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Slide 1
Responding to the Downturn in Recycling
Markets
Municipal Waste Association
Guy Perry
February 5, 2009
Slide 2
Topics
Blue Box funding implications of current markets
Review calculation of stewards’ contribution
Effect of current market conditions
Update on market development activities
Update on Unical
RFP for plastics re-processing capacity
Data collection
Optical sort testing
Slide 3
Stewards Financial Obligation
50% of best practice net cost of municipal Blue
Box recycling system
Gross cost less gross revenue
Revenue calculated as 3-year rolling average
To moderate changes in fees resulting from
swings in commodity prices
Gross cost less 3-year average gross revenue
Slide 4
3-Year Average Revenue Calculation
1. Revenue reported for each material
WDO datacall
Account for revenue sharing
2. Determine average price for basket of goods
across all municipalities
3. Determine average basket of goods price over
previous 3 years
4. Multiply the 3-year average price by reported
tonnes recovered
Slide 5
Example
3-Year Average Revenue Calculation
Year
2005
2006
2007
Reported tonnes
marketed A
861,313
935,095
902,498
Reported gross
revenue B
$83,608,610
$85,856,294
$106,662,213
$97.07
$91.82
$118.19
Basket-of-goods price
($/tonne) C = B / A
Three-year rolling
average price
($/tonne)
D = Avg (05, 06, 07)
$102.36
Gross 07 revenue for
09 fee setting ($)
E = A*D
$92,379,702
Slide 6
Historic Revenue
$135
Reported Basket-of-Goods ($/tonne)
$125
Three-Year Rolling Average ($/tonne)
$115
$105
$95
$85
$75
$65
2003
2004
2005
2006
2007
2008
Estimated
Slide 7
Implications for Funding
Funding for 2009 is already set
Based on 2005, 2006 & 2007 revenue
Posted on WDO website
Funding for 2010 to be determined mid-2009
Based on 2006, 2007 and 2008 revenue
Captures drop in prices - last quarter of 2008
Funding for 2011
Will reflect 2008 and 2009 revenue
Slide 8
Market Development Investments
Provision to include additional material-specific
fees to overcome barriers
paid by stewards of affected materials
Focus on glass in first 2 years
$2.8M in additional fees paid by stewards of glass
New glass processing capacity => well over 100K
TPA
significant savings
For 2008, $2.4M market development fees to
increase plastics recycling - plastics stewards
Slide 9
Unical Plant
Accepting MBG from all six original partners
Generally meeting specs, and some already
achieving incentives
Expect to be @ full production in next couple of
weeks
Inventory of ~10,000 tonnes
Once at full production and working down
inventory, will be looking to secure additional
municipal material
Slide 10
Plastics RFP
Seeking proposals from re-processors
prepare plastics for direct use by end markets
not just prepare materials to broker to others
Ontario location
Joint initiative - CIF & Stewardship Ontario
$1.9M from Stewardship Ontario
$1.9M from CIF
address possible collection/processing impacts
support long-term municipal contractors
independent decisions whether to proceed with
any proposal
Slide 11
Successful Respondents
2-step Process
1) Proposal evaluation
1 or more preferred respondents
Municipal involvement
2) Due diligence & negotiations
1 or more successful respondents
develop contracts with municipalities
Funding provided only if contracts secured for
municipal material
Slide 12
Working with Municipalities
After selection of preferred respondent, Stewardship
Ontario & CIF work with municipalities
identify available plastics meeting respondent’s
specifications
provide data for respondent(s) to complete a business
case
Assess most beneficial result for province of Ontario
based on business case for proposals & available material
To prepare for negotiations
Stewardship Ontario is compiling detailed data on
quantities & composition of potentially available plastics
Slide 13
Refining Plastics Generation
Prepared plastics generation estimates for 20 largest
municipalities across province
Reviewed with municipalities
Estimated generation for each plastic material
Based on waste audit data gathered over past 3 years
Allows estimates of recovery by material using data
reported to WDO
Operational data to be reviewed as well
contract periods, materials targeted, promotion and sorting
capabilities
Slide 14
Findings
Represents ~ 75 to 80% of plastics generated in
Ontario
General municipal concurrence with approach &
results
Some questions about:
Consistency of household figures
Allocation of marketed mixed plastics to specific
material categories
To issue an addendum presenting these data for
potential respondents to the RFP
Slide 15
RFP Timeline
Task
Issued RFP
Timing
December 5, 2008
Last date for written inquiries
February 6, 2009
Last date for addenda
February 20, 2009
RFP closing
March 5, 2009
Preferred respondents identified
early April 2009
Commence negotiations
mid-April 2009
Allow for possible ‘Round 2’ depending on quality of proposals
Slide 16
Optical Sort of PET Thermoform
Test of recovery performance of PET thermoform sorting
at Toronto’s Dufferin MRF
Jointly funded Stewardship Ontario & EPIC with
cooperation of Toronto and Canada Fibres
~ 80% positive sort of PET thermoform
~ 11% of positive sort PET is thermoform
PS successfully rejected
Less than 4% contamination from PS thermoform
Report will be posted on Stewardship Ontario website
Further tests anticipated under different conditions:
where PET thermoform targeted
test market capabilities
Slide 17
Thank You!