While touring Big River Steel, David Burritt, president and chief executive officer of Pittsburgh-based United States Steel Corp., says he was impressed by Big River’s production speed, high-tech facility and entrepreneurial spirit.
“When you get the opportunity to tour their facility, you get this hometown, make-it-happen, hard-work feel of the minimill,” Burritt says.
In October 2019, U.S. Steel announced it was investing $700 million in Big River Steel, acquiring a 49.9 percent stake in the company. U.S. Steel says it will work to acquire the rest of the company over the next four years, though economic circumstances also will play a part in the timing of the total acquisition of Big River Steel.
The partnership brings together the oldest and second-largest steelmaker in the United States with the newest and most advanced flat-rolled steel mill in North America.
Burritt says the investment will strengthen U.S. Steel’s competitive positioning in high-margin end markets. It also will allow Big River to leverage U.S. Steel’s long-standing relationships, especially in the automotive industry, and expertise in producing high-quality steel.
Big River Steel, a LEED-certified, technology-based steel mill and recycling facility in Osceola, Arkansas, began operations in 2016. With expansion plans well underway at its facility, Big River is on track to become one of the largest electric arc furnace- (EAF-) based mills in North America. Its expansion, which is expected to be completed in 2021, will double the mill’s hot-rolled steel production capacity to 3.3 million tons annually, says Big River Steel CEO David Stickler.
“These are folks that collaborate extraordinarily well,” Burritt says of Big River. “Clearly, they have a great teaming capability and excellent leadership, and we’re going to learn a lot from them.”
Best of both companies
Burritt and Stickler say the partnership will offer customers the “best of both” companies by bringing together the capabilities of integrated and mini-mill steel production.
“The thing to remember with the minimills is they’re low on the cost curve, so they do things very cost-effectively, and the speed in which they can make a steel coil is very rapid,” Burritt says. “A minimill can make a steel coil in 40 minutes, whereas it would take us several days to do that with our existing technology.”
Of Big River, he says, “They can make the products at the lower end a lot better than we can, but because of new capability, Big River is also moving into the high-quality steels, too. If you’re going to have a marriage, this would be the marriage you would want where you do get the best of both.”
When Big River first formed as a company, Stickler says its vision was to “combine the best of the integrated steelmaking community with the best of the minimill steelmaking community.” He says it also wanted to become a world leader in the production of electrical steels that are used in the automotive industry.
“We believe that the partnership will accelerate Big River’s entrance into the automotive community,” Stickler says. “Big River will have the opportunity to benefit from the expertise and knowledge U.S. Steel has in-house regarding electrical steels.”
“We expect the Big River-U.S. Steel partnership will ultimately be pointed to as one of the most highly successful partnerships [in the industry].” – David Stickler, CEO, Big River Steel
Burritt adds, “We can do the introductions with the minimills and help them expand into the auto market.”
In addition, the partnership will accelerate Big River’s ability to produce even higher grades of steel. Stickler says a misperception persists in the industry that minimills can’t produce the high-quality steels that integrated steelmakers are known for.
He says he acknowledges U.S. Steel for “shedding that legacy view and embracing the fact that EAF steel producers will have a clear path to the highest quality steels produced.
“Big River now has access to U.S. Steel’s historical and ongoing product development and product quality expertise rather than us trying to spend the next 10 years trying to catch up to where U.S. Steel and others in the industry already are,” Stickler says.
Big River also will be able to use U.S. Steel’s research facility to test new grades of steel while continuing production as usual, according to the two companies.
“One of the big advantages that we have that will help them is the ability to qualify steel,” Burritt says. “They’ll be able to move faster and get to these advanced markets faster,” he explains.
Another benefit of the partnership is that U.S. Steel has iron ore reserves that could potentially be converted into pig iron and sold to Big River, “thus avoiding Big River Steel from having to buy pig iron from Brazil and Russia,” Stickler says.
The Big River partnership, coupled with U.S. Steel’s other announced investments, including the installation of its first EAF in Alabama and a $1 billion investment in a new endless casting and rolling facility at its Mon Valley Works in Pennsylvania, also will allow U.S. Steel to compete with “anyone, anywhere,” Burritt says.
“The acquisition of Big River creates a very bright future for us,” he adds. “I think people have really embraced our strategy.”
Advancing into the future
Until U.S. Steel’s acquisition of Big River is complete, the two companies say they will continue to operate independently and as competitors within the steel industry.
“They’ll run independently from us, and we’ll get to see how they operate,” Burritt says of Big River. “Frankly, once we acquire all of them, there’s going to be a lot of independence that we want them to have. They’re a newer, leaner company with a big entrepreneurial spirit that we want to make sure continues.”
Over the next few years, U.S. Steel says it will have the opportunity to benchmark performance and understand how the companies can work together in the future, Burritt says.
Of U.S. Steel’s investments, Burritt says, “There are a lot of pieces for us to pull together when steel prices have dropped off significantly. We’re trying to find the right way to bring that together to get to our future faster.”
“[Big River Steel is] a newer, leaner company with a big entrepreneurial spirit that we want to make sure continues.” – David Burritt, president and CEO, U.S. Steel Corp.
He adds, “When you’re fighting the toughest competitors, it’s better to join them than to fight them. Over time, this will be the perfect marriage.”
In the meantime, Stickler says Big River Steel will explore and evaluate opportunities to invest with U.S. Steel to “reconfigure the North American steel industry.”
He adds that Big River will continue to establish its place in the market, completing expansions that including doubling its production capacity by 2021 and completing construction on a $1.6 billion steel mill and distribution facility in Texas.
“If you look around the metals and mining industry, you see the concept of partnerships are fairly common and have proven to be successful,” Stickler says. “We expect the Big River-U.S. Steel partnership will ultimately be pointed to as one of the most highly successful partnerships” in the industry.
Burritt says the future merger of the two companies is going to be “very positive” for their current and potential customers because the combined capabilities of U.S. Steel and Big River will be unmatched.
“We think it really changes our offerings from pure commodity to differentiated, ‘green’ steel because we will be more environmentally friendly and nimble to meet our customers’ needs than ever before,” he says.
“Consolidation is inevitable,” Burritt says of the U.S. steel industry.
“The tariffs and safeguards that were put in place have been a big help to the industry and people have been doing a lot of investing,” he continues, referring to the Section 232 and 301 tariffs the Trump administration introduced in 2018.
“Our investments were a result of having more free trade,” Burritt continues. “I have optimism that we’ll get more free trade over time.
“In the meantime, there’s going to be some pain that we have to endure,” he says. “We have to make sure that we have the right business for the opportunity. We’re going to move as fast as we can to the future.”
The author is the digital editor for the Recycling Today Media Group and can be contacted at kmaile@gie.net.
Paying the duty
Features - Scrap Metals Supplement
An industry consultant considers how the 232 and 301 tariffs have affected the various segments of the aluminum industry.
Tariffs are intricate policies with wide-ranging impacts. They also can be meaningfully different, as is the case with the Section 232 and Section 301 tariffs. While we often seek binary answers—right or wrong, successful or unsuccessful—in assessing tariffs, that ignores the fact that our aluminum industry is comprised of multiple segments that are affected differently by these tariffs.
Section 232
Section 232 of the Trade Expansion Act of 1962 authorizes the president to restrict imports in the interest of national security, which is defined as economic security and military readiness.
Many questions arise from the 232 premise as it pertains to aluminum: How much capacity is needed for economic and military security? Does our deep relationship with Canada and that nation’s large primary smelting capacity suffice? Is it geopolitically intelligent to anger NATO allies while we are in conflict with China and Russia simultaneously? Is the redistribution of wealth caused by duties fair, and does it achieve the stated goal?
Primary smelters. Smelters benefit from a 9 percent increase in Midwest Transaction (MwT) price, which yields an increase in net profit of more than 150 percent when aluminum prices are $2,200 to $2,500 per metric ton.
Proponents of Section 232 point to restart announcements, while critics say two of the three restarts were announced prior to tariffs. Industry participants know smelter competitiveness is primarily a function of energy costs, and the 232 duties don’t exceed the differential in energy costs, which have driven closures and curtailments during the past 19 years.
Despite 232, the MwT premium as of December 2019 is about 15 percent lower than at the time the duties were announced and has been lower every day in 2019. Global primary overcapacity in China is the root cause. Although 232 does benefit smelters compared with no tariff, it is not sustainably beneficial. We live in a global economy where aluminum price is a manifestation of global supply and demand.
Domestic smelters currently produce about 25 percent of U.S. demand; curtailed capacity represents an additional 15 percent. If current capacity can be argued to be a floor relative to national security, one vastly more tax- and cost-efficient option versus the 232 tariff could be for the government to subsidize the ongoing mothball costs to prevent further dismantling of capacity for busbar scrap value.
If one argues for minimum smelter capacity on national security grounds, we also should address our lack of raw materials. We have no operating bauxite mines in this country. We operate one commercial alumina refinery and two small industrial specialty refineries. Should we believe that in the case of a world war we could secure bauxite and alumina but not primary aluminum?
The 232 tariff, though helpful, does not solve the underlying and structural issues our domestic smelters face with (1) global overcapacity driven by China, (2) electricity costs that are prohibitively expensive for electrolytic aluminum production and (3) a lack of raw materials.
We are linked economically with Canada through trade agreements and our geography. The probability that we lose our deep interlinkage is highly unlikely. Canada has 75 percent more installed primary smelting capacity than the United States. and produces 150 percent more aluminum. An American company owns plants in Canada that represent 50 percent of total U.S. capacity. National security is, therefore, a weak 232 argument with respect to smelters because it ignores our hydroelectric-efficient, NATO-adjacent ally Canada (which, with Mexico, has been exempted from the 232 tariff since July 2019).
Semimanufactured products, i.e., mills. The military readiness argument is more appropriate for mills. The technology expertise required to manufacture aerospace and military products is significant and more sensitive to national security. Only three domestic flat-rolled aerospace mills exist today (one owned by a foreign ally). As metals manufacturing has declined over the past 20 years, so has the number of defense and aerospace forging companies, extruders, investment casting and traditional casting facilities.
Mills that produce defense and aerospace (D&A) products predominantly maintain a balance of commercial work. If they were solely dedicated to D&A, we would lose them during periods of fluctuations in military spending, resulting in a loss of capacity and beneficial competition. In this respect, the 232 tariff supports D&A mills.
For domestic mills, the “pass-through” business model yields no advantage for the London Metal Exchange (LME)/base metal component because these mills incur the duty via a greater Midwest Premium (MwP). Domestic mills do benefit from the 10 percent duty with respect to “conversion premium.” In commercial markets, the approximate 4-cent per pound duty is sufficient to compete with non-Chinese imports while maintaining some profitability and operating sustainability.
Although 232 would apply to and benefit mills, the Department of Commerce (DOC) effectively nullified the program. While we debate the 232 policy and assume it is protecting industry, through Oct. 20, 2019, the DOC granted 5.8 million metric tons of exemptions—three times the total semifabricated volume we imported in 2018.
Scrap companies. For scrap companies, higher and rising commodity prices result in higher volumes and better margins. Additionally, increased local production increases local demand for scrap, tightening spreads.
The U.S. did not include scrap within 232, which makes sense because we import little scrap from countries outside of Canada and Mexico. This, however, did not preclude China from retaliating with 25 percent duties on U.S. aluminum scrap, which resulted in meaningfully lower U.S. exports to the country. Critics might argue that the existing and increasing quality restrictions and quotas diminish the retaliatory impacts. The Washington-based Institute of Scrap Recycling Industries’ (ISRI’s) position on 232 is clear: The scrap industry has been materially injured by China’s retaliatory duties, which began in response to 232, and, therefore, it does not support 232.
The holistic view. If we conclude the duties are valid and useful for fabrication plants but not for smelters, then we’d also conclude the 232 approach is too broad, and, in conjunction with approved exemptions, is not the most effective means to achieve the stated goal of national security. The best solution is targeted tariffs focused on specific harmonized codes and countries.
Section 301
Section 301 (through 310) of the Trade Act of 1974 provides the U.S. with the authority to enforce trade agreements, resolve trade disputes and open foreign markets to U.S. goods and services. It is the principal statutory authority by which the U.S. can impose trade sanctions on foreign countries that either violate trade agreements or engage in other unfair trade practices. When negotiations to remove the offending trade practices fail, the U.S. can raise import duties on the foreign country’s products to rebalance lost concessions.
This statute is appropriately used for trade and commerce imbalances as opposed to geopolitical retaliation. That being established, without listing the many examples here, China’s economic behavior in the global marketplace warrants use of the 301 statute.
Below and to the right of the parity line are the countries that tariff U.S. goods more than we tariff theirs. Effectively, as of early 2018, every major country tariffed the U.S. meaningfully more than we tariffed them, with the exception of five countries, which we tariffed by 0.1 to 0.3 percent more.
China undoubtedly has driven excess aluminum capacity, from smelters to fabrication plants, in its government-managed economy. The country’s significant net exports disrupt the supply- and-demand relationship, degrading global prices. An equally undermining behavior is China’s direct government support and subsidy of its aluminum companies.
Section 301 tariffs directly address economically belligerent nations and are more rational and effective than 232 tariffs. At the same time, we are part of a global economy, and our counterparties can react in various ways, including with retaliatory duties.
Current Section 301 tariffs include five individual tranches of products and duties that take effect at different times. The first three tranches include a variety of early-stage manufactured products derived from aluminum mill products, such as pressure tanks, stranded wire and heat exchangers.
The products we consider aluminum industry mill products are included in tranche 4A, which became effective Sept. 1, 2019. The 301 duties are not fully additive to 232 duties but are differentially incremental. The 10 percent duty in Section 232 is deducted from the base 25 percent duty in Section 301, for a net 15 percent duty on aluminum products.
The public comment period for tranche 4A is ongoing, and the product-specific exemptions have not been determined nor have company-specific exclusions; therefore, we cannot discern the actual 301 impacts on traditional aluminum mill products, rather only the expected impacts for various sectors, assuming exclusions and exemptions don’t nullify the program as in the case of the Section 232 tariffs.
The 301 duties help aluminum mills; however, the aluminum scrap industry is in its worst business environment in decades. As a critical component of the overall aluminum industry, beginning the discussion with our upstream partners in scrap is warranted.
Scrap companies. It is difficult to understand why we included scrap in the third tranche of 301 duties. We don’t import scrap from China. Our imposition of duties created an unnecessary precursor for retaliatory action. In response to 301 tariffs, China increased retaliatory duties on imports of aluminum scrap from 25 percent to 50 percent, damaging our U.S. companies beyond the existing Chinese quotas and excessive import regulations. We can clean scrap for a few cents per pound more, but we can’t sell it for 33 percent less to equalize a 50 percent tariff.
China is the largest importer of aluminum scrap globally, having imported 1.57 million metric tons in 2018. It was the largest market for U.S. aluminum scrap, having imported 500,000 metric tons in 2018 (down from 830,000 metric tons in 2017). Insufficient alternative outlets exist for scrap flowing to China. Trickle effects between scrap types have reduced global prices for all aluminum scrap, not just export-oriented zorba.
A depressed and smaller scrap supply base significantly affects the environment, as well as our economy, which ISRI describes in the “Economic Impact Study” on its website at www.isri.org/recycling-commodities/economy. Less recycling leads to more domestic greenhouse gas emissions. Less scrap remelting and wider spreads for industrial scrap negatively affect U.S. manufacturers’ cost competitiveness.
Challenges, however, present us with opportunities. Our domestic average scrap consumption is 42 percent. If we normalize for used beverage cans (UBCs) and class scrap in the can segment, a well-established closed loop, the balance is about 35 percent.
In the U.S. we consume 2 pounds of prime aluminum for every pound of recycled aluminum! We also export more than 1.8 million tons of aluminum scrap. I am awed that our advanced economy consumes so much prime and prime-based feedstock. I am also inspired by the great opportunity we have in front of us.
We can better protect consumers of cast alloys, like we have protected wrought extrusion, foil and sheet mills with anti-dumping and countervailing duties, by increasing demand for scrap we export today. We can design and specify secondary alloys in lieu of primary alloys. We can increase recycled content at wrought mills, reducing wrought scrap available to cast outlets, increasing supply chain needs for cast scrap. We are in the early stages of learning how to best separate wrought and cast scrap from aluminum auto shred, and with further investment we will progress faster. We can dismantle more auto cores and sell high-grade cast shredded products. With spreads at historically unprecedented levels, capital expenditure for melting capacity can now be paid back in two-to-three years instead of four-to-six years. Now is our greatest opportunity to move the sustainability and recycled content needle.
While the scrap industry has been meaningfully damaged through retaliatory duties and our trade war with China, conquering much of the negative impact is within our aluminum industry’s control and capability.
Primary smelters. Similar to scrap, it is difficult to understand why we included prime in the fourth tranche of 301 duties. We import 0.5 percent of our primary aluminum from China, up from less than 0.1 percent the past 10 years. Our 301 duty on prime provided China unnecessary grounds for retaliatory actions.
Semimanufactured products, i.e., mills. Often the most unfair and subsidized Chinese advantage is base metal, i.e., its cost versus our MwT. The amount is equal to the sum of (1) Shanghai Futures Exchange (SHFE) versus LME, (2) value-added tax (VAT) rebates and (3) negligible regional delivery premium (versus MwP). The amount grew to exceed the entire U.S. value-added cash cost for many products, averaging more than $500 per metric ton in 2008 and 2018 and $700 during some months. The disparity also can be hedged, extending an unrecoverable dynamic into future periods.
The first aluminum products affected were castings, forgings and extrusions, as they require less capital expenditure and could quickly be overbuilt in China. Flat-rolled products followed, which require larger investments.
This unfair advantage devastated the U.S. extrusion industry. The Aluminum Extruder’s Council successfully lobbied for anti-dumping and countervailing (AD/CV) duties for extruded products from 2010 to 2012. These duties continue.
The light-gauge foil industry closed several plants, which also affected the heavier gauge foil and fin stock industry. AD/CV duties were placed on Chinese foil in early 2018. More than 2 billion pounds of sheet imports, mostly 3000-series and 5000-series common alloys, much from China, resulted in sheet mill closures. We reacted a bit earlier in that cycle, lobbying for AD/CV duties in late 2018.
Nov. 20, 2019, the U.S. International Trade Commission approved AD/CV duties on Chinese wire and cable.
Aluminum mills benefit from an appropriate penalty placed on Chinese aluminum semimanufactured goods. The AD/CV tariff programs were very effective when applied to extrusions, sheet and foil. The 301 policy can be similarly and proportionally effective for the other product groups; but, because of the smaller tariff amount, they cannot be equally effective.
The wider view. Section 301 duties are damaging for scrap companies as a result of retaliatory duties from China, irrelevant for smelters and beneficial to mills.
Our national policy appears clear, given our actions. We coexist with China in the global economy, and that country is unfairly targeting and damaging our economy to benefit its economy. We have attempted to negotiate for years but have received no real or sustainable changes. Our warranted reaction is to institute 301 statutory tariffs to incent behavioral change and to demonstrate our resolve to achieve real and sustainable improvement in our trade relations and protections for our intellectual property and domestic industries.
We do need to establish if our personal perspective regarding the aluminum industry is synonymous with our perspective for overall national policy. One can argue that, given our recent enacting of AD and CV duties against China, we do not require Section 301 tariffs for most aluminum products. We might feel that the breadth and extremity of 301 tariffs have resulted in retaliatory duties in excess of those China would have enacted in response to the AD/CV duties. We might believe AD/CV duties are more sustainable than Section 301 duties, which are politically fickle and more easily diluted through executive branch action and DOC exclusions and exemptions. If we believe these assertions and segregate our 301 perspective of industry policy from national policy, we might conclude we do not support 301.
The counterargument links the U.S. aluminum industry and national policy and asserts Chinese behavior is consistent. A belief that weakening U.S. national policy, or enabling Chinese policy, will not ultimately strengthen the aluminum industry but will weaken it. This position espouses that 301 duties on China are no different than the responsible, sometimes uncomfortable, decisions we make every day as stewards of our own business and personal finances. Long-term responsibility can cause short-term discomfort, and we agree to incur this discomfort for future betterment.
As the chart above [and on S37 in the print edition] shows, it is clear our nation is not representing itself effectively and reciprocally in global trade policy, and many manufacturing segments are suffering as a result.
Tariffs are intricate business. As you develop your opinion and position about U.S. tariffs and trade policy, I hope this article contributes to your perspective.
The author is the principal at JW Metal Consulting and has held management positions in the aluminum industry. He is based near Nashville, Tennessee, and can be contacted at jw@johnwoehlke.com.
At Allegheny Manufacturing, we have been committed to providing application engineering, manufacturing, project management services and turnkey solutions for a wide range of bulk handling and size-reduction tasks in the recycling, mining and cement industries. While our company is relatively young, our employees have more than 25 years of experience working in equipment design and manufacturing in the aggregates sector.
Allegheny Manufacturing’s success lies not just in our technical expertise but also in the responsiveness of our staff. When you work with us, you’ll find that Allegheny Manufacturing’s design solutions, robust equipment and drive for excellence are unmatched among others in the industry. Allegheny Manufacturing’s team of dedicated professionals is detail oriented. Our engineering and production team collaborate on equipment, ensuring the best outcome for our clients. We earn our customers’ trust by educating them about their recycling options, even if they don’t directly benefit us.
Our material handling solutions include vibratory feeders, conveyors and rotary screens, while our size-reduction equipment includes our Bison hammer mills and Rotary Impact Separators. Through the combination of our original equipment manufacturer (OEM) partnerships and in-house proprietary designs, Allegheny Manufacturing offers the best equipment solutions for the most challenging size-reduction and bulk handling applications.
Our strengths
Our primary strength is being able to provide turnkey solutions and support to deliver systems that meet our customers’ requirements while using innovative equipment that also is economical to purchase and maintain. In many cases, we’re creating new products specifically to solve our customers’ problems. Custom solutions are what set Allegheny Manufacturing apart from traditional suppliers to the recycling industry.
Our customers include roofing shingle manufacturers, carpet recyclers, blown insulation manufacturers and plastics recyclers. When we’re approached with a new opportunity, our team goes to great lengths to produce complete recycling systems that make economic and environmental impacts.
We help with process design, providing process flow sheets and general arrangement, or GA, layouts. Engineering, fabrication, assembly, in-house logistics and surface preparation are all just a part of what we can offer our clients.
Down to size
Our Bison line of hammer mills and grinders are ruggedly constructed to provide our customers with years of low-cost production and are suitable for many applications. They can be used as standalone units or combined with the innovative Rotary Impact Separator machines for the ultimate in processing versatility.
Our hammer mill line includes the Bison (B) Series standard hammer mills for abrasive and coarse grinding applications; the Bison (F) Series fine grinding hammer mills for nonabrasive materials, such as pulp, wood, grains, minerals and fibers; the Bison (I) Series impact crushers, which are heavy-duty, smaller size units with big impactor features; and the Bison (R) Series heavy-duty recycling hammer mills, featuring our largest and heaviest hammers and multiple rotor options.
Allegheny Manufacturing focuses on product and process development using our customers’ desired applications and materials. We offer sample testing at our facility for our customers and provide detailed process analysis and solutions for difficult applications. This helps our clients know what type of mill to select to achieve the desired particle size for their applications.
Technological advancements
We’re committed to delivering new recycling technology like our Rotary Impact Separator. We have partnered with Broadview Group International LLC (BGI) on its Rotary Impact Separator technology. This patented system is revolutionizing the material reduction and separation industries by combining both these operations in a single machine for mechanical disassembly and separation in one unit. The process is strictly mechanical, requiring no heat, water or chemicals. The Rotary Impact Separator also offers low operating costs thanks to its rugged design and use of abrasion-resistant wear parts.
It was originally designed for disassembling carpet into its primary components. Carpet is a difficult product to deconstruct, but our unique technology separates the face fiber, backing fiber and calcium carbonate from the backing material. This unique processing technology keeps the various plastics and fillers out of landfills, allowing them to be reused to manufacture roofing shingles or in road construction and many more applications.
Since its inception, the Rotary Impact Separator has excelled in processing other materials, such as artificial turf, fiber, commingled paper and plastic and shingles, to name a few.
For example, this system has been able to successfully separate commingled paper from plastic to make cellulose insulation for a company. The task of separating and recovering the cellulose-based fibers from mixed paper is a tricky process. The technology begins by taking a contaminated mixed paper and mechanically beating the material with a specialized implement, which breaks up the more friable paper components while leaving the durable plastic pieces intact. The cellulose fibers transfer through the screen on the unit, while the plastic pieces remain on top of the screen, resulting in easy recovery.
For many companies, the Rotary Impact Separator is the key to transforming problem materials into resources. It dramatically reduces the personnel needed to hand sort material while also allowing companies to procure lower quality infeed materials at reduced costs.
As BGI's partner on this RIS technology, Allegheny Manufacturing is the sole manufacturer of this device. Our team is always up for a challenge and wants to help you convert a disposal problem into a resource.
From initial concept to installation to ongoing maintenance, Allegheny Manufacturing wants to be your single source for your process equipment needs. Contact us today to learn how we can help you succeed.
Municipal
Departments - Newsworthy
Recent news from the various sectors of the recycling industry
Despite city staff’s recommendation to approve a $112 million contract with Emterra Environmental USA, Flint, Michigan, to haul Ann Arbor’s recyclables to Emterra’s new single-stream material recovery facility (MRF) in Lansing, Michigan, the Ann Arbor City Council voted in favor of working with area nonprofit Recycle Ann Arbor (RAA) to rebuild and reopen the city’s MRF.
Emterra Environmental is the U.S. division of Canadian waste management firm Emterra Group, which has 45 years of experience in collecting, processing and marketing recyclables and owns and operates 14 MRFs that process 550 million tons of materials annually.
The proposal to transport recyclables to Lansing would result in 2.5 truckloads daily for a total of approximately 91,000 vehicle miles traveled annually, working against the city’s Carbon Neutrality by 2030 goal, city council says.
In July 2016 the city says it closed its MRF, formerly operated by Charlotte, North Carolina-based ReCommunity, which was acquired by Republic Services in late 2017, because of safety concerns about the equipment. Since 2017, the city has contracted with RAA to haul recyclables to Ohio-based Rumpke’s MRF in Cincinnati for processing. That contract expires June 30.
Ann Arbor issued a request for proposal to haul recyclables to another MRF or to “equip and modify the city’s MRF to receive, process and market all recyclable materials.”
“There has been a serious shortage of material recovery facility capacity in southeast Michigan and this has in part led to Michigan’s underperformance in material recovery,” says Kerrin O’Brien, president of the Michigan Recycling Coalition, Lansing.
RAA offered the only bid to restart the Ann Arbor MRF, the city says.
“Rebuilding the MRF would restore a $6 million publicly owned community asset with no upfront capital cost to the city,” the city reports. It also would create approximately 20 local jobs.
Despite staff concerns that RAA lacks the experience and qualifications to operate the MRF, city council directed them to negotiate an initial 10-year agreement with RAA.
During America Recycles Day 2018, the EPA hosted its first America Recycles Day Summit, bringing together stakeholders from across the U.S. recycling sector to sign the America Recycles Pledge to work together in 2019 to identify actions to address the challenges and opportunities facing the U.S. recycling system.
The “2019 National Framework for Advancing the U.S. Recycling System” highlights some of the actions stakeholders have taken and establishes goals for 2020. The report looks at recycling education, recycling infrastructure, secondary materials markets and measurement.
According to the EPA’s report, it can be difficult for consumers to understand what materials can be recycled and how and where to do so.
The EPA’s report indicates the need to develop clear, consistent messages about materials management that enable consumers to recognize the value of reusing, recovering and recycling materials and the value of buying products with recycled content.
The report set goals for 2020 to develop and distribute common recycling messages on national issues.
According to the report, America’s existing recycling infrastructure has not kept pace with the changing materials stream. Contamination can cause equipment failures and halt production. A more holistic, modern and adaptable national recycling infrastructure that embraces innovation and is resilient to changes in material streams, markets and consumer expectations could help to address this.
In 2020, goals include conducting and compiling research on successful infrastructure investments and potential investment opportunities.
Recent policy changes, including scrap import restrictions in China and other Southeast Asian nations, have accelerated the need to improve domestic markets for recyclables, the EPA notes.
The report sets goals to continue to promote government programs to purchase recycled materials and to identify and work with companies designing packaging and products to encourage recycled content use and recyclability.
Various definitions and recycling rate methodologies exist across the U.S., creating challenges when setting goals and tracking progress. In 2020, the EPA says it seeks to establish standardized recycling metrics supported by consistent terminology and methodology.
Two U.S. senators have introduced bipartisan legislation that would create a new federal grant program through the Environmental Protection Agency (EPA) to help educate households and consumers about residential and community recycling programs.
U.S. Sens. Rob Portman and Debbie Stabenow have introduced the Recycling Enhancements to Collection and Yield through Consumer Learning and Education (RECYCLE) Act of 2019 (S.B. 2941), which is designed help increase recycling rates and reduce contamination in the recycling stream, according to a news release on Portman’s website. U.S. Sens. Susan Collins, Ron Wyden and Todd Young are co-sponsors.
If enacted, the RECYCLE Act would:
authorize $15 million per year over five years in grants to states, local governments, Indian tribes, nonprofits and public-private partnerships to educate and inform consumers and households about their residential and community recycling programs;
direct the EPA to develop a model recycling program toolkit for states, local governments, Indian tribes and partners to deploy to improve recycling rates and to decrease contamination in the recycling stream; and
require the EPA to more frequently review and revise, if appropriate, its Comprehensive Procurement Guideline program, which designates products containing recycled materials and provides recommended practices for federal agencies to purchase such products.
Reports have indicated that consumer confusion on how to properly recycle is one of the top recycling challenges and that education and outreach increase participation in recycling and decrease contamination. According to the EPA, the recycling rate in the U.S. is 35.2 percent, and $9 billion worth of recyclables are thrown away each year, which presents an opportunity to improve the nation’s recycling systems.
“Reports have indicated that one-third of materials that households put into their recycling bins end up in landfills and are not actually recycled,” Portman says. “This is in part because there is confusion about what can actually be recycled, which leads to contamination of materials that could otherwise be recycled but instead are landfilled. Education is a key component in both increasing the amount of material that is being recycled and ensuring that the material being put into community and residential recycling programs is actually being recycled.”
“To improve recycling rates across our country, local communities must have the right tools to recycle in an effective way,” Stabenow adds. “Sen. Portman and I introduced this bill to help households understand what can and cannot be recycled and invest in programs that improve recycling practices across the country.”
Kelly Maile
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