State Fees & Commodity Prices Blamed : rePlanet Closes 191 Recycling Centres in California

rePlanet recycling california closures calrecycle
© Bryan Mills via Flickr

rePlanet, which runs California’s largest recycling network and works with numerous big retailers across the state, has closed 191 recycling centers and laid off 278 employees throughout California.

According to the company, following the most recent reduction in State fees on January 1st 2016 and after enduring 12 months of unprecedented declines in commodities pricing of aluminium and PET plastic, coupled with the mandated rise in operating costs as a result of minimum wage increases and required health and workers compensation insurance, the it concluded that operation of these recycling centers was no longer sustainable.

In a statement the company said that the restructuring will allow its remaining 800 employees to continue providing recycling services in the communities within which we operate the 350 recycling centers that have not closed.

However, it warned that that may only remain the case as long as current conditions remain unchanged.

The company said that it has participated in numerous meetings over the last year with CalRecycle to try and resolve issues surrounding the Beverage Container Recycling Fund, which is critical to the overall success of this program.

According to rePlanet, change is needed and it will continue to work with the State of California and the Division of Recycling to develop solutions that will keep containers out of landfills and ensure the viability of the recycling industry long into the future.

“If and when the State makes the necessary changes that allow us to operate profitably, we welcome the opportunity to reopen as many recycling centers as possible,” said the company’s statement.

CalRecycle: Commodity Prices not Processing Payments to Blame

A spokesperson for CalRecycle told WMW that the state fees referenced are processing payments paid to recyclers to help bridge the gap between the cost of recycling some materials and the market value.

He explained that CalRecycle adjusts these quarterly for participants in the beverage container recycling program. While the payment did decline from the October to January period, year-over-year, the January 2016 processing payment is actually higher than the January 2015 processing payment, and we project that total processing payments will increase moving forward as recycling volumes rise.

According to CalRecycle, while the fee has some impact on a recycling center’s operations, the primary driver at the moment is the weak commodity prices.

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