The Recycling Partnership urges Congress to enact tax credit for recycling infrastructure investment

The Recycling Partnership is calling on Congress to pass legislation that includes a recycling infrastructure investment tax credit to help unlock the economic and environmental benefits of recycling and a circular economy following the Environmental Protection Agency’s (EPA’s) release of its recycling needs assessment report, “An Assessment of the U.S. Recycling System: Financial Estimates to Modernize Material Recovery Infrastructure” in August of last year.

In its report, the EPA writes that as part of the fiscal year (FY2021) appropriations bill passed in December 2019, House Report 116-448 directed the EPA “to develop estimates of the infrastructure investment required to modernize the material recovery infrastructure … [and] develop estimates for the amounts of investment needed to provide all citizens with access to recycling services on par with access to disposal.”  Therefore, EPA says it developed estimates of the total infrastructure investment required to modernize recycling infrastructure, improve recycling education and provide all residents with access to recycling services that are on par with trash disposal services, with the goal of such investments being “to achieve consistent collection across the nation and maximize the efficient recovery of materials.”

The  Partnership says it collaborated with Congressional leadership to call for this report in the FY2021 appropriations process. To realize these economic benefits, the Washington-based nonprofit  is advocating for including a recycling infrastructure tax credit as Congress considers policy changes that will enable domestic manufacturing and resilient local economies.

Considerable investment needed

The EPA writes in its report that an estimated total investment of $36 billion to $43 billion would improve curbside collection, drop-off and processing infrastructure, such as material recovery facilities (MRFs), packaging-material-specific recycling facilities, composting, anaerobic digestion and livestock infrastructure, by 2030, when packaging and organics are considered. (When only packaging materials are considered, the investment needed ranges from $22 billion to $28 billion.) “This level of investment, which would leverage combined funding and financing mechanisms from stakeholders across the entire recycling system, including federal, state and municipal governments; the private sector; hybrid public-private partnerships; and fee-based programs, could lead to the potential recovery of an additional 82 [million] to 89 million tons of packaging and organic waste, a 91 percent increase in recovery over current levels,” the EPA writes. “This increased tonnage of recovered material could increase the nation’s recycling rate from its current level of 32 percent to 61 percent, allowing the U.S. to surpass the national recycling goal of 50 percent set by EPA.” 

While expanded recycling infrastructure is needed nationwide, the EPA report identifies regions with high rates of potentially recyclable material and a general lack of recycling infrastructure. For packaging materials recycling, these areas include the South (parts of Kentucky, Mississippi, Alabama and Georgia), Southwest (parts of Texas, Arizona and New Mexico) and Rocky Mountains (parts of Wyoming, Montana, Colorado, Idaho and Nevada). For organics recycling, these areas include the South (in particular, parts of Louisiana, Alabama and Mississippi), Southwest (parts of Texas, Arizona, New Mexico and Oklahoma) and Rocky Mountains (parts of Montana, Idaho, Colorado and Nevada). 

“The needs assessment demonstrates that investing in domestic recycling can pay dividends for local communities and the American economy,” says Keefe Harrison, CEO of The Recycling Partnership. “Our mission is to build a better recycling system, one that delivers the economic and environmental benefits our communities and the hundreds of thousands of people who work throughout the recycling industry deserve. This new data from the EPA makes clear the challenges ahead but also the opportunity for collective action to transform the way we use, reuse and recycle materials.”

System gaps

The EPA report identifies a number of gaps that must be addressed to improve recycling in the U.S., including that roughly 40 percent of households do not have access to recycling services for packaging materials and and roughly 91 percent of households do not have access to recycling services for organic materials that are equivalent in quality to trash disposal services. Regarding sorting and processing, the report says approximately 10,000 facilities currently recycle 65 million tons of material, which includes packaging and organics, adding that many facilities still require technological updates to streamline sorting more efficiently address contamination in incoming materials and that many regions of the U.S. have few or no recycling facilities. When it comes to end markets, roughly 200,000 facilities in the U.S. can use the end products produced from the recycling process, though few policies and economic incentives exist to encourage using recycled materials in production and support end market development.

An important first step

The Recycling Needs Survey and Assessment serves as an important first step for Congress in strengthening the U.S. recycling system, helping to identify and prioritize investments and improvements to capture the full economic value of recycling, The Partnership says, adding that investments in the U.S. recycling system are investments in American manufacturing, local jobs and resilient domestic supply chains.

The Recycling Partnership’s 2021 “Paying It Forward Report” quantifies that access to recycling that is on par with trash service for everyone across the U.S. would provide $11 billion in new wages and $9.4 billion in landfill cost savings for municipalities as well as create approximately 200,000 new jobs. 

A recycling infrastructure investment tax credit could transform the way businesses and private investors contribute to the circular economy, giving them the financial surety needed to bring a new wave of financing to needed programs, according to The Partnership, which is calling for its fellow nongovernmental organizations and our community and corporate partners to help advocate for effective policies that provide the needed investments required to fully unlock recycling’s economic and environmental benefits.

“As we partner with states to implement extended producer responsibility, we continue to realize the tremendous opportunity we have to advance our domestic recycling system,” says Kate Davenport, Chief policy officer at The Recycling Partnership. “This monumental data from EPA lays the framework for needed national investments, and we look forward to working with Congress and other key partners to continue to unlock the economic and environmental benefits of recycling and a circular economy.”