5
Materials and Markets

This chapter explores the various materials commonly accepted for recycling that are within the committee’s scope of task, and it identifies relevant issues that are unique or specific to individual materials. It also builds on previous chapters’ discussions of end markets, which are critical to an effective recycling system, and outlines various public policies relevant to enhancing those markets.

5.1 RECYCLING RATES

In the United States, most communities focus on five material types collected curbside or at drop-off centers and processed at materials recovery facilities (MRFs): plastics, paper, cardboard, glass, and metals (ferrous and aluminum). Less commonly collected are food and yard wastes, which can be managed through composting or anaerobic digestion. Industry plays an important role by collecting and recycling some of its own materials. Understanding the materials accepted by MRFs across the country, and the rates at which those materials are collected, is complicated because of a lack of standardized reporting; see Box 5-1 for legislation proposed to address these issues.

Absent standardized reporting, data on national collection and processing of recyclables are updated rarely. The most recent data were published in 2020 and reflect estimates of diversion in 2018 (see Figure 5-1 and Table 5-1; EPA, 2020). Figure 5-1 shows the amount of material recycled rose rapidly in the 1990s and early 2000s but has risen much more slowly since.

In addition to total recycling material tonnages, efforts have been made to calculate recycling rates for different materials over time. As displayed in Figure 5-1B, Arbex and Mahone (2024) use data from the U.S. EPA, together with material flow accounts, which track economy-wide material use (Eurostat, 2018), to calculate an overall recycling rate for recycled materials from 1970-2015. While recycling rates for materials differ, all materials display an increase in recycling rate during this time. Recent changes in recycling may be explained by a combination of technical factors such as differences in the inherent flexibility of materials for sorting and reuse, and economic and regulatory factors affecting waste processor costs and consumer preferences (Bening et al., 2021; Butler and Hooper, 2005; Le Pera et al., 2023).

In Figure 5-1, the tonnages for all recycling categories increase over the entire 50-year period, but the largest tonnage in all those years is for “paper and paperboard.” The next largest tonnage across this period is for “metals.” Interestingly, Figure 5-1 shows that tonnages for the glass category remain small relative to the others, but Figure 5-2 shows that the recycling rate for glass has increased more than any other category. The recycling rate for plastics started small but has increased somewhat more than the increase for metals. These recycling rates are each an average across the country, so they understate rates for individual materials currently recycled in locations such as cities that invest heavily in recycling (see Box 5-2).

To help understand these trends in recycling tonnages and recycling rates, we might like to see trends in total recycling expenditures by government. However, most local governments report total MSW expenditures, and do not break down collection of garbage for the landfill and other collection for recycling. In general, recycling might be an increasing fraction of total MSW expenditures, but it is difficult to determine how much that share has increased. Thus, recycling expenditures cannot be shown for the several time-trends in Figure 5-3. However, the dark blue trend does show total U.S. MSW expenditures as a fraction of gross domestic product (GDP). That ratio doubles from 100 percent of its 1970 level to 200 percent of that level in 1992 and then levels off until 1995, before falling steadily thereafter. In other words, after 1995, any growth in MSW expenditures was exceeded by overall growth in GDP. This decline in relative MSW spending may or may not partially explain the slowdown in growth of the overall recycling rate (shown in the orange trend line for the aggregate of all materials in the previous figure).

Another influence on recycling tonnages or recycling rates over this period might be changes in prices, so Figure 5-3 also shows a time-trend for the prices paid by firms for recycled materials (in light blue) and for the price of virgin materials (in green). For average recycled materials prices, data are not available until 1990 and then unavailable again in 1997 and 1998. These prices are highly volatile, though they end in 2015 somewhat higher than in 1990. In contrast, the price for virgin materials bounces up and down across the entire period, but it falls by 2015 to about 70 percent of its 1970 level. That price decline is only partly explained by recent reductions in prices for petrochemicals used to make plastic.

As it turns out, the trends in recycling tonnages and rates cannot be explained either by changes in government MSW expenditures nor by these two price trends. This is because the time-trends are determined simultaneously by the same complicated economic influences. For example, an increase in economic growth could explain increased demand for virgin materials, but any resulting increase in price of virgin materials could shift some of that demand to recycled materials. That shift might increase recycling rates, with or without more MSW expenditures. The trends cannot readily be disentangled.

EPA (2020) estimated the financial benefits of recycling in terms of jobs (681,000 in 2012), wages ($37.8 billion), and tax revenues ($5.5 billion). Yet, according to The Recycling Partnership (2024), over 76 percent of residential recyclables are landfilled or incinerated. Part of the loss in recyclables can be attributed to the fact that only 85 percent of communities have curbside collection and 63 percent of multifamily communities have no access to recyclables collection for an overall access to recycling of 73 percent. Unfortunately, over 57 percent of households do not participate in recycling (for lack of access or interest), and the average MRF captures only 87 percent of its accepted recyclable materials. Therefore, The Recycling Project (2024) estimates that over 50 percent of recyclables from homes with curbside collection is landfilled or incinerated.

Efficient recycling has technical, behavioral, and economic barriers, and multiple challenges that include contamination of recycling streams, single-stream recyclable collection, limited access to recycling collection, failure to properly separate recyclables, and inefficient processing of recyclables at MRFs.

Contamination of materials in recycling bins and drop-off facilities reduces the economic benefits of recycling. EPA (2021) identified contamination reduction as a key element of its National Recycling Strategy. The Recycling Partnership (2020) estimates that nationally the contamination rate is 17 percent, but in some cases it may be as high as 50 percent (Runewese et al., 2020). Contamination can occur because of poor communication between municipalities and participants, confusion over what can be recycled, indifference to the environment, and “wish-cycling” (placing materials in bins that participants hope can be recycled).

The following sections discuss the collection and use of the five main materials collected for recycling, as well as food and yard waste.

5.1.1 Plastics

Plastic is a ubiquitous component because of its strength, low cost, durability, environmental benefits, and wide range of properties (Avery et al., 2025). Dozens of types of plastic resins are or have been in use (see Table 5-3). Most have single or short-term use and therefore routinely and quickly find their way into municipal solid waste (MSW) streams. The production of plastics consumes 6 percent of the world’s refined crude oil (Dal et al., 2022).

Although these resins are all types of plastic, each resin has different characteristics that are beneficial for different types of manufacturing and product uses. Different challenges also relate to recycling for each resin type. Thus, to be useful for manufacturing, plastic recyclables must be separated by resin type.

Although plastics make up only 12 percent of MSW generated in the United States, many people see it as the most problematic type for several reasons. Plastic has low density, so it represents a greater share of waste by volume than by mass. Plastic waste has especially high environmental costs because it is long lasting, highly visible in the environment as litter, and has recently been identified as the source of micro and nano plastic particles in the environment. Approximately 5 percent of plastic waste is managed inappropriately, harming marine and terrestrial life when animals become entangled in it or ingest it (NASEM, 2023). Micro and nano plastics have been found in every environment on earth and may harm human health.

Some types of plastics are collected by almost every curbside recycling program. EPA (2024a) estimated that, in total, approximately 9 percent of plastic waste was recycled in 2018. Recycling of plastics avoids the consumption of energy and fossil fuels to produce virgin plastics. Figure 5-4 shows the breakdown of plastic waste by resin and product type as determined by Milbrandt (2022), who reported that 5 percent of plastics were recycled globally in 2019. Although most thermoplastics (plastics that can be remelted and molded into new plastics) can be recyclable, only resin numbers 1 and 2 are commonly collected in household curbside collection programs or at drop-off centers (see Table 5-3). Types 3–7 are considered hard to recycle, although interest is increasing among developing programs to manage these waste types. Film, wrap, and bags made of low-density polyethylene (LDPE) dominate plastic wastes, representing 5.8 percent of MSW by weight (Milbrandt, 2022; see Figure 5-2). LDPE is still poorly recycled because of the

Milbrandt and colleagues (2022) also reported that about 86 percent of plastics was landfilled and 9 percent was combusted in the United States in 2019. Based on these data, the authors calculated the total mass of plastics landfilled as 44 million tons, representing $2.3 billion in value and 3.4 Ej (exajoule) of embodied energy (or 12 percent of the energy consumed by the industrial sector).

Since 2018, when EPA published its latest dataset regarding national waste generation and management, several confounding events have occurred. First, China banned imports of recyclables with its National Sword policy in 2018 (discussed further in later sections of this chapter). Nearly 3 million metric tons of U.S. recyclables (largely plastics and mixed paper) that would have been exported to China diverted elsewhere, often to landfills (Sigman and Strow, 2024) or to other countries, where they may have been mismanaged (Taylor et al., 2024).

Additionally, beginning in early 2020, the COVID-19 pandemic had multiple effects on MSW generation and recycling. As many people worked from home, waste from commercial businesses decreased, while household waste increased markedly. Plastic wastes increased because personal protection equipment (predominately gloves and masks) was discarded in large numbers. Take-out packaging also increased, as fewer families ate at restaurants (Olawade et al., 2024). Finally, online shopping grew to over 13 percent of U.S. commerce in 2020. E-commerce packaging can use up to 4.2 times the material of that used for

Food waste has the highest methane generation potential of all wastes landfilled. This fact, coupled with the high degradation rate of food waste and the typical delay in formal gas collection from landfills, means that most, if not all, of the methane potential in food waste is generated prior to collection of landfill gas (Amini and Reinhart, 2011).

Beyond the impact landfilled food waste has on the environment, the social implications of food wasted (at the retail level) and lost (during harvesting, storage, or transport) on a global scale mean that 24 percent of the world’s calories go uneaten (Goodwin, 2023). Also lost are the land, fertilizer, water, and energy used to generate uneaten food. Regulations at the federal, state, and local levels have tried to prevent food waste through more accurate date labeling; rescue of food for the hungry through food safety and liability protection; and diversion from landfills through animal feeding, organic waste bans, and mandatory recycling policies.

Food and yard wastes can be composted, digested, or converted into biofuel. Kiran and colleagues (2014) estimated that 1.32 × 10⁹ m³/year of methane could be produced globally from food waste, which would generate some 2.6 × 10⁷ joules of energy. Today, composting is the most common alternative to landfilling for food and yard waste, but interest is growing in anaerobic digestion of organic waste, which produces biogas and digestate that can be used as a soil amendment. Badgett and Milbrandt (2021) reported that 283 anaerobic digestion facilities, or digesters, in the United States are processing food waste, including 82 located at wastewater treatment plants and 68 at livestock facilities.

One of the impediments to recovery of food wastes is the difficulty and cost associated with its collection. Many communities that have banned food waste from landfills have created drop-off locations (e.g., New York City) or added collection routes for separated food waste, or allow food waste to be collected along with other green waste. Additional collection routes increase the number of trucks on the road, along with tailpipe emissions, increased accident risks, and cost. However, these disadvantages are offset by reduced landfill gas emissions and potential sale of biogas generated by food waste treatment. A recent study of the impact of adding a food waste collection line (beyond garbage, recyclables, and recyclables) found that food waste diversion reduces the global warming potential of waste collection significantly at a relatively low cost (Reinhart et al., 2023). Furthermore, separation of food waste may decrease the contamination of recyclables, which can have significant advantages for reducing cost and global warming potentials.

5.2 DEMAND FOR RECYCLABLE MATERIALS: END MARKETS

Sales of recyclable commodities in end markets provide revenues that reduce the expense of recycling for local governments and private parties. Commodity revenues can cover a substantial share of the costs of processing recyclables (see Chapter 4). Ideally, recycled commodity prices would be high and steady enough to contribute reliable revenue toward supporting the recycling system. However, the effect of end markets is not exclusively financial, because end uses determine much of the environmental benefit of recycling. Recycling is more likely to improve environmental quality when secondary materials successfully substitute for extraction or production of environmentally damaging primary materials and when these recycled materials can be incorporated into new products without themselves requiring resource-intensive processing. Thus, end markets and programs to support them should be assessed not just in terms of revenue but also in terms of environmental attributes.

Table 5-4 provides summary information about common, current end uses for materials in the United States and Canada. The prices represent the average sales prices of each material after it has been sorted at a MRF in the U.S. Northeast and Canadian Maritime provinces. The price ranges reflect variation in values of the average prices by week for the first half of 2024. Only for some materials do these end markets meet the goals for supporting the recycling system: high prices, steady prices, and environmentally favorable replacements for extraction of primary materials.

TABLE 5-4 End Uses and Prices for Recycled Commodities

NOTES: HDPE = high-density polyethylene; PET = polyethylene terephthalate. Prices ranges are for a recent 6-month period. A longer time series is shown in Figure 5-3 below.

^a Data from wv.gov based on recycle.net data.

^b Miller, 2024.

^c PET bottle reuse: Brian Staley in presentation to committee, June 11, 2024.

As Table 5-4 reports, prices per ton vary greatly across recycled commodities. Materials that are good substitutes for valuable primary materials, such as metals and corrugated cardboard, typically maintain high prices. However, many materials do not easily substitute for primary materials. For example, dyes are often added to color high-density polyethylene (HDPE) and glass bottles, making the postconsumer material suitable only for uses that are not sensitive to the color of the material. And, for another example, reprocessing strips some plastics and paper of desirable chemical or physical properties, restricting the number of times they can be recycled or requiring they be reused only when mixed with primary materials (Basushi et al., 2023). Thus, improved markets for many materials will require either invention of new technologies or vastly improved sorting processes. Federal research funding could help address this important weakness in the recycling system by supporting development of these new technologies. Pointing to the importance of end markets, Bradshaw and colleagues (2025) conclude that “large MRFs also demonstrate success finding markets for a variety of plastics and gain significant revenue from plastics compared to smaller MRFs” (p. 326).

Competition with low-price virgin materials in end markets creates a challenge for recyclables. Virgin materials prices are often lower than the full social costs of producing these materials—both because of the environmental impacts of mining and other raw material production, and because of subsidies for energy production that lower the cost of feedstocks for virgin plastic manufacture. With low prices for virgin materials, manufacturers have limited incentives to use recycled materials in their production. Virgin plastic has become especially cheap in recent years because of fracking in the production of petrochemicals, and because of low-cost imports from China. For 2023–2024, Figure 5-3 shows prices for food-grade recycled polyethylene terephthalate (PET) and a similar grade of virgin PET. It demonstrates that the recycled resin price is consistently higher than the virgin resin price over time, which limits demand for recycled products.²

Volatile prices present another challenge. Price volatility creates stress on local governments that finance most recycling, and it creates fragility in the recycling system because investments are risky. In the history of prices for several commodities, shown in Figure 5-6, prices commonly double or triple and then fall back again on a year-to-year basis. Recycled commodity prices are substantially more volatile than other commodity prices (Moore et al., 2022; Timpane, 2024).

Several features of markets for recycled commodities may explain this price volatility. First, supply of recycled materials is insensitive to price (“price inelastic”). Households do not receive any compensation for recycled materials, so the amount they send to MRFs and other processors is unrelated to the value of the material. MRFs may be contractually obligated to process recyclable material and attempt to sell it regardless of whether they expect to cover their costs in doing so. With this price-inelastic supply, fluctuations in demand for the material translate into large price swings. In addition, in many recycling markets, demand for the materials is driven largely by the prices of the primary commodities for which they substitute, and these primary materials prices themselves are volatile. In the United States, plastics derive from natural gas and from feedstocks from natural gas processing and crude oil refining, resulting in prices that vary with energy market conditions. They are also subject to other global production shocks, such as a recent surge in low-cost imports of virgin PET from China (Staub, 2024). Finally, volatility in these prices relates to the fact that prices are low, because small absolute changes in value can create large percentage price swings. Many of these prices can be very low: mixed paper prices were below zero in 2019 but rebounded dramatically by 2021 with the development of new domestic paper mills (NERC, 2021). These factors are fundamental features of these markets; recycling policies must manage volatility but cannot eliminate it.

5.2.1 Evaluating End Uses

When a recycled commodity is a close substitute for the primary material, their prices are similar, and the recycled commodity’s price reflects the private costs avoided when 1 ton of the recycled material replaces 1 ton of the primary material. These savings may include savings in labor and energy inputs in addition to mineral or other raw material values. They also include costs of environmental controls on

TABLE 5-5 Key Definitions of Recycling Technologies

Policies Around Chemical Recycling

Chemical recycling legislation reclassifies advanced recycling facilities as manufacturing plants, rather than as facilities that handle solid waste (see Figure 5-8). Many state laws, such as those in West Virginia and Mississippi, permit the products of advanced recycling to be “returned to economic utility,” but they often lack specificity regarding what qualifies as recycled material. Conversely, states such as Arkansas and Kentucky do not recognize fuel production from plastics as recycling, necessitating a nuanced approach to mass balance accounting. Given the potential of chemical recycling to address complex plastic waste streams, states may foreclose desirable uses from recycling with outright bans on these technologies. Instead, states would benefit from regulatory frameworks that ensure transparency, environmental integrity, and economic viability of novel recycling methods. This approach can enable chemical recycling to complement mechanical recycling in achieving broader sustainability goals.

5.3 GLOBAL, REGIONAL AND LOCAL RECYCLING MARKETS

Recyclables are commodities that flow to markets with the highest value. U.S. trade laws generally allow shipment of commodities across the globe to these markets based on the economics associated with these transactions.

5.3.1 Global Markets for Recyclables

While the United States does not limit the export and import of nonhazardous waste, trade is subject to the applicable laws and regulations in the country or counties that control the receipt of waste and recyclables, as well as applicable international agreements. In 2021, most plastic scrap was added to the Basel Convention, which regulates international movement of hazardous wastes (EPA, 2021).

Packaging is needed where products are produced. From the 1980s through the early 2010s, China’s economy grew and became a primary source of products in the global economy. As its finished-product exports grew, China imported more recyclable materials to use in the production of their products and packages.

China’s appetite for feedstock to make new products and packages grew during a time when the United States was collecting more material for recycling. As China’s production of low-cost goods increased, U.S. production shifted to a reliance on products made in China and other developing countries. This development reduced demand for packaging, and the increasing costs of environmental controls and labor resulted in increased costs for U.S. domestic manufacturing companies and a corresponding increase in exports of recyclables to China.

In the 1990s and early 2000s, China purchased increasing volumes of recycled paper and plastic from across the globe to feed its growing economy. Its low-cost labor and mill production (with few environmental controls) led to a massive shift in the production of goods and packaging worldwide. In China, imported recycled plastics were turned into flakes or pellets to be repurposed by plastic manufacturers. This practice was made profitable by favorable shipping rates—in cargo vessels that carried Chinese consumer goods abroad and would otherwise return to China empty—coupled with the country’s low labor costs and high demand for recycled materials.

Operation Green Fence

The reliance on China and its insatiable appetite for recycled feedstock began to change in 2010 with China’s preparation for the 2012 Olympics and with the growth of internet communication about the harms of China’s pollution. Photos and videos were commonly shared showing plastic-filled rivers and ditches, and neighborhoods filled with smoke from plastic and paper mills. China’s air and water pollution became global news at a time when it hoped to attract positive global attention.

As domestic press and global visibility into China’s “pollution problem” grew, Chinese authorities began their first of several constrictions on imports—called “Operation Green Fence”—starting with plastics in 2013. These restrictions banned many types of plastics from being imported into the country. Operation Green Fence was a wake-up call for the U.S. recycling industry. As demand for recycled materials continued to increase in the United States, demand for recycled plastics previously shipped to China came to a halt. Some plastic in the United States was warehoused until end markets could be found, but anecdotal evidence indicates that most low-quality plastic (resin codes 3–7) was ultimately landfilled.

The change in Chinese policy was a precursor to subsequent restrictions and may have begun a shift to more investments in domestic U.S. solutions for materials previously exported across the globe. Research suggests that the policy’s effect on overall waste trade was limited at first, causing a temporary decline in exports to China but not otherwise altering patterns on international trade in waste (Balkevicius et al., 2020).

National Sword Policy

In July 2017, China informed the World Trade Organization of its intent to ban imports of all recycled plastic and mixed paper, effective January 2018. The policy, part of a broader crackdown on imports called the “National Sword,” was an effort to halt a deluge of soiled and contaminated materials that was overwhelming Chinese processing facilities and leaving the country with yet another environmental problem (Katz, 2019).

Because China was handling nearly half of the world’s recyclables at this point (primarily paper and plastic), the Chinese ban had a dramatic effect on global markets. Before the ban, 75 percent of U.S. recycled plastics was exported, with 40 percent going to China (Sigman and Strow, 2024). Europe exported 46 percent of its recycled plastic, even as the phase-in of the Chinese ban began in 2017 (Bishop, 2020). U.S. exports to China in the waste categories covered by the ban fell from 2.9 million metric tons in 2016 to only 135,000 metric tons in 2018. Some exports diverted to other international buyers, such as Vietnam and India, but these countries also began to implement their own restrictions on imports through their ports (Resource Recycling, 2022).

The loss of the Chinese markets had profound effects on U.S. waste management and on the environmental effects of trade in recyclables. Landfilled waste rose in the states most affected by the ban; the ban also seemed to undermine local recycling systems and led to reductions in employment in MRFs (Sigman and Strow, 2024). Taylor and colleagues (2024) found that other countries experiencing the largest increases in recycled plastic imports following the Chinese ban also experienced increases in plastic bottle litter.

Basel Convention and International Trade in Recyclable Scrap and Waste

The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (Basel Convention) was adopted in 1989 and came into force in 1992. It is the most significant multilateral treaty governing the movement of hazardous waste, solid waste, and scrap for recovery and disposal internationally (UNEP, 2011). Currently, 187 countries are ratified members of the Basel Convention. The United States was an original signatory to the Basel Convention in 1989 but never ratified the agreement and is not a current member of the Convention.

The Basel Convention establishes rules and regulations for international shipments of all hazardous waste and solid waste for reuse, recovery, and disposal. It thus has important impacts on international markets for recyclable materials members and nonmembers alike. A notable feature of the Basel Convention is that member nations are prohibited from trading scrap and waste with nonmember nations if it is classified as having hazardous characteristics (UNEP, 2011). This rule has the potential to severely limit the markets available for the United States to export recyclable materials that are classified in categories deemed to have hazardous characteristics.

A significant example involves trade in plastic waste. Beginning in January 2021, provisions in the Basel Convention reclassified plastic scrap and waste from a single category that was previously freely traded to two new categories that are now subject to Basel Convention trade restrictions (even plastics that are not hazardous). The first new category covers mixed-plastic scrap and waste, plastic waste mixed with other forms of scrap, and plastic waste that is contaminated (e.g., with food or other nonhazardous substances). The second new category covers plastic scrap and waste that the Basel Convention classifies as hazardous waste. Both categories now require prior notice and consent, which means an importing country must accept in writing any shipment before it leaves the port of the exporting country. The Basel Convention plastics amendments significantly reduced international trade in plastics. For example, Ishimura and colleagues (2024) found that the Convention reduced plastic waste trade volume from developed to developing countries by 64 percent.

Importantly, the Basel Convention contains a provision that its members are not permitted to trade Basel-controlled plastic scrap and waste with nonmember countries except under the terms of an agreement or arrangement provided for by Article 11 of the Convention (Department of State, 2025). Thus, for the 187 Basel member countries, plastic scrap and waste that was uncontrolled prior to January 2021 cannot be traded with the United States unless a separate agreement is negotiated. The United States has negotiated separate agreements for importing and exporting hazardous waste with five countries: Canada, Mexico, Costa Rica, Malaysia, and the Philippines.

The United States and Canada first established a bilateral agreement in 1986 to address the movement of hazardous and municipal waste for recycling and disposal between the two countries. In 2020, they developed an additional agreement regarding the transboundary shipments of nonhazardous scrap and waste products, including nonhazardous plastic scrap and waste. These shipments are not subject to prior notice- and-consent rules as long as the movement of the material is only between the two countries and is being sent to locations following environmentally sound practices (EPA, 2018). The U.S. agreement with Mexico was also established in 1986 and allows for the movement of hazardous waste from Mexico to the United States for the purposes of recycling or disposal, but it only allows for hazardous wastes to be shipped from the United States to Mexico for the purposes of recycling. The United States also has bilateral agreements with Costa Rica, the Philippines, and Malaysia stipulating that wastes may be exported from those countries to the United States for recycling or disposal, but the United States may not export waste to any of them.

In addition to those five bilateral agreements, the United States is a member of OECD and is thus subject to the Council on the Control of Transboundary Movements of Wastes Destined for Recovery Operations, as well as OECD’s plastic waste amendments effective January 2021. These amendments grant OECD member countries the right to govern nonhazardous plastic waste trade according to their own national and international laws. Given that most OECD member countries are also members of the Basel Convention, most have adopted the new Basel Convention restrictions on plastic waste.⁴

U.S. Trade in Recyclable Waste and Scrap Material

Recyclable scrap and waste materials operate in interconnected global commodity markets. From 2012 to 2023, the world traded more than 776 million metric tons of scrap and waste glass, paper, plastic, and aluminum across international borders.⁵ Of the four commodities traded internationally in Figure 5-9, scrap and waste from paper and paperboard products are the largest by weight. Prior to 2018, plastic scrap and waste was the second-largest recyclable commodity of the four (UN Comtrade, n.d.). But after China’s National Sword policy was implemented in 2018 and plastics were reclassified under the Basel Convention in 2021, plastic scrap and waste trade has fallen off dramatically, from 15 million metric tons in 2012 to 4 million metric tons in 2023 (UN Comtrade, n.d.). This trend could continue with more countries restricting imports of plastic scrap and waste. In January of 2025, Thailand will completely ban the imports of plastic scrap and waste (Igini, 2023).

Trade in scrap and waste glass and aluminum has remained fairly steady over this period, with minor increases from 2012 to 2023 (UN Comtrade, n.d.). The United States has been, and remains, a large player in all four scrap and waste commodity markets internationally. Of total world trade in 2023, the United States was either an importer or exporter of 4 percent of glass traded, 50 percent of paper and paperboard traded, 27 percent of aluminum traded, and 22 percent of plastics traded (UN Comtrade, n.d.). However, as demonstrated in Figures 5-10 through 5-12, the United States has been a net exporter of scrap paper and aluminum for the past decade but a net importer of glass from 2012 to 2023.

The biggest changes have been observed in plastic scrap and waste trade. Figure 5-12 shows that, from 2012 to 2023, the United States has gone from being a net exporter (1.69 million metric tons per year) to being a net importer (15,000 metric tons per year) of plastic scrap and waste (UN Comtrade, n.d.). This dramatic decline follows the general worldwide trend for scrap and waste plastics, shown in Figure 5-12.

Importantly, much of the reversal in the U.S. trade surplus in plastic scrap has been driven by changes in trade with non-OECD nations. Figure 5-13 shows that U.S. exports of plastic scrap to OECD countries remained relatively stable, but exports to non-OECD countries, such as China, Thailand, and

The Role of the Global Marketplace

Although the amount of paper and plastic recycled domestically has grown since the 2010 peak in exports of recyclables, the global marketplace plays an important role in creating balance between supply and demand. When demand (and prices) are low because of seasonality or changing economics, the export market tends to help keep material moving. Even when domestic demand is high, the availability of international trade partners helps keep markets competitive, ensuring that domestic purchasers such as mills do not develop too much power over prices. These relationships can help stabilize prices for metals, paper, and

5.4.1 Postconsumer Recycling Content Policies

PCR content laws (PCR policies), also called minimum content legislation, can play a vital role in promoting recycling by requiring manufacturers to reach a minimum percentage of inputs that are recycled material. These policies apply to postconsumer content, as opposed to postindustrial content (a byproduct of manufacturing) or preconsumer content (a product that never reaches the consumer). Postconsumer content is sometimes less pure and harder to use compared with these other types, so legislation has focused on these materials.

PCR policies can increase regional and national demand for recycled materials, thereby supporting prices (Palmer and Walls, 1997). They may also help stabilize prices by providing a reliable source of demand, because manufactures cannot easily substitute from the recycled commodity when primary materials prices drop. Thus, these laws reduce the economic risk for investments in capital-intensive recycling infrastructure. By supporting the recycling industry, they help provide many of the benefits of recycling discussed above, such as reducing reliance on virgin materials and the adverse climate and environmental impacts associated with raw material extraction and production.

Experience with PCR Policies

Although no federal PCR policies have been passed to date, states have used them for more than 30 years as part of a demand-side market development strategy. The first wave began in the 1980s and focused on newsprint. By 1990, eight states enacted recycled content mandates: Arizona, California, Connecticut, Illinois, Maryland, Missouri, Oregon, and Wisconsin (National Solid Wastes Management Association, 1991). In the 1990s, California enacted PCR policies for fiberglass, glass containers, plastic containers, and plastic trash bags. In 1995, Oregon set a 25 percent PCR content standard for plastic beverage containers.

Although these early PCR policies played an important role in supporting the expansion of recycling, they were not adopted by other states. Most of the focus of recycling programs between 1995 and 2017 focused on collecting more material and processing it to grow supply for end markets. Few policies were designed for growth demand of recycled materials.

As discussed above, cheap virgin resin has undercut demand for postconsumer plastic. In response to pressure from recyclers, states have passed a new wave of minimum PCR content standards. These new initiatives primarily target packaging materials, beverage containers, and plastic bags. For example, California’s AB 793 mandates that plastic beverage containers must meet specific recycled content thresholds, which are set to increase over time. New Jersey has phased in PCR content mandates across various packaging types, including rigid plastic and glass containers, plastic bags, and trash bags, with rates that will rise incrementally through 2027. Similarly, Washington State’s SB 5022 sets minimum PCR content for plastic beverage bottles and other containers, aiming to drive the use of recycled materials across common consumer products (Retail Compliance Center, 2023).

Problems with PCR Policies

Although PCR content standards can have benefits, they also have drawbacks. First, these standards often require that materials are reused in consumer products, which may not always be the least resource-intensive use of recycled materials (as some indicated by some of the examples in the discussion of closed loop recycling above). The standards may thus raise the overall social costs of the recycling system. The Oregon Department of Environmental Quality’s 2020 report, “Evaluating the Effects of PCR Content on Environmental Impacts” stated:

The second finding is that recycled content by itself is not a good predictor of lower environmental outcomes when comparing functionally equivalent (substitutable) packaging made from different

5.4.2 Government Procurement

Government procurement may be an important public policy in supporting recycling end-use market. The U.S. federal government is among the largest consumers of goods in the world and thus has considerable influence on many product markets. The 1976 Resource Conservation and Recovery Act required EPA to set requirements for recycled content in government purchases, resulting in the Comprehensive Procurement Guideline Program (EPA, 2024b). EPA set requirements for 62 products in eight categories that range from paper to construction materials and vehicular parts. Although difficult to assess empirically, the program’s benefits may come not just from its direct effect on demand but also from the information it provides to other purchasers about which products contain or could contain recycled materials. States and local governments also have recycled content requirements for their purchases, but their reach is narrower than that of the federal program.

5.4.3 Taxes and Fees on Virgin Material

Another mechanism that governments use to stimulate end markets for recycled material is to impose taxes or fees on virgin (i.e., nonrecycled) material. This kind of policy places an economic disincentive on the use of virgin material while creating an economic incentive to use recycled material. A recent example of this kind of tax is from the United Kingdom (Box 5-7), which has a policy that focuses on plastic use in packaging.

The United States also imposes taxes on virgin plastic resin through the Superfund program. These fees, discussed in Box 5-8, are not designed for their effects on recycling but nonetheless slightly discourage virgin plastic use.

5.5 KEY POLICY OPTIONS

Policies that influence material use and recycling can help balance economic and environmental considerations while shaping market dynamics and consumer behavior. Effective approaches aim to address cost differences between virgin and recycled materials, encourage the use of recycled content, and support waste reduction efforts. Well-designed policies can also enhance market stability, promote innovation in recycling technologies, and improve the overall efficiency of material management systems.

5.5.1 Revenue-Neutral Fee-and-Reward Program

For two major reasons, the societal costs of virgin materials extraction exceeds the direct dollar costs to companies and their customers. First, for many years, various direct and indirect government subsidies have promoted oil and gas industries that provide petrochemicals used to make virgin plastic resins

The policy reduces environmental and social damages from disposal by incorporating some of the external costs of these materials into the prices that manufacturers and consumers pay for these materials.⁸ By enhancing demand for recycled plastic resin and reducing demand for virgin material, this policy would reduce environmental costs from virgin materials extraction and landfilling of plastics. It would increase the effectiveness of MSW recycling programs and may have additional effects of decreasing plastic litter. Lastly, an additional strength of this policy approach is that it avoids mandated rules about company behavior and allowable materials, instead leveraging price incentives in market choices.

Trade-offs need to be acknowledged for this policy approach, however. The committee acknowledges the challenges in enacting and administering large-scale tax policy. Furthermore, while companies that can readily adjust to the new incentives for using more recycled inputs receive a cost advantage, this policy may place some cost disadvantages on companies less capable of readily adjusting their processes to these changes in relative material prices. Finally, while suppliers of recycling material would likely see increased profits on account of increased market demand for their product, producers of virgin plastic resins would likely see declines in their profits on account of increased market competition and decreased demand for their products.

In general, this policy would require a multiyear process to establish the appropriate fee and reward levels, as well as the eventual tax procedures including reward eligibility and fee liability, and all reporting requirements. As reasonably assessed by the committee, 5 years is a likely minimum scenario from introduction to implementation.

After implementation, various metrics can be used to evaluate effectiveness of the policy. Evaluation could benefit from measures of virgin resin sold at various fee-and-reward rates, compared with recycled material sold. After the policy has been in place for a few years, actual effects of specific fees and rewards on prices and quantities of virgin materials and on prices and quantities of recycled materials need to be compared with projected effects, along with actual and projected effects on environmental damages from extraction, landfills, and plastic litter.

As referenced in its statement of task, the committee did not have sufficient data available to recommend specific monetary values of such fees and rewards, so this policy requires further study. Nevertheless, sufficient information is available to outline this policy structure and approach (see Figure 5-15). The committee provides this summarizing conclusion and policy option:

Conclusion 5-1: A revenue-neutral policy that applies a fee for using virgin plastic resins and a reward for using recycled plastic resins would increase the cost-competitiveness of recycled materials relative to virgin inputs and would enhance end markets for recyclable materials.

Key Policy Option 5-1: The U.S. Congress could enact a new revenue-neutral fee-and-reward policy to increase the competitiveness of recycled materials relative to virgin inputs. It would encourage the use of recycled plastic resins in the manufacturing of plastic packaging and single-use products. This policy could comprise two levers:

• First, the Department of the Treasury, in partnership with the U.S. Environmental Protection Agency (EPA), could implement a new fee on the use of virgin plastic resins used in product packaging and in the manufacturing of consumer products, and a corresponding reward for the use of postconsumer recycled plastic resins in those same manufacturing processes. If implemented, this new fee and reward should be paid and received by domestic manufacturers that use plastic resins in their manufacturing processes, should be weight-based, and should be of sufficient value to encourage the use of recycled plastic resins. Market parity can facilitate economic competition between recycled plastic resin and virgin resin.