Challenges in Island Recycling

Island living. The phrase conjures images of the expanse of ocean, the gentle breezes, the seduction of the environment, the easy life. But nowhere else are the pressures of solid waste management more critical than on an island with limited land space for traditional disposal. Nowhere else is the idea of "throwing something away" more ironic, since there is no "away" for people who live on a mound of land in the middle of an ocean.

Sadly, the easy island lifestyle that seems so exciting is completely dependent upon the importation of just about everything. Hawaii, for example, prides itself on its tourism, which is largely based on the consumption of food, drink, beach supplies, hotels, and trinkets. Ninety-nine percent of the products used to supply tourism and the residents of Hawaii are imported. Virtually nothing is manufactured from raw materials on the islands to meet the demands of its visitor industry or its resident population.

As a result, state and county solid waste officials have tried a variety of measures to stem the flow of what will ultimately become the 2.1 million tons of garbage left behind each year from the 5 million tourists and 1.4 million residents.

In 1990, the Hawaii Legislature approved recommendations made in the Integrated Solid Waste Management Plan developed by a committee of business people, environmentalists, regulators and county solid waste officials. The Integrated Solid Waste Management Act requires each county to develop programs to achieve 50 percent diversion of municipal solid waste by the year 2000.

The legislation established the Office of Solid Waste Management (OSWM) under the Department of Health for regulatory and planning purposes, and named the Department of Business, Economic Development & Tourism (DBEDT) responsible for recycling market development.

In 1993, a group of concerned business people, legislators, county council members and environmentalists were successful in lobbying the legislature to create the Clean Hawaii Center within DBEDT to assist businesses in developing the capacity to recycle materials throughout the islands. The Center was supported by DBEDT in its initial year, but in its second year staff positions were eliminated as the state faced a severe economic crisis. Only one program of the Center continues as a result of funding from the OSWM, and that is to use a competitive bid process to distribute $250,000 to recycling businesses engaged in research and development. The administrative process however, restricted companies from using the funds to purchase machinery and equipment.

John Harder, chief of solid waste for the state of Hawaii, placed no conditions on the use of the funds by businesses and was disturbed by DBEDT’s restrictions. "I am really disappointed that they restricted the use of this money, especially since it was money from our office and we were looking at alternative ways to get the money to companies," he says.

In 1994, the state initiated a 25-cent-per-ton tipping fee (raised to 35 cents by the 1997 legislature) to pay for administration of its solid waste management program. Additionally, the state imposed a 1.5-cent advanced disposal fee on all glass containers entering the state. In 1996, this disposal fee resulted in the collection of $2.4 million, 90 percent of which was distributed to the counties to operate or contract for glass recycling programs.

Harder estimates that of the 2.1 million tons of MSW produced in 1996, 500,000 tons were diverted from the waste stream and recycled, recovered, or composted (see chart for exact breakdowns). Maui led the islands in recycling, with a 25 percent diversion rate; Oahu estimated 24.5 percent diversion; the Big Island of Hawaii diverted 17.5 percent; and 15 percent of Kauai’s MSW was diverted.

In 1993, legislation was passed to redefine recycling as a manufacturing activity rather than a solid waste disposal alternative. DBEDT argued with the OSWM that this determination should exempt companies involved in the re-manufacturing of secondary paper, plastics, and glass from having to obtain solid waste permits. DBEDT maintained that the materials collected were clean and separated prior to disposal in the waste stream, and as raw materials for a manufacturing process could not be discriminated against.

But the OSWM did not want to lose its ability to force correction of disposal abuses that might result in public health hazards. A compromise was reached where the manufacturing company could submit a simple letter for a "permit by rule" which would alert the OSWM to its activities and would allow the OSWM to track its progress and lower the hammer if violations occurred. Companies that collect or process the secondary materials – or the raw materials used by the manufacturers – are granted relaxed permitting but are still regulated under solid waste management statutes.

The island of Oahu (home to Honolulu) has a waste-to-energy facility which was erected in 1986 with a put-or-pay contract to burn 600,000 tons of MSW per year. The facility, built with bond financing at a cost of $60 million, is one of two licensed MSW disposal sites on the island. Oahu’s landfill, which is operated by Waste Management Inc., has approximately four years of disposal capacity remaining. A privately owned and operated construction and demolition debris landfill receives these special wastes at a substantial cost difference from the MSW facilities.

Honolulu uses a series of 60 drop off containers, located at schools throughout the island, to collect old newspaper, glass, aluminum, and plastic milk bottles. The schools receive the money earned after expenses paid to the recycling processor.

In the initial stages of the program, schools were earning $50 to $100 per container, which is collected either weekly or twice a month depending on the location. The downturn in paper prices has resulted in the revenues dropping to $1 to $5 per container.

Honolulu does its best to use the recyclables in the state. The milk bottles are shipped to Maui, where Aloha Plastics processes them for their extruded plastic lumber operations; glass is crushed and either shipped to the West Coast or mixed into glassphalt or cement. Yard trimmings will be picked up at curbside from residences that are assigned the city’s new automated collection system. Honolulu also has encouraged green waste recycling with a few contracts to businesses to operate wood and green waste processing sites.

The majority of Honolulu’s recovered materials come from the commercial sector. Suzanne Jones, recycling coordinator for the city and county of Honolulu, feels that material disposal bans are an effective means of stimulating diversion efforts. Trucks are monitored at the county’s disposal facilities, and may not contain more than 25 percent cardboard or yard trimmings. A total disposal ban has been instituted for scrap metals, white goods, tires and batteries.

The county has legislated that all offices greater than 20,000 square feet must recycle old newspapers, office paper and cardboard. Restaurants and bars serving alcoholic beverages must recycle glass. Large food processors, food preparation operations, kitchens, grocery stores, and restaurants must recycle their food wastes. This material has traditionally been given to the island hog farmers, or collected for a fee by Unisyn, a food and animal waste processing facility that uses an anaerobic digestion process to convert it to a usable soil amendment.

Most businesses are able to comply with these mandates. "We want to keep it based on sound economics," Jones stresses. "If a company cannot meet our diversion requirements for economic reasons we will review and sometimes relax these requirements on a case-by-case basis."

Maui operates one transfer station and one central landfill that has two years of space remaining in its current phase, and an additional 20 years anticipated with phases 4 to 6. Additionally, Maui has developed a network of recycling drop-off sites, a sewage sludge/green waste composting program, and a bio-diesel project that converts used cooking grease into diesel. The island has also used grants to encourage small-scale re-manufacturing in plastics and glass.

Dr. Hana Steel, Maui’s recycling coordinator, credits community pride and participation for the island’s successful and creative approaches to developing end-use businesses. The support of Mayor Linda Lingle, TEAM MAUI and the grassroots Maui Recycling Group have been critical for the program’s successes over the past eight years.

"I am just the coordinator," says Steel. "The recycling businesses and entrepreneurs have been the island’s recycling think tank. The deserve most of the credit for being willing and able to develop creative solutions to any disposal problems."

The Big Island of Hawaii has transfer stations situated throughout the island and two licensed landfills. The Hilo site has approximately 18 months of operating life remaining, while the new Kona landfill operated by Waste Management Inc. has another 50 years of life expectancy.

The Big Island, however, was recently sued by the United Public Workers Union for privatizing services that could be provided by civil servants. The union won its lawsuit and the county has notified WMI – which won the contract in 1994 to build and operate the facility – that it will assume operation of the site within 18 months. The island’s recycling contract to Recycling Systems Hawaii was temporarily suspended during the legal action but is expected to resume shortly. The business operates commercial recycling, buy back and drop-boxes for newspaper, glass, aluminum and plastic. They crush the glass on-site using an Andela Pulverizer, and have marketed the resulting product as a soil additive, decorative glass rocks for aquariums and landscaping purposes, among various other uses. The paper, aluminum and corrugated cardboard are sold out-of-state, the plastics are sold to Aloha Plastics on Maui.

A few composting companies struggle to make ends meet on the Big Island, producing quality soil amendments from local green wastes that are brought to the sites by tree trimmers and landscapers. The Big Island does not maintain a recycling coordinator, but in the past has contracted these services through the local non-profit group, Recycle Hawaii.

Kauai’s landfill, which had only three years of space remaining in 1991, was filled in one week by debris generated when Hurricane Iniki hit the island in September 1991. The island is currently using a temporary facility, which has another 18 months of capacity. Kauai has no recycling coordinator, and eliminated its solid waste manager’s position in 1996. The island currently supports a scrap metal processor, a glass recycler, and a company that receives green waste for composting.

Despite all of their determination, it seems unlikely that the islands of Hawaii can reach their goal of diverting 50 percent of the waste stream annually by the end of this century. Scrap metals still represent the majority of materials diverted from each island. This is the result of aggressive efforts to reduce stockpiles of abandoned vehicles, and the demolition of military and sugar cane processing complexes.

Island recycling is far more complex than recycling anywhere on the mainland. There are two particularly significant reasons: the lack of local – or even regional – markets for recyclables, and the cost of shipping materials inter-island as well as to off-island markets.

Successful recycling depends on manufacturing, and no where else is this precept more obvious than in an island economy which supports no manufacturing. Productive manufacturing – which is based on profit realized on sales of goods manufactured – relies on easy access to cheap raw materials. But "easy access to" and "cheap" are two phrases usually not associated with island life. Without an already-established industrialized base, island economies find it difficult to start up manufacturing or recycling companies.

Additionally, most island governments have traditionally supported the visitor industries, since the tourist dollar usually has a more immediate return-on-investment than a manufacturing dollar. For example, if you spend a dollar buying a souvenir trinket, that dollar is returned immediately to the local economy through the retail establishment or street vendor. This vendor will then pass a percentage of the dollar to the distributor, the wholesaler and ultimately the manufacturer. In island economies however, these "uplink" businesses are almost always located off-island. Because of the nature of manufacturing and international trade, retail establishments usually represent lost opportunity costs. Most often the only local jobs they support are in the companies that service their businesses, which traditionally pay less than manufacturing jobs.

On the other hand, economic returns from manufacturing operations almost always support multiple layers of a local economy, but the return on investment is more subtle and less immediate. In recycling, for example, a re-manufacturing company will support jobs in the local collection and processing companies in addition to the jobs created within its own operations. Additionally, the value added to the end product through the manufacturing process will be realized with additional taxes paid to the local economy, either through employment, sales, or other operations. The multiplier effect of every dollar is higher in the manufacturing trades than in retail.

Tourism however, is usually considered a "clean" industry, while manufacturing has traditionally been viewed as "dirty". Since island economies rely on visitor dollars, they are very concerned with maintaining beauty and image.

Individuals and companies that choose to work in recycling collection, processing and re-manufacturing in an island economy face similar but more complex challenges than their mainland counterparts. In most island economies, recycling is an anomaly and knowledge of the recycling industry is limited among business developers and financing institutions. This lack of familiarity, accompanied by a few failures over the decades makes it extremely difficult for a business to obtain funds to start-up or expand operations. The financiers are not confident that the money invested can be recovered by local resale of machinery and equipment, should the business fail.

As a result, most successful collection and processing companies are started small, with second-hand equipment and a focus on two or three materials. This helps to protect the companies from over-capitalizing and taking on too much debt that will sink their ships when markets inevitably collapse and transportation expenses outstrip their revenues.

Actual recycling of materials on any island is extremely rare, since so little manufacturing exists. Companies that wish to establish such operations in the islands face an almost impossible problem with their bottom lines. Their start-up costs of transporting machinery and equipment and the expense of maintenance, repair and replacement of their machinery are a significant cost and ultimate debt that may easily cause them to price their end products out of reach of the local market.

Additionally, re-manufacturing companies need to supply enough finished product at competitive rates to meet local demand. Capitalization costs alone may make it impossible to meet or beat the prices charged by large-scale manufacturers that have already fully amortized their property or have huge production runs and as a result can spread the cost of their products far more widely.

Finally, the island manufacturing company must be able to count on the local collection systems, which are often spread throughout the islands, to provide it with enough raw material to manufacture sufficient quantities of the end product to meet the demand of its markets. The collectors and processors on neighboring islands, however, may not be able to afford the costs of the inter-island transportation based on the revenues from sales to the local manufacturer.

Much of the research we conducted in the early years of the Clean Hawaii Center focused on the potential to establish small scale or niche market re-manufacturing companies that could beat the prices of imported products by using the transportation costs as the pricing cushion. For example, we knew that most products imported to Hawaii carried a transportation cost that ranged from 40 percent to 80 percent of their wholesale price. A local company could use this spread to price their products competitively and still cover higher operating costs. We also focused on micro businesses that could support the full circle from collections to manufacturing, on each island with populations ranging from 1,200 to 1.2 million.

The islands of Hawaii will always remain vulnerable to the international price wars surrounding secondary materials because it does not – and probably never will – have the capacity to absorb its own paper, metals or all of its plastics. According to research done by the Clean Hawaii Center, however, the islands have the ability to use all of its wood, green wastes, glass, and food wastes.

The OSWM is currently exploring the creation of a local chapter of the Solid Waste Association of North America, since there is no similar organization of its type in the state. In cooperation with the Rural Community Assistance Corp., the OSWM is also conducting community meetings to determine the feasibility of establishing a non-profit recyclers’ association or a similar entity based on cooperatively run businesses.

The businesses that have survived, sometimes in spite of government assistance, insist that all they need is for the government to even the playing field between the assistance it provides to solid waste management and what they provide to recycling businesses. For example, the state has provided land, free of charge to the counties, on which to build existing landfills and transfer stations. If that same land were provided free of charge to the recyclers they could easily make a profit, expand collections and processing, and establish more re-manufacturing operations.