As demand for recyclables plummets abroad, Texas lawmakers back plan to boost market at home

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For decades, countries like China and India have bought much of the United States' recyclables, turning them into plastics, paper and other valuable goods. But in recent years, those countries have implemented policies — including banning certain plastic imports — that have cast further doubt on the future of municipal recycling in the United States.

On Monday, bipartisan legislation designed to help offset the sapped demand for recyclables abroad cleared a final legislative hurdle at the Texas Capitol.

Senate Bill 649, which passed the Senate last month on a 21-10 vote, cleared the Texas House on an informal voice vote. The bill aims to increase the number of Texas plastics and paper manufacturers using recyclables as industrial feedstock to produce consumer and other products.

It will require the Texas Commission on Environmental Quality and the Texas Economic Development and Tourism Office to figure out how best to increase demand for recyclable materials in the manufacturing industry, identify the quantity and type of recyclables cities and industrial sources are currently collecting, and estimate how much of it isn't being reclaimed. The bill also calls for the development of a statewide campaign to educate the public about the economic benefits of the recycling industry and how to properly recycle.

Its passage comes as cities across the United States, including in Texas, are reevaluating recycling programs in the face of a variety of challenges. Some already have canceled them or scaled back.

State Sen. Judith Zaffirini, who authored the bill, said in a statement that the legislation is about propping up the recycling industry and spurring business growth. The Laredo Democrat noted the results of a recent economic impact study that discovered the recycling industry has a meaningful economic footprint in the state.

That study was required by a 2015 bill by state Rep. Ed Thompson, a Pearland Republican who authored a bill identical to Zaffirini's. The analysis found that the industry has a statewide annual economic impact of more than $3 billion — and that it employs more than 17,000 people.

“This is a critical industry that has a significant impact on the Texas economy,” Thompson, who is vice chair of the House Environmental Regulation Committee, said at a public hearing on the legislation in March. “Considering the volatility in the recycling market, I believe it is imperative that the state step in and do something.”

In lobbying for this year's legislation, proponents painted it as pro-business rather than pro-environment, hoping the argument would resonate more with Republican lawmakers.

“What we really wanted to do was have the voice of the industry push this bill,” said Jordan Fengel, executive director of the State of Texas Alliance for Recycling, a nonprofit that advocates for recycling through education and business partnerships.

And it didn't hurt for industry support. The bill won the endorsement of more than 60 businesses, according to Fengel. And, perhaps most notable, the powerful Texas Chemical Council backed it.

Hector Rivero, the council's president and CEO, described it in an interview as "a progressive effort."

According to the economic impact study Thompson's bill required, the legislation could increase the amount of recycled municipal solid waste in Texas from 23% up to 50%, as more businesses and processors would move to the state if demand increased.

In March, Thompson said one of the most obvious ways the state could encourage manufacturers to use recyclables as industrial feedstock is to place plants near the source of the materials — a concept Fengel said would make it easier on everyone in the supply chain.

Fengel said the state’s recycling industry cannot produce a market development plan of its own because antitrust regulations prevent sectors of the industry — from collection to manufacturing — from coordinating. Instead, the plan would make the state a third-party facilitator, allowing industry leaders to have otherwise prohibited conversations.

The legislation is estimated to cost $1 million to implement through 2025. Funding would come from the state’s GR549 account, which collects fees associated with solid waste disposal.

Steve Shannon, who chairs the recycling alliance's business council, said the legislation is critical considering China’s implementation in 2017 of its National Sword policy, which banned the import of two dozen types of recyclables and led to a devaluation of the U.S. recycling market. He said that Texas — especially as its population grows and generates more recyclables — should be rolling out “a red carpet” to industry. And he said it costs far less to ship something across Texas than it does to send it overseas.

Gwendalyn "Gigi" Gebhardt, a regional sales manager for Sierra International, a California-based equipment provider for scrap and recycling businesses, said the bill would definitely create more industry jobs.

“If the feedstock demand is increased, then we’ll have companies setting up shop in Texas to produce the products,” Gebhardt said.

The TCEQ and the Texas Economic Development and Tourism Office will have until September 2020 to send an initial implementation plan to Gov. Greg Abbott and the Municipal Solid Waste Management and Resource Recovery Advisory Council.

Correction: An earlier version of this story misspelled Jordan Fengel's name.