A Secondary Commodity

Dick Cheney, a known commodity on Capitol Hill, is pointed to as a 1980s carryover who will wield a decent amount of clout within the Bush Administration. If one wants to know how the new Bush administration will act on recycling and environmental issues, one need only look at how George H.W. Bush and Dick Cheney acted on the same issues, one line of thinking goes.

At the same time, Christine Todd Whitman, the new head of the EPA, is new to Washington, with an environmental record that does not extend beyond the borders of New Jersey. Thus, another line of thinking suggests, how George W. Bush acts on certain recycling and environmental issues cannot necessarily be predicted by the events of 10 years ago.

There are several recycling and commodity market issues that may be considered at the federal level over the next four years. With a new administration from the party that had been out of power for eight years taking over, it might be a good time to for recyclers to consider how this set of circumstances may play out.

BEYOND SUPERFUND

Thus far, the Superfund Recycling Equity Act, signed into law in late 1999, has held up fairly well for scrap recyclers seeking protection from it (see story page 74). For two decades, scrap recyclers had to live in fear of being named as partially responsible parties (PRPs) liable to pay cleanup costs simply for shipping industrial feedstock to a smelter or refinery.

With the hard fought battle to win (and uphold) Superfund reform seemingly well behind it, the Institute of Scrap Recycling Industries Inc. (ISRI) and other organizations representing the interests of secondary metals dealers can devote more attention to other issues.

There are several issues ISRI is keeping on eye on:

• At the state level, flow control and solid waste franchise measures that might be written too broadly, thus impeding the buying and selling of scrap.

• On the international front, the Basel Convention continues to be a source of concern for ISRI and the other national recycling associations that make up the Bureau of International Recycling (BIR), Brussels. The trade groups have had to work diligently to convince Basel Convention policy authors to carefully spell out the differences between recyclable commodities and waste when drafting import/export laws.

• There are several pending transportation and environmental regulations that, as proposed, will have an effect on the day-to-day operations of recyclers.

One of the primary concerns for many North American metals companies is their very survival. Lobbying interests for many steelmakers have been trying to gain attention in Washington regarding import restrictions and other federal actions they believe can help them through the current environment.

STEWARDSHIP ISSUES

When it comes to borrowing ideas for laws and regulations, it remains to be seen how often the U.S. will look to imitate the European Union (EU).

Some environmentalists and recycling advocates, however, are hopeful that the U.S. will consider following in the EU’s footsteps when it comes to enacting end-of-life producer responsibility laws.

The notion of product stewardship-that a manufacturing company will ultimately be responsible for recycling or disposing of that which it creates and sells-has gained a firm foothold in Europe.

While Germany’s “Green Dot” program brings the concept to packaged goods makers, the EU is phasing in the concept for makers and importers of vehicles, appliances and electronic equipment.

European automakers and importers are currently devising systems (often cooperating with existing dismantling and scrap companies, as well as parts suppliers) to make sure they can reach-and document how they have reached-the recycling mandates.

Although the laws were lobbied against by many manufacturers, most are making efforts to find the positives in such a system, often involving dealers and suppliers in the process to design initiatives that may ultimately prove helpful to the bottom line.

At seminars and trade shows in the automotive, electronics and other industries, the topic of product stewardship is already on many agendas in North America, as the European divisions and operating groups of global companies report what they have learned.

Selling producer responsibility as a just or economically advantageous way of doing things may not be easy in America. “Manufacturers have a responsibility to manufacture products that are safe, and hopefully designing for recycling is important. But that by no means leaves the purchaser of the obligation to dispose of that product once they own it,” says Steve Levetan, an Atlanta-based consultant who represents ISRI as a lobbyist in four Southeastern states.

“I’ve seen people extend this concept to the purchaser having no responsibility, and that somehow all responsibility should revert to the manufacturer,” says Levetan. “Does this mean that if someone throws a beer can out of their vehicle onto the side of the road, that it’s not their fault, but that of the beer company?” he asks. “That seems to be what some people are trying to get others to believe. To shift that entire burden onto the manufacturer is irresponsible and ludicrous.”

It is unlikely that manufacturers will urge the U.S. government to adopt stewardship laws simply to make procedures uniform on both sides of the Atlantic. One exception might be in the computer and office equipment sector, where much of the equipment is leased and ends up back with manufacturers anyhow. These companies might actually benefit from a mandated and organized collection and processing system that reduces disposal/recycling costs and eliminates potential environmental liabilities.

CURBSIDE QUESTIONS

Americans, by and large, feel good about the act of recycling, and largely support local government efforts to collect recyclables at the curb. A cynical observer might hope that this will still be the case after taxpayers have a chance to see expenses versus revenues for curbside programs in 2000 and 2001.

Unless circumstances change soon, 2001 could mark a second straight year of low recyclable commodity prices coupled with high fuel costs. Recycling advocates can still make the case that a sound recycling program makes fiscal sense over time, both in terms of landfill space preserved and income earned when prices are more favorable.

But conditions like the current ones give recycling detractors a chance to scrutinize funding choices. And a slowing economy could mean smaller tax receipts, more governmental obligations, and a thorough review of state, county and municipal budgets.

Recycling budgets coming under review is nothing new, National Recycling Coalition (NRC) executive director Dr. Will Ferretti points out. “Every year we will see states revising their statutory and fiscal requirements regarding recycling. I don’t see it as a negative issue reflecting recycling. It’s just an ongoing part of responsible government.”

According to Ferretti, the NRC, based in Alexandria, Va., will continue to go to bat for state recycling budgets, but is also concerned about wider issues that affect the future of recycling.

“We’re on record as opposing subsidies of any form that give preference to virgin materials over recycling, or give preference to disposal over recycling,” comments Ferretti. “We see some of the greatest opportunities for leveling the playing field probably lie in those kinds of rules that give preference to those materials.”

The ability of recycling processes to save energy may be a help in this regard, in light of the energy shortages that have affected the western half of the U.S. “It’s well documented that recycling systems-from collection through manufacturing-use less energy per ton of material than systems based on virgin materials,” says Ferretti.

THE NEW BOSS

With several issues up for debate, can a new presidential administration be expected to drastically implement any new recycling policy-or quickly reverse any existing ones?

With recycling issues not on the “first 100 days” agenda of the new president, the answer probably is that it’s too early to tell.

“I’d say it’s extremely hard to determine what is likely to come out of this administration in terms of recycling,” says Ferretti. “Everybody is still awaiting word on some key staff appointments within the EPA and within other key agencies,” he adds.

One item of speculation is whether the Office of the Federal Environmental Executive, now vacant but managed during the second half of the Clinton Administration by Fran McPoland, will be re-staffed. In a letter to President-elect Bush written late last year, Ferretti urged Bush to “expand the mission of the Federal Environmental Executive to bring much-needed coordination to and strategic development of the broad array of federal programs aimed at business and technology development for the benefit of recycling enterprises.”

Ferretti believes the new administration can be expected to take a market-based approach to recycling, which he says is not out of step with the viewpoint of NRC and its members. “We would hope that the current administration sees recycling as an environmental activity that is compatible to its overall philosophy of government. It is a market-based activity,” says the NRC executive director.

In his letter to Bush, Ferretti also urges the administration to continue strengthening federal recycled-content purchasing directives, urging action to “direct all federal agencies to expand their purchasing of recycled content and environmentally preferable products, as well as their efforts to reduce and recycle the waste they generate.”

On the scrap recycling side of things, issues faced by scrap-consuming steel mills have been in front of the new administration since it moved into its Washington office space. Lobbyists from competing steelmaking and manufacturing interests are weighing in with their views on how or if the new administration should respond to the growing influx of imported steel.

The American Iron and Steel Institute (AISI) has been the loudest voice seeking federal help in protecting domestic steelmakers. In mid-February, the association called for “an immediate action program calling on the Administration to provide, without delay, comprehensive temporary quantitative restraints on steel imports, by means of a Presidentially-initiated steel industry-wide Section 201 case or other remedies available to the President to counter threats to the economic or national security interests of the United States.”

The state of the domestic steel industry (which is also the subject of a separate feature in this issue, starting on page 40) is a concern of not only ferrous scrap processors, but also to a range of recyclers, including secondary aluminum “de-ox” producers, municipal program coordinators seeking nearby markets for tin-plated steel cans, and for the heavy equipment makers and dealers who supply both scrap yards and steel mills with material handling equipment.

Thus far, groups like ISRI and the NRC have not taken a strong stand on the issue, in part because the domestic steel industry itself is divided on which courses of action the government should or should not take to protect domestic steelmakers. But without question, when a steel mill shuts down it can cause temporary havoc in a region as processors look for new end markets.

Tax cuts and Middle East tensions will probably draw the most attention from the new president, but economic issues directly affecting recyclers will almost certainly begin to cross his desk as his first year in office plays out. RT