This is why we don’t want to do recycling

Britain’s biggest recycler of plastic milk bottles is facing possible collapse after being squeezed between a slump in global oil prices and a supermarket price war.

Closed Loop Recycling, based in Dagenham, could be forced to call in administrators within days because clients have cut back on buying recycled plastic.

The company, which produces more than 80% of recycled plastic used in the UK’s milk bottles, matches its prices closely to the cost of virgin plastic in order to attract and retain customers. But the prices that can be achieved for recycled material has fallen nearly 40% in the past nine months as the oil price has dropped.

The slump in global oil prices has already caused the collapse of at least two other recycling firms in the past four months as the price of reprocessed plastic in the open market has become between £300 and £500 per tonne more expensive than virgin plastic.

Chris Dow, chief executive of Closed Loop, said the company was in urgent need of financial support: “Our customers want to buy recycled plastic but they don’t want to pay more [than virgin plastic]. Without the support of the industry or the government it is inevitable we will go into administration.”

Prices do in fact work. They measure the resources (of course, they only measure the resources that are being measured by prices) being used to produce something. Thus, if recycled plastic costs £300 – £500 per tonne more than virgin plastic then therefore recycled must be using more resources than virgin. £300 – £500 a tonne more in fact.

Recycling’s a great idea when you make a profit at it. And it makes us all poorer when it makes a loss. So, when it makes a loss don’t do it.

37 thoughts on “This is why we don’t want to do recycling”

  1. Bloke in North Dorset

    We ought to have a sweep on how long it takes one of the parties to make subsiding the recycling of plastic a manifesto pledge.

    We also need a new measure of the efficiency of these sorts of subsidies and I suggest nurses per week. In this case the cost of the subsidy is approximately 1 nurse per week per tonne.

  2. So Much for Subtlety

    Thus, if recycled plastic costs £300 – £500 per tonne more than virgin plastic then therefore recycled must be using more resources than virgin.

    OK. This is killing me to say. Really it is. But … externalities. Not all the costs are captured in the price.

    We don’t want a lot of plastic in the environment. I am not too keen about it in landfill either. Even burning it is an issue. If someone wants to remove waste plastic and re-use it, we all benefit in some way that is not reflected in the price. How much to prevent an albatross choking on a piece of plastic?

    Not that I think they deserve anything because it will just be an electoral boondoggle. But total costs of plastic-related pollution is an issue worth discussing.

  3. Surreptitious Evil

    BiND,

    You want nurse-weeks per tonne as your derived units, not nurses per week per tonne.

  4. Tim

    Candidly, you’re wrong here. Very wrong. Most of the firms competing with the Dagenham manufacture are engaged in rent seeking by setting the price at a level below what is actually sustainable. Many of them also engage in unfair tax competition, with extensive use of secrecy jurisdictions and behaviour which whilst technically legal is certainly contrary both to the law as originally envisaged and also against the overwhelming majority of civil society, which as I have constantly said I am uniquely qualified to assess.

    Under the Green New Deal which is essential if the country is to avoid a return to neo-feudalism, abstract concepts which really should be the preserve of textbooks and have no connection to the real world like ‘Markets’, ‘individual freedom and other vestiges of neoliberalism will be swept away and recycling will not only be compulsory, the Courageous state will direct the recycled resources in an appropriate fashion to ensure the needs of civil society are prioritised over arcane, neoliberal concerns like ‘individual wants’, ‘markets’ and other absurdities.

    Candidly, I do not think I can waste any more time with these excursions outside reality. There can be no constructive debate whilst people whose ideas are so far outside the political mainstream have a voice in the argument. I believe in freedom of speech, considering myself a libertarian and a friend of the truth, but this is not the forum for it. Future contributions from you will be deleted

  5. Bloke in North Dorset

    SE, I can live with that one. Anything that gets the cost across to the soft thinking lefties and greenies (sorry for repeating myself).

  6. “Our customers want to buy recycled plastic but they don’t want to pay more [than virgin plastic]. ”

    So they don’t want to buy recycled plastic then.

    Maker of washing powder:

    “Our customers want to buy our washing powder, but not if it costs more than our competitor’s washing powder. Subsidise our washing powder so our customers can continue buying our washing powder”.

  7. That is why the capitalist economies that take market related pricing into account is so bad and why the eco-loonies lobby for a different set of rules.

    The comments of SMFS is a case in point. Forget about the costs of doing things, but we must find a way of putting a price on that great feelgood and holier than thou factor that you get from putting plastic into the correct recycling bin.

  8. Their business plan required 120$ oil permanently? No bank would have touched them.

    I suspect that the original business could turn a profit at 50$ oil but something has gone wrong. Greedy unions or more likely exploding cost of regulatory compliance.

  9. I sneeze in threes

    https://m.youtube.com/watch?v=rExEVZlQia4

    Bury the plastic bottles, return them to the land from which they came for future generations to use. Think of it as a plastic bottle bank. They’ll come in handy when we start to run out of oil. The critisicm that they don’t degrade ( quickly) is actually a bonus.

  10. I agree with SMFS. If the recycler is saving the community a lot of money by removing waste, then it should be able to reclaim some of that from the local authority or its waste management contractors. But it isn’t going to be anywhere near £300/ton even including theEU levy on landfill.
    Adding collection and transport costs to the EU levy of €75/ton still won’t get you to £100/ton.
    Next question, if waste plastic costs zilch (it should be *minus* €75/ton), why does the cost of reprocessed plastic cost £500/ton?

  11. @I sneeze in threes: I have always said exactly that. Stick all domestic waste in holes in the ground, extract the methane and use it to generate electricity. Then in 50 years time or so when the oil price makes it viable dig the whole lot up again and reprocess the plastic, which will still all be there. Job done. Everyone’s a winner. We get cheap waste disposal now, the future gets a source of cheap(er) plastic.

  12. you are of course right that recycling can be a bad idea. although as with all things environmental, if you don’t include externalities in your calculation, you’ve gone wrong

  13. So Much for Subtlety – We don’t want a lot of plastic in the environment.

    Eh, it’s not so bad. The environment is mostly dirt, creepy crawlies, and animal poo anyway.

    I am not too keen about it in landfill either.

    Me neither. I dump most of my plastic in the non-recyclable waste bit at the tip.

    Even burning it is an issue.

    Nah, it burns really easily. Smells a bit funny, but I sort of like it.

  14. We don’t want a lot of plastic in the environment. I am not too keen about it in landfill either. Even burning it is an issue.

    I understand the environment and albatrosses and pacific corals surrounded by plastic, but landfill / burying? What’s the big deal there (environmentally), if the economics was to say that’s the best cost option? And happy to insist on burial (and an extra cost for that) over landfill as part of the equation if eyesores are the problem?

  15. @john77
    I’ve been told by my local tip that they’re required to turn a profit – if true, I’m guessing that the tip is selling the plastic to the reprocessors – indicating that there is a cost on the raw material

    After that they still need to sort, wash, grind, and carry out at least one (usually two) extrusion processes. This assumes they’re making repro as opposed to regrind.

    £300-500 a tonne seems pretty reasonable for this, it’s fairly labour and energy intensive. The problem isn’t that they’re at a £500 sale price, the problem is that they’re at £500 above the price of virgin material – no idea what HDPE is down to these days, but I’d guess £800-1000 a tonne.

    Somewhere they’ve got some major costs that aren’t obvious. If it’s really costing them £1500 to make repro, we’d be better off storing it until the price of virgin raises or they find a way to do this economically.

  16. Biodegradable plastic will biodegrade. Non etc plastic won’t so a prize to be offered for the best means of reusing it or transforming it in some way. A closed furnace that burns it and draws off fumes? Reshape the plastic and use it as a base for growing new coral reefs? There is always a way.

  17. Prices do in fact work. They measure the resources … being used to produce something.
    it’s fairly labour … intensive
    What if some of the labour would otherwise be idle?

    This is an argument for a citizens’ income – so the users of labour have to pay only the market premium demanded for not being idle, not the whole wage.

  18. The problem with How much to prevent an albatross choking on a piece of plastic? and This is an argument for a citizens’ income is that those get outs (and their logical extensions) mean no company will ever go bust & the UK becomes a commie car crash.

  19. Ok Nurses per week, but if it was virgin plastic it would need to be priced in virgin nurses – not so easy you see??

  20. @ Ben
    Thanks. Last time I asked (some years ago) the contractors were only supposed to reduce the cost to the local authority of providing a statutory duty (waste removal). If they actually make a profitit, that’s quite impressive and shows how much more productive they are than the council workers they replasced.

  21. What are the externalities of used plastic, when considering disposal versus recycling?
    Proper disposal in landfill is a cost a real cost. Which is not an externality as far as I can see.
    Flytipping, illegal dumping at sea, littering, these can see having some externalities but so long as proper disposal is cheaper, easier than recycling then recycling can’t claim to have removed the externalities.

  22. bloke (not) in spain

    “the contractors were only supposed to reduce the cost to the local authority of providing a statutory duty (waste removal). If they actually make a profitit, that’s quite impressive and shows how much more productive they are than the council workers they replasced.”

    Slightly sore point there. Councils were supposed to provide a household refuse collection service – which is something somewhat different from “waste removal.”. At least, that’s what householders always presumed they were paying their local taxes for. If the private contractors are making a profit, a portion of the profit maybe coming from the sending of plastic for recycling.
    Now thanks to your f***ing recycling regulations all the hard work of sorting & pre-processing – ie washing out of food containers – has been dumped onto the house holder at their cost in time & energy use. At marginal earning rates, for some householders, of hundreds of pounds an hour.
    Do we factor this in?

  23. @ b(n)is
    They are *not* *my* recycling regulations. As the joint householder who gets lumbered with the pre-processing (NB the other joint householder does her fair share of housework, just that’s part of my share) I can advise you that most of the stuff that we take to the tip was formerly classified as “household refuse” and *all* the stuff that we occasionally take to recycling bins in the town centre carpark was formerly classified as “household refuse”.
    I should have said “household refuse” not “waste removal” – I just forgot.
    If the tip operators are making a profit, it is very probably mostly from recycling metal, wood and cardboard for which there is a market with relatively low cost of sorting. Copper is sufficiently expensive to justify the labour cost of sorting through what’s left after a magnet removes the iron and chipboard can use unsorted wood as long as the laminated stuff is dumped in a separate skip.

  24. Their business plan required 120$ oil permanently? No bank would have touched them.

    Yes, but it’s worth bearing in mind that several oil companies and even a few countries had similar business plans. 🙂

  25. bloke (not) in spain

    @John77
    I specifically said *your* recycling regulations because, as a resident of Spain & France I don’t have to bother with this ess H one T. I chuck it. They take it. As such, I’ve been scrupulously ignoring UK regs my entire, thankfully soon to be curtailed, sojourn in this nasty little fascist state.

  26. Schools churn out recycling is morally good messages for 10 years before a small percentage of the pupils learn about opportunity cost. I remember querying a campaign at the kid’s school to collect the bottle tops (plastic ones) that you have to take off and do not go in the local council recycling schemes. They had mum’s and the school and the kids doing this for Years! when I asked what happens to them they told me the company that agreed to pay for them- I looked up thier rates and the most they could get was £30 for an insane amount of bottle lids… and someone had to lug half a tonne 40 miles away to the factory. I find this morally wrong. just a complete waste of everyone involved time and energy which could be spent doing far far more worthwhile things.

  27. @ Hallowed Be
    When I was at school we had a Conservative Government (except for my first two terms) and there was no propaganda about recycling because we didn’t have a throw-away society. Recycling was mostly done by rag-and-bone men but Boy Scout troops across the country collected read newspapers which were recycled at a price that justified the effort *because it was demand-driven by the companies that used recycled paper* not supply-driven by ideologists.

  28. @ PaulB
    Would you consider a Citizens Income to cover the currently unpaid labour of householders (as per b(n)is) as well?

    @ SMFS, Steve, Mr Ecks
    Burning it could make sense if done through a gasifier – you would at least recover some of the energy fairly cheaply. Not as much as efficient recycling, but since that doesn’t seem to be happening…

    @ b(n)is
    The number of recycling bins does seem to increase rather often. In practice I use only a couple. Most of my ‘household waste’ can be reused in house simply – food waste mostly goes to compost, wood goes on the fire, metal goes in the furnace, etc. Glass, plastic, rubble and most electronics aren’t worth my time to do anything with – the council can have them.

    I could reprocess and reuse the plastic – but given the low cost of virgin feedstock it’s not worth my time

    @ Hallowed Be
    Good point about the relative weight given to opportunity cost vs the ethics of recycling

  29. So Much for Subtlety

    thejollygreenman – “Forget about the costs of doing things, but we must find a way of putting a price on that great feelgood and holier than thou factor that you get from putting plastic into the correct recycling bin.”

    That would be nice but I don’t think it was what I was arguing for. There are externalities sometimes. Plastic in the environment is one of them. It is not unreasonable to think of market solutions that would reduce the levels.

    Perhaps we should have a five pence deposit on plastic bags as some places have on plastic bottles?

    Steve – “The environment is mostly dirt, creepy crawlies, and animal poo anyway.”

    Yeah but some of that dirt is really nice to look at.

    PF – “I understand the environment and albatrosses and pacific corals surrounded by plastic, but landfill / burying? What’s the big deal there (environmentally), if the economics was to say that’s the best cost option? And happy to insist on burial (and an extra cost for that) over landfill as part of the equation if eyesores are the problem?”

    It probably is the best option and it is saner than anything else we can be doing. We should be using them more. But simply burying a problem does not make it go away. I didn’t say I hated it, just that I wasn’t keen on it. Landfills aren’t so much of an eyesore once they have been filled on and covered up.

    Mr Ecks – “Reshape the plastic and use it as a base for growing new coral reefs? There is always a way.”

    I think you are on to something. Plastic bottles might make for a very good reef. You can tie a few hundred of them together and drop them on some sandy bottom. Lots of nooks and crannies for small fish to hide. In a few years, they would be covered in coral and teeming with fish. Not a bad solution really.

    I don’t believe the middle of the Atlantic has an enormous Sargasso sea-type plastic dump. But if it did, it would provide an excellent shelter for fish. For much of the ocean, life is constrained by shelter from the bigger fish. A patch full of small plastic objects would provide a lot of places for young fish to grow into bigger fish. I wonder, could we tie enough plastic bottles together to create a semi-submerged island the size of, say, the Isle of Wight? Think what a bio-rich place it would become.

  30. Yeah but some of that dirt is really nice to look at.

    I think you meant ‘was really nice to look at’, because it’s now all covered in windmill.

    Recycling, like windmills, is just a silly ritual in Gaia worship. It very rarely makes any rational sense.

  31. Burning is by far the best option, plastic bottles are made of oil, once you get the temperature high enough they become the fuel and it is self-combusting. Waste to Heat Generators are very advanced nowadays and emissions and toxins are probably comparable to most other forms of recycling.

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