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Indiana Integrated Recycling Plan

Draft Plan

Table of Contents

Introduction

The Indiana Department of Environmental Management (IDEM) is leading the way to revitalize recycling efforts throughout the state. An initiative is underway to develop a statewide, cost effective recycling system for our state. A system that consumes what is collected for recycling in Indiana, producing marketable goods, reducing solid waste disposal and saving energy and natural resources. Efforts are underway to fully understand the extent of recycling activities existing today in Indiana; including a thorough review of materials collected, processing capabilities, and the market value of recyclables, use, reuse and manufacturing operations utilizing recycled feedstock.

A complete understanding of all costs and benefits of these activities is also needed as the agency works to achieve this goal. It is imperative that all facets of recycling are considered in order to determine how best to create an integrated recycling system in our state. IDEM’s Office of Pollution Prevention and Technical Assistance (OPPTA) will use this information to develop a strategy for Indiana to create this system, based on fundamental economics; consuming those materials that are collected today through our state’s recycling programs. OPPTA calls this the Indiana Integrated Recycling Plan.What Indiana generates as recycled materials ideally will be consumed in Indiana to produce valued, marketable products. This market driven approach will provide the opportunity and revenue necessary for cost effective, market driven recycling programs to succeed. In order to accomplish this task, OPPTA must take a tough look at the state of recycling in Indiana, review successes, challenges, and assess what changes will be needed and missing components created to make the loop complete.

Current Recycling in Indiana: Breakdown of Programs

Recently, OPPTA's Source Reduction and Recycling (SR&R) Branch took over all the recycling programs from the Lt. Governor's Office of Energy and Defense Development (OEDD). These programs support the processing and manufacturing of recycled goods. Bringing all recycling funding assistance programs under one roof allows the SR&R branch to take a comprehensive approach to solid waste diversion and recycling. Integration of these recycling programs will provide clear and concise information on the costs and benefits of recycling to citizens and businesses and how each other's recycling efforts are integral to one another's success.

The SR&R branch previously hasn't had grant monies available to support recycling efforts in the business sector. The transfer of the Recycling Market Development Program (RMDP) from OEDD (formerly the Department of Commerce) to IDEM provides financial incentives for private businesses to take advantage of the potential for utilizing recycled feedstock generated in Indiana. Using this feedstock saves energy, reduces raw material costs and saves limited natural resources. Funding is also available for businesses to increase their recycling efforts, further expanding the types of materials available and adding to the volume of recycled materials collected for reuse.

SR&R Grants

The purpose of the Solid Waste Management Fund (SWMF) established by IC 13-20-22 is to provide grants for education, to promote recycling and the use of recycled materials, waste reduction, and management of yard waste, to implement household hazardous waste source reduction or recycling projects, and for household hazardous waste and conditionally exempt small quantity generator waste collection, recycling, or disposal projects.

Local units of government, solid waste management districts (SWMDs), K-12 schools, not-for-profit organizations, and colleges and universities are eligible to receive funding for new or expanded source reduction, reuse, recycling, and composting projects through the recycling grants. SWMDs and local units of government are eligible to receive Household Hazardous Waste grants to establish programs that provide proper disposal of HHW and some small business hazardous waste.

During Fiscal Years 2002, 2003, 2004, and 2005, more than $4,692,563 supported local solid waste programs and education.

  • FY 2002 – 2005, $4,692,563 awarded in recycling and PEP grants, funded 140 recycling grants and 179 PEP grants.
  • FY 2002 – 2005, 140 recycling grants went to 78 cities and towns, 39 SWMDs, 9 counties, 7 schools, and 7 non-profits.
  • FY 2004, recycling grant projects totaling $680,173 were completed. Through this investment in local community programs, 37,536.35 tons of solid waste were diverted from final disposal.

RMDP Loans and Grants

The Recycling Market Development Program was established by the Indiana Department of Commerce in the early 1990s as part of Indiana’s commitment to meet federal requirements for states to better manage solid waste. Funding allocated to reach this goal was established by IC 4-23-5.5-14, creating the Recycling Promotion and Assistance Fund (RPAF), to "promote and assist recycling throughout Indiana by focusing economic development efforts on businesses and projects involving recycling." The RPAF is a special dedicated fund, having a specific revenue source and expenditures restricted for a specified purpose. The fund is administered by the Recycling and Energy Development Board (REDB), which sets the amount, terms, and interest rates for loans and establishes the criteria for awarding grants and loans according to IC 4-23-5.5-14.

The Department of Commerce used several measurements to determine eligible applicants, including landfill diversion as a result of the proposed projects, numbers of jobs created, amount of private investment leveraged, and energy savings realized. These measurements were recorded in quarterly and annual reports submitted by the applicants on a regular basis on a schedule dependant on the contract's requirements of the project's progress.

In addition, Commerce based much of their numbers regarding how recycling affected Indiana’s economy on national and state-specific studies, including the Recycling Economic Information Study, 2001, (1999 figures). Commerce explained through this study that the recycling industry was "an important and significant part of Indiana's economy, representing 1,700 establishments that employ approximately 75,000 people in Indiana, with annual revenues of $19 billion and payroll of approximately $3 billion." Much of this information includes major industrial plants. The size of Indiana’s recycling manufacturing sector exceeds the recycling collection, processing and reuse sectors, covering a wide range of industries, including metal casters, plastics manufacturers and automobile parts manufacturers.

However, the RMDP measured its performance by the amount of money invested; not necessarily by results achieved or success of the company after investment. This initially led to high default rates, causing monies to be obligated which were then not used. The total amount in the fund now is misleading in comparison to the “secured” amount received annually from the Solid Waste Management Fee, currently set at $0.50 per ton of solid waste disposed in Indiana landfills.

In Commerce's 2003-04 annual report, a total of $1.2 million for 20 projects were claimed approved by the program in fiscal year 2003. These projects leveraged over $10 million, diverted approximately 34,675 tons of material from disposal, and created 70 new jobs.

The RMDP has been with IDEM only since October 2005, but the agency has already begun to implement changes that would substantially reduce the obligation discrepancy for loans within two years. These include working with local chambers of commerce, the Indiana Finance Authority, and the Indiana Economic Development Corporation to develop economic indicators that will help develop long-term success goals for future applicants.

IDEM must also consider how the recycling industry is changing. The collections and processing sectors make up a smaller portion of total employment, but have the very important job of providing feedstock material into the manufacturing and reuse sectors. They are necessary to Indiana’s recycling system and must be considered for funding in addition to the larger companies typically consuming materials. With this understanding of each program’s purpose and the essential components of an integrated recycling system, the challenge is to take the available information and devise a means where the programs not only complement each other but support Indiana's financially challenged community based recycling activities through increasing the market value of recyclables.

Available Information

Recycling was primarily used as a waste diversion tool of the 1990s to help save space in landfills. The unfortunate reality of today’s recycling efforts is that in most cases, recycling programs are operated at a continued cost to the community. Materials that can be recycled are collected at a significant cost, reducing the small of amount of revenue received through materials collected due to high sorting and processing costs and little market value of materials collected. This approach leads to poorly funded programs, program cuts during tough economic times, and disposal of some materials that were collected with the intent of being recycled. We must move away from basic diversion numbers as the indicator of success for community recycling programs and more towards the economic benefits realized through recycling.

OPPTA's Integrated Recycling Plan will begin with an assessment at the first step of the recycling system; those entities collecting materials, where they are located in Indiana and dispersion throughout the state. OPPTA believes recycling programs can regionally work together, increasing volumes collected, providing reliable supplies of these materials, reducing regional collection and processing costs and raising market prices. The assessment will continue with where and how the materials are being processed and what products those materials can potentially be used for. Successful processing and manufacturing models from other states and countries will be examined to determine the best, most efficient use of recyclables to produce marketable goods. These models can be recreated here in Indiana, where practical, using this knowledge and the recycling program grant and loans.

Waste Characterization

In an effort to gain a thorough understanding of what is being disposed of today in Indiana as solid waste, a waste characterization study is being conducted. Goals of the study include: determine the types and quantities of potentially available recyclables in the waste stream; understand the composition of the solid waste stream, identify deficiencies in Indiana’s regional recycling system infrastructure, and to provide recommendations for long-term recycling program focus and initiatives.

Hoosiers and Recycling

Increased participation rates are a key to moving recycling programs towards cost effectiveness. OPPTA plans to better understand the public perception of recycling through surveying Hoosiers; going to the people to really know how recycling is perceived. The Aluminum Can Council has estimated that to reinvigorate recycling, especially curbside programs, each local government entity should expect to invest at least $3 per household.

OPPTA believes it is possible that an integrated recycling program in our state can be cost effective for a community, even returning dollars to the community, if designed and implemented successfully. After talking with the public through a one-to-one survey, OPPTA will have a better understanding of how to address misconceptions about recycling. A revised recycling education campaign based on these findings will provide the public with an understanding of all the benefits of recycling, not just to the environment but on economics as well, correlating recycling with energy and natural resource savings and the production of environmentally friendly consumer goods. Increased participation rates will be integral to the success of Indiana’s recycling program.

A compilation of recycling information as outlined in this summary, will also provide SR&R staff with the ability to review grant and loan applications more thoroughly, examining where current companies already exist in a particular area, what affects the addition of a similar company may have on local job markets, and how the new company could affect current feedstock supply, product markets, and customer demand.

As an example, if Sullivan County had enough composting facilities, we might suggest to a prospective mulching company a better area to locate. Sullivan County may be a better candidate for a plastic products manufacturer, using locally collected and processed feedstock. Staff will work with the Indiana Economic Development Corporation local chambers of commerce, and SWMDs to determine recycling business needs in that area, types of existing recycling related businesses and what gaps and opportunities may exist in that region for creation of those entities necessary to a sustainable regional recycling system.

Build Framework

Certainly today, there are missing components of an integrated recycling system in regions of our state. Most community based recycling programs operate in a vacuum, striving to succeed as a stand alone program. It will be important for OPPTA to understand the economic state of Indiana regions, counties and communities in an effort to support the creation of new recycling programs and economic success of existing programs and recycling support entities. This knowledge is needed to compare the "Have" and "Have-Not" regions of Indiana, assess their recycling operations or lack thereof, and to better understand those areas that are economically disadvantaged, consequently receiving greater benefit from recycling facilities and service entities being located in their area. Successfully creating such entities in these communities in particular, provides a higher value to the state of Indiana as a whole.

Conclusion

Recycling programs can be economically viable. Materials that can be recycled do have market value. A statewide recycling system generating sufficient volume of these materials can entice processors and manufacturers to locate near the regional source, reducing material costs and saving energy. It is OPPTA's responsibility to identify the challenges and opportunities in Indiana's recycling system, applying proven strategies to develop a successful, market driven recycling program in Indiana.