Time to share some experiences about the export market and used electronics. I've now spent more than a decade building the Fair Trade Recycling aspect of the business, and growing my companies (American Retroworks, Retroworks de Mexico, and Good Point Recycling) to be healthy and fully functional. There is not as much strategy and trade secret to the business.
In this Part I, we can see how electronics recycling is basically just like curbside recycling. There are three key differences which we will explore in Part II. Part I starts with simple and factual observations about the recycling business, and then wades into how government can or should involve itself in regulating that "waste" or "raw materials" business.
1.0 Similarities between E-Scrap and Consumer Recyclables:
Like curbside recycling, the revenue comes from different grades of raw material which must be separated, graded, and cleaned to replace virgin raw material from feldspar mining (glass), smelting (metals), forestry (fibers), and refining (polymers). Each of these products can be sold, at some stage, for cash, but they have drastically different values, grading, and transport requirements.
1.1 Commodity Value: Glass is a bane for both curbside and e-scrap recycling, in that it's heavy, easily contaminated, distances to furnaces are enormous, virgin production is fairly simple and raw material - igneous, metamorphic, and sedimentary rocks all have abundant silica for feldspar mining. Metals are easy to manage (magnets and eddy currents) and easy to sell, and the pollution from metal mining and smelting is colliding worldwide with growing population. More people, with more money, want more things made of metal, and no one wants the smelters to impact their property values through pollution. Even in China and India, the incomes and expectations have grown to where people are less and less tolerant of a lead-zinc smelter which spills noxious toxins into the rivers and water supplies. Fiber is much more or a part of the curbside business, but the difference isn't as great as you'd assume when you look at the declining tonnage of newspapers and the huge volume of wood from console televisions, speakers and stereos which our plants manage.
1.2 Labor: If all of the materials in a computer, tablet, TV or printer were pre-disassembled, you could run them down the exact same Mayfran sorting belt that you run curbside recyclables through. Magnets and eddy currents can grab the steel and aluminum, blowers could separate the lighter plastics, shaker trays could get the small light pieces into a different direction than the big pieces. But in every Materials Recycling Facility (or Material Recovery Facility*), labor is high. You need humans to pick out and grade different raw materials. You can add two people and further grade (glossy magazines from newspaper, for example) or one person and send the bales to a paper mill with easier tolerances. But each laborer adds value. The problem is when the value added by labor (e.g. sorting plastics by resin, paper by ink and clay content, green from clear and brown glass) produces less than minimum wage. If you pay a woman $8 per hour to separate two tons of material and only make an additional $5 on the sorted material, you cannot afford her. This labor-to-value dynamic is just as important in E-Scrap recycling as it is in collection.
1.3 Collection: The distance between residents in a city and a countryside is a part of the cost of both recycling and waste collection. The economics and competition between waste and recycling collide. Since you cannot affordably recycle road kill, dirty sponges, spoiled food, wet tissue, many high heeled shoes and chicken skin (sorry Zero Wasters), you are committed to running the Waste truck. If you don't, ask Naples Italy and Seattle Washington (recent Waste Management strike) what happens to property values and pest control. The recycling truck is therefore an "also ran", and has to collect material valuable enough to offset the convenience of running a single waste truck to a single landfill or incinerator.
Fortunately, despite know-it-alls like Penn and Teller saying otherwise, this works for a couple of reasons. First, like a subway, you don't have to prove that the subway is faster than the cars on the commute. Going to work by car may be faster, but if you eliminate the subway the people are all in cars and it's no longer faster. Similarly, if you try shutting down recycling, you find that avoided disposal costs are more than the per ton at the landfill. When you add the "value added" from income of sale of the commodities, you find a lot of multipliers and higher employment - not just at the sorting line but at the paper mills and refiners as well.
1.4 Markets: There are "niches" in collection besides rural (high mileage costs) and urban. Some recovered materials - especially glass (and especially especially CRT glass) have a small number of buyers around the world and face huge transport costs after collection. This transport cost affects labor - you may decide to pay someone to sort plastic by color because the transport distance to a mixed-color market is higher.
1.5 Government involvement: Both electronics recycling and curbside recycling involve government, through procurement law (government contracting), labor law, environmental law, transport law, etc. Every time there is a real problem with waste management - a recycling fire, an abandoned speculatively accumulated pile, a fraud, illegal dumping, alleged malfeasance (usually a claim by a competitor with a different or better process) - we pay for a regulator to enforce rules and public contracts. Recycling businesses must know the laws (ignorance is no excuse), but also anticipate how regulators are interpreting the laws.
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| Commodity value of fiber = ? |
1.0 Similarities between E-Scrap and Consumer Recyclables:
Like curbside recycling, the revenue comes from different grades of raw material which must be separated, graded, and cleaned to replace virgin raw material from feldspar mining (glass), smelting (metals), forestry (fibers), and refining (polymers). Each of these products can be sold, at some stage, for cash, but they have drastically different values, grading, and transport requirements.
1.1 Commodity Value: Glass is a bane for both curbside and e-scrap recycling, in that it's heavy, easily contaminated, distances to furnaces are enormous, virgin production is fairly simple and raw material - igneous, metamorphic, and sedimentary rocks all have abundant silica for feldspar mining. Metals are easy to manage (magnets and eddy currents) and easy to sell, and the pollution from metal mining and smelting is colliding worldwide with growing population. More people, with more money, want more things made of metal, and no one wants the smelters to impact their property values through pollution. Even in China and India, the incomes and expectations have grown to where people are less and less tolerant of a lead-zinc smelter which spills noxious toxins into the rivers and water supplies. Fiber is much more or a part of the curbside business, but the difference isn't as great as you'd assume when you look at the declining tonnage of newspapers and the huge volume of wood from console televisions, speakers and stereos which our plants manage.
1.2 Labor: If all of the materials in a computer, tablet, TV or printer were pre-disassembled, you could run them down the exact same Mayfran sorting belt that you run curbside recyclables through. Magnets and eddy currents can grab the steel and aluminum, blowers could separate the lighter plastics, shaker trays could get the small light pieces into a different direction than the big pieces. But in every Materials Recycling Facility (or Material Recovery Facility*), labor is high. You need humans to pick out and grade different raw materials. You can add two people and further grade (glossy magazines from newspaper, for example) or one person and send the bales to a paper mill with easier tolerances. But each laborer adds value. The problem is when the value added by labor (e.g. sorting plastics by resin, paper by ink and clay content, green from clear and brown glass) produces less than minimum wage. If you pay a woman $8 per hour to separate two tons of material and only make an additional $5 on the sorted material, you cannot afford her. This labor-to-value dynamic is just as important in E-Scrap recycling as it is in collection.
1.3 Collection: The distance between residents in a city and a countryside is a part of the cost of both recycling and waste collection. The economics and competition between waste and recycling collide. Since you cannot affordably recycle road kill, dirty sponges, spoiled food, wet tissue, many high heeled shoes and chicken skin (sorry Zero Wasters), you are committed to running the Waste truck. If you don't, ask Naples Italy and Seattle Washington (recent Waste Management strike) what happens to property values and pest control. The recycling truck is therefore an "also ran", and has to collect material valuable enough to offset the convenience of running a single waste truck to a single landfill or incinerator.
Fortunately, despite know-it-alls like Penn and Teller saying otherwise, this works for a couple of reasons. First, like a subway, you don't have to prove that the subway is faster than the cars on the commute. Going to work by car may be faster, but if you eliminate the subway the people are all in cars and it's no longer faster. Similarly, if you try shutting down recycling, you find that avoided disposal costs are more than the per ton at the landfill. When you add the "value added" from income of sale of the commodities, you find a lot of multipliers and higher employment - not just at the sorting line but at the paper mills and refiners as well.
1.4 Markets: There are "niches" in collection besides rural (high mileage costs) and urban. Some recovered materials - especially glass (and especially especially CRT glass) have a small number of buyers around the world and face huge transport costs after collection. This transport cost affects labor - you may decide to pay someone to sort plastic by color because the transport distance to a mixed-color market is higher.
1.5 Government involvement: Both electronics recycling and curbside recycling involve government, through procurement law (government contracting), labor law, environmental law, transport law, etc. Every time there is a real problem with waste management - a recycling fire, an abandoned speculatively accumulated pile, a fraud, illegal dumping, alleged malfeasance (usually a claim by a competitor with a different or better process) - we pay for a regulator to enforce rules and public contracts. Recycling businesses must know the laws (ignorance is no excuse), but also anticipate how regulators are interpreting the laws.
