On a recent visit to Australia, Tom Szaky, founder and CEO of TerraCycle, shared insights with PKN into the company’s recycling efforts and the challenges of managing difficult waste streams. Navan Kaur reports.
Since entering the Australian and New Zealand markets in 2013, TerraCycle has recycled over 900 tonnes of hard-to-recycle waste with no other viable recycling solution. This success was achieved through more than 100 consumer-facing and B2B recycling programs, alongside freight and Zero Waste Box services.
The TerraCycle network in Australia and New Zealand (ANZ) has grown significantly, from just a few thousand participants to more than 1.2 million “TerraCyclers,” including schools, community centres, pharmacies, cafes, dentists, salons, and labs that collect recyclables for their communities. The public drop-off network has expanded from just 11 locations in 2014 to over 3000 locations in 2024, enabling people across both urban centres and remote areas to participate in recycling.
A key issue Szaky addressed is the economics of recycling. Infrastructure investments help with profitable materials like paper and bottles, but they fall short for harder-to-recycle items.
He likened the recyclability of materials to the difference between $100 and $20 bills. “What makes the $100 bill special is that it justifies the cost of collecting and processing it. But you wouldn’t bother picking up a $20 bill because the costs wouldn’t be justified,” Szaky said. “If I paid you $80 for that $20 bill, suddenly it would feel like a $100 bill — and that’s the mindset we need for recycling. The question is: who pays to bridge that gap?”
Packaging design trends focused on cost-cutting have also reduced the value of materials, making them less economically viable to recycle. “The only way to solve this is to inject that value back in,” Szaky explained. “It’s not just about building more infrastructure, it’s about making sure someone covers the full cost of collecting and processing minus whatever the recovered material is worth.”
Virgin materials, which are cheaper and often higher-performing, present another obstacle. “Many producers want to use recycled content, but only if it matches virgin material in price and quality,” Szaky noted. Solutions could include policies requiring minimum recycled content or imposing fees on non-compliance, alongside subsidies to make recycled materials more competitive.
TerraCycle’s brand-funded recycling model offers a way forward, with companies covering the costs of collection and processing. Initiatives like Loop, TerraCycle’s reusable packaging platform, aim to establish closed-loop systems, helping shift the industry toward circularity.
Creating lasting behavioural change among consumers, Szaky believes, involves more than education campaigns. “There needs to be a consistent desire from manufacturers or retailers to keep this a priority,” he says.
“This consistency allows for time to create effective strategies. Beyond awareness, there are three critical elements: funding, purpose, and incentives. Funding ensures recycling efforts are well-supported; purpose shows how recycling benefits the community; and incentives provide personal rewards, whether it’s a coupon, a donation to your favourite charity, or something else meaningful.”
The focus, Szaky concluded, should be on recycling streams that are profitable while subsidising the ones that aren’t. “It’s all about making the economics work. We need to solve for the white elephant in the room: the profitability of recycling.”
This article was first published in the November-December 2024 print issue of PKN Packaging News, page 21.
