HARTFORD, CT — The contractor operating the Materials Innovation and Recycling Authority’s recycling center in Hartford has filed a lawsuit alleging that the agency is forcing it to operate at a loss by accepting high levels of non-recyclable material from cities and towns.
FCR, LLC filed the lawsuit on April 30, and seeks court recognition that MIRA violated the operating contract so FCR can terminate the agreement, the lawsuit says.
FCR, a national company operating in Connecticut as ReCommunity Hartford, primarily contests the level of “contamination” in the recycling stream it sorts at the South Meadows plant. In recycling, the stream is contaminated when it includes items that cannot be processed or are not ready for processing, like household garbage mixed in or food residue still on jars or other containers.
The lawsuit says the contract with MIRA caps the level of contamination at 5 percent, but an auditor measured the contamination rate in the recycling stream at up to 30 percent.
“The revenue earned from selling bulk recyclables is FCR’s only form of compensation under the Agreement. The more contaminated the incoming recycling, the greater the processing costs FCR must incur to refine the stream into salable sorted recyclables,” the lawsuit says.
FCR also accuses MIRA of not enforcing a contract provision that requires loads of recyclables to come from only a single municipality. MIRA serves about 70 municipalities.
“Due to MIRA’s failure to perform its obligations, FCR has been operating the Recycling Facility at a substantial loss. FCR has repeatedly raised these issues with MIRA, but it refuses to address them,” the lawsuit says.
The dispute is the latest indication that recycling, once a reliable revenue generator, is increasingly becoming a drag on the bottom line with fewer options to sell plastic, glass, paper and other recyclable materials overseas.
MIRA President Thomas Kirk said Tuesday he could not comment on the specific allegations in the lawsuit, but said it’s related to the collapse in the national recycling market.
“They’ve been a longtime contractor for us and we’re confident we’ll be able to work out those issues,” he said. “The issues are intimately related to the problems in the recycling markets.”
Last year, China stopped buying recyclables in the U.S. and other markets, and there was an immediate disruption in the recycling and waste disposal operations.
The Connecticut Conference of Municipalities said in March that cities and towns around the state are being hit hard by the shift in recycling economics caused by China’s 2018 decision. Towns used to be able to sell materials collected in single-stream bins to processing companies, who would then sell the sorted goods overseas.
“With the new framework, those commodity streams dried up … the capability of doing that is zero now,” Kirk said. “It’s just remarkable, the change.”
CCM has proposed some measures to alleviate the crunch, like taxes on plastic straws and bags, expanded bottle deposits and public education campaigns to reduce contamination, but there would still be a lack of a market for recyclable materials.
“A year ago we were getting $25 a ton in revenue for our recycling,” said Fairfield First Selectman Michael Tetreau. “Since there’s not a market for people to buy the recyclables, many of the products are no longer a revenue generator but a cost generator. We’re now paying $75 a ton. That’s a $100 swing per ton.”
Fairfield is not one of MIRA’s customers. Tetreau said towns are lobbying the legislature to loosen some requirements to better reflect the current market.
“It’s a government-driven situation. When you have a government regulation saying you have to do something the market no longer supports, that’s the problem,” he said. “You can’t tell us to recycle things we can’t recycle anymore. We’re not against recycling, but change it so it reflects today’s market realities.”
Glass is one of the materials most affected in Connecticut because its recycling market has disappeared. Glass is heavy so it makes up a quarter of the recycling tonnage, which means a quarter of the recycling cannot be sold as a commodity anymore, Tetreau said.
“We’re not asking [the state] for collars. We know the market’s going to change over the next few years,” Tetreau said. “Please just set up a system that allows us to be flexible.”