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The Economics of Recycling in Hawaii

Paper, metal, plant clippings, plastic and many more items are recycled in Hawaii and each has a dollar value

(page 2 of 3)

The economics of HI-5 are a bit murky. The state has been collecting about $55 million a year from the 6 cents added to each beverage container at point of sale, and disbursing from $49 million to $63 million, according to Department of Health statistics, depending on the percentage of bottles recycled each year. Recently, the Department of Health proposed that consumers be charged an additional fee of half a cent per HI-5 container to cover the state’s expenses of processing and overseeing the deposit fee. Currently, consumers are charged 5 cents for the deposit and 1 cent that is nonrefundable to cover the processing. But the DOH says that it not only pays the 5-cent deposit, but also a 2- to 4-cent handling fee for each container. As recycling rates have risen, the original 6-cent charge isn’t covering overall costs.

A 2005 audit of the HI-5 program reported a “financial system in which transactions were not properly recorded, records were in disarray and the resulting environment was ‘ripe for abuse.’ ” Gary Gill, deputy director of DOH’s recycling program, says, “You would expect a little bit of growing pains starting a new program like this,” and pointed out that HI-5 more than doubled the rate of diversion for beverage containers. DOH officials say they’ve been able to reduce consumer complaints substantially, and increase oversight of recycling companies by hiring more inspectors and accounting staff. They are still working on fixing one of the key challenges found in the 2005 audit: Recycling companies are compensated based on estimates of the number of containers brought in for redemption, rather than the actual number. A change to that system is now under public review, but it may be a few months before action is taken. Critics say the DOH should wait for a further audit before raising fees.

The 1-cent fee was supposed to be in place until the recovery rates topped 70 percent, at which time the fee was supposed to go up. The program took a few years to get off the ground and, in the meantime, the economy tanked, prompting the state to raid the money in the account to cover budget shortfalls elsewhere.

Being on an island also changes the economics and the process of solid-waste disposal for less desirable materials. Junk mail, Nos. 3 to 7 plastics, magazines, telephone books and the like are often recycled on the mainland, but, in Hawaii, these low-value recyclables actually provide a better return on investment as fuel for waste-to-energy technologies like H-Power.

Other diverted products create opportunities for local businesses. Menehune Magic takes much of the green waste from Oahu’s green bin curbside pickup and produces compost for sale under the “Hawaiian Earth Products” label. Crushed glass is turned into “glassphalt” by Grace Pacific. Across the state, there are 120 recycling centers. There are also collectors, companies and nonprofits that pick up recyclables from homes and businesses and deliver them to a recycling facility. There are currently two of these on Kauai and 18 on Oahu, ranging from Big Brothers, Big Sisters, which picks up HI-5 items, to fee-based curbside collection companies like Oahu Community Recycling, according to Honolulu County’s Department of Environmental Services. There are also dozens of companies that actively recycle or otherwise repurpose used materials for a second life, ranging from Battery Bill’s (car batteries) to EcoFeed Inc. (food/wet waste for compost) to Hawaii Mail Box Services (packing peanuts and other loose-fill for reuse) to Island Recycling, which takes aluminum, cardboard, paper, metals and wood pallets.

The Department of Labor and Industrial Relations says these recycling activities help account for about 3,000 fulltime-equivalent jobs statewide. With 40,000 total jobs in waste management across the state, it’s likely that, as recycling, composting and reuse expand, jobs will be created. These jobs proved resilient during the economic downturn, mainly thanks to HI-5. They can’t be outsourced, so one big benefit of recycling programs is they encourage local economic development, create jobs and recycle money in our community.

More Info

Recycling websites for each county, including details on what can be recycled and how to do it:

Honolulu
www.opala.org

Maui
co.maui.hi.us/recycle

Kauai
www.kauai.gov/recycling

Hawaii
www.recyclehawaii.org
(run by a local nonprofit)

List of organizations on Oahu that will collect your recyclables
tinyurl.com/7vrg8x5

List of Oahu recycling companies
tinyurl.com/7pwh3gq

Hawaii Business magazine invites you to comment on our articles and the issues they raise. Comments are moderated for offensive language, commercial messages and off-topic posts and may be deleted. Some comments may be chosen for inclusion in the magazine on the Feedback page.

Old to new | New to old
Aug 9, 2012 10:39 am
 Posted by  brvhi

As I work in the recycling industry, I find this article important for those who do not understand the economics of recycling and believe that we in the industry make "tons" of money.

A successful recycling infrastructure, even if costs exceed that of landfilling, is critical to the future of our great state of Hawaii.

Aug 9, 2012 10:50 am
 Posted by  brvhi

Most local recyclables are shipped off-island. A recyclable materials processing infrastructure would reduce costs and increase our independence. For example, processing plants and smelters should be established in Hawaii. The materials developed, such as aluminum structural materials, and composites, can be used in construction, increasing jobs and contribute to the local economy. For our sake, we must consider this as an option. As well, we must not fall into the NIMBY syndrome.

Dec 14, 2012 08:25 am
 Posted by  princessbm

i love this cite

This has been flagged
Aug 14, 2013 04:35 am
 Posted by  Latoya.Smith

Recycling is good! Over the years I’ve ordered dozens of catalogs that were printed with less than expected quality, some being downright scrappy. A couple months ago my company in Hobe Sound FL, printed some catalogs with PCA Delta and they were great. I’ve been printing with them ever since. They show care for the environment by using soy based inks, plus recycled papers are available upon request. If you need items printed on recycled paper go to http://www.pcadeltaprinting.com/

This has been flagged
Jan 1, 2014 12:46 pm
 Posted by  johnjesselaRue

Made in hawaii products suffer from expensive glass containers shipped in to the islands. Create a glass factory here to use recycled glass for Hawaii products. A beautiful solar power glass factory Hawaii state funded to create jobs and reduce greatly the carbon footprint of the islands. New manufacturing in food and beer can instantly be more profitable. Adissionally unseparated glass (low grade) is used in Oregon to make a sand-like road material. We always can use more sand that we lose.

This has been flagged
Jan 1, 2014 12:52 pm
 Posted by  johnjesselaRue

Make a glass factory a priority in Hawaii. Please, use here this valuable recycled resource.

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