PREPARED STATEMENT OF CHARLES W. RAYFIELD Mr. Chairman and members of the Subcommittee on Environmental Protection: I am Charles W. Rayfield, Vice President and General Manager, Reynolds Aluminum Recycling Company. I am here today to testify on behalf of The Aluminum Association, Inc. on the subject of recycling. The member companies of The Aluminum Association, Inc., represent approximately 85 percent of domestic production of primary ingot and shipments of U.S. aluminum mill products. Mill products include sheet and plate, foil, extrusions, forgings and impact extrusions, electrical conductor, and wire rod and bar. In addition to producers of primary ingot and mill products, the association's membership also includes secondary smelters, foundries and producers of master alloy and additives. The association is a primary source of statistics, standards, and economic and technical information on aluminum and the aluminum industry in the United States. INTRODUCTION We appreciate the opportunity to address the subject of recycling before the Subcommittee today. Our message is straightforward: recycling is a critically important and growing part of the aluminum industry. Aluminum companies, on their own, have developed successful market-driven recycling businesses, which accomplish the very objectives the Congress is trying to legislate, in so far as aluminum is concerned. In 1990, 1.934 billion pounds of used aluminum beverage containers were recycled (55 billion cans). The vast majority was voluntarily recycled on a free-market basis and never entered the municipal solid waste stream. Aluminum can sheet producers played the major role in this effort. Scrap recovery from can manufacturing and used aluminum beverage cans represents an estimated average recycling content of 55 percent of can sheet being produced in the U.S. Every company in The Aluminum Association is intensely interested in maintaining the industry's access to an unrestricted flow of clean and usable aluminum scrap of all kinds. We have each developed our own systems for obtaining aluminum scrap. We look to government at all levels-Federal, State and local-to facilitate continuation of that access-without interference in the economics of the marketplace for materials and containers. Our testimony emphasizes that: recycling is an essential and growing source of metal for the aluminum industry; recycling grows more important as the consumption of aluminum increases and U.S. primary production decreases; efforts by the industry-and inherent market economics-keep aluminum out of the municipal solid waste stream; • the opportunity to increase aluminum recycling results from the increased use of the all-aluminum beverage container, which has high consumer acceptance because of its merits as a container; continuing source reduction efforts have cut the weight of the aluminum can by 30 percent since 1972; ⚫the all-aluminum can is America's most recycled package and neither deposit laws nor recycled content requirements are needed to assure its return for recycling. As with all forms of aluminum scrap, there is a strong competitive market for the material; and • it has taken our industry's relentless efforts over the past 23 years and hundreds of millions of dollars in capital spending and promotional efforts to reach our 63.6 percent recycling rate for aluminum cans in 1990. RECYCLING: AN ESSENTIAL SOURCE OF METAL FOR THE U.S. ALUMINUM INDUSTRY Before 1985, U.S. production of primary aluminum provided more than two-thirds of the total U.S. supply of aluminum. Today, the number of operating aluminum smelters in the U.S. has been reduced to 23 from 32, and U.S. primary capacity has gone from more than five million tons per year to just over four million. This restructuring occurred between 1983 and 1986. In 1990, the metal supply for the domestic aluminum industry consisted of 54 percent domestically produced primary ingot, about 19 percent imports (ingot and mill products) and 27 percent from scrap. Aluminum industry recovery from purchased scrap during the past 10 years has provided about 25 percent of the total U.S. metal supply. There are two sources of scrap-new scrap and old scrap. New scrap is generated by customers of the aluminum industry who manufacture products such as cans, aircraft and automobile parts, etc. One-hundred percent of new scrap is recovered. It once was the major source of metal recovery, representing as much as 80 percent of all of aluminum scrap recovery. Today, it represents just under 50 percent of the total scrap available. Old scrap has grown, especially in the past 10 years, and now represents about 53 percent of our national aluminum scrap consumption. This growth can be directly attributed to the all-aluminum beverage can, and the increased amounts of aluminum used in today's passenger cars. The used aluminum beverage can constitutes about 60-70 percent of old scrap, which is commonly called post-consumer scrap; scrap from automobiles is a large share of the remaining 30-40 percent. Clean, used aluminum beverage cans are consumed almost entirely as feedstock for sheet for new cans forming a "closed loop" in the production-recycling process. Most other scrap, including some cans from mixed trash, becomes foundry ingot, the principal raw material for aluminum castings primarily for use in the automotive industry. Exhibit 1 shows the generation of new and post-consumer scrap by aluminum end uses. This exhibit shows that containers and packaging are the major end use sources of post-consumer aluminum scrap that are currently a part of the municipal solid waste stream. All of the others are long term uses of aluminum whose discard probably will be handled outside of the municipal system. THE IMPORTANCE OF RECYCLING HAS GROWN The importance of scrap recovery has spurred the industry to develop sophisticated recycling systems especially for post-consumer scrap. This is based on our industry's need for the metal and the economics of recycling. Recycling saves 95 percent of the energy required to make aluminum from virgin materials. Manufacturers of aluminum rigid container sheet and their customers have developed this infrastructure for utilizing the new scrap generated by can-making. About 21 percent of the sheet remains after the can maker has stamped out the can bodies and ends. This is returned to the sheet manufacturers for fabrication into new can sheet. An even more highly developed and more sophisticated collection, transportation and processing arrangement for recapturing used aluminum beverage cans has been created. This system diverts used aluminum beverage cans before they become part of the municipal solid waste problem. It is widely estimated that aluminum cans are less than one percent of the U.S. municipal solid waste stream. Aluminum can recycling statistics began in 1972 when 53 million pounds of aluminum were recovered (1.2 billion cans). The number of cans recovered has increased each year through the efforts of a large and growing private sector collection system, as well as through an increasing number of government programs (see Exhibit 2). There are an estimated 10,000 aluminum can recycling collection points in the U.S. In addition to businesses, hundreds of thousands of individuals participate in the can collection process. The recycling public earns an estimated two million dollars daily for recycling used aluminum beverage cans. The system works because aluminum's intrinsic value enables the industry to pay for its recovery while covering the cost of collection, transportation and processing. We estimate that the process of collecting, remelting, rolling and can manufacturing takes just 90 days to put a new filled aluminum can on the supermarket shelf. This process of "re-use" is repeated endlessly. MORE THAN BEVERAGE CANS ARE BEING RECYCLED The private and public infrastructure which facilitates the recovery of used aluminum beverage cans is also stimulating the return of other post-consumer aluminum, including foil containers and household wrap, and food cans. Many programs are being considered by policy makers across the country to develop recycling markets and infrastructures for containers that cannot now be economically or technically recycled. Instead, we believe it makes sense for policy makers to encourage and support the use of containers which already have proven recycling markets-like the aluminum food can. While other uses of aluminum do not approach the magnitude of the container and packaging market, those aluminum applications, such as cooking utensils, window frames and siding, and tubing used in lawn furniture, are all recyclable. Their recycling contributes to a further reduction in the municipal solid waste stream. PERCENT OF RECYCLING RATE ACHIEVED The goal of the member companies of The Aluminum Association is to recover as much aluminum as possible. While two-thirds of aluminum beverage cans were recovered in 1990 (63.6 percent), we are working to recapture the remaining used beverage cans that are not being recycled. Cans escape the recovery system even in States that have curbside separation programs. In fact, in some deposit States, laws tend to destroy the recycling infrastructure necessary to achieve high capture of UBCs from MSW. In Delaware, a joint voluntary industry and customer program resulted in recovery rates high enough to convince the Governor and the legislature to exempt aluminum cans from that State's deposit program. Under no circumstances would we want to see the existing recovery infrastructure harmed through passage of a deposit law. AAI COMMENTS ON PROVISION OF S. 976 • The Aluminum Association emphatically recommends that recycling goals be the same for all packages in a given product category, but that aluminum beverage containers should be exempt based on present performance. No material should be penalized for developing a recycling market before being required to do so. • Recycling should be defined as "diversion from municipal solid waste" for return to the same or closely related use from which it originated. Recycled content should include scrap recovered from customers, but not “in process" industrial recycling. • Goals for recycling rates should be based on national data using total industry product shipments for each packaging category (i.e., aluminum cans) rather than State or regional estimates. National data are more reliable and more easily verified. Barriers to increased aluminum can recycling rates involve the collection of cans—not the industry's need and ability to recycle and reuse this metal. Other factors also impact on recycled content, as well as recycling rates: Scrap quality-contaminants in the form of plastics, glass, dirt, sand and other debris represent a major concern for aluminum can stock producers. High levels of contaminants can render used beverage containers unsuitable for reuse. The multiphase process used to produce can sheet is highly exacting and sophisticated and can be severely hampered by impurities. When this occurs, the metal is recycled into other aluminum products, thus reducing the potential recycled content of new aluminum cans. Contamination can also result from inadequate and careless materials separation in multi-material collection programs such as curbside recycling efforts. Contamination increases-and recycled content decreases-to the extent that aluminum cans are not segregated from other materials, both waste and other recyclables. • New aluminum can demand-the recycled content of new aluminum cans is limited to the degree that primary metal must be used to meet increased demand for aluminum cans. More aluminum cans are being made than are available to be recycled. The aluminum beverage can market has increased by an annual rate of about 6 percent during the past five years. • Melt loss-a small percentage of metal is lost when used aluminum cans are melted for reuse and fabrication. • Diverted metal—although alloy specifications and economics clearly favor using used aluminum cans to make new can sheet, a very small percentage of aluminum cans are nontheless purchased by scrap dealers and others for end-uses other than cans when market economics warrant. Foreign purchases of scrap-the potential recycled content of aluminum cans is reduced by the amount of recycled metal exported. In 1990, used aluminum beverage can scrap exports amounted to an estimated 81 million pounds. While we support municipal programs that promote recycling through the household separation and curbside collection of recyclables, we believe that maximum solid waste reduction can best be achieved through comprehensive systems that also include buyback centers, drop-off locations and group recycling by schools and similar organizations that benefit from aluminum's high scrap value. It is important to note that in curbside collection programs aluminum cans typically makeup only 2-3 percent of the recyclables, but provide more than 50 percent of the revenue the community derives from the sale of the processed recyclables. It is our belief that each material should pay its own way in such systems with a scrap value sufficient to cover its handling and that recycled content laws should be limited to those materials for which a recycling market must be developed. Recycled content laws are not needed to spur an aluminum industry that will rely more and more on the used aluminum it recovers and recycles. Aluminum can help pay the way for curbside collection programs, but it should not be asked to pay the way for the recycling of other materials. Under Iowa's container deposit law, for example, the State forbids the landfilling of redeemed glass and plastic containers. Beverage distributors without a market for their glass and plastic came to us and said, "If you want our aluminum, you've got to take the glass and plastic off our hands too." Clearly, aluminum was put in the position of covering everyone's costs. Products and materials of all kinds are seeking the aura of recyclability and we would suggest that the price for that aura could well be a scrap value that fully covers the cost of their recycling. Not every package will necessarily be recyclable, but those that want to wear the environmental badge should pay the price as we have. CONTINUING SOURCE REDUCTION EFFORTS Today's all-aluminum beverage can weighs 30 percent less than its 1972 counterpart because of design modifications and improved rolling technology. CONCLUSION From the point of view of the aluminum industry, the provisions of S. 976 do not address the impediments to aluminum recycling. We are diverting used aluminum beverage cans from municipal solid waste at a rate far greater than any other container. We want to divert more of other postconsumer aluminum products. What is needed is an effective program implemented by government and industry to educate the public on the value and importance of recycling. 1) Scrap recovery is essential to aluminum companies. We have diligently pursued business arrangements to assure access to this important part of our metal supply. 2) We are committed to the continued expansion of our industry's recycling businesses and to reducing the amount of aluminum needed to make products. 3) The forces of competition among aluminum companies, among their customers and between aluminum and other container materials dictate the increased uses of recycled metal. Recycling aluminum requires only five percent of the energy needed to make aluminum from virgin materials. As we have stated, once the aluminum is made, it can be recycled infinitely. 4) We strongly support public programs which will facilitate and promote the continued diversion of aluminum from the municipal waste stream, especially through expanded private efforts. 5) We urge you not to hide the realities of recycling from consumers or to remove from them the responsibility for making product and package choices which are environmentally sound. 6) We are also concerned that the high value of aluminum, compared to other materials, may tempt municipal authorities to view it as a large and easy source of revenue to help pay for the disposal of competing materials, which are not as easily reused and for which economic markets are not fully developed. Such an approach would penalize the one material that has created and sustained an economically viable market for its recycled product. Such a system could erase the distinctive value of more environmentally responsible packages like aluminum cans. The member companies of The Aluminum Association are individually committed to increasing the recovery of used aluminum beverage and food cans. Aluminum recycling will continue to increase as aluminum products in all forms are returned for reprocessing. We are prepared to buy back all the clean, usable aluminum scrap offered. We need help with better data collection to guide both public and private efforts to improve collection and utilization of recyclables. We need programs which increase public awareness of the importance of recycling. We have a good recycling system. Please do not do anything to diminish its effectiveness. While the amount of aluminum in solid waste is small, as an industry we want all of it we can get. More than anyone, we recognize it makes no sense putting it in the ground. Thank you for the opportunity to appear before you. If you have any questions, I would be happy to answer them. |