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The State of Recycling with Eureka Recycling's Kate Davenport
Discover the transformative power of recycling and how it intertwines with community economics in our latest Public Works Nerds podcast episode. I, Marc Culver, am joined by the insightful Kate Davenport, co-President of Eureka Recycling, who not only shares her personal journey from climate activism to leading a nonprofit recycling enterprise but also sheds light on the game-changing concept of revenue sharing in recycling contracts. Together, we examine the fluctuating tides of commodity prices and the effect they have on the cost of recycling services, giving you a behind-the-scenes look at how to navigate these challenges and turn sustainability commitments into financial wins for communities.
As we discuss the rising tide of extended producer responsibility (EPR) legislation, you'll grasp the profound effects of mandating brands to invest in recycling infrastructure and the push for regulations that demand recycled content in consumer packaging. You'll be swept up in the conversation on the significant role consumer choice plays in driving the demand for sustainable packaging, and the intriguing potential of long-term supply agreements to counterbalance the competition from virgin material manufacturers. Witness the innovative leaps, such as Sprite's move to clear plastic bottles, and the hurdles like non-recyclable packaging that shape the future of the recycling landscape.
Wrapping up our insightful dialogue, Kate and I turn our gaze towards the horizon of recycling and sustainability. We spotlight the essential role mission-driven recyclers like Eureka play in promoting environmental and public good, and how crucial collaboration between municipalities and businesses is to enhance recycling, reuse, and ensure a more sustainable future for all. Tune in to be part of a movement that's redefining our relationship with waste and crafting a greener tomorrow.
Since we recorded this episode, Kate has transitioned into a new role at Eureka as a Strategic Advisor.
https://eurekarecycling.org/
Welcome to the Public Works Nerds podcast. Welcome to the Public Works Nerds podcast. Public Works podcast of the nerds by the nerds. And for the nerds, I'm your host, marc Culver. Thank you for joining us. Today we're going to be talking about recycling. In my time as a Public Works director, I've seen some pretty significant swings in the commodity value of recycled material and I've seen firsthand how that's impacted a community and the cost of recycling in that community. But I've also been fortunate to work with a really unique organization that provides recycling, pickup and processing services, and I've learned a great deal from their leaders and employees, and so we're going to dive into that. We're going to nerd out today about recycling with Kate Davenport, who is the co-CEO of Eureka Recycling, located in Minneapolis, minnesota. Welcome, kate, and thanks for being here today.
Kate Davenport:Yeah, glad to be here.
Marc Culver:Yeah, Kate, why don't you just start us off here by telling us spending a few minutes, telling us a little bit about yourself and how you came into the industry?
Kate Davenport:Sure, so I'm the co-president of Eureka Recycling, as you noted, marc, and I'll say a little bit about Eureka and then who I am. But Eureka is a nonprofit social enterprise here in the Twin Cities in Minnesota. Our mission is to demonstrate that waste is preventable and we provide recycling, collections and sorting services primarily to municipalities, and then we leverage that experience to advocate for zero waste policies and do education around zero waste to help us address climate change and understand the connection between waste and human health, et cetera. So I got into waste many, many years ago. I actually helped start one of the first food waste collection businesses in Washington DC back in the mid-2000s.
Kate Davenport:We drove a dump truck in the middle of the night picking up food waste from restaurants back when nobody did that and I think for many people in the waste and recycling and composting world like once you start doing it, it's kind of hard to leave it. So I got involved in it. I actually started off as a climate activist doing going to UN global negotiations and was like that's a way to remove from the real world. So then I went all the way down into doing food waste collection and then kind of had a wandering path since then. So I've been at Eureka for about 12 years now on the recycling and we have done composting over the years as well.
Marc Culver:Yeah, and I think I want to dive into Eureka a little bit more in the second half of this podcast and I want to talk about that, where you've kind of dealt with food waste in Eureka's time, but also talk about how you went from DC to Minneapolis St Paul too. That's kind of a big question.
Marc Culver:But let's actually. I think there's a lot actually to unpack about recycling and the recycling market and Kate. I've had again the privilege of working with Kate on negotiating two contracts for the city of Roseville and Eureka and both of those contracts we came at times when there were shifts in the recycling market and the pricing of the commodities and that and one of the really unique things that and I don't know how unique it is I thought it was pretty unique and I don't know market wide or even nation wide how unique it is. But we had a relationship with Eureka where in the contract we actually had a revenue sharing agreement. So as Eureka sold our recyclable materials, we had an agreement that after a certain dollar amount or a certain value, we would actually get some of that revenue from the recyclables back to the community and that really helped offset the cost of recycling in our community.
Marc Culver:But when we renegotiate the contract there was a shift going on and there was a lot of questions about should we keep revenue sharing or not? And then when the second contract came around, it was very obvious that revenue sharing was not working very well and then we went away from it. And now that I'm away from Roseville and I'm kind of removed from that. I don't know where we are in the world now and how we would have done with revenue sharing, but maybe just kind of talk about how is that a unique thing across the country?
Kate Davenport:Yeah, so Eureka has been around for about 20 years and I would say Eureka is one of the first to really start the concept of revenue share 15, 20 years ago. So originally it was fairly unique to this, to the marketplace of the Twin Cities, and the reason that Eureka started it really was from a values perspective in terms of the material that you're collecting and recycling has value, right. Right, it had somebody buying that it's a feedstock to turn into new material, a new aluminum can, a new cardboard box, and that the communities that that's coming from should benefit from the value of that material. We should share in that revenue. And that's kind of where the idea of revenue share came from. It kind of became market standard in the Twin Cities. So we weren't the only service provider offering that. You saw become standard and RFPs and municipalities, and then you started to see it spread into other markets across the United States and then I would say, probably in the last five or so years you've really seen it become more and more standard across the United States, not from the values perspective that we approached it, but really from the perspective of stabilizing the economics of recycling. And so you know the way that recycling works is that material recovery facilities, so the place where the recycling comes to and gets sorted back into aluminum and cardboard and different types of plastics, that gets sold to manufacturers to get turned into a new product.
Kate Davenport:Those are commodities that we are selling, and the value of those commodities are highly volatile.
Kate Davenport:So you know this from back when we were in a contractual relationship. You know the price of cardboard can be $200 a ton one year and it can literally within a three month period, drop to $30 a ton. So I mean the value of the commodities can drop by more than 100% in a period in a very quick period of time. And so and we have seen that happen many times over the last few years we can talk about why some of those dynamics exist. And so revenue share became a tool to help stabilize that volatility, so that the service providers had some kind of floor, essentially so that when the commodity values tanked, that the municipalities were at least paying something, so that our processing fees were being covered. So I think you're seeing revenue share be more standard across the industry just to help provide for the base processing fees, because if the value of the material drops so much that it doesn't cover our cost to process the material that has to be made up for in some way.
Marc Culver:Yeah, and to that point and that was one thing I actually was struggling with as we were going through the contract was this isn't really revenue sharing. It's more of a. It's a cost and revenue sharing, you know.
Marc Culver:And like you, said in order to get that floor or in order to have more security. On the contractor side, you offered the cities the ability you know well what's in it for us and what's in it for us is to then share on the in the good days. You know we're going to help you during the bad days, but then we're also going to benefit when the sun is shining. So, yeah, I think it's a great model. I mean, roseville really benefited, benefited from it in the in the middle to late 2000s and into the early teens, and you know it, it, it did, it took a turn and maybe talk a little bit about why why?
Marc Culver:some of the factors in how, why those commodity prices really took a turn for the worst. You know, around that middle of the teens.
Kate Davenport:Yeah, and I think you're right. I think we saw in the you know, I think originally the idea behind revenue share there was always volatility, but kind of this idea that we would continue to see it go up so continually be a benefit to both the, to the municipality. We've seen increasing volatility, so in 2000,. Well, actually in 2013, but then again in 2018, we saw some major shocks to the system and so essentially what had happened, starting really in the mid 2000s, going onward was that, as we saw globalization happen and China become a major manufacturing force, that about 30 to 40% of the recycling collected and sorted in the United States was being sold to China.
Marc Culver:Yeah, and there was kind of mind boggling actually.
Kate Davenport:And there was kind of mind boggling, but if you think about it, it actually makes sense from an economics perspective. Now, most of what was being collected and sorted by Eureka, and particularly in the Midwest, was not being sold to China. This was primarily happening on the coast, particularly on the West Coast, and if you, this is where the economics makes sense, right, and shipping containers coming over from China with all the stuff that we buy our iPhones and our toys, and all that stuff, it was cheaper to send recycling back on that. If the shipping container back to China, then it was to ship it into the middle of the country and, as we saw the massive kind of de-manufacturing of the United States, all the economics pointed to shipping that cardboard over to China, where it was cheaper to ship it in the empty shipping container. And that's where the demand was for old cardboard to make new cardboard boxes to put our iPhones and to ship back to us. And that was just what was happening in terms of globalization. And so all of those forces lined up were just made sense for most of that recycling, particularly again on the coasts, to be shipped to China, and that's why 30 to 40% of what was being collected was going to China. It's just the way the economics worked.
Kate Davenport:And so at the same time, we saw that shift towards single stream, right. So you were at a municipality. We saw what did residents want. They wanted convenience. They wanted to put everything in one big cart. They didn't want to sort everything out in the bin, they wanted to just put it in one big cart and have it get picked up, and so that meant that those in the recycling industry had to invest in more equipment. That also meant that when you move towards carts and recycling, you just get more cross-contamination and you get dirtier material. And so you had the demand from China, and they were so hungry they would buy really dirty material.
Marc Culver:And by dirty you know you're primarily talking about net-side cross-contamination, like crushed glass inside the cardboard.
Kate Davenport:Right.
Marc Culver:Right, or maybe waste plastic contamination.
Kate Davenport:I don't mean that there wasn't sorting going on, but probably the paper wasn't being sorted as well as it could have been, for example, or the plastics weren't being segregated in the different plastic resins as much as they could have been, and so. But China was hungry for it, right, and they were growing, and so they were just buying it. And so then, in 2018, china shut the doors literally overnight. It was what was called national sword, and they put forward a national policy that said we're not. They first said we're going to. We'll only buy paper from the United States and Europe. There wasn't just the United States that was doing this, it was Europe as well.
Kate Davenport:Any paper from the United States and Europe has to have less than 0.5% contamination, which was a spec that basically nobody could meet, and then, within a few months, they just literally shut the doors. So you can imagine where was all that supply going to go. So this is basic supply and demand. So the recycling markets collapsed. I mean there were particularly on the paper side of things, and I mean there were recycling programs on the West Coast that had to landfill paper because we literally didn't have enough paper mills in the United States to absorb that supply.
Kate Davenport:I mean this is part of the greater story of the US de-manufacturing. We had lost those paper mills, we had shut them down, and so you just saw the commodity markets completely tank and it was a very painful process to go through, but it also really pulled the veil back to say this system isn't working. And so I think our perspective of Eureka is it was painful but it was also a really needed wake-up call. And so we've actually seen I think there's been more than 10 recycled paper mills open in the United States in the last five to six years, yeah, and so we've seen this in lots of other sectors, like re-manufacturing in the United States, kind of reinvestment in domestic recycling markets and a real focus on.
Kate Davenport:We should be recycling the stuff that we're consuming here in the United States. I think simultaneous to that event that happened in terms of China National Sword and the falling off, particularly at paper markets, was the other thing that happened was again, municipalities had this pressure to add everything to their recycling program, add all the plastics, because residents wanna feel like they can recycle everything, and China was saying we'll buy all those three through seven plastics. So that's not your like kind of classic plastic water and soda bottles and your laundry detergent and milk jugs, but all that other kind of plastic packaging crap. Excuse my language, sorry, nope, you're good you're good.
Kate Davenport:China was like we'll buy all of that, and what they were doing is they were buying all that three through seven. They were pulling out the number five, which is polypropylene, and they were throwing away all the rest, and so it wasn't actually all really getting recycled and everybody was like, well, somebody's buying it. La, la, la la la la la.
Kate Davenport:And so China National Sword also revealed, oh, that stuff isn't actually getting recycled. So, again, pull the veil back. Why are we recycling? Why are we actually doing this?
Kate Davenport:And, simultaneous to that, I think just the world became more aware of the plastics pollution issue and that we need to do something about this. And wait a minute, recycling isn't actually really solving this problem if we're just shipping stuff to China and it's not really getting recycled, right. And so all of those things really came together, I think, at once, in a moment of crisis, to really call to say what is the role of recycling and how does it help us solve this plastic pollution issue, our climate change issue, et cetera. And so you didn't ask this question. But, and so what we've seen in the last five years is a huge momentum shift in terms of the role of public policy and the role of brands, the people that make this packaging, in terms of their responsibility into this system, because when you and I were interacting as a service provider in a municipality, it was really our responsibility to figure this out, and the brands didn't have a stake in this game at all.
Marc Culver:Right, I mean there were some that were trying to be you know, conscious of it and that, but not enough to make any significant difference. Not enough.
Kate Davenport:And so, going back to that revenue share question, you know, at the end of the day, the volatility of recycling has been because we compete with virgin pricing. We compete when we sell plastic. We're competing with what's the cost of virgin plastic, which comes from oil and natural gas. Man, that's how plastic is made, right At the end of the day. So if oil and natural gas is super cheap, then virgin plastic is gonna be super cheap. So we're gonna have to compete with that.
Kate Davenport:You know if, if you're gonna be able to sell plastic, you're gonna be able to sell it, and that's true across all the recyclable commodities. And so you've seen a real shift in the last few years to say, hey, coke and Pepsi, you need to be using recycled content in your products. And you have now seen California, new Jersey, and there've been a couple of other states that have passed regulation that says state of California, new Jersey, you have to have a certain amount of recycled content in it. If you're gonna sell a cardboard box in New Jersey, you have to have a certain amount of recycled content in it. But that that is actually a public service and a public good and we can't keep asking the recycling system to compete with virgin, that we actually need to even the playing field, and so I think that's a complete game changer in terms of recycling and I think we'll probably actually see revenue share that concept move away, because we're actually moving their responsibility for recycling away from municipalities to the producers that make the packaging.
Marc Culver:Yeah, yeah, no. I think that's a great concept and I wanna maybe hone in on California, because California they're so large that when it's like even their EV goals is gonna have an impact on the rest of the country. Whether we pass those goals are not, because the manufacturers have to respond to that and they're not gonna. You know, what they do for California, they're gonna do for the rest of the country. So, with that said, with what California is now requiring, is that changing everything across the country for using the bottlers, for example, because I know they have, they're manufacturing those things in various parts of the US. So is that trickling down, do you think?
Kate Davenport:I think it's starting to. I mean, it's a very interesting time to see, kind of, how it's all playing out. So I think we've seen two things in the last like three years. One we've seen the recycle content mandates pass in California, new Jersey and a couple other states, but we've also seen extended producer responsibility pass in California, maine or again in Colorado, which are also are all four really different states.
Marc Culver:Yeah, yeah, I was, when we were talking about the states when. I was talking, looking into that, I was surprised that that diversity, the political, diversity of the states.
Kate Davenport:It's really interesting and waste is really different in each of those states. But California is a big one, obviously, and so both of those things are huge game changers. Now the extended producer responsibility legislation, which essentially says the brands are now responsible for paying into the recycling infrastructure Now what that looks like in each state, et cetera, is gonna be different and the rulemaking process. This is all kind of at the beginning stages, so nobody knows exactly how it's all gonna play out. So, to your point, I think it's a little too early to know exactly how California is gonna impact the rest of the country.
Kate Davenport:But I will say I think recyclers us included for years have said we need long-term supply agreements from the people we sell material to that stabilize pricing, that right. So and it was like talking in the wind and nobody gave two hoops and all of a sudden now people are returning my calls and I think that's because they see like the California mandate is here and all of a sudden they're like, oh my gosh, we have to meet this mandate. And also some of the brands have made really big, very public commitments around recycled content, around recyclability, and have begun to realize like they are gonna meet these unless they make some really big changes, and so, yeah, so we are starting to see some changes.
Marc Culver:It's gonna be interesting to see how it all plays out, yeah yeah but, I think it's great that it's getting to the point where there is some accountability placed on the actual producers and manufacturers, because it's gotta start from there and we as consumers can we have some leverage in that If there's a choice between two products? And one is in a better recyclable container, we should select that, but there's not enough of that to happen. That's happening, yeah, and I could change either.
Kate Davenport:And I think every, and I think you know there's not enough market incentive for one brand to change their packaging to recyclable Like. I think the brands have realized like the rules of the game need to be changed in order for really the system to change. And you know I used to it's. It's fascinating. I mean you used to also say the word extended producer responsibility in the United States and you'd get booed off the stage and the brands have been supportive of EPR legislation. It's a fascinating shift. So you know, we will most likely see EPR legislation introduced in Minnesota in the next session.
Marc Culver:Yeah, which is great. You know I think you touched on something a little bit there when you said that. You know when we talked about EPR in the United States that you know people just kind of shivered in that, but you know there is a history of EPR in other countries. So maybe talk, as far as what you know anyway, of the success and how that EPR has changed things, maybe in Europe and I think Australia is another country that's that has that in place.
Kate Davenport:Yeah, in Canada, british Columbia and Ontario have had two different provincial systems. They're now kind of merging those systems together. So I mean, I think there's a lot of different aspects, I think, both in Europe and in like the British Columbia system, for example, and Ontario, one of the things that EPR has done that is successful is the access issue. And so you know, let's take Minnesota right. Like all the you know, the residents in Roseville have recycling and the residents in St Paul and Minneapolis have recycling. But you go outside the Twin Cities and if you're in a rural area you don't have access to recycling Right right.
Kate Davenport:Because it's just too expensive, yep, and the private market isn't going to provide it the right, etc.
Kate Davenport:And so what EPR has done in those contexts is they provide. They provide kind of access, equitable access in terms of everybody gets a cart or they have access to get their recycling picked up, I think, and then also helps pay for the infrastructure and helps take that burden off the municipality. And so you know a lot. And so I think that's where you kind of see some of the different successes that you may see in Europe or in Canada, and sometimes more maybe sophisticated material recovering facilities, etc. Because the capital investment and the processing fees have been there to pay for that.
Kate Davenport:Because at the end of the day, mark back in the day, you and I are haggling over processing fees Well, that's how we paid for the new equipment to sort new material or, and you're beholden to city council and a mayor and taxpayers and they don't want to increase solid waste fee at the end of the day, and so when you bring EPR into it, there's a new stakeholder that can help pay for those capital expenses. I mean, I think we've seen the infrastructure stall in the United States as compared to other places where there's EPR because we've been relying on residential municipal taxpayers to pay for it, if that makes sense. Yeah, no, absolutely.
Kate Davenport:And I think where we haven't seen, you know, I think there's still a ways to go, even where there is EPR, in terms of those issues around, are we actually really reducing, like, how much are we really reducing demand for virgin material and some of those other environmental goals of recycling? But I mean, I think, fundamentally, from the perspective of you know this podcast, like you're taking the burden off of the municipality for supporting and paying for this system. Right. And it's time for that to happen. Yeah.
Marc Culver:No, absolutely it's overdue that we really treat the recyclables as a commodity. But we also get to a point where we know that what's coming into those bins is actually going to have value, and for a long period of time. You know that we don't have as much variability in that. I, during that process of you know, negotiating the contracts and talking about commodity pricing and then talking about, you know, contamination and the set and the other, you know, I kind of I started to think, like you know, and you said you know, we went to a single stream because of convenience, because we wanted people to recycle more, and that was one. That was the way to get them to recycle more, so they didn't have to have three bins and think about it. But I mean, do you think we were getting to a point where we were going to have to, like, go back to some sort of sort? You know?
Kate Davenport:Yeah, that's an interesting question, you know. I mean, you know your ego is dual stream for a long time, meaning we collected paper separate from containers in the bin, not the cart, and we were the last holdouts ago, single stream and our residual rate, meaning the amount that we were aren't able to like get in a bailed sales market, was less than 2%. Yeah, when we were that, when we moved to single stream and the cart and I say and the cart because the cart also is part of what brings the contamination Once you have a big cart it's hard for the driver to see the you know dust buster or whatever that's in there. You know now the residual rate and this is pretty consistent across all the Merse in Minnesota around 10%. So I mean it increased significantly in Minnesota has one of the lowest residual rates in comparison to other recycling programs across the country, which are more like 20 to 30%. But at the same time we saw participation increase. This actually wasn't as much the case in Roseville but definitely in some of the communities and, for example, the city of St Paul, when we saw participation increased by 30% when we moved to the cart. So the net of that is, although we saw an 8% increase in contamination.
Kate Davenport:We saw 30% increase in participation, and tons and some communities, I think, also like we're not going back yeah, like it's, and I think Americans in particular, like we're, just we're not on the investment in that infrastructure has been made like we're not, we're not going back. And so the question is what is the investment that we need to make? A in additional sorting infrastructure and technology to address the contamination? But even before that, then there's the design issue. Right, how do we need to design the packaging that's coming in to the stream purchased by consumers to be more easily recyclable, and EPR is the mechanism to do that. So if if producers, if the brands, are now paying into the system, then you can design EPR to have what's called eco modulation, so you're going to pay more into the system as a brand if your packaging is harder to recycle or leads to more contamination and thus incentivizing people to choose more easily recyclable, easily sortable packaging.
Kate Davenport:Now, that doesn't solve the person that throws their dust buster, yeah, dust buster in the cart and we just have to kind of deal with and continue to address that.
Marc Culver:Right, right, you know, and that is the sad thing, and again, when I was a public work structure, I mean we had, we had properties that basically treated the recycling bin like a trash bin, like an overflow trash bin, and you know, and then you guys, you know, you, you, you recognize it, you know your drivers recognize it and you don't collect it. So then we get a phone call they didn't take my recycling, well, and the trash guy is not going to take it because it's a blue bin, not a, not a brown bin. And so then we're stuck with in, you know, trying to deal with it. How do we deal with this thing? So that's, that's. The unfortunate thing is that, hopefully, that becomes less and less, that becomes more rare, but it's, it's something that we'll probably always be dealing with is for situations.
Kate Davenport:I also think one of the things that we've been advocating for in your you're seeing this kind of across the country is not just packaging, which is what we typically are referring to when we're talking about recycling but across the board, this concept of extended producer responsibility. So the thing that's the biggest challenge for recyclers right now is lithium batteries. Yeah. So we're seeing a proliferation of lithium batteries go into the recycling cart and they're causing fires. That's not good.
Kate Davenport:So, yeah, the greeting card that sings to you, you're the cell phone battery. Now you might have the dust buster that has a lithium battery in it. Yeah, when the loader at our facility drives over that, yeah, that's the problem. Now the, the manufacturers of lithium batteries, have no responsibility for the end of the life of those batteries, despite how hazardous that material is, and so, like we actually need extended producer responsibility on those batteries and there need to be economic incentives in place for people to correctly dispose of batteries. I mean, I think you know this just as well as I do. Education is important, but we actually also need economic incentives for people to dispose of properly. So, not talking about batteries, but, interestingly so, we are also advocating for a bottle bill in Minnesota.
Kate Davenport:So, that's the like where you were. You have five cents on your five or 10 cents and the reason is that in the states where there is a bottle bill so Michigan, california, etc. The capture rate, meaning the amount of bottles that actually get recycled, is above 80%, whereas in Minnesota or other states it's below 30%. I mean, the city of Minneapolis just did an audit of their trash and 50% of their aluminum cans are still going in the trash, even though everybody has a cart.
Marc Culver:Wow, talk about one of the most recyclable materials out there and 50% of that is still going into the trash. Hey everyone, I just want to take a quick moment to thank our sponsor, bulton Mink, who is producing and editing our podcast.
Bolton & Menk:At Bulton Mink, we believe all people should live in a safe, sustainable and beautiful community. We promise every client two things We'll work hard for you and we'll do a good job. We take a personal interest in the work being done around us and, at the end of the day, we're real people offering real solutions.
Marc Culver:And I will say, though, that I've become hypersensitive to and you mentioned accessibility. I've become hypersensitive to recycling carts. A waste bin, a standalone, solo waste bin, makes me shiver Because I don't have the opportunity to recycle unless I then carry that to the next place, and I think there are, and I don't want to throw all of the Parks and Recs departments in the state of Minnesota. I've been to a lot of baseball fields in my time in Minnesota, in Iowa, in Missouri, and blah and blah and blah, and I'm just shocked when I go to these places, the lack of opportunity to recycle. You know, somewhere we know there are going to be plastic, glass and aluminum containers, and so there's no place else for people to put them, but in the waste stream. And Minneapolis is not that I know. Minneapolis is very intentional about providing opportunities to recycle, so it's sad that even in that type of environment it's still at 50%. But that's the first step is making sure that wherever you have a waste bin, you have recycling bin right next to it.
Kate Davenport:Yeah, I mean, you and I worked for a long time on making sure they were recycling carts and residential parks for that exact reason. So there's a lot of, there's a lot of layers to this, but my point there is to just like, for whatever reason, like there does also have to be economic incentive on some other material to get it back into the recycling stream, and that's. That is just a reality.
Marc Culver:Yeah, and do you think so? And I think part of that is because and we actually I interviewed one of our podcasts. Recent podcast was with Rachel Lundholm, who is a former intern of yours, and she talked about, you know, if we can, if we get the whole bottle intact, that's so much easier to reuse and you use, you know, fewer resources to reform the glass into something, and so there's that again, there's that incentive and you know of getting that whole bottle back to the producer. Um, do you think that will like how much in the current stream, the way we currently collect this stuff, like how many of those are broken versus whole, you know?
Kate Davenport:In the current way we collect it, they're all broken.
Marc Culver:They're all broken.
Kate Davenport:If we are in a bottle bill context, that creates a whole new opportunity though. So, like I went to visit Oregon probably about 18 months ago, which has a bottle bill, and in their deposit return system so not in the like residential recycling collection system with the cart, because the bottles just break too, but in the return system where people are actually returning the bottles and getting the 10 cents, you do have the opportunity to have a full bottle, and they are experimenting with reuse infrastructure in that context. And like, how do we leverage this to actually not recycle the bottle but actually have reuse of the bottle? And so that's something we've been thinking a lot about in terms of if we are able to pass a bottle bill in conjunction with extended producer responsibility in Minnesota. Like, how do we leverage reuse infrastructure? And, to Rachel's point, like we all know this, but like it's reduce, reuse and then recycle, that actually uses less resources. And so there's a lot of really interesting stuff.
Kate Davenport:I mean I think very similarly to what we are seeing right now in terms of electrification and all of the changes I mean drastic changes to how we think about energy and transportation. The same thing is happening right now in terms of how we think about materials and supply chains and how we get our goods. And COVID did a really interesting thing too, which was COVID was actually really good for recycling. Shockingly, we were anticipating kind of markets to tank, but we actually saw markets do really well during COVID because we saw global supply chains collapse. Local, regional supply of aluminum and paper with highly in demand because people couldn't access those cheap global supply chains, and so it was actually a really interesting moment to be like oh look, there is possibility for like regional, circular supply chains. We just have to invest in that infrastructure and rethink how we do this and rethink the incentives that make for new film.
Marc Culver:Oh yeah, absolutely. That's great, that's great. Another good thing that came out of COVID A weird upside that came out of COVID. So I think we've talked about a couple of things in this realm, but where do you see the future recycling going Like? Where do you think we're going to make some gains? And what is Eureka currently doing? What are you changing? What are you planning for your MRF to adapt to future trends?
Kate Davenport:Sure. So I mean I think the I mean we've already talked about this a lot, but the public policy realm, I think is the big space right now is we need to change the rules of the economy, the game, and change how this is structured, and that's going to have huge impact in terms of investment. I mean, you know, the recycling partnership put out a report a couple of years ago, I think it was. There's $17 billion of investment needed in the recycling infrastructure and that's probably underestimated. So I think we're going to see a lot of public policy in the next few years and that's going to spur and we've already started to see this just a lot of investment into MRF number one, into and then further down the supply chain, into further sorting.
Kate Davenport:We're going to see investments into new markets and more, you know, plastics, recyclers and paper mills and all of that kind of stuff. I think we'll actually see more standardization of packaging. So as brands become responsible for the packaging, they're going to realize that it makes more sense to have kind of more standardization of packaging because then it's easier for it to flow through the system. So one example of that is next time you go to the gas station, notice that the change the color of the sprite bottle is now clear. So Coke, in about two a year and a half ago or so, changed the color of the sprite bottle from green to clear, and the reason for that is that they realized, as they've engaged further in this conversation, that the green sprite bottle wasn't really getting recycled, because when you recycle plastic, you melt it down and the plastic recycles pull the green out, because the green makes it not a clear color, and so it's harder just to get what I'm saying.
Kate Davenport:And so they said, let's just change it to clear and then that increases the profitability of that.
Marc Culver:So I think you're going to. So when is Pepsi going to do that with Maudou then?
Kate Davenport:Why don't you give them a call and ask them that We've been asking that and then we're hearing but they're not moving on that yet. But that'll be interesting to see. I think we've seen a proliferation of flexible packaging. So next time you go to the grocery store, just recognize how much more granola and other things are packaged in those pouches. There's a lot that stuff is not recyclable, so I think there's just going to be a lot of conversation around packaging and those kinds of things. This probably doesn't make into the news a lot, particularly right now, but there's a global plastics treaty being negotiated right now through the UN and huge discussions about should we be putting caps on the production of plastics from virgin petroleum, because I think people are racking, because what's happening and the projections are that as we move to electrification, that the oil and natural gas companies are now shifting towards more plastics products, and so the amount of plastics packaging is projected to grow by four times in the next 10 to 15 years.
Marc Culver:To your earlier point. If there's less demand on the automobile industry side for that oil, that's going to make the oil cheaper. It's going to make the barrel price cheaper, there's going to be less demand, the price is going to drop, and then that makes the virgin material even cheaper.
Kate Davenport:So yeah, so there's just going to be a lot of interesting conversation about, I think, what is the role of recycling? How does recycling help us actually address this issue of climate change and oil and natural gas? I think for the last 30 years there's just been like recycling is good, and now I think the conversation is like wait, what is recycling helping us do? If that makes anything, yep, and so I think it's just going to become a much more dynamic conversation. So you asked me what do I see? I just think it's going to be. Who knows it's?
Marc Culver:going to be really interesting to watch, but yours is just going to be a lot of public policy and a lot of interesting stuff happening, so yeah, and I think that question and your answer, I think, leads us as a good segue into talking a little bit more specifically about Eureka and your mission, and maybe how did Eureka start and why you're a nonprofit. Why are you doing what you're doing and how are you doing it? And given the changes that you do see coming in the recycling world, are these good things for Eureka and your mission towards zero waste?
Kate Davenport:Yeah, so Eureka's been around a little over 20 years. So there used to be hundreds of nonprofit recyclers across the country, because recycling really gained a momentum in the 70s and 80s, coming out of Earth Day, as communities came together and said, hey, we shouldn't be throwing this stuff in the landfill, we should be recycling it. And so you saw these community-based organizations coming together and doing paper drives and collecting aluminum cans. And then you saw those community-based organizations starting to go to cities to say, hey, you're responsible for trash, let's incorporate this into the city program. And then recycling started to become more mainstream and you started to see the trash companies come into recycling and as that happened, you saw some of those nonprofits go away. So there only are now there are only four nonprofit recyclers like Eureka and the country now where there used to be lots of us.
Kate Davenport:So I think the Eureka story is unique. We came into being kind of out of a convergence of events, where 20 years ago the city of St Paul contracted with a local community-based organization to help to manage the city's recycling program. The county owned a material recovery facility this was before single stream and a local family hauler collected the recycling and this nonprofit kind of managed the program, the county announced that they were closing their facility because things were moving towards single stream and they were kind of like we're going to get out of this business. And the city signed a contract with that family hauler who sold the waste management about 15 minutes after signing the contract and waste management raised the prices and the community based organization said you know what, let's try to do this. And so Eureka was born out of that process. It was a fairly unique kind of context and confluence of events and the city of St Paul put out a 10-year contract which Eureka got, which you understand, for me in this full context is somewhat unique.
Kate Davenport:That's a long contract yes, yeah, but that did help Eureka get the financing that was needed to build the MRF and get the truck. So there was a long-term partnership there with the city of St Paul. That's kind of how Eureka was born. And the reason that Eureka was a nonprofit was, as we were seeing the waste industry come into recycling no offense, and I have lots of friends that work for WM and Republic. They're landfill companies at the end of the day and we saw the folks that founded Eureka felt like that. There was a real need to have somebody in this space that was doing recycling from the perspective of doing it for the environmental and public good, not solely for profit. And so that's kind of how Eureka was born. And I think what's been unique about the model that we have competed in the marketplace for the last 20 years. A lot of people didn't think we were going to survive and we somehow have.
Marc Culver:Yeah, and even from a pricing perspective, I mean you were competing with the big guys.
Kate Davenport:Yeah, I don't think we've ever won a contract just because we were a nonprofit.
Kate Davenport:We won because of we were competing. So we've run a good business and I think our values around I mean you know this, mark, but our staff are all Eureka employees, they're with benefits and we've really been committed to selling our material to local and regional companies and knowing what it's getting turned into. And some people you know, I think originally we're like what are those hippie hippie values, but in the long run those turned out to be really smart business decisions Because we have really good staff retention and we run a really good facility, because people know what they're doing here and we have really good long term relationships with our markets and we do get, you know, premiums I think that other people don't because we have really good quality material, because we've been invested in making sure that we're sorting material well. So those values that we founded on, I think have actually really helped us from a business perspective.
Marc Culver:Yeah, and I think you know what you touched on about. You know developing regional markets. I think you guys have been really key in that because you've been intentional about selling your materials to as close to you know the source as possible. And then that does give it's kind of like your 10 year contract with St Paul. Well then, that gives those manufacturers confidence in investing in those facilities to use that recycling material closer you know, rather than having to ship it to Chicago or the West Coast or something.
Kate Davenport:Exactly, I mean the reason for the nerds here that are listening to this we're all nerds, yes.
Kate Davenport:Yeah, you're all nerds so and you've probably heard those a lot of recycling programs across the country have taken glass out of their recycling program because the recycler didn't have a market for their glass.
Kate Davenport:You know, the reason we have glass recycling in Minnesota and I feel really confident in saying this without just promoting Eureka is because of Eureka. So in the mid 2000s there was the threat of glass going away with the move towards single stream, and Eureka was like we're going to show that we can still have glass in the system. We demonstrated that we could optically sort it but there was supply for it and we had two glass sorters come to this market because of that. And at the same time we got the state and the Minnesota pollution control agency to support the passage of a statute that said using glass as landfill cover does not count as recycling, and so that meant that the waste companies that had landfill couldn't put glass on their landfill and say that that was recycling, and so that even the playing field and that meant that the that the glass sorters knew there was going to be enough supply to make the economics of it work for them to come here.
Kate Davenport:So like we really have played a role too in trying to make kind of figure out the enabling environment, demonstrate what we need to demonstrate to kind of make it all work, and I think that's why we haven't had glass recycling go away in Minnesota is that we've helped demonstrate that and that's what our mission is is to try to utilize playing the game and being in the game to change the game.
Marc Culver:Right To move the market, you know to move the market.
Kate Davenport:And we've done the same thing in composting, like we got into restaurant composting in 2008,. We had five restaurants come to us and say we got all this food waste. We don't want to be throwing it away. Can we compost it? And we helped figure out how to compost it and worked with the counties to figure out having to transfer facility and built that up to about 80 different restaurants. And then all the other folks in the metro, the waste industry started offering composting and we said you know what we've done, what we came to do.
Marc Culver:We're going to get out of it. We're out.
Kate Davenport:And now like composting is. You know, restaurants across the cities can compost. Then more and more cities are offering composting. So you ask, kind of that's what we're here to do is demonstrate, to try to say this is where the market isn't right now incentivized to do this, but from a mission perspective, we're going to try to go in and figure out how to do this, show that there's demand or you know like, push the public policy to create the enabling environment for something so that the market will come in and provide that. And so I think we'll continue to do that in terms of recycling and trying to get extended producer responsibility and some of those other policies passed here. And then I think the next frontier is reuse. So what's the? What do we need to be demonstrating and getting into in terms of reuse? And what does that look like? Got a lot of breweries in Minnesota.
Marc Culver:We do, we do.
Kate Davenport:You know. So it'll be interesting to see. Yeah, I don't know what that will exactly look like over the next few years, but that's kind of what our MO is like. What do we need to be demonstrating from an environmental and human health perspective? And then we got some business jobs so we can figure out kind of where the gap is.
Marc Culver:Yeah, no, I think that's great. I think you guys are doing a great job of balancing that. I mean, you're basically you're running a business, you're providing living wage jobs, but you're also using that to, you know, really drive advocacy and that as well, and so that's great. I know at Roosevelt we always really appreciate it. We were glad that you guys were competitive price wise, because we were also really happy that your values and that really aligned with our values as a community for what we wanted with recycling as well. So that was just a good relationship there.
Kate Davenport:And I would say for me, particularly for this you know the audience that's listening to this and for municipalities like I really mean this like please reach out, particularly on this topic of extended producer responsibility and such, because I think we really are at a point now to where we cannot keep asking municipalities to pay for the cost of recycling, whether you're talking about living wages or the cost of capital.
Kate Davenport:But I mean you just said it like in some ways, roosevelt was lucky that they had the service provider that matched your values but was cost competitive and that was somewhat of an anomaly. And I think the public policy space and extended producer responsibility is saying we actually need public policy that sets that standard. We can't just rely on like and we've always felt this, that Eureka, like you, can't just rely on the luck of having this like weird anomaly, this nonprofit in your backyard. That should be the standard, Right. And so I think EPR creates that opportunity and so I say that to your audience to say like there is a really unique moment right now across the country in many states. So if you're a municipality, want to understand that better and what's happening in your state, I'd be happy to talk to folks and put them in touch, because I think municipalities are a really unique voice in this. That's important and an important stakeholder to be heard, because you know, it's not even the front line of this for decades. Right.
Marc Culver:Right and I will say. I will also say that counties also have a role in this and counties and they have the ability at least in Minnesota they do they have the ability to really set some standards and requirements that the cities have to meet, and they provide some funding in order in order to do that as well. So but it's important to have that that the policy drives some of this stuff too, you know. So I guess I wanted to.
Marc Culver:You know one thing that impressed me for the most part with Eureka was you know you guys continued to try to make improvements on the collection side as well and I think you know that got into. You know it gets back into the full-time jobs and living wages and teaching, treating your drivers with respect and protecting them, and that gets into. You know. That's where Single Stream also helps is so that they're not out there lifting individual bins and things like that. But maybe talk a little bit about how that's progressed for you guys and maybe where you've seen technology help you on the collection side.
Kate Davenport:Yeah, I mean we definitely saw when we went from collecting bins at the curb to the carts, which is the predominant type of collection that we do. I mean we saw a huge decrease in workers' comp claims shoulder injuries, repetitive stress, those kinds of things. We also saw an increase in complaints from drivers because they were gaining weight, because they were getting more exercise.
Marc Culver:You just got to make them run around the truck so often, right?
Kate Davenport:So we, you know the job got safer. I mean, you know, I remember the tension we had with each other and we've had the tension with St Paul and we're in Minnesota and like every time that driver gets out of the truck when it's icy, snowy out, there's the chance for slip and fall and we're trying to protect in that regard and municipalities trying to have good service, and there's always a tension there, a good, healthy tension. So I mean, I definitely think the automation has been a huge in terms of safety. You know, I think it's interesting when we went to automated side load trucks in St Paul, most of the industry thought we were crazy, particularly in the city of St Paul, which is different than Roseville because it's a very dense alleys.
Marc Culver:Yeah, the alleys are a huge challenge. They're not no. Two alleys are the same.
Kate Davenport:Right, and now we have seen more and more folks go in that direction. One for the safety, but also there's a real driver shortage. It is very real. I mean all you need to do is drive around and see all the advertisements for UPS, fedex drivers, school bus drivers. I mean I have young kids like they, like the school district, I mean had to cancel like a bunch of school bus routes this year because they don't have school bus drivers. There aren't enough recycling and trash drivers. So some of the automation has, I think, even been faster than anybody thought, because they're just aren't enough drivers.
Kate Davenport:The other thing that we have seen and we've been somewhat on the cutting edge of this is just like more safety features in the trucks. So like more cameras on the truck, more pedestrian notifications on the trucks, et cetera. I mean we have, I think, five cameras on every truck, on the back, on the sides, on the front. So just all that kind of a technology. The new trucks that we're looking at like has all the bells and whistles that you see on new cars now, where, like, if there's a biker within a certain distance, it's going to actually warn, alert the driver and those kinds of things. So just a lot more safety features. Our first electric truck just arrived. A couple weeks ago.
Kate Davenport:So that's a huge piece, like what kind of what's going to happen in terms of how trucks are fueled. Yeah, it's going to be.
Marc Culver:I will reach out to you next spring or summer, because I would love to hear about your experiences through the winter of that electric vehicle, yeah, so we actually have a lot of public works. Nerds want to know that for vehicles.
Kate Davenport:Follow up with me it literally just arrived. Like two weeks ago, we actually got a grant from the federal department of energy to test it specifically to see how it does in the winter here. Because, yes, we're exactly like what happens when it's 30 below for three days in a row.
Marc Culver:Right, what kind of range are we really getting out of these?
Kate Davenport:things. What kind of range are we really getting out of these things? So I think that's, but I also just going back to the average age of a CDL driver in the United States is 55. Wow, and we are not seeing young people come into this industry, and so I think we have a real issue coming at us.
Marc Culver:Automated recycling trucks and trash vehicles.
Kate Davenport:I don't know self driving trash vehicles or not. So I think there's a lot of really kind of interesting challenges there. We've really really been trying to experiment with a lot of different things in terms of how do you create pipelines. We have a whole new program where we're like hiring people without CDLs and how do we train them to become CDL drivers. But it's not a job that young people want. Part of it has to do, like a lot of young people, the hours they don't want, the schedule type work, and it's not about pay. I mean, we've seen wages and the recycling and trash industry go up by 30 to 35% in the last three years. Wow, so it's not a wages issue. I think we're seeing that across a lot of kind of manufacturing jobs. We're also seeing like it's really hard to find diesel mechanics. So I'm sure, like in public works in general, I'm sure you saw some of this too.
Kate Davenport:It's just some of these trades. We did not create the pipelines that we needed to create in terms of the trades, and I don't think we as a society are prepared for the implications of that. So I think that's going to be a real challenge. When it comes to recycling, how do we collect the stuff if nobody wants to drive the truck?
Marc Culver:Yeah, and there is a movement and it's I don't know that it will ever be big enough, but there is a movement to try to get into the high schools, and maybe even a little sooner, and talk about you know what? It's okay not to go to college. There are a lot of great paying jobs out there if you don't go to college and if you want to be outside, if you don't want to be stuck in a building. But yeah, you have set hours and you're stuck in a cab and you're by yourself, and there are certain aspects of that type of job that people may not think they want to do. So it's challenging, but they're really great paying jobs too. Yeah, Usually union positions and if you have your CDL, it opens up a really wide range of possibilities for you yeah.
Kate Davenport:And so I think that's a piece we're really trying to think about and that's honestly. We have a couple of these trucks in our fleet now, and the new trucks we're looking at are actually a European design truck where the cab is a lot bigger, because now that the trucks are more automated, the driver doesn't get in and out a lot and that's their office space all day. So like if you got in one of our existing trucks, like it's a pretty small space, like how do we make that roomier? And then the last piece I would say, which actually goes to a comment you made at the beginning, is there are cameras all over the truck.
Kate Davenport:What's the integration of AI? What's the integration of that data with public works needs? How could you potentially actually use AI in the hopper on the truck to identify contamination? And then there's even a further step to say things like hey, mark, I'm driving down every street in roadville every week and I have cameras on all over the tracks, and that opens up, and then it's like who owns that data? And that's a whole other level of relationship. So those are also all really, I think, interesting questions to start to explore on the collection.
Marc Culver:And that last one you mentioned is really interesting because we're having those conversations with communities right now of how can we best collect that pavement condition data or sign condition data or what have you on a regular basis. So our data isn't two years old, it's a week old.
Kate Davenport:Yeah, I mean, we've had that's a, really, and it's like our drivers actually know really well they go down that street every week. They could be the early detection system for sure, but a lot of times what we have found is the public work system doesn't have the systems in place to receive that information or know what to do with it. Right, yeah, you know, this is part of the idea, but a lot of times they're very reactive and so like there's nowhere to even send that information.
Marc Culver:So yeah, those are. I predict that will change, I predict in the next five years. I think some of the contracts you will see in the next five years will have that specifically in there.
Kate Davenport:Oh, I mean you know, we I mean we have onboard computer systems on all our trucks. You could put a, you could put a button on the onboard computer system and a driver could push, like I don't know whatever, Yep. And then the whole needs to be looked at and it's geo located and that could automatically mean absolutely Yep.
Bolton & Menk:Yes, yeah, All right we'll talk, we'll talk. Yeah, we should talk about that.
Marc Culver:Well, hey, you know this is great. We're a little over an hour right now. This has been a great conversation. We've been trying to get this together for the whole summer. Yeah, I know we have. Yeah, but I'm glad this finally happened. This is really some great information. Thanks again, Kate, and look forward to maybe some future conversations, some catch up on on some of the topics we talked about.
Kate Davenport:So yeah, super fun. Good to talk to you, man.
Marc Culver:All right. Well, thank you, and thank you, listeners, for joining us again. And one last thing before you go if you have enjoyed this episode in the podcast in general, we ask that you help us spread the word. If you're on LinkedIn, comment on one of the Public Works Nerds posts. Comment on our YouTube page. Yes, we're on YouTube. You can watch this on YouTube, retweet one of our posts or, better yet, tell your colleagues about the podcast. Thank you, nerds out. All right, thanks for watching. I'll see you next time. Bye.
