Transcript Click to add title

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!