Recycling and Logistics

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The slippery slope of falling oil prices

In less than two years, the price of oil has gone from over $100, to just beneath $30 a barrel. The rapid price decline is having a major impact across most North American industries in one way or another. Most often, the exact net impact is complicated to determine because the industry or business may lose out in some areas, but benefit in others. However, when it comes to the business of recycling, the downward slide of oil prices has been unambiguous. The impact has been almost entirely negative. As oil prices continue to fall, so does the profitability of most companies who offer recycling services to cities and other businesses.

Though recycling is generally agreed by most consumers to be good for the environment, the actual cost of the process is something that isn’t discussed. Some of the costs involve emissions from shipping to be processed materials to recycling centers, which use a lot of energy and water. This means that the falling price tag of oil makes it so after a certain price point, it is simply cheaper for businesses to invest in creating new plastics and materials rather than recycle old ones.

“Abundant oil is the latest headache for recyclers. New plastics are made from the by-products of oil and gas production. So as plentiful fossil fuels saturate global markets, it has become cheaper for the makers of water bottles, yogurt containers and takeout boxes to simply buy new plastics”, writes the New York Times in this article. ” This, in turn, is dragging down the price of recycled materials, straining every part of the recycling industry” it continues.

New technology and new problems for sustainability efforts

The reduced price in oil isn’t alone in negatively impacting the recycling sector. As electronic products become ever smaller and cheaper, they are also impacting recycling cost and efforts:

Electronics devices contain less and less valuable materials and precious metals, which make reduce the size of economic urban mining opportunities. In itself, this isn’t a bad trend, but it does carry negative impacts when combined with designs that make materials harder to extract

The growing popularity of online shopping is also making itself felt in terms of environmental cost. In particular, the incredible amount of cardboard needed every day to meet consumer demand, and the subsequent freight that is needed to ship and deliver it. For some context, The United States alone produced 35.4 million tons of containerboard in 2014.

It’s not all bad

Despite the increasing cost tied to recycling plastics and other oil-based items rather than making new ones, some companies are still committing to their recycling and sustainability efforts. Some big companies such as Pepsi and Procter & Gamble are buying more recyclable material to meet sustainability goals. The online and e-commerce sector is also making strides towards lessening its environmental footprint according to Dennis Colley, the president of the Fibre Box Association — the trade group for the corrugated paper, or cardboard, industry — who states that 90 percent of corrugated packaging were recycled.

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