The concept sounds promising.

Last spring, Irvine partnered with a startup called Recycling from Home. The company, which was created with help from local recycling phenom Ryan Hickman, got one of five $1 million grants from the state to launch a pilot program that lets residents schedule having bags of recyclable materials, like bottles and cans, picked up from their homes. Residents then get all the nickels and dimes from the California Redemption Value (CRV) of those recyclables deposited into accounts they’ve set up, which they can cash in or donate with 10% taken out to pay for the service.

The goal of Irvine’s program – and other four state-funded mobile recycling projects launched in Culver City, San Francisco, San Mateo and Sonoma County – is to boost sinking recycling rates by making it more convenient for residents who no longer have access to local recycling centers, after hundreds of such centers have shut down across the state. These pilot programs also give residents a financial incentive to recycle that’s missing if they let their waste hauler collect those bottles and cans at the curb.

Irvine’s program was the one bright spot in a June 28 report from the Orange County Grand Jury that raised concerns about the state holding $600 million in unclaimed CRV payments that taxpayers could collect if only they had easier access to recycling centers.

But as the state considers awarding another $70 million out of those unclaimed CRV funds for more pilot programs, a new report from the Los Angeles-based nonprofit Consumer Watchdog says the original projects are largely “crashing and burning.” Not enough people are participating in the programs, the report says, and the projects cost too much to make them financially viable once state grants run out.

More important, experts say these programs do little to address much larger problems with California’s 35-year-old recycling system, which has seen a drop in recycling rates in recent years.

Real fixes that make better use of taxpayer funds do exist, said Liza Tucker, a consumer advocate with Consumer Watchdog. But they’ll require a major overhaul of the statewide recycling program along with support from everyone in the chain, from beverage makers to grocers to residents.

If some of those key changes don’t happen soon, Jeff Donlevy, general manager of Ming’s Recycling, expects another wave of recycling centers to shut down this fall.

How did we get here?

California became a recycling leader in 1986 when it joined a handful of other states in passing a container deposit law, better known as a bottle bill. The goal of these bills, now in place in 10 states, is to reduce litter and increase recycling rates by giving people an incentive to recycle empty aluminum cans and glass and plastic bottles rather than send them to landfills.

In California, the bottle bill adds a “deposit” of 5 cents on recyclable containers under 24 ounces and 10 cents on larger containers. Distributors pay that CRV fee to CalRecycle, then charge it to retailers when they buy the products. Retailers get the fee back by tacking it onto customer receipts, and consumers can get the deposit back if they return the empty can or bottle back to a recycling center. Then those centers can get the fee back from CalRecycle, theoretically closing the loop and making the program “free” for everyone.

But only about 58% of CRV fees paid to CalRecycle end up getting claimed due to products getting tossed in landfills or in blue bins for curbside pickup, leading to that $600 million surplus the O.C. Grand Jury cited. And that fund just keeps getting bigger as California’s recycling rate continues to go down.

California’s bottle bill set a goal nearly four decades ago to recycle 80% of eligible materials, and the state hit that goal for eight years in a row through 2016. But a combination of state policies and global events has caused California’s program to crumble in recent years, with the recycling rate dropping to 68% in 2021.

Recycling programs the world over were thrown for a loop when China, amid the trade war in 2017, started to dramatically limit imports of some recyclable materials. Since the United States and many other countries long relied on China to buy our scrap plastics and paper, markets for these reclaimed materials dried up and prices plummeted.

Then COVID-19 hit. Even though people started buying more bottled drinks and using more disposable materials to avoid spreading germs, they also started recycling those products less often, as they stayed home and avoided interaction with strangers.

At OCC Recycling Center, which is attached to Orange Coast College in Costa Mesa, technician Leo Stiles said their volume is still down about 30% from before the pandemic. But he said they’re still getting by thanks largely to their affiliation with the college, which Stiles said covers their facility’s rent and insurance.

Other recycling centers haven’t been so fortunate. Since 2013, more than 1,369 supermarket redemption centers have closed down in California amid rising costs and falling prices for materials, leaving just more than 1,200 centers open throughout the state.

While market disruptions have impacted recycling programs everywhere, other states and countries haven’t seen the same precipitous drop in recycling rates and centers. Donlevy and Tucker both said that’s because of how California’s system is set up.

First, Donlevy said subsidies the state pays to its certified recycling centers to help fund operations are not high enough and fluctuate every two years under what he says is a flawed cost study.

“The result is 60% to 70% of centers are underpaid,” he said. “That is the root cause of why recycling centers are closing.”

Last month, Donlevy said the state’s cost study called for cutting a key set of subsidies to the industry by 41%. After an outcry from recycling centers, he said the state agreed to freeze those rates for two years. But he said the state is expected to propose cutting another key subsidy by up to 12% this fall, which Donlevy said would likely put even more recycling centers out of business.

The other big problem with California’s program is that, if there isn’t a recycling center close by, grocers are required to take recyclables back themselves. But some stores can pay $100 a day to opt out. And survey after survey shows many stores don’t have systems in place to accept empty bottles and cans, while Donlevy said there’s little enforcement since big chains quickly lawyer up to fight the mandate. And he can see why.

Remember that closed loop for CRV fees? If residents return empty bottles to grocery stores, retailers have to pay the nickels and dimes back to customers. But Tucker explained there’s no mechanism in state law for stores to get those CRV fees back from CalRecycle the way recycling centers can. That means grocers would be going through the hassle of dealing with handling messy bottle and can returns with no way to be made whole.

In Southern California, Donlevy said high land and labor costs mean coastal cities have been hit the hardest by the lack of recycling centers. In Orange County, there are now just 85 redemption centers left, or one for every 37,000 people. The state average is one center for every 32,000 people. There are 187 grocers in O.C. that are supposed to take back bottles and cans, per a searchable CalRecycle database. But a 2019 investigation by Consumer Watchdog showed two-thirds of stores statewide simply don’t take them.

Residents in most of those communities can still opt to toss recyclables in their blue bins and let their waste haulers deal with them. But even the most diligent of trash companies struggle with contamination that sends recyclable goods to landfills. And residents are clearly less motivated to participate, with curbside recycling only accounting for 10% to 12% of all recycled materials each year.

The state has been looking at ways to address recycling center deserts in hopes of reversing this trend. That’s where funding for pilot mobile recycling programs comes into play.

Pilots flop

Three years ago, state legislators approved $5 million in funding to support five pilot mobile recycling programs that promised to develop innovative ways to fill the gap in communities that no longer had easy access to recycling centers.

A year into launch of four of those five programs, Consumer Watchdog says the programs are not proving cost effective, innovative or particularly helpful in boosting recycling rates. And the nonprofit has so many concerns with conflicts of interest in San Francisco’s program that it’s calling for an investigation.

While the report praises Irvine’s program for being the only one that’s “truly mobile,” since it does pick up recyclables door to door, it also calls the effort a “financial bust.” It’s costing 14 cents per container to refund consumers a nickel, the report says, while the program is only serving “roughly 10 to 15 customers a day in a city with a population of 273,000.”

The report also raises concerns about Irvine’s program not being in line with the state’s bottle bill, since residents aren’t getting full CRV refunds once that 10% fee is taken out. And it claims the program could leave the city open to legal challenges from its contracted waste haulers.

In response, Irvine spokesperson Kristina Perrigoue said the city is glad to have more ways for residents to recycle. And she said, “Since this pilot only began last June, we also are looking forward to learning more about its successes and viability once more time has elapsed and data is garnered.” She deferred to Recycle from Home for more details, saying they run operations, collect all data and report it to CalRecycle. Recycle from Home didn’t respond to a request for comment.

Consumer Watchdog’s report also criticized the program in Culver City, where the city deploys a truck to sit in the parking lot of two different grocery stores and collect bottles and cans during certain hours. The report says it’s costing a penny and a half to return a nickel to residents. Hours of service also aren’t convenient, which the report says is holding back volume. And the report raises concern with recyclables being tracked with pen and paper, which it says opens the program up to fraud concerns that have plagued CRV operators.

Culver City didn’t respond to questions about these concerns by deadline.

Given these lackluster results, Consumer Watchdog is urging CalRecycle to stop funding these programs and focus on more impactful solutions.

“Only a systemic overhaul of the redemption system with widespread convenience will increase redemption rates,” the report states.

Real solutions exist

So what are solutions that would move the needle?

California needs to raise and stabilize subsidies paid to recycling centers, Donlevy said. It also needs to create a mechanism for grocery stores to get reimbursed for paying out CRV fees, then take away loopholes that let them get out of collecting empty bottles and cans.

Tucker praised elements of a $330 million budget request from CalRecycle for the current fiscal year, including plans to pay for convenient reverse vending machines and bag drop technologies that can be used at or near supermarkets. She also supports plans to raise the CRV rate to 10 cents for all recyclables. That’s in line with fees in Michigan and Oregon, which have substantially higher return rates.

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