Whether it's Ray's Trash Service in Indy or Perpetual Recycling Solutions in Richmond, these two believe in Indiana's potential in waste management. Robert Scheer,


Each day, three or four rail cars filled with recycled glass roll into Knauf Insulation’s yard in Shelbyville.

A massive furnace melts the glass before spinning it into tiny threads that look like cotton candy. Millions of recycled bottles get turned into insulation for homes every year, creating jobs for Hoosiers.  

Yet, not even one of those bottles comes from nearby Indianapolis, said Scott Miller, Knauf’s director of sustainability. “All of it,” he said, “is imported.”

After decades of paralyzing debate, Indianapolis' elected officials now preside over one of the most underdeveloped recycling programs among large U.S. cities, robbing the state’s manufacturers of cheap in-state recycled material.

More than 70 companies employing 30,000 Hoosiers say they regularly use recycled materials like plastic, paper and glass, according to a 2013 study, the most recent data available. But many of those businesses can’t get their materials locally. Others say they would use recycled material if only it were available.

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In 30 seconds:How Indianapolis has fallen behind in recycling

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Businesses like Knauf are paying the price in shipping costs for raw materials. And some say such issues are stifling a manufacturing industry with a stronger presence in Indiana than in many states where recycling has been embraced.

“There are dollar bills in that recycling bin,” said Allyson Mitchell, executive director of the Indiana Recycling Coalition.

And Indianapolis is throwing the vast majority of them away.

“There are risks that if this is not fixed, these manufacturers and companies will move to the areas and states that have robust recycling,” said Ron Gonen, co-founder and CEO of Closed Loop Partners, which invests in recycling technologies and infrastructure.

But, industry experts told IndyStar, with the right leadership and innovation, Indianapolis could leapfrog other cities with decades-old recycling programs. If the city can design a system that produces a clean recycling stream — one that turns out materials ready to be remade into new products and packaging — these companies would not only stay in Indiana, but expand, creating jobs for Hoosiers and a stronger outlook for part of Indiana's manufacturing sector.

Already, no shortage of demand

The white flakes Joe Merchant pulls off the conveyor belt at Strategic Materials look like a handful of unbelievably glittery snow. These flakes, though, aren’t cold, and they didn’t come from the sky: They’re made of recycled glass crushed at Merchant’s plant in southwest Indianapolis.

Strategic Materials, the largest glass recycler in the United States, is kind of a middleman in the recycling industry. The company takes recycled glass bottles and grinds them into different sizes for customers such as Anchor Glass, which makes beverage containers, or CertainTeed, which makes fiberglass insulation.

But at its Indianapolis location, it can't keep up with demand.

“We’ve got customers begging for material,” Merchant said. Yet the plant operates below capacity, at about 60 to 70 percent.

The company has tried to get more glass from Indianapolis, the largest U.S. city without a universal curbside recycling program. It has helped taverns install “bar boxes” to collect their beer bottles. It also acquires glass from other cities with recycling programs. Still, Strategic just can’t get enough material to satisfy the demand.

And it's not just glass recyclers who are hurting. Manufacturers that use paper, plastic and aluminum told IndyStar that the state's poor recycling system makes it difficult to get all kinds of materials locally:

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  • Pratt Industries recycles paper and cardboard into packaging for Amazon, Home Depot, the U.S. Postal Service, Cummins and others. The company's Valparaiso mill could recycle all of the paper generated in Indianapolis, but 75 percent of what it uses comes from out of state.
  • Perpetual Recycling in Richmond prepares plastic for companies that make bottles for beverage companies like Coca-Cola, Pepsi and Nestle — all of which have bottling plants in Indiana. But CEO Peter Zurkow estimates that less than 3 percent of the plastic his Richmond plant prepares for bottle and food container manufacturing comes from inside the state.

Importing the materials adds a considerable cost of doing businesses, companies told IndyStar. In some cases, the cost of importing materials can determine how competitive they can make the prices of the products they sell.

Meanwhile, more than half of the material sitting in Indiana landfills is paper, plastic or glass, according to an analysis of landfill composition conducted by Purdue University Calumet.

Diverting more material away from landfills and incinerators could create as many as 20,000 new jobs in Indiana, according to a 2013 study from the Indiana Recycling Coalition, which advocates for recycling in the state on behalf of businesses, municipalities and environmental groups.

Increasing the recycling rate in the state would make Indiana recycling companies more competitive and Indiana more attractive for these types of businesses, said Mitchell of the IRC. But the state, and especially Indianapolis, has for years missed out on the promise of recycling, viewing it too often as a trash hauling problem, rather than an economic opportunity.

Indiana, she said, needs to "flip the conversation."

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Corporations want even more

Major corporations are already getting on board with recycling — and they’re opening their wallets for it, too.

An alliance of major companies, including ExxonMobil, Chevron and Procter & Gamble, committed in January to investing at least $1 billion in reducing plastic waste, in part by boosting recycling.

And over the past five years a coalition of more than 40 corporations, called The Recycling Partnership, has worked with cities to invest more than $29 million in recycling infrastructure across the country since 2014.

Members such as Starbucks, Amazon, Dow and PepsiCo — which, alone, has six bottling plants in Indiana — recognize recycling as a large component of their sustainability goals, both economically and environmentally, said Rob Taylor, senior assistance specialist at The Recycling Partnership.

A well-functioning recycling system can protect companies from wild swings in materials costs, Taylor said, by supplying a steady stream of plastics, metals and paper that doesn’t depend as much on market forces, such as the price of oil. For those businesses, recyclable materials are about certainty.

“(These companies) have the long time horizon when they’re thinking about where their package comes from. It’s not just now,” Taylor said. “They know that securing recycled feedstock from recovered materials is something that they can rely on 25 years from now, no matter what happens to oil markets.”

There's another thing driving brands towards recycled materials: consumers.

Younger consumers are highly idealistic, said Scott Mouw, senior research director of strategy and research for The Recycling Partnership. They want companies to engage in problems like climate change and pollution, not ignore them.

"They want the people they buy their products from to be contributing to solutions," Mouw said.

Many major U.S. companies have developed sustainability pledges or commitments that include using recycled materials. But fulfilling those promises becomes difficult when the recycled materials aren't actually available.

For example, if all of the Cokes and Pepsis of the world were to fulfill their sustainability pledges today, there wouldn't be enough recycled plastic to meet the need, Zurkow said.

"If they make their goals," he said, "collection has to go up."

Those pledges, though, have had a ripple effect throughout the supply chain. In January, the purchase of Perpetual Recycling by DAK Americas was the latest in a series of moves by companies that make new plastic to expand their business into the recycling space. 

Pratt Industries is also expanding. Within the next several months, the company will open another paper mill in Dayton, Ohio, doubling its consumption of paper in the Midwest.

But whether Indiana will be able to take full advantage of these companies in its backyard relies on one major factor: the way it recycles.

China changes the game

In an ideal world, piles of pure polyethylene terephthalate would arrive in the form of soda bottles and food containers to Zurkow’s Richmond plant.

In reality, what arrives are compressed bales, each roughly the size of a couch, made of a mishmash of materials.

Many of the bales he buys from city recycling centers and private haulers contain a lot more than plastic — newspapers, aluminum cans, cat box liners, packing tape and playbills stick out in all directions. Sorting the usable plastic from the junk is costly. Some of the bales may actually lose him money.

“We probably should not have accepted this one,” Zurkow said about a particularly bad bale.

This is the way much of America recycles: Residents throw their paper, glass, metal and plastic into a single bin, which haulers then separate and sell to processors like Zurkow.

This "single stream" approach to recycling makes it easier for residents to recycle, because they don't have to sort materials at home. But it has made a dirtier product for processors and manufacturers. In the worst cases, garbage and recyclables are all dumped into the same stream.

Imagine, said Paul England from Pratt, taking a sheet of paper, mixing it up with your tomato sauce and kitty litter, and then trying to make something out of it.

“Anytime paper is commingled with garbage, the paper is contaminated beyond recovered use,” he said.

For decades, trash haulers have largely ignored the complaints of U.S companies who want cleaner recycling. They opted instead to export contaminated recycling, largely to China.

Modern China was built on the backs of scrap imports, said Adam Minter, columnist for Bloomberg and author of Junkyard Planet. Steel and copper scrap went toward Chinese infrastructure, and household recyclables helped make China a manufacturing powerhouse.

"We gave them a source of cheap raw materials," Minter said. "The alternative was the virgin material," something some Chinese companies didn’t have access to or couldn’t afford.

So as manufacturing jobs fled places like Indiana, China was busy accepting millions of tons of the world’s recyclable materials and turning them into a vast array of products they sold back to North America and Europe.

As long as China was buying dirty recycling, the U.S. was happy to sell it. China has imported 45 percent of the world’s plastic waste since 1992, and was taking more than half of global paper waste as of 2015. In 2016, it imported two-thirds of the world's plastic waste.

“It became really easy for people to just send it to China and not worry too much about it,” said Marjorie Griek, executive director of National Recycling Coalition.

Over the past few years, however, China has become fed up with the rest of the world's dirty recycling. In 2014, out of its own environmental concerns, China enacted a new policy to turn away shipments that didn't adhere to existing contamination standards.

Then in 2018, China stopped accepting several types of recycled materials altogether and introduced much stricter contamination standards.

Many cities were striving to get their contamination rate below 10 or 15 percent. China, on the other hand, said imported materials must have less than 0.5 percent contamination.

The move sent municipalities and haulers scrambling to find someone to buy their recycled materials.

Opportunity to get it right

One row over from Zurkow’s more contaminated bales lie a series of bales made up almost entirely of plastic bottles.

The bales are so free of debris, Zurkow can hazard a guess as to where these bales come from based on the type of bottles he sees. One impeccable bale might come from Michigan. The bales with more green bottles, Zurkow joked, probably come from Iowa.

“They drink a lot of Mountain Dew in Iowa,” he said.

Iowa and Michigan are among a handful of states with bottle deposit laws, where customers pay five or ten extra cents for every plastic bottle they buy, money they get back if they return the empty bottles. It’s an incentive that works: for nearly 30 years, more than 90 percent of bottles bought were returned and recycled in Michigan.

The highest performing countries have financial incentives for recycling (like bottle deposits), legally mandated goals, and requirements for separated materials. Germany leads the world with a recycling rate of 56 percent (compared to Indiana's 17 percent, and about 35 percent for the U.S.). There, glass gets separated by color, paper gets its own bin, and when you drink from a plastic bottle, you'll pay between 8 to 25 cents extra — money that will be returned when you recycle the bottle.

Since China's restrictions, some cities have started to consider dual stream recycling, where plastic and aluminum would be put in bins separate from paper. 

If Indiana wants to have a successful recycling system that works for and attracts manufacturers, it should learn from other cities and countries with higher recycling rates, Zurkow said.

Imagine, said Zurkow, a plastic bottle that is made and filled in Indiana — say at one of the PepsiCo bottling plants in the state. The contents of that bottle are consumed and recycled by a customer in Indianapolis, picked up by a collector, processed at Zurkow’s plant, remade for and refilled by PepsiCo, and then consumed again in a continuous process.

“The only thing that's missing in the state of Indiana for this virtuous circle, this continuous economy, is collection,” Zurkow said.

That's why Indiana, and Indianapolis in particular, may have an advantage over other cities and states right now, said Mitchell, of the Indiana Recycling Coalition. Indiana already has the manufacturers in the state to take recycled materials and transform them into all types of new products.

If it can be one of the first to hit the market with a clean recycling system, it could move ahead of other cities struggling to convert their systems.

But the state and the industry will have to move fast to take advantage of the opportunity. Already, Chinese companies have started buying recycling plants across the U.S. If Indiana can seize the moment, it could not only feed its own manufacturers, but also become a recycling exporter to the rest of the country and possibly the world, Mitchell said.

"Here's our moment," she said. "This is an opportunity for us to build a system where the conditions are optimal, so that when all of the (recycling) commodity prices rebound, we're in a good spot to take full advantage of that."

Emily Hopkins and Sarah Bowman cover the environment for IndyStar. Contact Emily at 317-444-6409 or Contact Sarah at 317-444-6129 or 



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