A Response from the Steel Recycling Institute to
“Understanding Steel Recovery and Recycling Rates & Limitations to Recycling”
Published by Dovetail Partners. Inc. 23 March 2015

By: Jim Woods Sr. Director of Sustainability Communications for the American Iron and Steel Institute

Executive Summary:
For nearly as long as the industry has been making steel, it has also been recycling steel. Steel recycling is sustainability in its most simple form. Environmentally, the recycling of steel scrap offsets the need for valued raw materials. Socially, the recycling of steel scrap keeps an important resource out of our nation’s landfills and provides a detailed roadmap for end-of-life scenarios. Economically, steel scrap offsets the costs associated with energy consumption and procurement of natural resources. Therefore, it is across-the-board, good business to recycle steel.

To accurately, and credibly, quantify the rates of steel scrap consumption, each year, the Steel Recycling Institute (SRI) works with mills, associations, industry customers and manufacturers to publish annual steel recycling rates.

Dovetail Partners (Dovetail) have published a paper, “Understanding Steel Recovery and Recycling Rates & Limitations to Recycling” on 21 March 2015. This paper was intended to identify inconsistencies in reporting of recycling rates and identify opportunities for increasing diversion of steel scrap to steel mills.

SRI shares Dovetail’s expressed vision of maximizing the volume of steel scrap and acknowledges the diversity of calculations by associations and reporting entities based on the scope of their individual functions. However, the paper, published by Dovetail, seems to indicate intent to inflate recycling rates through specific omissions or other practice. This response will clarify misunderstandings that have been communicated through the Dovetail paper.

Defining Recycling:

By Dovetail’s own explanation, “recycling reduces the need for resource extraction, typically requires far less energy consumption than when processing virgin raw materials, and results in lower emissions and other environmental impacts.”

The SRI fully embraces this as the goal and outcome of recycling steel scrap and therefore defines its recycling accomplishments through the conversion of steel scrap into new steel, which reduces the need for resource extraction, requires less energy consumption and results in lower emissions.

Calculations of recycling rates for other materials may include initial diversion rates from waste streams to material recovery facilities. However, certain materials have thresholds for contamination which result in the unfortunate landfill of products that do not meet this threshold. With steel, however, items, including labels, are quickly melted away, becoming fuel to the recycling process. And, while home (runaround) scrap, internal to mills, and new (prompt) scrap are of specific, known chemical composition, Dovetail is correct in identifying the diversity of products and composition that come in as old (obsolete) steel scrap.

Predictable Chemistry of Old (Obsolete) Steel Scrap:

Fortunately, in the case of old (obsolete) scrap, the steel industry has a very long, and close working relationship, with scrap processors. The Institute of Scrap Recycling Industries produces a highly detailed Scrap Circular Specifications which specifies the grades, and types, of steel scrap that can be included in specific types of bales—greatly increasing the efficiency and predictable chemistry of bales to be consumed by the steel industry in lieu of virgin resources.

Therefore, while dirt and other non-ferrous elements may end up as part of scrap bales, these predicted tolerances are accounted for in the steel recycling process and have only a small, finite impact on the efficiency of the recycling of old (obsolete) steel scrap. And, many of these impurities quickly become slag, which as a co-product of the steel making process, is also recycled into a coveted ingredient for the making of concrete. In fact, up to 96 percent of steel making byproducts, including water, slag, gasses and heat are all recycled during the steelmaking process.

Recycled Content:

As the Dovetail paper accurately portrays, there is a distinction between recycled content and the recycling rates. Inherently, recycled content refers to the ratio of steel scrap used to the volume of virgin material. The tolerances for recycled content are defined through the specifications for the specific grades of steel being produces. And, as indicated in the paper, the tolerance for recycled content is inherent to the steelmaking process used to produce the steel. There are two main processes for steelmaking used in the United States—the Basic Oxygen Furnace (BOF) and the Electric Arc Furnace (EAF).

The BOF process uses 20 to 35 percent recycled content to make new. It produces products—such as automotive fenders, encasements of refrigerators, and packaging like soup cans, five-gallon pails, and 55-gallon drums.

The EAF process uses more than 80 percent recycled content to make new. It produces products—such as structural beams, steel plates, and reinforcement bars.

Understanding the differences in the grades of steel produced by these processes, it is important to understand that these are complimentary processes, since steel has an open loop among steel products. Therefore, cans are able to be recycled into cars or construction materials, and vice versa. And, as recycling rates indicate, both processes are needed to ensure continued balance between production of steel and scrap availability.

Recycling Rates:

Steel recycling rates, which are at the center of the discussion in the Dovetail paper are complex calculations for the overall recycling of steel scrap, as well as collaborative, market-based calculations for core steel markets, including packaging, automobiles and construction materials.

At their most basic, steel recycling rates calculate steel scrap consumed in lieu of natural resources for steelmaking against new steel entering the market—based on a market-neutral calculation. Like the steel recycling process itself, steel markets are mature, relatively stable markets. And, by the nature of steel, and the myriad product profile steel represents, steel’s time in the marketplace is long and varied.

While a predicted “lifetime” of automobiles and appliances may be around a decade, and construction products can be seen as five decades. The reality is, through reuse of car doors and other parts, the existence of ‘classic cars’, the long-standing nature of iconic structures, like the Golden Gate Bridge or the Empire State Building, steel products have a long, varied life span.

In addition, as the Dovetail paper cites, in the Damath 2010 study there is more than one billion tons of steel scrap “in inventory.” This means, not only are there products where actual lifetime well exceeds typical projections, but there is also a significant inventory of steel scrap at our nation’s more than 2,000 scrap processors that is waiting for conditions to be processed and sold to steel companies. Vast inventories of cars and appliances sit, waiting to have their reusable parts re-sold and put back into the market for an extended lifetime.

While, as the Dovetail paper acknowledges, there are discarded products, or un-obtainable sources of steel scrap—such as underground piping that simply cannot be recycled due to a barrier of some sort, taking a market-neutral approach in calculating steel recycling rates accounts for both scrap “in inventory” and ultimately unobtainable steel scrap.

With established, mature markets, and the understanding of the “scrap in inventory” material flow, a market neutral approach is justified and credible.  A market-neutral approach examines the flow of grades of steel being produced and entering the market vs. the grades of steel scrap that are being consumed from that market. This market-neutral approach, comparing the scrap consumed for steelmaking against new steel production, therefore accounts for scrap in inventory and unobtainable steel scrap.

The American Iron and Steel Institute Annual (AISI) Statistical Report and member Energy Survey are primary data sources for the calculation of steel recycling rates. These reports are generated from AISI member data, which represent the majority of steelmaking capacity in North America. This data is combined with data from the U.S. Geological Survey data, which tracks the import and export of steel scrap, which also contribute to the overall steel recycling rate.

For the individual, product-specific market recycling rates, specific grades of steel production and steel scrap consumption are factored against market-specific data reported by the National Automobile Dealers Association, the Association of Home Appliance Manufacturers, the Can Manufacturers Institute, and direct surveys to scrap processors and demolition contractors.

The bottom line is that for more than two decades, SRI has used a consistent, credible rate, which applied across the lifetime of steel products, accurately reflects the comprehensive recycling accomplishments of the North American steel industry. Peaks and dips may occur at individual data points due to external factors, but as a whole, the rates accurately reflect, over time, the vast recycling accomplishment of the steel industry.

Quite simply, steel scrap is far too valuable of a resource to simply discard or leave to waste. It is economically and environmentally prudent for municipal solid waste programs, automotive dealerships and scrap yards, demolition contractors and manufacturers alike to ensure the recycling of any available source of steel scrap.

And, in representing steel producers in North America, there is no value in misrepresenting our industry’s recycling accomplishment, as ensuring every collection effort, and maximizing availability of steel scrap, is essential in maintaining a proper balance of supply and demand.

Differences in Steel Recycling Rate Reporting:

The Dovetail paper makes reference to differences in steel recycling rates as reported by the U.S. Geological Survey (USGS) and the Canadian Steel Producers Association (CSPA), as well as mentioning other reporting bodies. As indicated above, recycling rate reporting is, essentially, in the eye of the reporting body. The scope and conditions are defined by the universe by which the reporting body operates.

For example, the USGS, which is a close partner of the SRI in rates generation, acknowledges that their data is extrapolated from about 25 percent reporting rate of receipts they track (M. Fenton, USGS). The CSPA, which was also cited in the Dovetail paper, limits the scope of its recycling rate reporting to Canada. As acknowledged above, the SRI rate calculations are built around the consumption and production of steel scrap, conserving resources.

Other, market-based approaches, referenced in the Dovetail paper also have their own set of assumptions or scope limitations. For example, the steel industry receives tons of recyclable steel cans, and other products, from waste to energy facilities, which lie beyond the typical municipal waste and recycling streams. In addition, a vast network of individual haulers—sometimes labeled as peddlers—scour the landscape and local curbsides in search of sources of steel scrap which they sell direct to scrap processors. This process reaches beyond the scope of typical recycling processes, however, it is represented when tracking the material flow into, and out of, steel production facilities.

Additionally, the Dovetail paper cited the inclusion of home (runaround) scrap and new (prompt) scrap in the calculations of steel recycling rates as a reason for differences. However, inclusion of these valuable sources of steel scrap is warranted as, by Dovetail’s definition, the uses of these sources of steel scrap “reduce the need for resource extraction and requires far less energy consumption” than producing steel from virgin material. It simply would not make sense to landfill, or otherwise, dispose of these large sources of steel scrap. Therefore, the steel industry embraces these sources of steel scrap and ensures that the resource savings are included in its annual rate benchmarks. The bottom line is that whether it is home (runaround), new (prompt), or old (obsolete) steel scrap, its use in steelmaking still conserves natural resources, and ultimately will return to the industry as part of steel’s continuous recycling cycle.

Infinite Recyclability vs. Continuous Recyclability: 

While a fine point, the Dovetail paper calls into question the infinite recyclability of steel, which, in full disclosure, would be more properly characterized as continuous recyclability. But, the sentiment is reflected through both characterizations. Steel can be recycled a continuous number of times without loss of strength or quality. The same cannot be said of many other materials. The Dovetail paper cites issues with contamination, or un-obtained recyclables, as barriers to steel’s continuous recycling cycle.

While, undoubtedly, as the Dovetail paper notes, any steel scrap that has not been collected through one of the processes, detailed above, has indeed broken the continuous recycling cycle, by nature of its omission. This, scrap, however is the exception to the rule as shown by steel’s high recycling rates—regardless of source or calculation methodology.

As for the contamination that the Dovetail paper also cites as a barrier to continuous recycling, this issue is efficiently marginalized through the classification of steel scrap by bundles as designated by ISRI Scrap Specification Circular cited above. These specifications for scrap bundles, give steelmakers a predictable understanding of the scrap being added to the steelmaking process in place of natural resources. Steelmakers then know, and can allow for specific tolerances that maximize the benefit from the bundled steel scrap, as well as the known alloys present on the steel in the bundles. Steelmakers readily adjust the mix of bundles and alloys to produce high quality steel that embraces the alloys and non-ferrous elements in scrap bundles—making these elements an asset rather than a barrier to continuous recyclability.

The Dovetail paper also cites slag, which is a known co-product of steelmaking as a yield loss. Slag is a result of impurities, metal oxides and other co-products, which are separated from the steel product to ensure purity. Like steel, the co-product slag, is also recycled. Slag is used widely in highway construction as asphalt aggregate, granular base, embankment cover or mineral wool insulation (National Slag Association 2013).

The steelmaking process, inclusive of the recycling of steel scrap in to new steel, is a highly efficient process. Through the investment in state-of-the-art steelmaking technologies, the AISI Annual Statistical Report cites a yield efficiency of 92 percent—indicating a very small impact of any yield loss to slag from impurities. Therefore, the final steel product represents a high-quality product that has been produced with steel scrap that reduces the need for natural resources and energy.

Bottom Line: 

Steel is North America’s most recycled material. Each year, more steel is recycled than paper, plastic, aluminum and glass—combined. Regardless of the reporting body, steel is recycled widely, through a plethora of material flows which may be reported upon differently dependent of the scope of the reporting organization.

The Steel Recycling Institute (SRI) makes every effort to accurately report and inclusively reflect the entire flow of steel scrap that is consumed by steelmakers in place of raw materials. There is simply no benefit to the industry, or overall recycling efforts, to “obscure actual recovery and recycling performance” as the Dovetail paper mistakenly implied.

Steel is blessed by physics and is able to be recycled continuously across the wide array of steel products while maintaining its material qualities. And through advanced technologies, the steel making process operates at a high level of efficiency, which minimizes any yield loss.

SRI continues to work closely across all aspects of the steel product life cycle to maximize the volume of steel scrap collected for recycling. Steel’s value and continued, predictable quality ensures that all efforts continue to be made to maximize the flow of steel scrap to steel mills—a goal shared by Dovetail, SRI and recycling rate reporting bodies alike. Lastly, SRI welcomes feedback and continues to work with industry partners to promote understanding of the steel recycling process, the benefits and the associated reporting.