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Finding Gold in Your Waste and Recycling Program Through Commodities and Rebates

Waste Harmonics

St. Patrick’s Day is just around the corner, but sometimes it doesn’t take the luck of the Irish to find gold in your everyday operations—including your waste and recycling program. Instead, it just takes an experienced managed waste services team who knows the ins and outs of how to leverage relevant rebates and commodities to your benefit that will have you saving “gold” and perhaps even reaching your “green” sustainability goals, too.

Both commodities and rebates can help offset your total program costs. Let’s start with the very basic definitions for each to put things into perspective. Commodities are also known as by-products or the raw materials produced during the manufacturing process that can then be bought, recycled, resold or reused as a new economic good—think metal, cardboard and paper, to name a few materials that can serve a new purpose in the circular economy by avoiding the landfill.

On the other hand, rebates are classified as a type of credit (e.g., stocks) or a contractual rate that can be brokered for certain materials within the economic lifecycle. For example, designating an item in the waste stream that’s still in relatively good condition as having value, but instead of diverting that material to the landfill and paying to dispose of it, a third party may come in to purchase it, repurpose it and resell it.

Understanding your waste streams is first and foremost, as volume is a key determining factor in establishing value for certain commodities and rebates. Other conditions that influence these cost-effective tools boil down to basic economic circumstances such as supply and demand. Certain markets, like pallet management, for example, tend to be cyclical, whereas other markets vary week to week, or can fluctuate per region in North America or facility location. Staying attuned to indexes and global export markets will help establish what the value is for certain commodities and materials per ton.

To put this process into perspective, let’s look at a program key to keeping the supply chain—and the world—moving: pallet management. Consolidation was a core element that drove substantial growth in the pallet market for several years, fueled by interest from private equity funds, mergers and acquisitions, competition in the market and the low cost of pallets. But when the pandemic hit, and subsequently for the next four years, activity in the marketplace slowed, impacted by economic indicators of high supply and low demand. This led to a downward trend in recycling rebates for pallets overall. Still navigating through a period of rapid normalization, there’s an optimistic outlook for this marketplace heading into the spring season this year, but a managed waste services provider can help by looking at pricing models and indexes consistently to ensure pricing is fair to market and to prepare for any continued economic ups and downs. In 2021 alone, Waste Harmonics collected more than $25 million in rebates on behalf of its customers in pallet management programs.

Beyond rebates, pallets—specifically, wooden pallets—are a valuable commodity. Around 95% of all wooden pallets across the country can be recycled up to 15 times before they reach an end-of-use state. Once a pallet has reached that state, it can become a different product that serves a new or unique purpose in the marketplace such as mulch, animal bedding or biofuel. If you’re an organization focused on improving overarching commitments to ESG, wooden pallet recycling programs can have a tremendous benefit to meeting those goals—improving your “green” bottom line in more ways than one by offsetting program costs and enacting sustainable business practices through recycling.

If you’re feeling overwhelmed or like you’re back in economics class, it may be time to consider connecting with a managed waste services provider who has the network, resources and knowledge to survey the market and understand how to apply rebates and commodities to your waste management program. Expertise and due diligence from a planning perspective will not only help determine what commodities you have, what your goals are and what visibility is required to support moving toward those goals, but will also help you realize what savings may be waiting for you at the end of the rainbow.