8 questions about the top trends shaping waste and recycling in 2022

This story is the first in a series on trends shaping the U.S. waste and recycling industry in 2022.

In an increasingly unpredictable world and an ever-changing industry, it can be hard to guess what’s coming next. Instead, Waste Dive’s editors are continuing the annual tradition of sharing the questions that are on our minds heading into a new year.

From M&A to recycling policy to workforce issues and much more, we’ll be tracking many themes throughout 2022. We invite you to share your thoughts on these questions, or questions of your own, via email at waste.dive.editors@industrydive.com. Please also join us for a live, virtual event on Feb. 10 to engage with the Waste Dive team directly about how we’re approaching 2022 coverage and to hear from top recycling experts.

Can anything affect the outsized amount of M&A and private equity investment in 2022?

Acquisitions are a fact of life for the modern U.S. waste industry, dating back to the high-flying wave of agglomeration its first public companies led in the 1970s and continuing over multiple cycles since. Most recently, the Trump administration’s tax cuts and speculation that Democrats could make tax changes of their own are among the factors that may be fueling a new wave of activity. The pandemic has played its own role by exacerbating the evergreen issues smaller operators face around labor, capital requirements, succession planning and overall fatigue from the stress of running a business.

Yet all waves must crest sometime. Could 2022 mark that shift, or will it go down as just another year in a string of big deals? The U.S. Department of Justice showed greater scrutiny of recent large transactions by Waste Management and Republic Services, but analysts believe large players still have plenty of room to maneuver. Financial factors could change, such as rising interest rates, but that may not be enough to dampen activity either.

Private equity-backed investments in waste and recycling companies are also increasingly common, sparking bidding battles and building up companies to become acquisition targets or candidates for initial public offerings. ESG-driven transactions are similarly gaining attention, leading to intriguing bets on companies or market areas that previously had less interest.

Fourth-quarter results are still pending, but estimates indicate public companies may have spent as much $3.46 billion on acquisitions last year. Whether or not that turns out to be the peak of this M&A roller coaster, 2022 is likely to be an interesting ride.

The pandemic has exacerbated an already-tight labor market and given workers new leverage. How will waste employers convince more people to join and remain in the industry?

Waste and recycling has long been a tough industry in which to hire and retain workers, who face hard, dirty and sometimes dangerous conditions. Industry employers say they can only take full advantage of growth opportunities as fast as they can fill jobs.

Finding enough CDL drivers to keep collection going has been a persistent challenge, especially as the booming e-commerce sector attracts more of those skilled individuals. Today, the industry’s pitch is further complicated in an economy in which workers of all types are quitting and changing jobs at record rates as they seek better pay, benefits, conditions and flexibility in the “Great Resignation.” With inflation rising, so too must wages increase, as companies have acknowledged. The recent shifts in the labor market will require further adaptations to what one union representative described as a “wage, benefits and respect shortage.”

In addition to offering pay increases or signing or retention bonuses, some of the industry’s largest employers are trying to attract workers with novel benefits including education and training programs.

While companies are looking at automation to address high turnover in unattractive roles, this year’s labor challenges (already worsened by the omicron variant) could prompt the industry to increase its recruitment among underrepresented groups, such as women or formerly incarcerated individuals. Many companies have made diversity, equity and inclusion pledges in the past few years, but critics call for more transparent updates on their progress and long-term implementation efforts. Time will tell how these efforts actually affect the makeup of the industry’s workforce, especially in senior leadership positions.

Tonelson via Getty Images

Will the momentum around state recycling policy continue to grow, and possibly influence federal discussions?

2021 brought significant new state waste and recycling laws such as a rare update to Connecticut’s bottle bill and the country’s first extended producer responsibility (EPR) for packaging laws, in Maine and Oregon. Numerous other bills aimed at reducing reliance on virgin plastic, increasing postconsumer plastic content in packaging and banning single-use plastics also passed.

When one state passes such a bill, other legislators take detailed notes. This year, Colorado is expected to introduce EPR legislation after more than a year of studying other state programs, and numerous other states plan to introduce or reintroduce EPR bills. Advocacy group Beyond Plastics has created a draft model EPR bill meant to help with the process. Meanwhile, Massachusetts, Vermont, New Hampshire and others are working to update or introduce bottle bill laws, and advocates also plan to introduce a federal bottle bill similar to the one outlined in the Break Free From Plastic Pollution Act.

Single-use plastics will remain a target for state legislation, too. Washington, Virginia and Colorado were among the states last year to ban certain single-use plastics, and advocacy groups like Environment America have said they plan to support additional bills in 2022 to do so in Connecticut, Texas, Illinois and other states. Bills targeting PFAS in packaging are expected to pop up in several states, including Rhode Island.

Meanwhile, a working group of state recycling officials in the Northeastern U.S. is drafting model legislation for minimum postconsumer recycled plastic content standards in items such as trash bags and beverage containers, using laws in Oregon, California and New Jersey as examples.

Labeling is another hot topic advocates expect to tackle in 2022, after California passed a law that no longer allows manufacturers to deem packaging recyclable unless it goes through the state’s detailed approval process. Advocates are pushing for a federal version of that bill too.

How will the Biden administration’s efforts on climate change influence the national waste and recycling discussion?

President Joe Biden has repeatedly said addressing climate change is a priority for his administration, but we don’t yet have the full picture of how this might affect day-to-day operations in landfills, recycling facilities and other industry sectors.

The U.S. EPA is expected to offer more details on its circular economy goals, most notably how it plans to approach source reduction – a waste management approach many critics felt was erroneously left out of its National Recycling Strategy. Further reports and data on federal reuse strategies, plastics, food waste and more, plus a recycling measurement guide, are in the works.

The Federal Trade Commission is also expected to review its guide on environmental marketing claims, known as the “Green Guides,” in 2022. The updated report could shed light on the ongoing debate over what materials should be deemed recyclable. This information will be valuable to recyclers, as well as for lawmakers at the state and federal levels who have expressed interest in “truth in labeling” laws, that would dictate whether a product’s recyclability claim is accurate.

The administration has also supported additional funding for recycling infrastructure and other needs. About $350 million in recycling-related funding from the Infrastructure Investment and Jobs Act is expected to start becoming available by the end of the year, but further funding some hoped to get in the Build Back Better bill isn’t looking promising due to a stalemate in the Senate. Meanwhile, Congress is slowly moving numerous waste and recycling bills forward, which may offer more opportunities for funding if any of them reach the finish line.

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