St. Anthony: Minnesota's recycling companies helping shift industries toward more sustainable materials

Bill Keegan, who runs a 150-acre landfill-and-recycling operation in Shakopee, is part of the long-term supply-chain solution for all those small brewers and beverage makers whose sales are restrained by the shortage of cans and bottles.

Keegan's company, Dem-Con, established in the 1960s solely as a family-owned landfill, is growing the recycle-and-reuse side of the business to process and sell used materials from glass and aluminum to cardboard, steel and construction debris into increasingly lucrative markets. That business now diverts up to 75% of material that once ended up in the landfill.

Dem-Con has invested millions into the processing and recycling facilities. The result: Less garbage. Lower manufacturing feedstock cost. Less energy. Less carbon output than with virgin materials.

"There is a growing market and political demand for a recycling of what was 'waste,'" said Keegan, whose company now employs 230 in Shakopee and several smaller Minnesota plants.

Take aluminum, the most recyclable and valuable single-use beverage container.

The value of recycled aluminum has soared from 40 cents to more than $1 per pound since 2020. It can be transformed into a new aluminum can or other product at 90% energy savings from processing aluminum from virgin bauxite.

The U.S., which lacks huge bauxite reserves, imports most aluminum for fabrication from China, Russia, India and Canada. And the economic surge and demand for products in the past year, from beer growlers to aluminum car parts, pushed prices up amid geopolitical issues, shipping bottlenecks and soaring intercontinental rates.

The international supply-chain issues — plus better quality of processed recycled goods — has opened an opportunity for Minnesota metals and papers businesses like Dem-Con to grow.

Moreover, over the last three years, China — a huge buyer of U.S. recyclables — cut way back on purchases, claiming much of it was contaminated with food or otherwise unable to be processed into new products. China has turned some of its focus on higher-value manufacturing.

This also focused U.S. regulators and businesses on finding more domestic markets for a growing glut of recyclables and producing them here.

"We knew China was coming," Kate Bailey, research director of Colorado's Eco-Cycle, told Governing magazine in 2021. "The silver lining ... is that it brought the challenges facing recycling to light and we're starting to have some of the hard conversations that we should have had all along."

And recyclers and manufacturers are slowly doing more business at home.

Scott McCarty, an executive with Ball Corp., a Colorado-based container manufacturer that is a global producer of glass and aluminum containers, including a busy St. Paul plant, said the company is investing $1 billion in U.S. plant expansion and new construction.

"I think this surge in demand for aluminum cans and bottles points to an underlying trend that we can expect to continue," McCarty said. "In recent years, we've seen an uptick in interest in cans largely due to sustainability benefits. Aluminum is infinitely recyclable."

While McCarty said the company does not address plant capacity or pricing, he said every can made in St. Paul is needed by domestic customers. In its fourth-quarter earnings release, the company said of its North American operations: "Packaging mix shift to sustainable aluminum cans continues, and demand is outstripping supply."

Ball is part of a consortium of manufacturers that has joined with recyclers to increase the national recycling rate for aluminum from around 60 to 90% and increase recycled-feedstock content to 85% of new containers. Worldwide, Ball increased earnings 50% to $878 million in 2021 on $13.8 billion in revenue, a 17% gain.

In 2020, WestRock, the paper-and-cardboard maker that operates a huge plant in St. Paul's Midway, consumed a record 8.4 million tons of recycled paper and introduced its popular bio-degradable "eco-collar" that has replaced tons of polluting plastic rings that hold together six- and eight-packs of beverages.

Mark Bergen, a professor at the University of Minnesota Carlson School of Management, researches how companies and consumers react to price increases and make substitutions. The increased sourcing of recycled feedstock and onshoring also is an example of how business will work through an inflationary time of expansion.

"Business looks to lower cost," Bergen said. "And among environmental-sustainability projects, the ones that are cost-effective will leap off the page in these inflationary times. It's also good for employment, cost-efficiency and lower-carbon production."

Wayne Gjerde, the Minnesota Pollution Control Agency veteran who works with industry to develop recycled product markets, said there's increased discussion of opening an aluminum manufacturing plant to serve Upper Midwest makers from microbreweries to fabricators of auto-and-boat parts.

Kate Davenport, co-president of 125-worker Eureka Recycling, said increased use of recycled content in manufacturing is encouraging for environmental and economic reasons.

But it doesn't lead to a decrease in price, she said, unless Minnesota has a manufacturing plant.

"We we don't have an aluminum manufacturing plant in Minnesota, we sell our aluminum to smelter operators in Kentucky and Tennessee and they sell sheets of aluminum to manufacturers," she said. "But if we use more recycled content locally and globally, that should lead to lower costs overall."