Why The US Loses $800M A Year In Unrecycled Aluminum Cans | Big Business | Business Insider

Aluminum is one of the most recyclable materials on earth. It can be melted down and reshaped over and over and still be good as new. It sounds simple, it's not. But the U.S. recycles less than half of its aluminum cans, leaving nearly 800 million dollars of valuable scrap in landfills every year. Other countries, like Germany and Brazil, recycle nearly all of them. So why is the U.S. so far behind? And what will it take to catch up to the rest of the world? America actually pioneered aluminum recycling back in 1904, when two of the first facilities in the world opened in Chicago and Cleveland. The push to recycle aluminum skyrocketed during the World Wars, when the U.S. government needed the material for weapons, armor, and airplanes. As a Girl Scout, 15-year-old Carol Davis has been saving every scrap of tinfoil she can find. Americans donated their household scrap in droves. After that, scrapyards, where people could exchange their old metal goods for money, began to pop up throughout the U.S. And in the 1970s, cities started to implement curbside recycling programs. Over the next three decades, many adopted the big blue bin, where you could throw all recyclables in unsorted, a model still very common today. The lack of sorting is a big reason why materials aren't recycled more often. But since we started putting everything together for decades in one bin for the sake of convenience, we really trashed our recycling system. Separating it is expensive and time-consuming, and not every city has centers that can handle it. The mess of glass, paper, aluminum, and all kinds of plastic often gets contaminated by food, trash, and packaging that appears recyclable, but isn't. We actually don't have one American recycling system, so we have nearly 10,000 different recycling systems that are all operating on a shoestring budget. Over 20-ish years, the U.S. exported most of its so-called recyclable waste to China, a grand total of more than 11 billion dollars worth of materials. The country would import almost any kind of waste unsorted, which meant American recycling centers did not need to prioritize sorting infrastructure. But in 2018, China cut back on its recycling imports. That left local governments and recyclers kind of holding the bag, trying to figure out what the heck to do with all of these materials that it turns out weren't really recyclable. Worse yet, as of 2024, a quarter of American households don't have access to recycling of any kind. Meanwhile, all kinds of aluminum pile up in scrap yards like this one in Michigan. This is post-consumer scrap, a mix of wires, window frames, and junk cars. And while nearly everything in this scrap yard will be recycled, about 2.4 million metric tons of post-consumer scrap ended up in landfills in 2018, potentially worth hundreds of millions. This kind of waste is usually shredded with large machines, like this one, that can break down any item, including whole fridges It'll be pulverized and be fist-sized pieces within a matter of seconds. It's a pretty impressive process. Then, a series of magnets, x-rays, and heat separates metals, plastics, and textiles into different piles. The challenge here is that aluminum is often alloyed, so it's mixed with other metals like copper or zinc, and there are almost no facilities in the U.S. that have the tech to separate those. The company that owns this yard, Patnas, partnered with a Norwegian manufacturer called Hydro to bring a brand new tech to the U.S. It can separate aluminum alloy by alloy at scale. This tech can handle more than 10 metric tons per hour. That's 30% more than similar machines in the U.S. If you're only able to operate one, two, three tons per hour, it is not economically viable. You'd have to have many of these installations, and they are very expensive. The separated alloys go to Hydro's new $150 million facility in Cosopolis, Michigan. So what we have here is a pile of shredded post-consumer scrap. This is what I recognize. If you live in a house in the United States that has an asphalt shingle roof, you have this around the border of your roof. It's drip edge. The main innovation here is how they're using this de-lacquering kiln. It uses hot air to burn any paint or lacquer contaminating the alloys, but leaves the metal in solid form. That basically burns the organics off of the scrap. Those organics, we don't just vent them to the atmosphere. We actually capture them and use them as a fuel source to help melt the metal. A similar type of kiln has been used in can recycling for decades. But Hydro is one of just a few U.S. companies using it to turn low-quality scrap into high-quality scrap. I would estimate that we are looking at single-digit numbers for facilities in the U.S. Hydro also buys piles of pre-consumer scrap directly from companies. Every time a manufacturer uses aluminum to make a product, it creates metal shavings and trimmings like these long, thin pieces. In the U.S., the majority of this comes from cars and construction-related industries. And because it arrives relatively clean, it's pretty easy to process. About 90% of it gets recycled every year. But pre-consumer scrap still needs to go into this furnace, which melts the alloys at 750 degrees Celsius. The remaining impurities, called dross, rise to the top. The dross is scraped off with a large, spatula-like tool called a skimming machine. This is where Hydro mixes both pre- and post-consumer scrap. Next, workers brush a protectant onto these graphite rings, which will form the final product—7-meter-long aluminum ingots. Think of a log. Instead of being made of wood, it's made of aluminum. And that's what we produce here in Cosopolis. Workers pour the molten metal into the casting table's troughs and test it for quality. Then it flows through the graphite rings, where it instantly cools and solidifies. The ingots are sprayed with water to further cool them down. These are usually sold to car companies and used to make auto parts, like trim pieces and the chassis. The Hydro team casts more than 310 metric tons of ingots per day. Workers clean up excess aluminum on the casting equipment, which will be recycled in another batch. Building a facility entirely dedicated to recycling post-consumer aluminum is expensive. So Hydro is investing in places where there's plenty of sorted scrap and enough demand to buy their final products. For the company, those places are Luxembourg, Norway, Spain, and now the U.S. After the ingots are cut down to size, workers like Keith Bonner do a final quality check using an ultrasonic tool. It's looking for cracks and flaws by sending sound waves into the material and then searching for that sound wave to come back. Hydro says its recycling process uses 95% less energy than it takes to make new aluminum. We make the metal out of this red rock called bauxite. Processing it involves chemicals, steam, and a lot of energy. Refining one metric ton uses roughly the same amount of electricity needed to power the average American home for a year and a half. And one of the most common uses of the metal is the aluminum can. Some of the biggest contributors to can recycling are people like Josefa, who lives in New York, one of 10 states that pay people to return their cans. On a really good day, she and her partner Pedro can earn as much as $300 for 10 hours of work. But most days, they'll make about half of that. By the end of the day, the bags are almost as tall as she is. Josefa caches in her containers at Sure We Can, a collection center in Brooklyn. She gets 5 cents for each can and plastic or glass bottle. So she needs 20 for $1, 100 for $5, and this huge stack for just about $85. But only 10 states in the whole country have these laws known as bottle bills, which incentivize recycling with money. In New York, consumers pay a 5 cent deposit on top of the price of a drink. You'll get that 5 cents reimbursed if you return the container to a store, which will deliver it to a distributor to get back its nickel, plus a 3.5 cent handling fee. If a can ends up in a landfill and no one collects that nickel, either the state or the beverage distributor keeps it. In 2021, New York's unclaimed deposits totaled $139 million. The state kept 80% of that. About 16% of the unclaimed deposits went to New York's Environmental Protection Fund, and the other 64% went to the state's General Fund. A lot of people don't take advantage of the deposit system. So in New York City, many consider canners an essential part of making recycling work. Recyclers with Sure We Can collected 12 million containers in 2023, enough to fill an estimated 47 garbage trucks. But they can only get paid if the containers were once filled with soda, beer, energy drinks, or water, not tea, wine, or liquor. So Coke can sell a soda beverage and a tea beverage in literally the same bottle, but because one has soda in it, one has tea, one is redeemable and one isn't. It doesn't make any practical sense. We want to see that change. The last time the handling fee increased was more than 10 years ago. But the 5 cent deposit hasn't changed since New York's bottle bill took effect in 1983. Again, essential workers who haven't had a raise in over 40 years, which in any other industry would just be completely inconceivable. Of course, the cost of operating a business in New York has risen quite dramatically in that same amount of time, which means right now redemption centers are closing all across the state. Most states that collect higher deposits, Maine, Oregon, and Michigan, have container recycling rates above 80%. But can recycling has been declining in America since the 1990s, hovering around 45% in recent years. Compare that to Germany, which recycled 99% of its aluminum cans in 2020. Over there, people get about 27 cents back for returning a single-use container, more than five times what most U.S. states with bottle bills offer. On top of that, passing new bottle bills has become harder, as beverage industry leaders and even waste management companies have lobbied against them. That's because containers are one of the steadiest income streams for recycling centers. Pulling those out of the standard waste stream really does make the floor drop out in terms of the economics of recycling the rest of our waste. They currently prop up a lot of our recycling industry financially. To understand why European countries are further along than the U.S., it's worth looking again at Germany's 99% can recycling rate. Germans first enacted a deposit system in 2003, more than 30 years after the U.S. But the government implemented a nationwide multi-bin system. To catch up to the Germans, some experts say that the U.S. should pass Extended Producer Responsibility Laws, or EPRs. So under these policies called EPR policies, producers actually have to pay for the end of life of their product. Until then, Sure We Can, and members like Josefa, will remain crucial to keeping valuable cans from going to waste.