After years of challenges, can secondary sortation take off?

National Harbor, Md. — The idea of specialized facilities that pluck out hard-to-recycle plastics from curbside waste streams and aggregate them into something marketable has been a vision in packaging recycling going back more than a decade.

But the economics of the idea have never matched the promise, and the recent history of plastics recycling is littered with failures of secondary sortation facilities, as they're called.

Now, however, some say there are changes underway that could make secondary sort facilities more viable. They point to investments from waste collection giant Republic Services Inc. and, in the next few years, more money flowing into recycling infrastructure from extended producer responsibility programs.

That was the sense of a panel at the recent Plastics Recycling Conference, held March 6-8 at National Harbor, just outside Washington.

Republic, for example, is opening its first secondary sortation plant, or what it calls a polymer center, this year in Las Vegas to aggregate and process hard-to-recycle waste plastic. It said the facility will produce more than 100 million pounds of recycled resin a year.

In February, Republic announced plans for a second facility, in the Midwest, to open next year. An executive at the event said it wants to have two more, in the Northeast and the Gulf Coast, open in 2025 and 2026, respectively.

"There are very mature recycling programs in the West also [with] high population," said Pete Keller, Republic's vice president of recycling and sustainability. "All of those things come together quite nicely to make Las Vegas make a lot of sense. It's a similar situation in the Midwest as well. We've got a critical mass coming out of our recycling centers in that part of the world."

He pointed to both minimum-content legislation in states and public announcements from brand companies to use recycled plastic in their packaging, as drivers for Republic's investments.

"Almost every major brand has some voluntary goal relative to their packaging, and we believe that over time, they will begin to walk the walk," Keller told the audience. "There's a huge gap today between what those brand commitments are and what the supply is."

But others on the panel were more skeptical of talk of a turning point moment.

Greg Janson, former CEO of QRS Recycling, which operated and then closed secondary sorting facilities to process plastics 3-7 in Louisville, Ky.; Georgia; Maryland; and St. Louis between 2011 and 2018, said the economics proved difficult.

"I think the No. 1 lesson is, 'A high market is not a business plan,'" he said. "For these facilities to be successful, we need to align the value chain starting with the end product. The facility will be designed to meet that end product.

"I would like to think that a spade should not go in the ground and turn any dirt that results in a secondary sortation facility unless a very, very high percentage of the material is under contract," said Janson, who is currently president of polyethylene and polypropylene recycler Granite Peak Plastics in St. Louis.

Too often in the past, he said, recycled plastic buyers would switch to off-spec virgin resin when virgin plastic prices dropped.

"That is absolutely devastating to the recycling industry," Janson said. "If you're a buyer of recycled plastic and you're truly committed to circularity, show that with a contract. Then guys like me can show that contract and go get capital."

Still, Janson said he does see potential positives, if technologies to use chemical recycling of plastic move ahead.

"I think chemical recycling is really just a huge kind of game-changer because most of those facilities are going to be fed somehow by secondary sortation," he said. "I think the pieces are in place, depending on how chemical recycling actually develops and scales."

A November report from McKinsey & Co. said secondary sort facilities could play a role in supplying feedstock to chemical recycling plants.

The head of a company that operated a now-shuttered plastics secondary sortation facility in California, Titus MRF Services, said his state's extended producer responsibility legislation that passed last year, known as Senate Bill 54, will help the economics of secondary sortation.

"Now we're staring at SB-54 in California," said Titus President Mike Centers. "That is going to create a huge change for a lot of these MRF operators, a lot of the end users, and it's going to help shape secondary sorting. I see it as very positive."

Titus wrote a report for the American Chemistry Council in November, suggesting that secondary sorting facilities in the Northeast could make economic sense and recover enough recyclable materials for a 3-5 percent boost in the recovery rate.

Titus has estimated it would cost $16 million to build a secondary sort facility to cover Washington state and Oregon.

Janson said it's a positive that Republic, the country's second-largest residential waste management company, is investing.

But a lack of consistent demand for recycled material has been a major hurdle for secondary sorting, he said. He was unwilling to say the industry has definitely turned a corner.

"You have economic scale with the Republics getting into the game, but collectively, if you take the secondary sort facilities that haven't worked, that represents a half a billion pounds of processing capacity that has been taken off the market because of lack of consistent demand," he said. "I think that's the issue."

"I think if we start to see contracts and commitments, then we would be at an inflection point. But when we don't see contracts and commitments, that would tell me we're at a different spot," Janson said in an interview after the panel.