After a tumultuous few years for the waste and recycling industry, 2024 will hopefully be marked more by internal shifts than external macroeconomic shocks. The Waste Dive team is nevertheless expecting a busy year. At the federal level, the U.S. EPA is expected to make multiple key decisions on PFAS while continuing to dole out historically high amounts of funding for recycling projects of all kinds. Meanwhile, states are implementing policies on industry concerns that include extended producer responsibility and organics processing infrastructure. We’re also continuing to track the business environment, including mergers and acquisitions and the growth of private equity investment.  We welcome your thoughts on these trends or any others. Please email us at [email protected]. How the economy affects operations and M&A After years of complex operating conditions, from the pandemic to supply chain and inflation issues, could the economy return to some semblance of normalcy this year? Waste and recycling service providers have reported incremental improvements in recruitment and retention, as well as in truck order timelines, all of which placed serious strains on operations in recent years. Interest rates also could be poised to come down. In addition to helping daily operations, a more stable financial market could create new investment or expansion opportunities via M&A. While the industry’s largest players were well-positioned to make deals throughout last year, some smaller companies or private equity firms were more affected by challenging debt markets, and deals occurred at a more uneven pace in 2023. S&P Global recently forecast the possibility for PE-driven deals to increase on a macro level, noting an “unprecedented” amount of available funding among certain major firms. The waste sector’s defensive nature remains attractive for PE and infrastructure firms alike. Analysts are watching not only the ongoing consolidation or growth opportunities in solid waste, but also the more fragmented environmental services segment this year. Pending changes to U.S. antitrust policy could throw a curveball into the mix. The waste industry, among others, has come out against a proposal that could increase the cost and time involved in deal reviews. Current guidelines already prolong or otherwise affect deal timelines, industry participants say. If changes do occur, they could create additional opportunities for regional companies versus their larger competitors. New EPR legislation, plus ongoing EPR implementation 2024 will shed more light on how EPR policies for packaging will impact industry operations. How will the industry adjust? Colorado, Oregon, Maine and California are still implementing the nitty-gritty details of their EPR laws, deciding on key rules this year. Meanwhile, Maryland and Illinois are both conducting needs assessments to provide data that could serve as the foundation of eventual EPR policies. Maryland’s advisory council is expected to submit recommendations by the end of the year, while Illinois plans to name its advisory council this month and submit final recommendations by the end of 2026.  At the same time, lawmakers are expected to introduce or reintroduce even more EPR for packaging bills throughout the country. Although such bills are becoming more common and lawmakers and stakeholders are becoming more familiar with the complexities of writing and passing such laws, experts don’t expect any easy wins. Brand owners, producer responsibility organizations, industry groups, recycling facility operators and municipalities will likely weigh in on the same challenges that blocked EPR bills from passing last year. They are expected to debate issues such as state recycling infrastructure, control over materials, plastic reduction approaches and the role of chemical recycling. Though EPR for packaging is likely to garner the most attention and the most controversy, EPR policies for some other types of items — think batteries, textiles, mattresses or paint — are expected to pop up in state legislatures, too. The expanded tip floor at Casella's Boston MRF, which was recently retrofitted by Machinex. Cole Rosengren/Waste Dive Clarity on PFAS regulation and remediation PFAS remediation and management could come into sharper focus this year as long-awaited EPA regulations on destruction and disposal techniques are expected to take shape.  National drinking water standards for certain per- and polyfluoroalkyl substances could be finalized as early as this month. These standards could be important to the waste industry because PFAS-containing leachate is typically handled at wastewater treatment plants.  The EPA could also designate two types of PFAS as hazardous substances sometime in March. The waste industry hopes to avoid potential liability and higher operational costs once the EPA makes this designation. Groups have tapped federal lawmakers for help in carving out exceptions for “passive receivers” of PFAS-containing material. Movement has been slow so far in Congress, but discussion is ongoing. Meanwhile, private companies are offering more types of remediation technology and services for PFAS. More landfill operators could hire environmental services companies to provide PFAS remediation for leachate this year, while others may continue to invest in other infrastructure to take on leachate management themselves. At the same time, the EPA is expected to update its guidance on landfilling, incineration or deep well injection of PFAS-containing material as well as potentially offer more insight into environmental effects. This could influence what types of remediation technologies — if any — waste companies will choose. It could also affect such companies’ business opportunities and competitive edge depending on what methods they emphasize. RNG projects coming online Synthica, an anaerobic digestion company, holds a ceremonial groundbreaking at its first facility in Ohio in August. The company is part of a growing group looking to cash in on RNG. Permission granted by Synthica   If 2022 was the year of major renewable natural gas developer acquisitions, and 2023 was the year of RNG facility planning, 2024 may be the beginning of a wave of project deliveries.  Last April, WM predicted it could earn more from RNG facilities at its landfills than it could from recycling as soon as this year. The country's largest landfill operator saw adjusted operating earnings before interest, taxes, depreciation and amortization at four test sites more than double in 2022. Those strong results led to its goal to build out 20 more RNG facilities by 2026. WM had six RNG sites operational last year and plans to have 11 by the end of this year, a spokesperson confirmed. Other companies are also scaling up their RNG portfolios in 2024. Republic Services listed 16 landfill-gas-to-RNG projects in development in its sustainability report last year, including partnerships with Ameresco and BP's Archaea. Enbridge and Divert announced a $1 billion anaerobic digestion RNG partnership of their own. GFL Environmental is also making progress on its landfill-gas-to-RNG buildout, though it reported that progress slowed last year due to permitting difficulties. Waste Connections and Casella Waste Systems, among others, also have RNG project pipelines.  The EPA’s update to the Renewable Fuel Standard last summer is expected to provide more stability to the RNG industry, as it set RIN credit volumes for multiple years for the first time. Industry groups plan to continue their push to expand the program with renewable energy credits for electricity generated from biomass. They formed the Partnership for Electric Pathways to advance that goal in November.  While the RIN market will enjoy greater regulatory stability this year thanks to the extension, California's Low Carbon Fuel Standard credit market could see changes. In September, the California Air Resources Board proposed a series of amendments to the LCFS, including a phase-out of credits for avoided methane. Such credits have provided significant benefits to anaerobic digesters on dairy farms, but the change would stop certifying such projects for avoided emission credits in 2030 and phase out such credits from existing projects by 2040. CARB is expected to vote on the proposed rule in the first quarter of this year. Organics processing capacity, spurred by legislation, is growing As landfill operators work to extract value from existing landfill methane emissions, a growing body of research is fueling legislation designed to prevent organics from reaching landfills in the first place. One report from the EPA released last year found that 58% of fugitive greenhouse gas emissions from landfills comes from wasted organics, while another listed landfilling as one of the least preferable options for unused organics. As a result, policymakers interested in reducing organics emissions are increasingly addressing not just waste in place but a growing range of diversion and separated organics processing tactics. Last year, the federal government disbursed a record amount of funding for recycling infrastructure, millions of dollars of which went to organics recycling projects. In 2024, several of those projects are expected to take a step forward, and the EPA will continue to take applications on a rolling basis for additional funding. Previously announced EPA grant funding is slated to support a range of projects, including the creation of a composting site in Baltimore, an expansion of one of the only large-scale composting facilities in Iowa and the growth of a brush composting program in Alaska. Meanwhile, New York City also received EPA grant funding to support education and outreach for its growing curbside organics collection program, which the city plans to roll out to the Bronx, Manhattan and Staten Island this fall.  Movement continues on the state level as well. The next phase of Maryland’s organics diversion mandate for large food waste generators kicks in this year. Under California’s SB 1383, jurisdictions like Los Angeles will begin enforcing penalties for commercial and multifamily buildings that don’t follow organics recycling laws. California will also increase organics processing capacity this year — in December, CalRecycle announced it would disburse $130 million in grants to more than two dozen local projects that improve municipalities’ compliance with the organics diversion law.

2023 brought some aspect of normalcy to waste and recycling operations, after a turbulent period of pandemic and economic challenges. Workforce issues and inflation showed signs of improvement, and many companies reported positive earnings results. The pace of state and federal policy changes was also somewhat muted versus prior years. At the same time, the sector still saw a complex commodity price environment, notable M&A activity and other trends. We’ve gathered some of the industry’s highlights by the numbers to help reflect on 2023. What themes will you be watching in 2024? Let us know at [email protected]. Labor and the economy welcomia via Getty Images By the numbers   7th Waste collection was the seventh deadliest job in 2022, according to BLS data released in December. It’s the same ranking as the previous year.   2,500+ The number of workers on a new contract negotiated between the International Brotherhood of Teamsters and several waste companies in Chicago. The agreement followed a busy labor year during which Teamsters in Atlanta and Mack Truck workers represented by UAW ratified contracts.   9.8% The increase in the “waste collection” producer price index between November 2022 and 2023, according to BLS data. That’s compared to an overall PPI increase of 7.4% during the same period.   500,000 The number of workers employed in “waste management and remediation services” in November 2023, according to seasonally adjusted BLS data. That number is up 16,000 from November 2022. RELATED COVERAGE Continued labor challenges are leading top waste and recycling execs to innovate ➔ Recruitment and retention were key topics at WasteExpo. Leaders from WM, Republic Services, Waste Connections, GFL Environmental, Casella Waste Systems shared their perspectives. As some labor strains ease, the waste and recycling industry has further opportunity to grow its ranks ➔ Pandemic-era labor challenges for the waste industry are persisting years later. Read what Stifel, SWANA, the Teamsters and the Women in Trucking Association say could help. M&A Courtesy of Republic Services By the numbers   100+ The number of transactions involving U.S. solid waste companies tracked by Waste Dive so far in 2023, during a year which saw activity decline slightly relative to prior boom years.   $2.99B Estimated M&A spending by the industry’s top five publicly traded companies through Q3, led by Republic Services.   $1.6B (Canadian) GFL Environmental’s proceeds from divesting select assets to WM, Republic Services and Casella Waste Systems in multiple states — transactions which accounted for a notable amount of overall industry spending this year.   6 The number of years Florida-based Coastal Waste & Recycling had been operating before it was acquired by a Macquarie Asset Management fund — one of the year’s more notable investments in a growing company. RELATED COVERAGE Has the waste and recycling industry’s multiyear M&A boom peaked? ➔ Experts from Stifel, Houlihan Lokey, Comerica Bank, Raymond James, Waste Connections and others weigh in on the latest trends involving valuations, private equity, environmental services and more. Tracking the waste and recycling industry’s M&A boom ➔ Acquisition spending and consolidation levels remain high. Follow along with Waste Dive’s running list of U.S. deals. Federal policy U.S. EPA Administrator Michael Regan at COP28 Sean Gallup via Getty Images By the numbers   $105M The amount of funding the U.S. EPA released in 2023 for Solid Waste Infrastructure for Recycling grants meant to improve communities’ recycling, organics and waste management systems throughout the country.   $33M The amount of funding the EPA released for Recycling Education and Outreach grants intended to help engage the public through training and other resources.   6 The number of PFAS chemicals listed in the EPA’s proposed drinking water standard, which is expected to be finalized sometime in January. The proposed regulations will set legally enforceable drinking water standards, which could impact how waste facilities monitor or manage PFAS-containing material like leachate. RELATED COVERAGE Tracking the future of US recycling policy in Congress ➔ Spurred by market challenges, the Hill has seen a historic influx of big bills. Keep up on all the latest developments with our legislative tracker. EPA’s historic year of multi-million-dollar investments in recycling and organics projects ➔ The U.S. EPA announced grants in 2023 meant to boost infrastructure projects, recycling education, environmental justice initiatives and more. State and local policy Annapolis, Maryland Mark Wilson via Getty Images By the numbers   21 The number of members on Maryland’s extended producer responsibility advisory council, who will report findings and recommendations on a proposed EPR plan for the state next year. Haulers, processors, composters, local government agencies, PROs and consumer goods representatives are included on the council.   30 The number of states that introduced right-to-repair legislation in 2023. Three states passed notable right to repair laws for various products this year: California, Minnesota and Colorado.   223 million The amount of additional containers CalRecycle estimates California will process in its container deposit system when the state adds 100% fruit and vegetable juice containers to the bottle bill. Gov. Gavin Newsom approved the expansion in October.   $32M The amount New York’s Department of Sanitation expects to save as a result of proposed budget cuts for fiscal year 2024, which includes eliminating community composting and delaying the rollout of its curbside organics program in the Bronx and Staten Island. RELATED COVERAGE EPR implementation strategies come into focus in 2023 ➔ Colorado, Oregon, Maine and California are in the process of hammering out details of their extended producer responsibility laws. Many of them passed major implementation milestones in 2023. California Gov. Newsom vetoes bills on franchise agreements, SB 54 updates ➔ Newsom also vetoed a plastic gift card ban and several bills related to packaging, though later signed others. Tracking 2022 recycling laws by state ➔ Follow bills about organics recycling, EPR, recycled content, container deposit systems and product bans that passed into law. Commodities Casella’s retrofitted MRF in Boston Cole Rosengren/Waste Dive By the numbers   31% to 38% The decrease in average blended commodity prices Republic and WM, respectively, reported in Q3 2023 compared to the previous year. Most companies saw major decreases in commodity values on OCC, mixed paper and plastics, though some fiber prices were beginning to recover by the year’s end.   25% The EPA projected that renewable natural gas volumes would increase by 25% year-over-year from 2023 to 2025 in its update to the Renewable Fuel Standard. That growth rate means greater generation of RIN credits, which is expected to bolster waste-to-RNG project development.   16.2 million tons The amount of surplus food composted in 2022, according to data from ReFED. That’s compared to 32.6 million tons of surplus food landfilled in the same year. RELATED COVERAGE What’s in the box? Maybe a gift of recovering corrugated demand ➔ Containerboard demand remains down year over year, but it is ending October in a less scary position than previous quarters, according to newly released data from AF&PA. How the EPA’s Renewable Fuel Standard program changes could be a boon for landfill and AD operators ➔ The program’s biggest change to date would set long-term renewable natural gas targets, add credits for powering electric vehicles and much more. U.S. EPA announces draft national food waste prevention strategy at COP28 ➔ The strategy cites ongoing commitments to building out organic waste recycling infrastructure, including on-farm anaerobic digestion and decentralized community composting programs.

More than six years after Los Angeles launched its commercial waste franchise system, many haulers are struggling to hit contractual disposal reduction targets. City officials are weighing numerous options that could change the program’s future. The system, known as recycLA, encompasses more than 66,000 accounts (including commercial buildings and multifamily buildings of five units or more). Its 11 zones are serviced by six haulers, including the industry’s two largest players — WM and Republic Services — and large local company Athens Services. Under the current contracts, haulers are required to provide black, blue and green bin service to any customer within the system, while also working to meet contractual obligations around diversion and many other initiatives. LA Sanitation and Environment touts many aspects of the program as a success, but also says the program’s goal to cut 1 million tons of landfill disposal by 2025 will likely not be met.  Contracts that took effect in January 2017 are approaching the back end of their initial 10-year terms. The city must now decide whether to extend for five years with renegotiated expectations, issue a new RFP for some or all zones, or possibly take over service itself. Despite multiple rounds of negotiations since October, LASAN said recently that it has yet to lock down an agreement. "We had healthy discussion and healthy debate and some progress with the [recycLA service providers], but it wasn't significant enough at this point to come before you with a contract amendment,” said LASAN Director Barbara Romero at a Dec. 8 meeting of the Los Angeles City Council’s Energy and Environment Committee.  Key sticking points include haulers “under performing” on scaling organics recycling service, costly access and distance fees that haulers charge to customers and state fleet electrification requirements. The clock is ticking for all three.  While LASAN fined five haulers a total of $12.2 million in liquidated damages earlier this year for failing to meet their 2022 disposal reduction targets, all of the companies have appealed. In the meantime, CalRecycle is actively working with the city to bring it into compliance for not having full-scale commercial organics recycling as required by state law. The city is currently subsidizing access and distance fees for blue bin service, at a cost of $23 million per year, subject to annual budget decisions. The California Air Resources Board’s requirements for zero-emission vehicles were not contemplated when the contracts were signed, and a recent LASAN report most haulers were still only at the “early stages” of planning and researching for electrification. These factors and others have left LASAN in a highly complex position of planning for multiple outcomes simultaneously, all of which have the potential to increase costs. “It’s expensive to do the right thing and there's only three options — we pay more, the consumer pays more or our provider pays more. And two of those are really bad,” Councilmember Tim McOsker, vice chair of the committee, said during the recent meeting. By the numbers   606,000 The contractual tonnage reduction required by January 2023. Haulers reported a 403,000 ton reduction.   28% The share of accounts that had green bin organics service as of LASAN’s last report.   543 The number of compressed natural gas trucks on the road for recycLA, fully replacing diesel   $175M Haulers’ investment in new infrastructure — 3 new facilities, 2 under construction and 5 upgrades Complex decisions LASAN launched recycLA in July 2017 with a goal of modernizing the city’s commercial waste system. Athens, Republic, Universal Waste Systems, WM, CalMet Services (acquired by Athens in 2022), NASA Services and Ware Disposal were awarded the initial contracts. While the program had a difficult rollout, LASAN now touts a 99% collection efficiency rate with 24/7 customer service support. Worker health and safety requirements are stronger, as are community protections. Any facility handling recycLA material must be certified by LASAN (42 have qualified to date) and eventually all of their operations will be enclosed. All haulers had to phase out diesel trucks and many have streamlined their routes, with the city estimating a reduction of over 1,400 vehicle miles traveled per week. A collection truck with the recycLA logo operating in 2017, the program’s first year. Cole Rosengren/Waste Dive Nearly all customers have blue bin recycling service and maximum prices are capped at contractual limits. Haulers have funded $3.1 million in food rescue programs to date, recovering nearly 27,000 tons of edible food as of September.  During a Sept. 29 council meeting, Romero called it “a very ambitious program with some very significant environmental goals,” noting that while there have been multiple successes "it's also been at a cost, not only to the city but to our customers.” Dan Meyers, division manager for the program, said at the meeting that the access and distance fees charged by haulers when containers are not directly reachable have had a “significant impact.” The agency’s report showed large numbers of customers get charged these fees in each zone. "In many cases the access and distance fees for customers can exceed their monthly rate for just their solid waste service,” said Meyers. A detailed report outlined how the ability to charge fees for each type of bin can also inhibit diversion. Following a 2019 contract amendment, customers no longer have to pay access or distance fees for blue bin service and have saved an estimated $144 million. Yet the city’s responsibility to bear 50% of those fee costs through its Removing Barriers to Recycling program is considered untenable and LASAN is angling to see the fees dropped entirely. And even though 97% of customers now have blue bin recycling service the agency said recycling “tonnage collected remains below targets.”  This, combined with many haulers not hitting their targets for organics diversion, led to the program missing its disposal goal in the latest measurement period. Athens was the only company to achieve its disposal reduction target, aside from the zone previously serviced by CalMet, which did not meet the threshold for liquidated damages. The company declined to comment on how it achieved this target. LASAN’s report noted it was also reviewing the data from other Athens zones, with the possibility to change its decision. The agency declined to comment on the status of that review, or any other questions. The other five haulers received liquidated damages notices for a collective $12.2 million earlier this year. According to LASAN, all of them claimed force majeure due to the pandemic and are appealing the decision. Multiple councilmembers suggested such fines may be too low. This follows the assessment of $3.4 million in liquidated damages for other customer service issues through May, $2.2 million of which had been paid so far. In the future, LASAN hopes to improve diversion performance by making green bin organics service part of a bundled rate. It is currently an add-on that customers must opt in to, because when the program launched organics processing infrastructure was still evolving. Starting in January, LASAN will begin enforcing its own commercial organics ordinance under SB 1383 after an extended pandemic delay — which has affected processors in the region, such as Anaergia — and the agency said haulers are overdue in helping ramp up participation. “The contracts fully contemplated compliance with organics, including all customers having organics service. So there should be no unanticipated cost associated with the provision of that service,” said Meyers at the December meeting. During both recent council hearings, it was mentioned that CalRecycle has been actively engaged on the recycLA compliance issue and financial penalties could be coming if the city didn’t accelerate its progress. CalRecycle confirmed that in June 2022 it placed the city on a formal plan to address barriers to achieving AB 1826 and SB 1383. LASAN has reported progress on meeting these requirements, including efforts to boost participation by providing kitchen pails to customers this year. Trucks from the original recycLA service providers at the time of the program’s launch in 2017. Permission granted by LA Sanitation & Environment What’s next While LASAN’s initial options also included allowing the recycLA program to continue under the status quo, councilmembers and agency staff did not consider this a viable plan. Instead, LASAN is hoping the companies will agree to some kind of change. Speaking on Sept. 29, Romero said that cooperation with the haulers “is critical if this program is going to survive in its current form,” adding that "if we want to change our results we need to revisit the contract." WM did not respond to a request for comment, and Republic declined to comment. Councilmember Katy Yaroslavsky, chair of the environment committee, could not be reached for comment about her current view of the negotiations. At the September hearing, recycLA boosters such as Teamsters Local 396 and the Los Angeles Alliance for a New Economy testified that the program should continue with modifications as needed. “We supported it from the very beginning and we'd like to see it continue,” said Jim Smith, political director for Local 396, during the Sept. 29 hearing. "This program has really benefited the city.” The union did not support the possibility of LASAN taking over service, and the city has recognized this would be a lift. "We do not have the resources. We do not have the drivers, the trucks, the yards,” said Meyers on Sept. 29. Preliminary esimates found that while the agency is technically capable, as it already provides residential service, it would need to hire over 900 people. Other possible costs would include building a publicly-owned MRF (estimated at $120 million), plus electric trucks and associated infrastructure (upward of $2.4 billion). In the meantime, the need to accelerate progress on organics service is a pressing one as CalRecycle’s agreement with the city ends this year. “CalRecycle has been meeting with the city staff every two months to ensure that progress is being made. We are not planning to extend any of the formal plans,” said spokesperson Lance Klug via email. While LASAN reported a notable increase in green bin service, up from 20% of customers to 28% in recent months, more work remains. Meyers said recycLA customers will soon begin receiving 60-day compliance warnings and the first penalties could be issued by March. "We're getting close to exhausting the negotiation process as the means for accomplishing our goals for this program,” said Yaroslavsky on Dec. 8. “I don't want to go to an RFP process as I see our organics compliance is a major and pressing issue that will only draw that out further, but if we can't resolve the major pieces by the end of this month I think it's a necessary step." The committee requested that LASAN report back on its progress by Jan. 26. The agency could issue an RFP as soon as April if required.

In 2023, the U.S. EPA announced several rounds of waste and recycling funding touted as the largest such investments in 30 years. Millions of dollars will go to a variety of recycling infrastructure, environmental justice, organics and climate projects.  The funding — which comes from the 2021 Bipartisan Infrastructure Law and 2022 Inflation Reduction Act — is considered to be a boost for local governments, tribes, nonprofits and community groups. Projects aim to improve aging recycling systems, add public education programs, bolster landfill diversion projects, and support neighborhoods disproportionately affected by pollution and climate change. Separate funding from the U.S. Department of Agriculture is also expected to help kickstart food waste reduction programs. Here’s a rundown of major funding announcements and project details from 2023.