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The Honolulu Advertiser
Posted on: Thursday, February 24, 2005

Bottle law limits profits on empties

 •  List of redemption centers

By Sean Hao
Advertiser Staff Writer

Ben Asato is a longtime recycler who's losing money thanks to the state's new bottle law.

Manoa resident Elvina Yamashiro gets assistance from Tammy Pasoquen at a mobile automated recycling center at Times Supermarket on Beretania Street. The RRR Recycling Services Hawaii truck sets up at various locations throughout the week.

Bruce Asato • The Honolulu Advertiser

The Kuli'ou'ou resident used to get about $6 a month in scrap value for a load of about 720 cans.

That was until Jan. 1, when consumers began paying a refundable 5-cent deposit and a 1-cent administrative fee for each container under the state's new recycling program.

Now Asato is only able get his 5-cent deposit back. But he loses the 1-cent administrative fee, which amounts to nearly $5 for the same load of cans.

"I'm going backwards," Asato said. "That's my problem with this program.

"I think if they paid for the value of the can and the deposit, more people would participate."

Of the 11 states with beverage container deposit laws only one, California, allows consumers to receive the scrap value of aluminum cans.

The absence of such a feature in Hawai'i's program could be one reason the recycling rate is well below expectations.

The state Department of Health, which runs the recycling program, has collected more than $7.5 million in deposits under the bottle law, but has paid out only $333,000 in redemptions. That's with about one-third of redemption centers reporting results.

State officials hope that eventually 70 percent of eligible containers will be recycled statewide, which could help reduce litter. So far, common consumer complaints include long lines at some recycling centers, a lack of redemption centers with convenient hours, the need to separate different types of bottles and the requirement that aluminum and plastic containers not be crushed.

Some also complain that weighing the redeemed containers, rather than counting them, may have reduced their refund. Recycling centers have the option of calculating redemptions based on weight in cases where a consumer has 50 or more containers to redeem.

A key to improving the program is increasing the number of redemption centers, Health Department officials said.

The number of redemption centers statewide has more than doubled to 60 since Jan 1. One of the attractions for recyclers is the fact that they get to keep the value of the scrap aluminum. The state also pays them a per-container subsidy of 2 cents on O'ahu and 3 cents on Neighbor Islands.

"We have to make it attractive for businesses to get into this market or nobody would want to be a return center," said Health Department spokeswoman Laura Lott. "So they have to be compensated."

Reynolds Recycling, the state's largest recycler, said increased costs associated with the bottle law include adding 10 recycling sites and 48 employees. Those extra costs are keeping a lid on profits.

"That's a huge change in our business," said Reynolds Recycling President Terry Telfer. "We were on a small scale, now we have to do it on a very large scale.

"We'll make absolutely zero profit on this for quite a while."

Requirements that recyclers accept less profitable glass and plastic containers also crimps profits, according to both Reynolds and the state. Reynolds said glass containers are sold locally for almost no profit for use in road construction and as a foundation for sewer lines.

Hawai'i's plastic containers are shipped to China for use in clothing, rugs and computer cases for a net profit of 2 cents to 3 cents a pound, Telfer said.

Sending aluminum to the Mainland is the most profitable proposition. There, the metal can fetch as much as 68 cents a pound, or about 2.2 cents per can. Labor, shipping, insurance and other costs shave profits by about 23 cents per pound, Telfer added.

The going rate for scrap aluminum exceeds five- and 10-year averages, said Jerry Powell, editor for Portland, Ore.-based Resource Recycling, a magazine for municipal recycling managers.

"It's not a bad time to be recycling Hawaiian bottles and cans," Powell said

Profiting from recycling requires moving huge numbers of containers, which typically sell by the ton. For example, one ton of scrap containers equals 60,000 cans or 24,000 plastic bottles. Crushing and packing those containers for shipping requires $300,000 to $500,000 in equipment, Powell said.

Consumers complain that Hawai'i's law requires them to deliver containers to recycling sites. Hawai'i and California are the only states out of the 11 with bottle laws that don't require retailers to take back empty containers.

Six states, including Hawai'i, charge an added fee per container to offset costs associated with running container redemption programs, according to the Container Recycling Institute in Arlington, Va.

"There are 11 states including Hawai'i and they're all different," said Patricia Franklin, the institute's executive director. "There are no two states that have identical (bottle) laws."

However, the results in terms of recycling are similar, Franklin said. In the 10 states that implemented bottle laws before Hawai'i, the recycling rate was 490 containers per person, versus 191 containers per person in non-bottle-law states, according to the Container Recycling Institute.

Despite a slow start, recycling rates should reach a comparable level in Hawai'i, once the kinks are worked out of the program, Franklin said.

"I think the majority of those containers will end up being recycled, but I don't think anyone could expect that to happen right away," Franklin said. "It's going to take time before the public, the state and the visitors of the state see the impact of this law" in the form of reduced litter.

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.

Correction: Ben Asato is a Kuli'ou'ou resident who is a longtime recycler of drink cans. His name was incorrect. In addition, he normally recycles about 720 cans each month. A previous version of this story contained incorrect information.