【Peter Baumgartner】

You probably have Peter Baumgartnerno idea how recycling works.

Most Americans -- who recycle nearly 87 million tons of waste each year -- likely think that the plastic and paper thrown into those special blue bins gets sorted by some nebulous government agency and automatically becomes an environmentally-friendly product.

But that's not how it works. Recycling, first and foremost, is a business.

When recycled goods get picked up by the state's waste management corporation, they are taken to a Materials Recovery Facility (MRF) where everything is separated and packaged up to be sent to another facility where it's processed depending on the material.

For example, paper is processed at a mill where it is turned into pulp to be repurposed.

But in order for the recyclable material to get to its proper sorting center, someone has to buy it first.

And that's where we have a problem.

Bales of recycled cartons sit outside and await transport. Credit: Sean Gallup/Getty Images

Recycling has worked well for the last 40 years because recycled waste was valuable and in high demand in countries around the world.

The United States has historically sold most of its recycled goods to China.

But new restrictions from the Chinese government on imported recyclables have demanded that the materials have very, very little contamination, or in the case of paper, that it is processed into pulp before reaching their shores.

Typically, contamination is a people issue. Plastic or paper with food remnants on it -- like your greasy pizza box -- cannot be recycled because those contaminants would mess up the refining process.

Contamination levels in America are at 25 percent right now, meaning 1 out 4 items in a recycling bin should actually be thrown in the trash, according to Waste Management. But China wants the contamination levels down to 0.3 percent, which is effectively code for "we will not be accepting any imported recyclable materials."

“China is sort of saying to itself we want our socioeconomic industrial programs to have recyclable programs like America does," National Waste & Recycling Association director Steve Changaris said.

"They are kicking us out, and trying to use their own wastes so they can develop their own domestic recycling capacity."

Sorted recycled materials sit in stacks outside of a recycling facility in Germany. Credit: Sean Gallup/Getty Images

This causes problems on two fronts, he explained.

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First, since the United States has to rely on other countries to buy the recyclables, the value of the commodity is staggeringly low. Over the course of 2017, the value of mixed paper dropped from $75 per ton in January to $25 per ton in December.

Second, the U.S. has more supply than these countries are demanding.

“The material keeps coming in. It’s piling up and the value is diminishing,” Changaris said. “And recycling isn’t free.”

Many Materials Recovery Facilities (MRF), especially in states that don’t put much emphasis on recycling policies, are going to be facing a hard decision as they continue to lose profit.

Unless they come up with a sustainable solution, recycling in large swaths of the United States might come to an end.

In the future, cities less committed to sustainability might have to drop their recycling programs in favor of an easier disposal program, Sims Municipal Recycling manager Tom Outerbridge said.

Waste management companies are only going to turn to landfills when that’s the cheaper option, like in Alabama, where you can put garbage in the ground for $19 a ton.

Otherwise, the more comfortable position is continue to work within the already established infrastructure and try and update it to meet the new world order.

Outerbridge says some ideas are already floating around.

Since the biggest change to the market involves mixed paper (newspapers, junk mail, and magazines) corporations in the United States are looking to swoop in and exploit the newly vacated market.

Workers at a recycling facility in San Francisco sort through trash on a conveyor belt. Credit: Justin Sullivan/Getty Images

One purported way companies are making space for themselves in the market is by purchasing paper mills and retrofitting them to include processing abilities -- giving these companies the ability to turn the recycled mixed paper into pulp, and therefore bypassing China's restrictions.

But beginning that process is a huge risk.

“We don’t know for sure if this world is the new status quo," Outerbridge said.

"Chinese paper mills might be struggling without the constant influx of U.S. recyclables so much that the Chinese government eases some of the restrictions and then people go back to shipping mixed paper there.”

Current tensions between China and the U.S. certainly aren't helping. The Trump administration's recent efforts to increase U.S production of goods by increasing tariffs on Chinese goods has lead to full-scale retaliation by the Chinese government.

For example, the Chinese government placed a 25 percent tax on aluminum scraps. Formerly, the U.S. made more than $1.1 billion off of aluminum trading. The new tariff places a $300 million burden on that industry.

It's safe to say the whole infrastructure is in limbo right now, as corporations weigh their options.

A spokesperson from the Environment Protection Agency (EPA) acknowledged via email that the government organization recognizes the challenges that lie ahead when it comes to updating recycling infrastructure.

"[The] EPA is communicating with governments at the federal, state and local levels, as well as stakeholders at the private sector, to determine what (if any) additional steps should be taken at the national level regarding the domestic management of materials," the spokesperson explained.

In the mean time, MRFs are tightening up production by adding more staff to ensure that the materials collected are of the best quality -- as well as altering what is collected to more closely match the market demand according to the EPA.

Recycling hasn't reached critical failure just yet, but the industry is in desperate need of an upgrade. The alternative is a world full of trash.

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