CRP Market Development & Commodity Sales 2 — Questions and Answers
Question 1: When commodity markets collapse and recyclables have negative value, what term describes the fee a MRF charges a municipality to process those materials?
- Processing fee (or tip fee) (Correct answer)
- Rebate share
- Diversion credit
- Avoided-cost subsidy
Correct answer: Processing fee (or tip fee)
A processing fee (sometimes called a tip fee) is charged by the MRF to cover sorting and handling costs when commodity revenue falls short.
Question 2: Which recycled commodity is most susceptible to price volatility driven by overseas export demand, historically affecting US MRF economics?
- Mixed paper and cardboard (OCC/ONP) (Correct answer)
- Clear glass cullet
- Aluminum UBCs
- Steel cans
Correct answer: Mixed paper and cardboard (OCC/ONP)
Mixed paper and OCC prices have historically been highly volatile because US MRFs relied heavily on Chinese export markets, which restricted imports under China's National Sword policy in 2018.
Question 3: A CRP is evaluating two bids for sorted HDPE natural containers. Bid A offers $0.28/lb delivered to a broker; Bid B offers $0.22/lb with the MRF paying $0.04/lb shipping. Which is the better net return?
- Bid A at $0.28/lb net (Correct answer)
- Bid B at $0.18/lb net
- Both are equal
- Bid B because shipping offsets broker markup
Correct answer: Bid A at $0.28/lb net
Bid A yields $0.28/lb with no additional cost, while Bid B nets only $0.18/lb after the $0.04/lb shipping cost, making Bid A superior.
Question 4: What strategy can a recycling program use to increase demand for recovered glass when traditional bottle-to-bottle markets are limited?
- Develop alternative end-markets such as fiberglass insulation, road base aggregate, or sandblasting grit (Correct answer)
- Switch to single-stream collection to boost glass volumes
- Mandate glass-only curbside bins to improve purity
- Lobby for deposit legislation in all neighboring states
Correct answer: Develop alternative end-markets such as fiberglass insulation, road base aggregate, or sandblasting grit
When bottle-to-bottle glass markets are saturated or unavailable, alternative uses like insulation, road aggregate, and abrasives provide lower-value but viable demand outlets.
Question 5: Which term describes a recycled-content purchasing requirement written into government procurement contracts to stimulate demand for recovered materials?
- Buy Recycled policy (or Comprehensive Procurement Guideline) (Correct answer)
- Extended Producer Responsibility (EPR) mandate
- Minimum recycled content standard
- Product stewardship ordinance
Correct answer: Buy Recycled policy (or Comprehensive Procurement Guideline)
The EPA's Comprehensive Procurement Guideline (CPG) program requires federal agencies to purchase products with minimum recycled content, stimulating demand for recovered materials.
Question 6: What is a 'spot market' sale in recyclable commodities?
- A one-time sale of a load at the current prevailing market price, without a long-term contract (Correct answer)
- A sale made directly to a consumer without a broker
- A sale negotiated six months in advance at a set price
- An auction held at the MRF facility
Correct answer: A one-time sale of a load at the current prevailing market price, without a long-term contract
A spot market sale involves selling a commodity load at today's market price with no ongoing commitment, offering flexibility but exposing the seller to price fluctuations.
CRP Market Development & Commodity Sales 2
When commodity markets collapse and recyclables have negative value, what term describes the fee a MRF charges a municipality to process those materials?