” session. Both stressed that a high-capacity facility is necessary for the greatest operating and cost efficiency. Rodriguez-Pinero then went on to discuss that new MRFs (or transforming old ones) must be designed for today’s waste stream in order to increase recovery. She noted the impacts of “the Amazon Effect” (lots of smaller boxes), flexible packaging and the light-weighting of plastics as important and permanent shifts in the waste stream. She talked about new types of auger screens on the front end that can better handle this, with artificial intelligence (AI)-enabled optical sorters key to better recovery. Taylor concurred and noted that AI-enabled optical sorters have an added advantage as they can continue to keep learning, and thus be able to adapt when the waste stream changes. Rodriguez-Pinero noted that up to 600 picks and 98% recovery is possible with this combined technology. She also stressed technology use in education about contamination, promoting virtual tours. Safety is also of paramount importance, and she discussed the use of fire suppression systems, particularly in light of the proliferation of MRF fires as a result of lithium ion batteries. Taylor talked about the importance of SCADA systems for tracking and auditing and the need to upgrade to better, high-capacity balers on the back end. The key message from both speakers was that getting labor out and improving maintenance at the MRF in the current labor market was of the highest importance, and the take home message was that the technology is now both available and just emerging to make significant strides on improving operating efficiencies and lowering labor and maintenance costs. The added benefit to AI-enabled optical sorting is that it leads to a higher capture rate and a cleaner bale, with less valuable commodities slipping into the residuals. Finally, both stressed that other AI-driven enhancements are just beginning to be implemented in MRFs, and there will be many more applications to come throughout the MRF.

Other AI-driven Advancements in the Future for MRFs

In a session “AI-Driven Enhancements in Bottle-to-Bottle Recycling”, representatives from AMP Robotics (AMP), the American Beveridge Association (ABA), the Closed Loop Partners and Greenbridge/Evergreen talked about a more virtuous circle developing in bottle-to-bottle recycling and moving toward a circular economy. The ABA representative talked about the “Every Bottle Back” initiative within the beverage industry, which is driving (along with brand companies’ minimum recycled content pledges) greater demand for recycled PET, which, in turn, has given the reclaimer Evergreen the confidence to expand. The issue has now turned from building end-market demand to getting sufficient supply, as it was noted that only 31% of PET bottles are captured—too much is lost in the current system. The Closed Loop representative talked about the Partnership’s investment in AMP, with their AI identification and sorting technology seen as a way to help close that gap. Bottom line—all the participants agreed that now is a great time to invest in recycling—macro forces are aligned; there’s a strong demand signal, and there is much better technology available to pick and sort.

Two representatives from EverestLabs spoke in the session “MRF Data—The Proof is in the Numbers” and discussed their AI technology, which enables actual object count on a line, so the MRF operator is not just relying on overall weight or tonnage figures. They stressed just how much valuable commodity material was lost to the residual line, and how their AI-robotics combination post the main sort line could get recovery up substantially. The space considerations required (3’x3’x7’) and overall cost were noted as reasonable and not prohibitive, with a good return on investment. They also stressed the value of the object-based data to managers and even the C-suite!

EPR—It’s Coming

Abbie Webb of Casella Waste and Resa Dimino of RRS spoke in the “Upsides and Downsides of EPR” session. Although federal action on EPR was still considered unlikely, both participants saw the likelihood of more state activity, especially in the Northeast and on the West Coast, and primarily focused on paper and packaging. Six states are currently considering it, in addition to the EPR legislation recently passed in Maine and Oregon. RRS’s Dimino noted that EPR’s proponents cite drivers including providing stable funding for recycling infrastructure, promoting a circular economy and reigniting stagnant recycling rates. From a hauler perspective, the concern is that an EPR system does not prove to be redundant with systems already in place—Webb noted that we need to leverage what we already have. However, she also noted that EPR can help to improve the incentives for brand companies to design for recyclability and strengthen end market demand. Webb stressed that it’s important to get involved now and make sure the solid waste industry voice and perspective is heard as EPR is considered more broadly—too often MRFs and haulers have been marginalized in EPR discussion and policy.

Environmental Justice—Becoming a Factor in Due Diligence

In the session “Practical Justice—Preparing to Comply with NJ’s Environmental Justice Law”, Matt Karmel, attorney with Riker Danzig, focused his presentation on NJ, given the recently enacted environmental justice (EJ) legislation in that state, but like EPR, EJ is increasingly on the horizon for the solid waste industry and comes in many forms. It is pending in 13 states, and local EJ policies, such as bans, reviews and codes among others, have popped up in at least 25 cities. Karmel noted that particularly with the heightened M&A activity in the industry currently, all parties and stakeholders should review the facilities being acquired with an eye to EJ considerations in the course of their due diligence process.