How Much Profit Does a Recycling Center Make?

monkeybusinessimages/iStock/GettyImages

Yes, recycling plants make money recycling plastic, fabric, glass and scrap metal, but it is an ever-changing business with spiking costs. This doesn’t mean it’s not a big industry worldwide, and it’s certainly an important one. As of 2014, the recycling industry employed more than 1.1 million people and generated $236 billion in gross annual revenue worldwide.

Unfortunately, most waste in America is thrown away rather than recycled, and that proves to be much more costly. For example, it costs an average of $30 per ton to recycle but $50 per ton to put something in a landfill and $60 to $75 per ton to incinerate trash.

Recycling plants tend to make the majority of their money transforming used plastic, cardboard and metal into sellable products like bottles and sheets of metal. This can be lucrative when you consider the fact that a million recycled cell phones produces 35,000 pounds of scrap copper, 700 pounds of silver and 75 pounds of gold. Those metals aren’t cheap.

TL;DR (Too Long; Didn't Read)

According to IBISWorld, recycling facilities in the United States made $7 billion in total revenue in 2019, but the growth across the last five years was only limited to 1.2%.

Household Consignment Centers

Household consignment centers aren’t exactly traditional recycling centers, but recycling used clothing is actually a pretty big business. According to the Environmental Protection Agency, about 2.62 million tons of textiles were recycled in 2014, and 3.14 were burned for energy compared to the 10.46 million tons that were put in a landfill.

The textile industry is a more than $1 trillion global industry, and this includes the recycled textiles. These are either used and sold as secondhand products, are transformed into cleaning cloths and rags or are used to create things like mattresses, fiberglass and upholstery.

Used clothing can be particularly lucrative for thrift stores and secondhand charity shops, which hold about 10% of donated fabrics in Canada. If clothes are donated, the sale is entirely profit after staffing and overhead costs.

Revenue for Plastic-Recycling Businesses

It’s actually pretty difficult to make money recycling plastic unless you’re specifically picking the most expensive types of plastic to recycle, and it’s meticulously sorted. In fact, it is so nonlucrative that some plastic recycling businesses are considering nixing mixed plastics altogether because they are not worth processing. As a rule, cans and corrugated cardboard are worth much more, and mixed plastics may not even be worth the effort both economically and environmentally.

Most plastic bottles are made of PET, which is a form of processed oil. As the price of oil has steadily increased, the price of these bottles has also increased. This translates to decent returns for a recycling plant but increased packaging costs for the companies that buy those bottles.

Currently, a recycling plant can sell PET bottles and jars for 15.58 cents per pound. This comes after they purchase curbside baled bottles at an average of less than 10 cents per pound. Natural high-density polyethylene can be sold for 38.25 cents per pound and color can sell for 14.22 cents per pound. Even if plastics are donated, recycling plants can make OK money recycling plastic.

Revenue for Cardboard, Paper and Fiber Recycling

In 2017, the U.S. made $3.2 billion on scrap paper and fiber exports, but unfortunately, cardboard recycling is decreasing as a whole. Less than 300,000 tons of corrugated containers (the traditional type of cardboard you’d get with your Amazon packages) was actually recycled. When cardboard is recycled, there’s a pretty decent return.

Big-box stores like Kmart, Sears and Target recycle 90% to 100% of their cardboard. In the process, they wind up reselling that cardboard for more than $74 per ton. A lot of this is dependent on contamination, as China, who buys a large swath of American cardboard, will no longer accept bales of contaminated cardboard. For example, a pizza box with a piece of pizza still in it would not be sellable.

According to USA Today, recycling plants are having a hard time finding buyers for cardboard because of reduction in Chinese exports. As a result, a lot of this material ends up in landfills, and recycling plants have to eat the cost.

Revenue for Scrap Metal Recycling

A scrap metal recycling plant will probably stand to make more money than a plastic recycling business. Scrap metal is one of the most profitable materials to recycle. As a rule, ferrous metal (metal to which a magnet is likely to stick, like steel or iron) is worth the least amount of money. Nonferrous metals like copper, brass, stainless steel and bronze are worth much more.

Copper is one of the most lucrative metals, and scrap yards might offer a little more than $2 per pound but can flip it for $2.65 per pound if it’s in good condition. Aluminum, such as your average Coca-Cola can, is a little bit less lucrative. A recycling plant might buy the aluminum for between 20 cents and 30 cents per pound and sell it for 34 cents per pound. In 2017, the United States made more than $4.1 billion exporting ferrous scrap alone.

Revenue for Glass Recycling

Glass, which makes up about 20% of the materials sent to recycling facilities, is not one of the most profitable materials to recycle. Unfortunately, it’s mostly purchased as a substitute for sand, which is used while making new glass. This means that it has to cost less than sand, which is notoriously inexpensive, in order for companies to want to purchase it. As one of the heaviest materials to ship, it is much more costly to process.

Most recycling plants take a loss on glass but save when it comes to energy. Recreating glass packaging from used glass takes 30% less energy and 50% less pollution than creating it from scratch. One glass bottle could take up to 4,000 years to decompose in a landfill, so it’s an important job regardless of the profits.

Keep Contamination in Mind

Most collections are a public service, operating in the same way that your municipal garbage trucks pick up waste. Sorting, on the other hand, can either be done through a government entity or a private third party, and this is where you can really make money recycling plastic and other recyclable materials. Regardless of the materials with which you’re dealing, the most profitable things to recycle have the least amount of contamination.

Considering there are so many different types of plastics with different values, you can get a lot more for a bale of used plastic with little contamination. You will make less money from a bale of used plastic where sorting has been minimal, and there’s a lot of residual waste. As a third party, it may be lucrative to buy bales of sorted plastic and re-sort them even further. The people who do this are known as “reclaimers”.

The Association of Plastic Recyclers sets the standard for bale contamination. The most valuable plastics are Grade-A bales, which are comprised of 94% to 95% of the indicated plastic. Contamination such as rocks and medical waste are universally prohibited.