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    The Metals Industry Stance on Recycling and Recycled Content

    By Keith R | March 28, 2007

    Topics: Design for the Environment (DfE), Economics & the Environment, Environmental Protection, Extractive Sectors, Waste & Recycling | No Comments »

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    At the end of November a coalition of entities representing major segments of the mining and metals industries* issued a joint “Declaration on Recycling Principles.” As you may have discerned by now, everything having to do with waste and recycling interests me. I downloaded the Declaration, jotted notes and questions in a draft post, and resolved to finish it later when I could.

    There it might have languished until my blogfriend Mark from Ecoiron (the excellent blog about green computing and IT issues that I read religiously) mused not once, but thrice, about the possible scarcity of key metals (lithium, copper, tin). His articles in turn lead me to interesting articles about “peak copper” and “peak gold” theory. Then, even as I struggled over what to write about the Declaration and the issue of metal recycling generally, came the stories about scrap scavenging in Jamaica and the controversy over a facility to mine car batteries for lead in Paraná. The topic is timely, it seems.

    The LAC Connection

    Maybe you’re already asking what this have to do with the central focus of this blog, Latin America and the Caribbean (LAC).

    It actually matters to LAC on several levels. To begin with, metals recycling is underdeveloped in LAC. With the notable exception of aluminum cans (but not other secondary sources of aluminum) in Brazil and a handful of other LAC nations, post-consumer metal recycling is weak, if not poor. Given that no LAC nation is self-sufficient in all key metals, this is curious, particularly at today’s international metal prices.

    Second, many of the entities endorsing the Declaration have strong links to LAC nations: companies, association or institutes that are members; multinational corporations with large exposure in LAC; or LAC nations are important sources for their minerals. For example:

    Hence these countries and mining, smelting and metallurgy operations on their territory have a stake in whether the industry’s joint position prevails among policymakers and becomes translated into policy and law, both within LAC and among the major consumers of its minerals and metals, such as Europe, North America and Japan.

    Third, there are the impacts that may not be as readily apparent. For example, several LAC nations — notably Argentina, Brazil and Mexico — are interested in recovering and recycling batteries and electro-chemical piles (pilas in Spanish, pilhas in Portuguese, the word for small batteries, usually referring to common household batteries used in toys, handheld devices, etc.). They are likely to fail without a conscious effort to promote metal recycling. The key component of most battery/pile chemistries are metals such as lithium, cadmium, nickel, zinc, mercury, silver, lead, zinc and magnesium. Without a viable, licensed local or at least regional metals recycler, chances are those collected batteries and piles will simply be shipped off to recyclers in Europe and North America, or more dubious ones in Asia. Hazardous waste rules make it a bit more complicated than that, but the point remains that if you are Argentina and you do not have a recycler handy who is licensed to handle cadmium, you will not be able to truly recycle Ni-Cad batteries. Instead, you’ll export them out-of-sight, out-of-mind.

    Furthermore, many of these metals are toxic or dangerous (not the same thing!) so they really should not be allowed to end up in the uncontrolled or poorly controlled dumps many LAC nations euphemistically call “landfills.” Much better to put them in the hands of companies accustomed to handling their particular hazards and capable of utilizing them as production inputs.

    Or what about the several LAC nations interested in recycling construction and demolition (C&D) wastes? Such programs will not succeed without a viable recycling network for used I-beams, rebar, window frames, doorknobs, metal pipes, railing, etc.

    The Industry Argument

    The industry’s Declaration is two densely-packed, readable but terse pages. The gist of it is that the metals industry supports recycling and does quite a bit of it already, but they oppose applying the criterion of recycled content to their products.

    Their argument is crafted in more complex and nuanced language than that, of course. They argue:

    So the takeaway message seems to be: recycling good, which we do a lot of; application of recycled content requirements, senseless for this sector.

    Why Worry About Recycled Content?

    Before walking through the metal industry’s argument, let’s first answer a question that may have already occurred to you: why are they so concerned about recycled content requirements?

    Answer: because they are confronting such preferences/requirements in more and more market segments in more and more countries. For example, in the US the increasingly popular Leadership in Energy and Environmental Design (LEED™) construction standards call for materials with recycled content. These standards are fast becoming the model for “green building” standards in other countries.

    Furthermore, in the wake of the European Union’s (EU) end-of-life vehicle (ELV) directive, many manufacturers (especially those in Europe) are seeking to increase the recycled content in their vehicles.

    And then there’s the executive order guiding government purchasing under the US Government’s Office of the Federal Environmental Executive (OFEE) that emphasizes recycled content. Many governments — including some in LAC nations — are considering recycled content preferences in government purchasing as a way to “green their procurement” and perhaps stimulate recycling in their country.

    The metal industry, while already working hard to meet such demands, want it to go no further, at least as far as metals are concerned.

    bales of scrap steelHow sound is this argument generally, and in the LAC context in particular?

    Now let’s walk through the industry argument.

    Very true. While most materials are recyclable one way or another, some are easier and more economical to recycle, while others (hazardous materials) are dangerous, tricky, difficult and/or expensive to do so. Most metals are the former, not the latter.

    True. Because of the nature of their chemical bond, metals can be recycled over and over without degrading quality, at substantially lower energy consumption and other environmental benefits.

    Here is where the argument gets… iffy. Yes, metal recycling has a long history. Suggesting that high recycling rates applies across-the-board for the sector, however, is misleading. Good overall rates in steel and aluminum, maybe — if you limit the discussion to the US, Japan and Europe.**

    Outside the OECD context, the steel and aluminum industries tend to discuss only the sub-segments doing well, avoiding the rest. For example, they will point to high rates for aluminum cans (with Brazil as the global champion), but not discuss other aluminum segments. In Brazil, where recycling of steel cans is substantially lower (29% in 2005) than that of aluminum cans or PET containers, the industry likes to talk instead of steel drink cans, a sub-sub-segment where they do very well in recycling.

    As for the other metals, finding comprehensive, up-to-date recycling rates for any country is difficult, if not impossible. In the case of LAC, the latter is definitely true!

    The only other metals segment that seems to tackle the recycling rates question head-on is gold: the World Gold Council will tell you that the global five-year average of recycling gold scrap is about 23%.

    Share of recycled copper in total copper use, 2004Other metal industry spokesmen tend instead to recast the issue. For example, copper spokesmen like to emphasize how much of copper demand is met by recycled scrap, which is not at all the same as how much of copper in end-of-life products actually is recycled. The zinc industry will tell you that 80% of the zinc available for recycling (which means what, exactly?) is actually recycled, but that only 30% of the global offer of zinc comes from recycled feedstock. The lead industry uses a similar tactic in its “factbook” chapter on recycling, asserting that 70% of lead demand in the US is served by recycled lead, 60% in Western Europe and an average of around 50% elsewhere.

    As for cadmium, cobalt, lithium, manganese, mercury, molybdenum, nickel, palladium, platinum, silver, tin, titanium, tungsten, zirconium… try to find international recycling data that is not dated before 2000, and that is not limited to select segments. And best of luck finding data that covers developing nations such as those in LAC.

    In other words, apart from isolated examples for which the industry regularly provides recycling rate data, we the public can only take them at their word that they recycle at high rates. If most, if not all, metals have such high overall recycling rates in most countries, why not publish the good news for all to see and appreciate?

    It is curious that they do not, and tends to cast doubt on their key assertion. What data for LAC that I can find from other sources — government, academics and third parties such as Brazil’s Cempre, lead me to suspect that the overall recycling rate for most metals in LAC nations is rather low.

    What exactly is constraining the availability of feedstock material?

    It can’t be a scarcity of end-of-life (EOL) products that serve as the source for such feedstock, even if we’re speaking only of North America and Europe. Despite the enormous recycling of automotive steel, I still see untapped car junkyards when I travel across the US. The same holds true in LAC. And given the paucity of recovery and recycling of C&D waste, computers, electronics, appliances, car catalytic converters, etc. in LAC that everyone points to, it seems that the scrap potential is good.

    I can’t see scrap availability for recycling being harmed by price, since prices for many of these metals are at historic highs. Shouldn’t that be stimulating scrap recycling more?

    It can’t be lack of economic and technical capacity, even in the LAC context. Take steel, for example, where over a dozen LAC nations have mills, many of them electric arc furnaces that can run almost entirely on scrap. Or aluminum, in a region with many smelters. Or copper, in which LAC is a major refiner. Yes, not every nation has the capacity on its own territory, but the potential for intra-regional trade in metals for recycling is there.

    Could it be the lack of a clear, steady local and/or regional market for quality scrap, perhaps? If so, why isn’t the metals industry out in countries like those in LAC, working with governments, scrap dealers, waste haulers and recycling co-ops seeking to get scrap collection and recycling networks organized or better organized?

    When the aluminum drink can was introduced in in Brazil in 1989, there was no clear market for used latinhas. But once Latasa began organizing can collection and recycling campaigns in 1991, it produced a massive “turn in your cans” publicity and public education program while assuring collectors that it would take all they could provide, and at a good price. Within seven years Brazil had one of the highest aluminum can recycling rates in the world. Latasa began similar aluminum can collection programs in Argentina and Chile, with much of the collected scrap sent to Brazil for recycling.

    These days, it’s hard to find an aluminum can in a dump or landfill anywhere in LAC. Where they can’t be recycled locally, they’re shipped off to Brazil, the US or even China for recycling.

    So if, for example, LAC nations with electric arc furnace steel mills made it clear that they would buy at good prices all decent steel scrap on offer from cars, girders, rebar and appliances, how quickly do you think municipal C&D waste managers, construction contractors, junkyards, scrap dealers and waste picker co-ops would organize to meet the demand?

    Or if the major manufacturers of lithium and lithium ion batteries helped organize collection of spent batteries from computers, cell phones, etc. and agreed to utilize all lithium gleaned from such batteries in production of new ones, how quickly do you think collection points would spring up across LAC nations?

    If the constraint to greater availability is in tax, trade or technical specification barriers, then perhaps the metals sector should organize to lobby governments to change these, invoking the name of helping the environment and reducing energy consumption. In point of fact, the opening is already there for metal companies operating in MERCOSUR: the pact already is discussing common policy steps that they can take to facilitate management of post-consumer wastes. Why not advance the idea of a single market for metal recycling?

    For that matter, why not take a proactive sectoral stance and suggest to the various other regional fora in LAC with trade policy focus and powers — MERCOSUR, the Andean Community (CAN), the Caribbean Community (CARICOM), the Central American Integration System (SICA) — that they at least develop a pro-recycling trade and integration policy, if not work with the other blocs to create a LAC “recycling zone.” The UN Environment Programme (UNEP), together with the Basel Convention secretariat and the international finance institutions (World Bank, IDB, etc.) might be willing to assist/advise in such an endeavor.

    In essence, the industry is saying that, even if we only replaced the metal-based products we already have, some new virgin material would have to be mined, refined and added to the mix to replace material lost through wear, corrosion and difficulty in separating materials for recovery. True.

    But two points to underline here: (1) if an aggressive recycling program was in place, fewer EOL products with valued metal in them would have a chance to get as rusted, corroded or “dispersed” as now is the case, since they would be harvested early on; (2) the separation difficulty underlines the need for incorporating “ease of recycling” more into design-for-environment (DfE) work.

    And yet, if, apart from steel and perhaps aluminum, metal recycling is nowhere near its potential, why in these times of fast-growing demand and high metal prices is the industry investing so heavily in new exploration and mining, but so little in fostering recycling?

    The key word in the industry argument is “available.” What some in metals mean by that, but don’t wish to state it outright, is “cheaply and easily available.” I would suggest that, if recycling metal scrap really does provide the energy savings, lower emissions and lower potential environmental liabilities (compared to mining) that industry itself claims, then they should be investing at least as much, if not more, in “exploring” and “developing” sources of secondary material as they do on finding and exploiting primary sources.

    Yes, studies do suggest that even if metal recycling were maximized in all venues, some mining of virgin mineral sources would still be necessary to meet the demand of the developing world, particularly China’s economy. But that should not be an excuse not to aggressively pursue maximization of metals recycling.

    This, I think, is the true target of this Declaration. In essence, they are arguing “we’re the good guys, so such restrictions should not be applied to us. Put them on paper, plastic and glass instead.”

    To begin with, the cry of “market distortions” and “environmental inefficiencies” does not sway me much. In 26 years of dealing with industry on environmental issues, I have often heard such claims when industry is pressured to do something they initially don’t want to do, but often later embrace. Unless they can document that such “distortions” and “inefficiencies” are substantial and pervasive for their sector, this in my eyes is a throwaway argument (pun intended!). Often the “distortions” industry claims from environmental policies pale next to the market distortions they long tolerate (or even seek) from subsidies, tax policy, tariff and nontariff barriers.

    Second, I’d buy the argument better if I believed that most recycled content preferences/requirements were indiscriminately applied. From what I have seen, heard and read they are not — at least not in practice. Usually guidelines are nuanced, calling for recycled content where feasible and achievable. I seriously doubt, for example, that anyone is going to impose a recycled content rule for copper wiring — most procurement officers understand (or can easily be made to understand) that copper wire has to have high purity levels. But that does not mean that they cannot and should not set recycled content levels for copper tubing.

    Perhaps OECD nations do not need recycled content policies to encourage aggressive metal recycling, we can debate that point. But in developing nations such as those in LAC, recycled content preferences in government purchases, and/or in building codes, might be a powerful, even necessary spur to higher metal recycling.

    I actually support DfE to make products easier to recover and recycle. But I believe that DfE and recycled content preferences do not have to be mutually exclusive.

    The invocation of LCA and LCI is curious. The metals industry itself frequently uses the argument that greater recycling reduces energy consumption in refining/production and diminishes the adverse environment impacts of mining. In fact, they do so here again in the Declaration text:

    …metal recycling offsets primary production processes — and their associated environmental impacts and energy consumption — required to dig, crush, grind and otherwise metallurgically process virgin ore. Recycling increases the material and energy efficiency of product systems throughout the life cycle and thus is good management practice.

    If sensibly applied recycled content preferences are used to stimulate metal recycling at a high rate wherever feasible, can the industry really argue that a proper LCA done by a reputable expert — one looking at all environmental impacts from the point of mining the mineral until aggressive recovery/recycling of the post-consumer finished product to meet tough recycled content rates — would compare unfavorably to a metallic product not recycled, or recycled only intermittently?

    Perhaps they can, but I have my doubts. If they can, I hope they share it with all of us to analyze and learn from.

    Until then, I am not ready to endorse either abandoning recycled content preferences or wholesale exemptions from them for an entire sector.

    — Keith R

    * The Declaration has been jointly produced by: the American Iron and Steel Institute (AISI); the Cobalt Development Institute (CDI); Eurofer (European Confederation of Iron and Steel Industries); Eurometaux (representing the European non-ferrous metal industries); the International Aluminum Institute (IAI); the International Chromium Development Association (ICDA); the International Copper Association (ICA); the International Council on Mining and Metals (ICMM) [ICMM includes the World Gold Council (WGC)]; the International Iron and Steel Institute (IISI); the International Manganese Institute (IMnI); the International Molybdenum Association (IMOA); the International Stainless Steel Forum (ISSF); the International Zinc Association (IZA); the International Tungsten Industry Association (ITIA); ITRI (formerly International Tin Research Institute); International Lead Association (ILA); the North American Metals Council (NAMC); the Nickel Institute.

    What’s missing from this list? From what I can determine, missing are representatives for the cadmium (Mexico is a leading producer of primary cadmium metal), lithium (Chile is the top source, Argentina a leading source and Bolivia and Brazil have significant reserves), mercury (Peru is a source of cinnabar), platinum (Colombia is a minor source), silver (Mexico and Peru remain major silver sources) and zirconium (Brazil is a leading source of zirconium silicate) industries.

    ** The recycling numbers published by the US steel industry are indeed impressive: 102% recycling of steel from scrapped cars in 2005 (meaning that they sources more scrap from cars than they put in), 63% from steel cans, 90% from appliances, 97.5% from structural beams and plates, 65% from reinforcement bars and 75.7% overall.

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