As cities around the U.S. continue to react to recycling market changes, many are starting to seek new partnerships and rethink existing strategies. Given its direct proximity to major California ports, Los Angeles is one of many that has seen previous export patterns upended.
LA Sanitation (LASAN) runs one of the largest municipal recycling programs in the country, collecting an average of 800 tons per day and servicing more than 750,000 households each week. Established in 1990, the program, according to LASAN, has contributed to one of the highest landfill diversion rates of any large city in the country.
While the city contracts with multiple MRFs to process what it collects — and has stepped up education and quality control efforts — LASAN's program has still seen the effects of tight commodity prices. The service providers that hold franchise contracts for commercial and large multifamily recycling collection under the RecycLA program have felt a similar pinch.
Waste Dive recently spoke with Enrique Zaldivar, director of LASAN since 2007, to learn more about what comes next.
The following conversation has been edited for brevity and annotated for context.
WASTE DIVE: How is the city of Los Angeles feeling the effects of global recycling market changes?
ENRIQUE ZALDIVAR: Well, we're definitely enduring through the crisis as of now. Being on the Pacific Rim, we always felt that we were the only ones being impacted — but in fact, as you know by now, it's really across the nation. So that's how much influence and dependency all of us had on China being the primary, if not the only, market for so many years. It worked really well, made us complacent.
[We now] have a better sense of independence and reliability. We know that we cannot just come back to China and only China — we've already concluded that. We also came to realize that we had not capitalized on our very location. We're part of the North American economic block — in fact, we're the hub of it — and yet, we had not cultivated any movement within North America. We don't only mean us exporting out, because it could be in any direction. We definitely want to have a much better trade relationship on recyclables with Canada and Mexico ... however, our trade balance, or imbalance, will continue to be reshaped and change and evolve.
Zaldivar cites the United States-Mexico-Canada Agreement — a potential successor to NAFTA — as a key unknown in that equation.
But with it or without it, there's still a great framework within North America to be able to develop better movement of recyclables and the commodities that are part of our industry. Movement of goods definitely occurs every single day here within this block, and [that is] probably less susceptible to the whims of reactions to larger trade responses.
Where do your efforts stand to develop more market arrangements in Mexico?
ZALDIVAR: So we began discussions with our neighbors — Baja California, which is just literally two hours from here. We know how much product comes from that region into the U.S. and vice versa, so there's already an incredible infrastructure of logistics transportation-wise. It's sort of the same synergies that had us going to China, empty ships heading back to China. There are mostly trucks for now, but that can also include ships, frankly, going between Canada, the U.S. and Mexico.
So we know we can tap into the synergies of the logistics that already exist. We're not necessarily creating new logistics; we would be making use of the existing logistics. So we made some great inroads with Baja. We know that trade discussions at some point do become national, but if we utilize existing framework and existing trade agreements, then we don't necessarily need to depend on what comes out of the national discussion. So it's looking very promising with Baja California for fiber and some plastics.
They have pretty sizable paper mills in Mexicali, which is part of Baja California ... So we're not only exploring, but I do believe we're going to pursue some of that.
Any sense of timing on that?
ZALDIVAR: I'm hoping within this year, but definitely within the next two years.
The city's RecycLA franchise contracts have been designed to include financial penalties if certain disposal reduction targets aren't met in future years — but, as with everywhere else, global market changes have been impacting service providers. Earlier this year, as part of a broader settlement agreement, the implementation schedule for those requirements was extended to Jan. 2023, with interim targets scaled back. The city's original goal of 90% landfill diversion by 2025 remains in place.
Do you think with that extended timeline the market will hopefully stabilize by then? Is that the goal?
ZALDIVAR: So I sure hope that either the markets globally recover or we will have figured out a different solution — whichever occurs earlier. We are compelled to find a solution, not waiting only on the markets as we had known them to recover.
We have to create a different dynamic. And that's where we stand, and that's where we're coming from. I know the state is equally not only worried, but equally determined to bring stability back to this sector here in California. But I also believe that we can no longer just look at it as a state only. This, as we've come to see, has affected the entire country, so we may have more friends on this than we had imagined.
In the beginning, a lot of state agencies didn't seem to quite know how to respond to this market change back in 2017. Do you feel like CalRecycle has been a good partner since then?
ZALDIVAR: Yeah, it's definitely on their radar. And the whole success of our diversion strategy is depending on recyclables having movement and having a place to go. We cannot just truck them around in circles.
The state now benefits from the political stability of the new governor just being installed. That does translate to departments. Whether we admit it or not, it does. So was CalRecycle necessarily fully focused on the markets? We [now] have a new governor fully in place ... which means CalRecycle is in full stability mode and refocused.
