“The Growing Battle for Used Beer Cans”

This Wall Street Journal video touches on an idea we discussed today in class. Why is recycling aluminum such a hot topic and important for brewing? As expected, a nation’s wealth and its recycling rate are seemingly inversely proportionate. The U.S. recycling rate is rising and will most likely continue to do so as we enter an era of carbon footprint caution and pollution taxes, not to mention cost savings for producers.

 

http://live.wsj.com/video/the-growing-battle-for-used-beer-cans/FEFD221C-A93A-49A2-AF5B-1F40801BE8BE.html?mod=wsj_article_tboleft#!FEFD221C-A93A-49A2-AF5B-1F40801BE8BE

 

 

7 thoughts on ““The Growing Battle for Used Beer Cans”

  1. OK, but for those of us too busy to watch the video, is it plain-and-simple scrap prices? Yes, as a well-off company we do have a higher opportunity cost of time and so ceteris paribus will recycle less. Who cares about being public spirited? – no payoff to that, rather hassle.
    To others in the class: follow up and find something about the recycling industry! Big, small? Lots of players, or a few big boys? Vertical structure – the recyclers are big, but on the downstream end are lots of jobbers and local operations, a guy with a semi trailer in a parking lot. Check the Yellow Pages / visit the recycler in BV or talk to the county landfill people.

  2. Given the list of recycling companies , it does not seem as if the market is controlled by a few big players. Interestingly, the US actually exports about 25% of its recyclable materials . However, about 55% of aluminium is currently recycled with the attempt to recycle 75% in 2015 since “recycled aluminum uses 95 percent less energy”.

    Disclaimer: I still feel weird drinking beer out of a can. Since glass is made from the abundant resource silica, it actually makes sense to bottle beer in glass. These glass beer bottles come with a deposit in Europe and each brewery reuses their bottles. Thus, they save money on the bottling process.

    • Aye, cans leave a bad taste (in the old days literally, a metallic flavor). But making glass consumes lots of energy and is heavier to transport, and at least in the US very little is recycled, much less recycled into glass [you may have to match colors to some extent, and some glass will have heavy metal residues]. So as an economist I’d ask which is cheaper to make — I think the answer will turn out to be aluminum cans, by a wide margin. If 75% will get recycled (saving energy in the next round), even better!
      Suggestion: buy a glass / Bierkrug [is there a Bavarian term?], and pour the beer out of the can….
      PS: bauxite is relatively plentiful, but you need electricity to refine it, whereas coal (and still a bleeding edge technology, natural gas) can be used to make iron, so I think the cost difference is more at that stage. It may be harder to prepare bauxite, too…iron foundries just pour off slag, but I don’t know whether that works as well with aluminum.
    • Interesting! I’m 99% sure that much of the local recycling budget comes from local governments, both to respond to concerned citizens and to lessen the load at the landfill. The recycling center’s income varies a lot with prices – when only a few places recycled they did better, but as more people recycle, guess what? — prices for things such as clean mixed paper and newspring and glass fell.

      At one point it was worth sorting glass by color. The last time I asked glass was broken up to use as road fill. Some items that were recycled no longer are, there’s either insufficient demand (no one wants it even if you pay to truck it to their facility) or it’s too far to the closest place to make it financially viable. Obviously – or I hope it is – I’ve not asked recently. I’m sure though that you can call the country administration and find out lots of details. While I don’t know the current person, in the past the supervisor at the collection center (behind the high school) could explain this back and forth in considerable detail.

  3. http://www.bizjournals.com/jacksonville/news/2012/05/22/republic-services-hosts-grand-opening.html

    This article discusses a new recycling plant in my hometown of Jacksonville. The plant was established in March of 2012 and cost about $6.5 million in construction costs. Although it is a state-of-the-art plant with technologically advanced recycling equipment, I cannot help but wonder if the plant is worth the cost. While it can serve over 10 counties at once, I have doubts that the plant will break even in years to come.

    • I need to look at the article but some parts of the country have very high prices for landfill. In addition, Levi is now using recycled plastic in jeans (albeit up to about 20%, more than that runs into quality issues (“not jeans material”). I’ll have to check, I think there’s an article on that in BusinessWeek.

Leave a Comment!