REPORT Meetillig Date: June 6, 2013 Waste Management Committee DATE: May 7,201 3 REPORT TITLE: ADDITION OF MIXED RIGID PLASTICS TO THE BLUE BOX RECYCLING PROGRAM FROM: Dan Labrecque, Commissioner of Public Works RECOMMENDATION That the Region of Peel's Blue Box Recycling Program be amended to include Mixed Rigid Plastics; And further, that staff be authorized to negotiate and approve the necessary capital improvements to the Material Recovery Facility with Canada Fibers Ltd. to process Mixed Rigid Plastics for an estimated capital cost of $3,107,500 (excluding applicable taxes) in accordance with Purchasing By-law 63-2008; And further, that the funds be provided from Capital Project 12-6610 in the amount of $3,107,500; And further, that staff be authorized to negotiate and approve the required contract amendments with Canada Fibers Ltd, to process Mixed Rigid Plastics for an estimated increase to the net annual operating cost of approximately $330,000 (excluding applicable taxes) in accordance with Purchasing By-law 63-2008; And further, that the required documents be executed by the Regional Corporation's duly authorized signing officers.
4b -2- May 7, 2013 captured material by up to 2,100 tonnes. 0 The household generation rate of Mixed Rigid Plastics is expected to increase over the The Cities of Toronto, Hamilton, Kingston and Ottawa, as well as the Regional Municipalities of York, Halton, Niagara, Waterloo and Durham have all added Mixed Rigid Plastics to their recycling programs. DISCUSSION 1. Background At its meeting held on May 26, 2011, Regional Council approved Resolution 2011-500, directing staff to review expanding the Blue Box Recycling Program to include numbers 1-7 plastics. These plastics, known as Mixed Rigid Plastics, refer to all non-bottle plastic packaging from households. They include rigid plastic packaging items of various polymer types and colours but exclude non-packaging items such as plastic toys. Examples of Mixed Rigid Plastics include clear plastic fruit and egg cartons, bakery and produce containers, take-out food containers, nursery trays and pots, and thermoform blister packaging. Markets for Mixed Rigid Plastics have stabilized over the past few years and, as a result, other Greater Toronto Area (GTA) municipalities have added Mixed Rigid Plastics to their Blue Box Recycling Programs. For a number of years the Region has allowed residents to place Mixed Rigid Plastics in their blue boxes but this material has not been formally introduced into the Region's Blue Box Recycling Program. Even though some Mixed Rigid Plastics are collected, the Region's Material Recovery Facility (MRF) is not designed to separate Mixed Rigid Plastics so it simply exits the facility as residue. Peel's current MRF operator, Canada Fibers Ltd. (CFL), reprocesses Peel's residue at its state-of-the-art MRF on Arrow Road and is able to capture Peel's Mixed Rigid Plastics there. Staff recommends against the continuation of this informal practice because: the Region's Blue Box Recycling Program would not align with other GTA municipal programs; residents confusion over the recyclability of this material would continue; the Region would lose out on potential diversion opportunities; and the Region's MRF would still require some equipment replacements to deal with current maintenance issues. Findings Based on waste composition audit data, staff estimates that there are approximately 3,600 tonnes of Mixed Rigid Plastics currently in the Region's waste stream, of which 1,600 to,-
4h.-3- May 7,2013 2,100 tonnes per year would be captured if Mixed Rigid Plastics was added to the Blue Box Recycling Program. This represents an additional 4.0 to 5.25 kilograms per household per year and a 0.3 to 0.4 per cent increase to the Region's annual waste diversion rate. It is anticipated that this additional volume of Mixed Rigid Plastics will not cause a significant problem to individual homeowners1 blue box capacity. As part of the review process, the Region retained Kelleher Environmental to conduct a study on current and future packaging and recycling trends within the Region. According to the study, the household generation rate of thermoform blister packaging and non-bottle plastic packaging will increase over the next decade. Mixed Rigid Plastics is increasingly becoming the material of choice for a variety of packaging applications as it is lightweight, shatter resistant and uniquely efficient at protecting and delivering products to the marketplace with a minimum amount of packaging. Staff also canvassed several of the surrounding cities and municipalities. As a result of the increasing volumes of Mixed Rigid Plastics in the waste stream and the establishment of stable recycling end markets, the Cities of Toronto, Hamilton, Kingston and Ottawa, as well as the Regional Municipalities of York, Halton, Niagara, Waterloo and Durham have all added Mixed Rigid Plastics to their Blue Box Recycling Programs. These cities and municipalities were only able to accommodate the addition of Mixed Rigid Plastics to their Blur Box Recycling Programs after completing upgrades to an existing MRF or the construction of a new MRF with the capability to recover Mixed Rigid Plastics. Staff consulted with the Region's various waste collection and processing service providers on the operational impacts if Mixed Rigid Plastics was added to the recycling program. Waste Management of Canada Corporation, Miller Waste Systems Incorporated and Green For Life Environmental Corporation have all indicated that the addition of Mixed Rigid Plastics will not affect waste collection operations. The Region's MRF operator, CFL indicated that the addition of Mixed Rigid Plastics to the blue box would have significant impacts at the MRF unless several operational changes and capital improvements were implemented. As a result, CFL was asked to submit a proposal for providing the additional services and capital improvements required to process Mixed Rigid Plastics at the MRF, as provided for in our agreement. The addition of Mixed Rigid Plastics to the Blue Box Recycling Program without the implementation of the proposed MRF capital improvements and operational changes would have significant impacts on the overall performance of the facility including a decrease in material throughput, material recovery and material quality. As the MRF would be required to run at a reduced speed to accommodate the addition of Mixed Rigid Plastics, a reduction in the material throughput would result in the MRF reaching its maximum capacity by 2016. Furthermore, reductions in material recovery and a decrease in material quality would result in decreased revenues associated with the marketing of recyclable materials. Maintaining the MRF capacity is critical. In addition to the increase in Mixed Rigid Plastics at the MRF, it is estimated that with the introduction of bi-weekly garbage collection, blue box recyclable material will increase by 10,000 tonnes. The completion of the proposed MRF capital improvements will maintain the MRF1s current material throughput, material recovery and material quality.
q'i -4- May 7,2013 Summary of CFL's Mixed Rigid Plastics Proposal CFL's proposal outlines the capital improvements, contractual amendments and operational changes required to recover Mixed Rigid Plastics. A summary of CFL's proposed capital improvements and systems modifications is as follows: The addition of a second optical sorter for the enhanced recovery of all plastics, including Mixed Rigid Plastics; B Replacement of the current trommel system with a steel disc glass screen and overhead magnet for improved separation of glass, metal and plastic materials; e The addition of a secondary glass cleanup screen for improved glass quality; Modifications to conveyors to add air screens and air knives for improved separation of fibre and container materials; 0 Modifications to material chutes and transfer conveyors for a more efficient movement of materials throughout the MRF; and Modification to the newsprint screens material scalping decks for improved separation of fibre and container materials. If Mixed Rigid Plastics is to be added to the Blue Box Recycling Program, CFL believes that the proposed capital improvements and system modifications are critical to their capability of maintaining the existing MRF contract performance requirements. CFL has estimated that the total cost of the MRF upgrades is approximately $3,107,500 (excluding applicable taxes). The Region can potentially recover up to half of this cost through Continuous lmprovement Funding. In addition to the capital improvements listed above, CFL's proposal contains the following terms that would need to be included in the MRF contract if Mixed Rigid Plastics is added to the recycling program: e The Mixed Rigid Plastics processing fee adjustments that depend on quantity of Mixed Rigid Plastics received at the MRF; The Mixed Rigid Plastics processing fee adjustments will be subject to annual Consumer Price Index (CPI) adjustments, as per the existing processing contract; and The Mixed Rigid Plastics will have an 80% recovery target. All existing contract performance requirements (recovery, quality, and throughput) for all other recovered materials will remain unchanged. CFL has indicated that all proposed MRF capital improvements can be completed by the fall of 2013. During the construction process, it is anticipated that the MRF would be unavailable for processing for nine days. This would cover a full week plus the weekends prior and post construction. During this shutdown period, CFL will accommodate the Region's blue box material at their Arrow Road MRF, thereby ensuring the proper processing of this material on the Region's behalf. Finally, a successful Mixed Rigid Plastics recycling program depends on the development and implementation of an effective communications strategy to educate the residents on the changes to the Blue Box Recycling Program. Staff would use several communication methods to instruct residents to place Mixed Rigid Plastics in the blue box, including Peel's website, water bill inserts, mobile signs and newspaper advertisements. Staff will also contact Stewardship Ontario through the Continuous lmprovement Fund to partner in their joint municipal education campaign that starts this September 2013. The intent of the
46-5 - May 7, 2013 campaign is to notify residents that all GTA municipalities now accept and recycle Mixed Rigid Plastics. 3. Proposed Direction Staff have already allocated $12 million for MRF capital improvements and equipment upgrades; however, given proposed Waste Diversion Act changes regarding extended producer responsibility, coupled with the Peel Integrated Waste Management Facility being identified as the primary site for a future Energy from Waste facility, staff believe it is not practical to proceed with a major MRF retrofit at this time. The completion of the necessary equipment upgrades for adding Mixed Rigid Plastics to the Region's Blue Box Recycling Program also addresses some of the equipment improvements required to maintain product quality, reduce maintenance costs and keep the MRF up to date and in a state of good repair. To maintain consistency with other GTA municipal blue box programs, increase the Region's waste diversion rate, manage a packaging material that is becoming increasingly popular in the marketplace, and reduce the overall confusion by residents on "Where Does it Go", staff recommend that the Region's Blue Box Recycling Program be amended to include Mixed Rigid Plastics. In addition, staff recommend that the MRF capital improvements and additional contract terms proposed by CFL be finalized and approved. Furthermore, the addition of Mixed Rigid Plastics to the Region's Blue Box Recycling Program would allow the Region to participate in potential higher commodity pricing, as the end markets for this material continue to evolve. With the Region being the second largest municipality in Ontario, the Region's Mixed Rigid Plastics tonnage could have a significant impact on the future development of Mixed Rigid Plastics markets. FINANCIAL IMPLICATIONS Adding Mixed Rigid Plastics to the Blue Box Recycling Program would require several MRF capital improvements and systems modifications. The estimated total cost of the MRF capital improvements is $3,107,500 (excluding applicable taxes). Funding for the proposed MRF capital improvements is available under Capital Budget 12-6610. Funding for the processing of Mixed Rigid Plastics, estimated at approximately $330,000 annually (excluding applicable taxes) was not included in the 2013 Waste Management Operating Budget; however, as the program will not be starting until late 2013, the additional cost can be managed. Mixed Rigid Plastics processing costs will be included in future Operating Budget submissions, under current Cost Centre WW70210. CONCLUSION Staff recommend that the Region's Blue Box Recycling Program be amended to include Mixed Rigid Plastics, that CFL's proposed MRF capital improvements and additional contract terms be approved and that a communications strategy be developed and implemented. The addition of Mixed Rigid Plastics to the Blue Box Recycling Program provides a much more simplified recycling program for residents and harmonizes the Region's and other GTA municipalities recycling programs.
May 7, 2013 4d -6- f' Dan Labrecque Commissioner of Public Works Approved for Submission: D. Szwarc, Chief Administrative officer For further information regarding this report, please contact Norman Lee at extension 4703 or via email at norman. lee@peelregion. ca pp Authored By: Kevin Mehlenbacherflravis Richards Legislative Services Financial Support Unit (FSU). Macintyre, Director of Purchasing and Project Management
4 &-7-1- May 7,2013 APPENDIX I Examples of Mixed Rigid Plastics