When manufacturers think about the financial value of recycling, the first question is often, “What will we get paid for this material?”

That is a fair question, especially when commodity markets can make certain materials a source of revenue. But not every recyclable material will generate a payment at every point in the market cycle. Plastic is a good example.

Plastic recycling markets can be challenging. A material's value depends on the type and quality of plastic, contamination, processing costs, separation, transportation, demand, and the price of new material. In some cases, recycled plastic may not have enough commodity value to pay the manufacturer. The EPA has identified the need for continued investment in plastic recycling infrastructure and stronger end markets.

Recycling Does Not Have to Generate Revenue to Create Value

Consider a manufacturer generating a plastic stream that costs $0.08 per pound to send to a landfill. If that same material can be recycled for $0.03 per pound, the recycling program may not generate a commodity payment, but it still creates $0.05 per pound in savings.

At 100,000 pounds, that is $5,000 in avoided disposal costs.

The material did not make the company $5,000. Instead, the recycling program prevented the company from spending an additional $5,000 on disposal.

Too often, recycling programs are evaluated based solely on whether a recycler sends a check back to the manufacturer. A better approach is to look at the total economics of the material stream.

What does it cost to landfill? What does it cost to recycle? What transportation is required? How much sorting or labor is involved? What value does the material have today? And perhaps most importantly, what could that material be worth in the future

The Plastic Market Is Changing

The plastic recycling market shows that commodity markets can change over time.

The value of materials can change from one day to the next. As more companies want recycled content, recycling technology improves, infrastructure grows, and more manufacturers look for recycled materials, new opportunities for recovered plastic will keep emerging.

The EPA notes that growing recycling infrastructure and end markets is key to strengthening recycling. The agency also points out that investing in plastic recycling technology can help recover more plastic and keep it out of landfills. This creates a valuable opportunity for manufacturers.

Get the Program in Place Before the Market Turns

Manufacturers don’t need to wait for plastic to become a high-value commodity before starting a recycling program. Setting up a program now can help a company be ready when the market gets better.

With a well-established program, the company already has the needed infrastructure to take advantage of the growing market. Employees know how to sort materials, collection processes are in place, and transport and recycling partners are lined up. The company also understands material requirements and has a steady supply ready.

When the market eventually reaches a point where a particular plastic stream moves from a cost-saving opportunity to a revenue-generating opportunity, the manufacturer is not starting from scratch, and the company is positioned to take advantage of the market instead of trying to build a program after the opportunity has arrived.

It’s much easier to shift from a recycling program that costs $0.03 per pound to one that pays $0.03 per pound than to switch from paying for landfill to building a new recycling program from scratch. If the recycling setup is already in place, any change in market value can quickly boost the program’s economics.

Build for Today, Prepare for Tomorrow

Plastic recycling won't have the same economics every year. Markets will continue to fluctuate, and some materials will have stronger demand than others. That is exactly why manufacturers should look at recycling as a long-term strategy rather than a short-term commodity transaction.

If recycling a material costs less than landfilling it today, that is a win.

If the program also reduces landfill waste and environmental impact, that is another win.

And if that same program positions the manufacturer to receive revenue when the market becomes more favorable, that creates another opportunity. The goal should not always be to make money from every recyclable material today. Sometimes the goal is to save money today while building the foundation to create value tomorrow.

For manufacturers looking at their plastic waste streams, that may be one of the most important opportunities in the evolving recycling market. The financial side of recycling matters. Cost is fundamental to how businesses operate, and manufacturers need to understand the economics of every waste stream. Disposal fees, transportation, labor, processing costs, and commodity values all play a role in determining the right solution.

But the financial calculation cannot be the only consideration. The environmental impact of sending recyclable material to a landfill should not be overlooked simply because the economics are challenging today.

A successful sustainability strategy has to consider both: making responsible financial decisions while recognizing the long-term environmental value of keeping recoverable materials in circulation and out of landfills.