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Introducing Evolving to Recycling 2.0 September 12, 2014 CONFIDENTIAL What makes something recyclable? Collection Pros 1. Single stream allows for broader collection and more types of materials collected (pro and con) 2. It increases recycling volumes collected 3. It allows for collection efficiencies Cons It is wet, dirty and contains broken glass Flatten materials get mis-sorted Marketing Processing 1. Requires technology and labor. 2. Films plastic collected in curbside programs have no markets due to moisture and dirt from collection and processing 3. Wet material and food impede recycling, contaminating other material. ©2014 Waste Management 1. Markets are global 2. WM exports 33% of our material – mostly paper, some PET, HDPE and some 3-7 plastics. 3. There is a robust market for clean and dry film plastics collected in take-back programs. None for film collected at curbside. 4. Volume plus value = markets Page 2 The Recycling World Has Changed And continues to evolve—we need to keep up! •The material we use daily has evolved tremendously The evolving ton •We use less paper (50% reduction in newspaper readership), more plastic and there is no growth in metal Single-stream recycling •Enables us to put all recyclables in one, convenient cart. Flip side is that it invites materials that aren’t recyclable •When in doubt, ~25% of people put something in recycle bin anyway Packaging •Food and other product packaging is constantly changing, and often made of so many different materials whose recyclability varies •Further compounding confusion about what Recycling programs vary by is recyclable from Area to Area—internally and region for our customers © Waste Management Page 3 Changing Materials Stream The Shrinking Newspaper • This is a reduction of 50% over eight years North American shipments of newspaper in millions of metric tons: 15.8 12.7 2000 2005 7.8 7.3 6.7 6.4 2010 2011 2012 2013 • The crunch created by high export demand, changing consumer practices and a crushing recession has been toughest on the domestic paper industry Courtesy: Resource Recycling Magazine ©Waste Management Page 4 Changing Materials Stream The Evolving Package • Light-weighting & increasing recycled content • Projected increase in film packaging • Flexible packaging expected to grow 3.5% annually in the next few years Glass jars, metal cap to PET jar, PP cap HDPE Bottle, PP Cap to multi-layer, flexible film pouch *Courtesy: Flexible Packaging Institute ©Waste Management Page 5 Changing Materials Stream Lighter plastics • At the same time that paper grades have changed, plastics volumes are increasing • Use of single serve containers and plastic packaging is up. • Plastic bottles have “light weighted” – water bottles take up the same space (volume) but weigh 25% less. • Non-carbonated bottles can be thinner which means that we have to spend more money to process more of them to get to a tons of bottles. The changing waste stream means that we process more volume with less weight which leads to higher processing costs. ©Waste Management Page 6 Changing Materials Stream The Increase in Non-Recyclables • Non-recyclables in loads is on average 16% of inbound tons and increasing. • Non-recyclables can be up to 50% of incoming loads • Non-recyclables cost an average of $140 per ton • Markets are demanding reduced contamination (Green Fence) • Processing costs have increased by 20% in two years, which is driving up cost to customers ©Waste Management 800,000 Contamination% 18.0% 16.0% 700,000 14.0% 600,000 12.0% 500,000 10.0% 400,000 8.0% 300,000 6.0% 200,000 4.0% 100,000 2.0% - 0.0% Inbound Tons Residue % Page 7 Changing Markets Operation Green Fence • Started in February 2013 • Part of overall effort to reduce pollution in China • Enforces existing regulations • New Chinese government policy to vigorously inspect imports at customs as part of their • Targeted materials include paper and mixed, low grade plastics Changing Markets Expected Long-Term Impacts of Operation Green Fence • PET and HDPE plastics have sufficient markets and are not impacted by OGF • Historically, the only market for mixed & low-grade plastics (No. 3-7, films, Mixed Rigids, ABS) has been China. We hope domestic markets will respond and develop for these materials. • MRFs are increasing their processing to reduce the amount of nonrecyclable plastics and other prohibitives. • Many of these materials are part of curbside recycling programs across the U.S. • Attention is focused on quality and pricing of these materials The Simple Math Increased Processing Costs • Decreased quality (due to single-stream, confusion) • Decrease in traditional recyclables (like fiber) • Constricted Markets • Regulation on bale quality due to OGF • More non-recyclables • Lighter recyclables • More marginal recyclables Decreased Revenue Opportunities ©Waste Management Page 10 Recycling is a Global Issue Other independent groups are working to solve same matter • SWANA • Manufacturers • Large CPG companies • EPA • We have the opportunity to be trend-setters and leaders Page 11 How is this effecting customers? • Consumers are confused about what is recyclable. While only 20% of participants admitted they weren’t always sure of what to recycle, up to 65% of participants improperly placed non-recyclable items in the recycling in practice. • Consumers can recycle more. Only 9% of the total plastic waste generated in 2012 was recovered for recycling. 55% of aluminum beer and soft drink containers generated were recycled • Messages need to be simple and targeted for change behavior ©Waste Management Page 12 What is acceptable Single Stream? Our Residential Single Stream concept simplifies recycling by allowing participants to place all acceptable recyclables into a single container for subsequent collection and processing, eliminating dual pick-ups and increasing recycling percentages by 30%. Commingled is not accepted in plastic bags. Newspapers should not be bundled or tied. Bottle caps and jar lids are not accepted and should be removed and placed in trash. Acceptable Single Stream Materials are as follows: Fiber Old Corrugated Cardboard, Newspapers Mixed Papers including: Mail Catalogs, Magazines, Copier paper, Printer paper, All other office paper Commingled Containers Aluminum Food and Used Beverage Containers (emptied/containing no residue) Ferrous Cans (tin, iron, steel) Plastic Containers as follows: • PET plastic containers where the neck is smaller than the base of the container • HDPE natural plastic containers (milk, iced tea containers, etc.) where the neck is smaller than the base of the container • HDPE pigmented plastic containers (detergent, shampoo bottles, etc.) where the neck is smaller than the base of the container • Glass bottles and jars Month XX, 20XX ©20XX Waste Management Page 13 What items are not acceptable in your streams? The items listed below may either cause injury to our employees, damage to our recycling equipment, create processing issues, and or have a negative impact the environment if not handled correctly. Commercial or Bulk Household Wastes (including bulk paper rolls, plastic strapping, wood pallets, string, rope, wire, coat hangers, construction materials (i.e. sheetrock, stone..etc.), bulk metals, mirrors, windows or auto glass, porcelain, ceramics, glass cook/bake ware) Plastic Wrap/Film Plastics/Cellophane/Aluminum foil/ aluminum foil products Plastic/trash bags (Note: All attempts should be made by sales team to have materials delivered loose, hence eliminating usage of bags) Food Products/Organics Wastes Wood, Trees, Leaves, Brush, Other Yard Wastes Kitchen/Restroom Wastes (paper/foam plates, paper/foam cups, tissues, paper towels) CFC Containing Appliances (refrigerators, air conditioners) Special Wastes (Light bulbs, Batteries, All Electronic Scrap, ink cartridges) Prohibited Wastes (car/truck tires, radioactive, volatile, corrosive, flammable, explosive, biomedical, infectious, bio-hazardous, regulated medical or hazardous waste, toxic substance or material, as defined by, characterized or listed under applicable federal, state, or local laws or regulations, or other waste not approved by WM. Month XX, 20XX ©20XX Waste Management Page 14 Impacts of Non-Recyclables at MRF Month XX, 20XX ©20XX Waste Management Page 15 What items are not acceptable in your streams? Yard/string E-Scrap Month XX, 20XX ©20XX Waste Management Page 16 Questions? Month XX, 20XX ©20XX Waste Management Page 17