Market Driven Recycling
Tržně řízená recyklace (anglicky)
The term market driven recycling is one thats often bandied around, but not always fully understood.
This page aims to define what it means and why it has such an impact on Australias recycling system as a whole.
Industrys response to environmental initiatives, in particular recycling, has been driven by a combination of factors, including self interest, minimising cost, responding to consumer demands and gaining a competitive advantage.
Where recycling makes good economic sense, industry has moved in to develop infrastructure and processes to meet market demand.
These market driven companies recycle as many tonnes as the market can absorb at a price that makes a profit for the recyclers.
Any obstacle to increase recycling is likely to be short term, such as lack of collection and production capacity as well as the current price available for recycled materials.
But if market demands for a material are consistently strong, such infrastructure emerges.
All phases of market-based recycling are economic.
The recovery rates vary as they are directly linked to the price of virgin raw materials that the secondary materials replace.
If the cost for collection, sorting, transport, reprocessing and marketing increase to the point where the total cost of the recycled material exceeds that of virgin raw material, then recycling rates will drop until supply matches demand.
This is one key reason why recycling contractors are always looking to maximise efficiencies and economies of scale.
If they dont, they are not viable - especially where virgin material is cheaper than the recycled secondary raw material that they can supply.
Conversely, as costs decrease and make the recycled material more viable for manufacturers than virgin raw material, recovery rates increase to meet the increased demand.
It should be remembered that recycling in Australia does not operate in isolation, but in a global environment and it is influenced by international developments. Indeed, some recyclers in Australia now employ people whose job is to monitor developments in these international markets.
Commercial and business sector support for recycling and resource management has been manifest in a number of ways.
Simple economics will determine that businesses will utilise recycled material in manufacturing processes where:
- that material is cheaper
- has no detrimental effect on the design characteristics of the end product, and
- where there is a plentiful supply of that quality recycled material available.
There are examples of this in common practice today for materials like steel, aluminium, glass, PET and paper and cardboard. All of these recycled materials are used by Australian industry to make new products.
Market forces ensure that steel cans are bought to be turned into railway tracks, steel girders and even new cans. Old PET soft drink bottles get bought to be turned back into soft drink bottles, sleeping bags and even clothes. The list of such examples is nearly endless.
Individual organisations have also made significant financial investments in infrastructure to process recycled materials.
$134 million has been invested in the development of de-inking and recycling facilities at Fletcher Challenges newspaper mill in Albury. The development of this infrastructure has resulted in their capacity to recycle 160,000 tonnes of old newspapers every year - turning them back into new newsprint that is on-sold to the newspaper industry.
Coca-Cola has also recently invested $100 million in their new bottling and recycling facilities. They are now buying and recycling up to one million old PET bottles every day, turning old PET bottles back into new soft drink bottles.
The Paper Converting Company has also invested millions of dollars to enable themselves to turn old office paper into high quality recycled toilet tissue. Marketed under the brand name SAFE, they are now selling over 24 million rolls of this tissue via supermarkets.
As they sell these tissue rolls to the public, market forces are enabling them to go back to their suppliers to buy even more office paper for recycling.
Its not just for kerbside recycling that market forces play a role.
Industry generators of recyclable waste materials can also have an economic incentive to source separate these materials for recycling. High landfill cost or a payment from the collector are usually these incentives.
Zdroj: Planet Ark Recycling Report
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