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Chicago-based LKQ Corp. has introduced a scale to auto salvage and recycling operations in the 21st century that is unmatched by earlier efforts. The firm has 1,600 locations and a global presence that likely help it monitor trends.
LKQ, following the lead of global vehicle manufacturers, likely has been studying when to make investments to gain a foothold in the electric vehicle (EV) market while not neglecting internal combustion engine (ICE) vehicles and the money it can make from them.
Changes afoot under the hood
The automotive recycling process, from parts harvesting and reselling to shredding, has evolved over decades to handle the many different opportunities and regulatory hurdles inherent in end-of-life vehicles (ELVs) with internal combustion engines.
ICE vehicles themselves evolve continually as automakers and truck manufacturers experiment with new technologies and materials. The in-common aspects of ICE ELVs, however, have provided several offshoots of the automotive recycling effort.
For dismantlers, those efforts can range from paying close attention to exhaust systems and the precious metals that can be found within them to ensuring the safe handling of lead-acid batteries, which entails strict health and safety rules while also being tied to an established end market.
Shredder operators keep an eye out for these same components but set up their shredding processes in large part because producing sufficient volumes of shredded steel body panels, frames and engine components creates a ferrous scrap grade desired by mills and foundries around the world.
EVs as designed initially by Tesla and increasingly by established global automakers will make some of these tasks fall by the wayside.
For shredder operators, Tesla has favored aluminum body panels for its models. Other EV makers are not compelled to follow Tesla’s lead on that front, but if a large percentage of them turns to the lighter metal, it contributes to a change in the ferrous versus nonferrous scrap blend potentially fed to a shredder.
For dismantlers, what is missing on an EV is perhaps most noteworthy. EVs do not contain an exhaust system or numerous under-the-hood components that have fueled the ICE auto components aftermarket.
The Automotive Recyclers Association (ARA), Manassas, Virginia, has made navigating change a theme at its 2021 event this November in Dallas. There is little doubt the change being referred to includes the eventual larger parade of EVs.
Included on the ARA program this November are two sessions with Andy Latham of U.K.-based Salvage Wire, who will address training issues regarding high-voltage vehicles and advanced driver assistance systems. Latham has contributed to the recently revised “ARA Electric and Hybrid Vehicle Technology Guide,” which is available from ARAUniversity.org.
In addition to lacking the staples of the components aftermarket, EVs contain something that remains a source of uncertainty for recyclers: the high-voltage battery packs, which are far from standardized and do not yet yield well-understood or established salvage or scrap markets.
How to handle batteries plucked from no-longer-roadworthy EVs, however, has attracted the attention of some entrepreneurs and, increasingly, of established salvage and recycling firms.
Buying time by acting quickly
The move by LKQ, the world’s largest scale auto dismantling firm, seems to signal it sees the same inevitable changes coming that ARA is helping to address. “This acquisition reinforces our ongoing commitment to expand our parts and services offerings to meet the demands and opportunities that arise from technological changes in the automobile industry,” Justin Jude, LKQ president of North America wholesale operations, said when the Green Bean Battery acquisition was announced in May.
“Battery reconditioning represents a natural extension of our current powertrain remanufacturing operations,” he added. “In addition, Green Bean’s entrepreneurial history, proprietary technology and sustainably focused products fit well with LKQ’s mission and culture, and we are proud to have them join our North American team.”
Michael E. Hoffman, who covers LKQ and is a Baltimore-based investment analyst for investment banking firm Stifel Financial Corp., is favorable toward the LKQ purchase of Green Bean and says he sees a clear strategic fit.
Why should LKQ make an acquisition while EVs still make up a tiny percentage of the scrapped vehicle stream? “Be an early mover, establish knowledge and expertise well in advance of any upswing in battery volume and the overall evolving change taking place” in the vehicle stream, Hoffman tells Recycling Today.
Jude of LKQ referred to Green Bean’s entrepreneurial history and proprietary technology, and Hoffman says the institutional knowledge at Green Bean is likely a core consideration for LKQ.
Dismantling firms like LKQ are not the only ones considering how to prepare for a future with a radically different vehicle mix. U.K.-based EMR Ltd., which operates auto shredding plants in that nation and the U.S., is investing resources in a more EV-centric future.
For EMR the stopwatch could be running even faster, as the U.K. government has a stated policy of ending the sale of ICE vehicles in the 2030s.
In a September essay posted to the Recycling Today website, Steve Thomas, end-of-life vehicle manager for EMR Ltd., writes in part, “The EV revolution is coming, and EMR is evolving its business to make sure it’s ready for the challenges and opportunities ahead.”
Late in 2020, EMR announced it was taking part in a three-year partnership called Recovas. Partners in that effort include automakers Bentley Motors, BMW and Jaguar Land Rover; several U.K. research institutions or consortiums; Connected Energy, which repurposes electric car batteries; and uRecycle, “which will develop the U.K.’s first commercial-scale recycling facility for automotive battery packs.”
The project states its aim is to “provide a standardized and reliable route for recycling and repurposing lithium-ion car batteries at a scale that can cope with the expected sales of electric vehicles in the U.K.” At the end of the project, the partners say they expect a circular battery supply chain will operate commercially.
“We would suggest that was the very purpose of [buying Green Bean], to acquire expertise and skilled personnel and put an early stake in the ground to be appropriately positioned for the long and slow gradual transition of the 280 million-plus United States automotive sector to vehicles such as hybrids and EVs,” Hoffman says.
Why should LKQ make an acquisition while EVs still make up a tiny percentage of the scrapped vehicle stream?
LKQ’s Green Bean purchase could make it attractive as a partner in wider efforts to establish a commercial circular battery supply chain, or it could allow the company to chart an independent course.
“Battery reconditioning represents a natural extension of our current powertrain remanufacturing operations,” Hoffman says. “This acquisition reinforces [LKQ’s] commitment to expand their parts and services offerings to meet the demands and opportunities that arise from technological changes in the automobile industry,” he adds.
Which battery or alternative energy technologies will gain market share remains an open question. But Hoffman says LKQ’s proactive approach is the right way to behave when change is afoot.
“There is no doubt in our view Green Bean is just a starting point,” he says, adding that LKQ already “offers a healthy mix of hybrid and EV aftermarket parts, both in Europe and North America.”
Hoffman adds, “We suspect, like it did with remanufactured engines and transmissions, LKQ put its foot in the water to gain knowledge and expertise to further seek opportunities to grow the hybrid and EV line of business.”
The author is the senior editor with the Recycling Today Media Group and can be contacted at email@example.com.
Polyethylene terephthalate and high-density polyethylene (HDPE) have been the most commonly collected and reprocessed plastic grades during the several decades municipal recycling programs have been up and running in the United States.
Plastic packaging made of polypropylene (PP) has, for most of that time, been consigned to mixed plastics bales that for many years were most often exported to be sorted and reprocessed overseas.
The unwillingness of overseas countries—led by China—to accept these mixed bales has spurred a rethink of how to handle PP packaging scrap, and in the past several years some of those thoughts have turned into action at the collection, sorting and reprocessing levels.
Going ’round in circles
Government recycling and circular economy targets in many parts of the world and corporate sustainability goals have combined to put a certain amount of pressure on PP packaging producers and users who had been accustomed to letting their end-of-life packaging become part of low-value mixed bales.
PP as a resin is used in a wide number of industries, including within automotive components and pharmaceutical pill vials. Operators of municipal programs and material recovery facilities (MRFs) are likely most familiar with the resin when it is used to make yogurt cups and other dairy product tubs or caps for beverage containers.
Multinational brands involved in the yogurt and dairy sector, therefore, have been allocating R&D effort and investments into reprocessing the cups, tubs and lids before they draw unwelcome attention as “unrecyclable” or otherwise make for an uncomfortable presence in a corporate sustainability report.
Paris-based Danone announced commitments and actions in 2018 designed “to ensure its packaging will become 100 percent circular and to accelerate the global transition toward a circular economy of packaging.”
Danone said it was making plans to help meet collection targets set by EU regulators and to support globally “more effective publicly organized collection and recycling systems, including extended producer responsibility” systems “when relevant.”
Multinational Procter & Gamble (P&G), which includes cleaning and hygiene products brands that can be packaged in PP, has developed PP advanced recycling technology that is being commercialized by Florida-based PureCycle Technologies Inc.
That company’s inaugural facility in Ironton, Ohio, is scheduled to open in 2022 and has presold more than 20 years of output, according to PureCycle. The company announced its intention to build a second facility near Augusta, Georgia, this July.
PureCycle will use proprietary technology it has licensed from P&G to recycle PP scrap into “virgin-like” resin the company says can be used in a variety of applications, including consumer goods, automotive, building and construction and industrial uses. The company says it plans to reach 500,000 tons of production across its network by 2025.
Capacity at that level would be a game-changer, though PureCycle has been identified by Hindenburg Research, a skeptical investment researcher, as having rewarded corporate officers with bonuses before it has met any production targets. The same research firm also interviewed mechanical recycler Scott Saunders, general manager of Troy, Alabama-based KW Plastics, who later confirmed to Recycling Today that he has not seen documentation of how PureCycle’s technology will work. Saunders also expressed reservations about chemical recycling efforts sewing confusion into the secondary markets long established for mechanical recyclers.
For a PP loop to be closed by mechanical or chemical processes, collection efforts also need to be made more feasible and attractive, which is where The Recycling Partnership is attempting to play a significant role.
No longer part of the mix
Campaigns with names like “All Bottles” were used several years ago to prompt the additional collection of household PP scrap, though at that time it was so the PP could be part of a mixed bale likely exported to Asia.
With that shipping lane largely closed, haulers and MRF operators have been faced with either ceasing the collection of No. 5 PP scrap or connecting with companies and organizations that can make collection worthwhile again.
The Recycling Partnership, Falls Church, Virginia, is funded in part by brand owners, plastic producers and retailer-related organizations, such as Keurig Dr Pepper, Braskem and the Walmart Foundation.
In an article in the summer 2021 edition of Plastics Recycling magazine co-authored by Katherine Huded and Rich Simon of The Recycling Partnership, the duo spell out how that organization “leverages a combination of grant funding and private facility investments to activate rapid change” in the PP recycling sector.
MRF operators or other recipients that receive grants are “making equipment installations within six months, on average, of receiving grant funding,” Huded and Simon write. “In just one year, the coalition provided nearly $5 million in grants and catalyzed an additional $10 million in private investments to inject much-needed capital in PP sorting within MRFs across the country,” they add.
In Cincinnati, Rumpke Waste & Recycling has invested almost $2 million, including some grant funding made possible by The Recycling Partnership, to install three robots at its MRF in that city. Rumpke says the investment will help its Cincinnati MRF to “better sort plastic containers from the rest of the recycling stream” and the investment “supports new recycling growth for the region.”
“Robotics are the latest and greatest technology in the recycling industry,” says Jeff Snyder, recycling senior manager at Rumpke Waste & Recycling. “We are very excited to be the first recycling facility in Ohio to add this cutting-edge technology.”
Snyder says the facility is the first among Rumpke’s MRFs to integrate robotics and one of the first MRFs in the Midwest to incorporate robotics.
Because of The Recycling Partnership involvement, the robots are being configured to help the plant recover PP from the inbound material stream. Rumpke says it also plans to add two more robots in the coming months to help the plant further improve the quality of its sorted PP scrap.
Rumpke says it invested in SamurAI robots made by Canada-based Machinex. The company says the robots use artificial intelligence to identify materials and engage articulated arms to grab the material and direct it through the plant. The robots can make about 70 picks per minute.
Prior to this investment, Rumpke says it recovered “some PP,” but with the robots the facility can “significantly increase” its PP recovery rates.
Other PP-related grants (including six announced in late August) went to MRF operators in several different regions of the country, casting a wide net that could help determine whether a larger and resolute PP scrap market can be established in North America.
Single and loving it
Global pricing services provider S&P Global Platts has identified Western Europe as a geographic region that could be ahead of the U.S. when it comes to establishing recycled-content PP scrap pricing.
In late July, S&P Global Platts launched six new daily price assessments in the recycled plastics sector, with two of them being for black recycled polypropylene (r-PP) pellets and clear r-PP pellets delivered duty paid (where applicable) within a Northwest Europe region that is identified as including Belgium, France, Germany, Luxembourg, the Netherlands and Switzerland.
Plastic scrap pricing benchmarks such as those offered by S&P Global Platts can also be key components in the “decoupling” of plastic scrap prices from virgin resins, which tend to rise and fall with petroleum demand, pricing and refining activity.
In an interview conducted last year with Recycling Today, Max Craipeau of Singapore-based Greencore Resources Ltd., a plastics reprocessor and trader, said such price decoupling results in “higher prices for recycled content” that “drive up collection and processing, turning the whole value chain into a profitable business.”
Craipeau trades plastic scrap (including PP) in Asia and Europe and operates reprocessing plants in Indonesia and Poland. He also serves on the Plastics Committee of the Bureau of International Recycling, Brussels.
His sentiments likely are shared by most plastics recyclers in North America, who would prefer to see pricing based on supply and demand for plastic scrap in their operating region that is separate from the vagaries of the global petroleum market.
“Contrary to fossil fuel feedstock, from which virgin plastics are made, recycled feedstock is more limited or difficult to access,” Craipeau said in 2020. This can put a floor on pricing for PP and other plastic scrap “no matter what happens to their virgin counterparts linked to oil price variations,” he added.
S&P Global Platts is thinking similarly, though some of its most recently introduced U.S. prices (for HDPE scrap) include PP as a contaminant rather than a traded commodity.
However, the more PP scrap is collected and the more companies like KW Plastics invest in reprocessing it, the faster it can lose its status as a contaminant.
The author is senior editor with the Recycling Today Media Group who can be contacted at firstname.lastname@example.org.
In the two years since Recycling Today last produced our wire chopping list, North America has added 26 lines that we did not have a record of previously, while 11 locations in the U.S. and Canada no longer seem to be operating.
The growth in wire chopping installations in North America reflects broader market forces, specifically China’s changing import policies that have necessitated more processing of this material in North America.
We have tried (perhaps imperfectly) to restrict our list to locations (recyclers and power companies that are processing internally generated material) that are specifically processing wire with their lines. Other companies are employing similar systems that are dedicated to processing other forms of copper- and aluminum-bearing scrap, such as meatballs and radiators and auto shredder residue, or ASR. However, if you notice a location that we misreported or one that we missed, please reach to out let us know. Email me at email@example.com.
A numbers game
When we published our list in 2019, we recorded 123 wire chopping lines in North America: 14 in Canada and 109 in the U.S. This marked significant growth from 2017, when 74 lines were operating in North America. While the pace of that growth has slowed in the last two years, at 141, the number of wire chopping lines on this year’s list far surpasses the low we recorded in 2003. At that time, 51 facilities in the U.S. operated wire chopping lines, while four in Canada did.
Some companies that were on our previous wire chopping lists that dropped off in 2003 only to appear again in subsequent years are Gershow Recycling in Medford, New York, and Midwest Industrial Metals in Northlake, Illinois.
SA Recycling, headquartered in Orange, California, has increased the number of wire chopping lines it operates compared with our 2019 list. Its newest line—in Pompano Beach, Florida—will be ramping up as this issue hits mailboxes, SA Recycling’s Chief Financial Officer Mark Sweetman says. SA Recycling also has added lines in Phoenix, the Los Angeles area and in Hattiesburg, Mississippi, bringing the total number of wire chopping lines the company operates to six.
That SA Recycling has expanded its wire and cable processing capabilities might not come as a surprise given that the company recently invested in SA Alloys, a brass and bronze ingot manufacturing company based in Columbia, Pennsylvania, purchasing the assets of the distressed Colonial Metals.
With its recent additions, SA Recycling has the most wire chopping lines in the U.S. Next in line, with four lines each, are Imperial Group of Chicago, whose subsidiaries Imperial Recycling and Exeon operate lines, and Prime Materials Recovery Inc. (PMR), East Hartford, Connecticut.
In 2020, PMR announced its plans to partner with Cunext Group, headquartered in Córdoba, Spain, on a joint venture called Ames Copper Group that will build a new copper smelter in Shelby, North Carolina.
Bernard Schilberg, CEO of PMR, has said China’s restrictions on copper scrap imports and the oversupply they have created in the U.S. prompted the venture, as did the demand for copper anodes in North America.
While PMR will supply some of the scrap Ames will consume, Schilberg has said, “a substantial amount will be purchased outside of PMR” and from throughout North, South and Central America.
That is likely is good news for the other companies operating wire chopping lines in North America.
*Missing from our U.S. list is Padnos' Grandville, Michigan, location, which has been operating a wire chopping line since 2014, and Frontier Metals in Middlesex, New Jersey, which added a line in 2019.
There comes a time when a material recovery facility (MRF) needs to be retrofitted, which involves adding or changing the equipment that is used within the MRF. This can include replacing and/or reconfiguring the MRF’s current system by adding another infeed conveyor or another material bin. Screens, optical sorters and robotics are a few other items that can be included in a retrofit or upgrade. The age and location of a MRF determines whether it needs a retrofit, upgrade or new system.
Signs it’s time to retrofit
A MRF is probably ready for a retrofit when the percentages of the commodities it recovers start to decrease. MRF operators want to maximize the recovery of the recyclables that are in demand in the most efficient way.
One of the biggest reasons for a retrofit is to add the latest separation technologies available. MRF operators will want to upgrade to what will make the MRF the most efficient. Depending on the site’s cost-benefit analysis, it might not make sense to spend the money on the changes being considered, while other times it will make financial sense.
Recyclables generally maintain some sort of value, though commodities prices will continue to fluctuate.
The most important part of operating a MRF is minimizing the plant’s residue to maximize returns. The goal is to pull as many recyclables from the inbound material stream as possible. When your system is not doing that any longer or there are new commodities coming through your plant that are not being recovered efficiently, it is time for an upgrade.
Preparing for a retrofit
When preparing a MRF for a retrofit, the biggest factor to consider is the shutdown period, if required. Depending on the duration of the shutdown, a MRF could need to redirect its inbound material to another facility. If the MRF operator chooses not to redirect material to another MRF, a second option is to make room to stockpile the material during the retrofit.
This decision depends in part on the extent of the retrofit and the duration of the shutdown required. Most retrofits range anywhere from a two-day weekend to a 30-day shutdown.
Scheduling is a huge part of executing a retrofit in a timely manner. MRF operators should try to manage the various trades that will be involved in the project so that they complement one another as opposed to adding more time to complete the project. It’s always good to have all your permits in hand and inspections performed before even considering a start date.
The timing of the permits depends on the requirements of the locality where the MRF is based and on the scope of work being done at the site.
Also, MRF operators need to have as much of the civil work completed before any equipment is removed or installed. This usually prevents delays on the mechanical or electrical side of the retrofit.
Considerations: When preparing for a retrofit, the biggest thing to consider is the shutdown period and how long that will take.
MRF operators also will want to maintain the existing equipment as they plan for the retrofit to ensure everything is in order. They also should be prepared to tune up the equipment that will continue to be used.
That means examining belts and pulleys for the conveyors as well as having discs for sorting screens on-site so these tune-ups can be performed during the shutdown by your maintenance department or the mechanical contractor installing the retrofit.
Additionally, MRF operators will need to ensure their plants are clean ahead of the retrofit.
Facility operators also can take advantage of the downtime created during a retrofit by addressing other areas that need attention, such as painting. This and other housekeeping tasks are good to assign to employees who otherwise would not be working during the retrofit, and these tasks can take place simultaneously while the retrofit is being done.
While the facility is shut down for the retrofit, portions of the plant, such as the baling line, might remain operable, allowing some work to continue.
Another consideration is hiring. With a retrofit, MRF operators could need more employees to operate the facility after everything is completed, particularly if capacity is being increased. Hiring is challenging, so MRF operators will want to work ahead of the retrofit to secure additional employees who might be needed to ensure the facility can operate efficiently.
Marketing the upgrades to a MRF’s customers and community also is very important to do ahead of the retrofit. MRF operators should let the affected parties know about the changes and upgrades before and after the retrofit.
Marketing efforts can be done using social media, through advertisements, billboards, mailers or by word of mouth. Marketing also needs to be geared toward outbound material purchasers and end-users.
After the retrofit is completed, the MRF operator will need to keep up with preventive maintenance.
Additionally, the facility’s production and newly gained efficiencies should be analyzed following the retrofit to determine if the correct upgrades were made.
Operators can look at their inbound and outbound ratios versus their residue. For instance, if a MRF had 100 tons on the inbound with 60 tons for outbound, that leaves 40 tons for residue. MRF operators want to reduce the percentage of residue. Analyzing these number on an ongoing basis also helps the operator to prepare the plant for the future.
Justin Rice is president of Midwest Recycling Service and Sales in Cartersville, Georgia. Visit www.mrssinc.com for more information.