RePlanet demise roils California beverage recycling program

Hoping to get a nickel for that can? With California’s recycling crisis, good luck

People earning extra cash by redeeming cans and other beverage containers are being hit by California's unfolding recycling crisis.

Aug. 14, 2019 5 AM PT

When California’s largest operator of recycling redemption centers, RePlanet, went out of business last week, the state suddenly lost nearly one-fifth of its redemption centers in one day.

“‘Crisis’ is an understatement,” said Jamie Court, president of Santa Monica-based advocacy group Consumer Watchdog. “The bottom just fell out with RePlanet, that’s what happened.”

The company, which ran redemption centers across the state, shut its doors Aug. 5, causing ripple effects down to the street level. Californians often turned to RePlanet to redeem deposit fees placed on beverage containers, a nickel or dime, depending on the size of the container.

“Many people rely on getting that nickel or dime back, and when you can’t get that back it hurts Californians, particularly those living on the lower end of the income scale,” said Jenna Abbott, executive director of Protect CRV, a recycling industry trade group.

The collapse of RePlanet has also sparked debate on California’s entire beverage container recycling program, whether it can be revived and whether lawmakers and a state agency, CalRecycle, moved quickly enough in the face of mounting problems.

“There’s no question that CalRecycle’s inaction is responsible for the demise of redemption centers in this state,” Court said. “If they simply paid them more to stay open until we had a longer-term solution, we would not be in this crisis.”

Redemption centers are crucial to implementation of a 1986 state law, informally known as the “California Bottle Bill,” which aims to reduce litter and excessive consumption of natural resources. Under the law, the state pays subsidies to redemption centers, including a processing payment to cover the cost of containers they collect — including glass and plastic containers — that are more expensive to process than the raw material is worth. The payments are calculated using a formula that takes into account national economic data.

But two years ago, China started refusing to accept many kinds of U.S. recyclables, contributing to the collapse of recycling markets. The declining price of commodities sent the formula dipping into negative territory, said Lance Klug, a spokesman for CalRecycle.

“That started to decrease processing payments just as the recycling industry started to feel the effect of the global market decline,” he said.

Mark Murray, director of environmental lobbying group Californians Against Waste, said problems with the container recycling program are very much legislative.

“It is a statutory problem, not a CalRecycle problem,” he said. “CalRecycle does not have the authority to fix this.”

Beverage manufacturers pay CalRecycle a processing payment that is intended to help the redemption center compensate for collected container that don’t have scrap values. “While the law conceptually promises that, there are outdated provisions of the law such that that’s not actually happening,” Murray said.

RePlanet’s demise took many by shock, despite the chaos roiling recycling markets. The company said in a statement it would work with creditors after concluding that operating redemption centers was was no longer financially sustainable. Representatives did not return requests for comment.

Though California’s troubles have been driven by global market forces, the state has felt the pain more acutely than many others, some advocates say.

“There’s a much more responsive system in other states,” Court said. “It’s largely because the best states with the highest redemption rates don’t rely on recycling centers as much as they do retailers.”

Eight of the nine other states that have bottle deposit programs require that beverage retailers, in addition to redemption centers, accept empty containers for recycling, Court said. Some of the most successful states also have higher bottle deposits.

In Oregon, the deposit is 10 cents, and the program is run by a cooperative of beverage distributors.

Oregon reported a beverage container recycling rate of 90% in 2018, higher than California’s 76% the same year.

CalRecycle said it has tried to adjust. The agency engaged in emergency rule-making each year since 2016 to amend the processing payment calculation in an attempt to help soften the blow. Any additional increase, Klug said, would require a change in statute.

Newsom, in his most recent budget, also approved $5 million in temporary assistance for the state’s lowest-volume recyclers. About 416 redemption centers will receive an additional $1,000-per-month subsidy, Klug said.

“Moving forward, I think this is going to be viewed as part of a larger problem that requires a collective response in California,” he said.