SIC 4953
REFUSE SYSTEMS



This category includes establishments that are primarily engaged in the collection and disposal of solid waste. Firms in the industry operate incinerators, solid waste treatment plants, hazardous waste facilities, land-fills, and other disposal sites and services. Companies that only collect and transport waste without such disposal are classified in SIC 4212: Local Trucking Without Storage.

NAICS Code(s)

562111 (Solid Waste Collection)

562112 (Hazardous Waste Collection)

562920 (Materials Recovery Facilities)

562119 (Other Waste Collection)

562211 (Hazardous Waste Treatment and Disposal)

562212 (Solid Waste Landfills)

562213 (Solid Waste Combustors and Incinerators)

562219 (Other Nonhazardous Waste Treatment and Disposal)

Industry Snapshot

In the late 1980s and early 1990s, the refuse industry was struggling to overcome the effects of a recession, which included reduced waste and a more competitive business environment. Many refuse companies were also buckling under stringent new environmental regulations. As it entered the millennium, the industry was continuing to seek new ways to safely handle growing amounts of waste at the same time that landfill space was rapidly declining. The industry placed a greater emphasis on recycling efforts, and by 1998, there were 9,000 curbside recycling programs in the United States. There also was a strong move toward privatization of former municipal operations, consolidation of firms, and increased flexibility of government regulation of the industry. About 2,400 landfills were still functional in 1997, and these, along with hundreds of incinerators, consumed the bulk of America's trash (not including hazardous waste).

However, by 1999, new problems loomed on the horizon. Of major concern was that the "clean-up" of America was causing new toxic byproducts. MTBE additives to gasoline fuel, ostensibly to reduce air emissions, ended up contaminating ground water. Methane gas fumes released from landfills had reached toxic levels in many states, and dioxin, a byproduct of incinerated waste, was brought under EPA monitoring. Moreover, chloroform, a byproduct carcinogen created during the disinfection phase of water treatment, was detected in high levels in approximately one to three percent of drinking water samples reported in 1999 by the U.S. Geological Survey.

During the early years of the 2000s, landfills remained the primary means of waste disposal in all regions except New England, where incineration dominated. Although recycling quadrupled between 1990 and 2001, from 8 percent to 32 percent, the industry saw a leveling off of recycling programs. While Americans increased recycling during the 1990s, they also decreased their garbage output for the first time in over 30 years. Between 1960 and 1990, average garbage output jumped 70 percent from 2.7 pounds per day to 4.6 pounds per day, before dropping to 4.46 pounds per day in 1998. That total edged back up past 4.6 pounds per day by the end of the decade. The rapid increase in waste production can be attributed to a 50-fold increase in the use of plastic as well as a doubling of all other waste material. The recent leveling off in waste production is due in part to increased efficiency in packaging by manufacturers and the rapid implementation of recycling programs. However, refuse management is expected to be a source of ongoing concern as environmental issues continue to arise.

Organization and Structure

The refuse industry traditionally has been fragmented in comparison to other businesses. Organizations range from local firms and government bodies that manage consumer garbage to companies that handle hazardous and specialty waste. However, from the mid-1990s on, there was a trend toward acquisition of smaller firms and privatization of former municipal efforts, which often were absorbed by large private companies. Municipal and government entities, which owned 85 percent of landfills in the early 1990s, owned less than 70 percent by 1997. Several large U.S. corporations also were active in all aspects of waste management on a global scale.

The two largest segments of the refuse management market are municipal solid waste (MSW) and hazardous waste. MSW includes non-hazardous garbage discarded by homes, businesses, and governments. In 1997, 217 million tons of MSW was generated across the nation, constituting eight million tons more than in 1996. The largest part of trash was paper and yard trimmings, which accounted for 51 percent of all MSW. By 1999, nearly 30 percent of MSW was recycled. Recycled solid waste prevents the release of more than 33 million tons of carbon into the atmosphere each year.

Hazardous waste includes liquid and solid materials that are toxic or radioactive. Liquid waste commonly emanates from nuclear energy facilities and U.S. Department of Defense activities. Solid waste often comes from mining and milling operations (especially from extracting uranium ore), sludge in abandoned storage tanks, and contaminated equipment and structures. Large amounts of both solid and liquid hazardous materials also emanate from chemical, medical, and petroleum industry activities, as well as from the mishandling of those wastes by businesses, governments, and consumers.

Disposal Methods. By 1998, landfills were managing about 55 percent of MSW, 30 percent was being recycled, and 15 percent was combusted. In raw figures, this meant that approximately 60 million tons of material were recycled rather than dumped into landfills or incinerated. The highest recycle recovery rates are batteries (93.3 percent) and paper/paperboard products (41.7 percent). About 41 percent of yard trimmings are also recycled.

Like MSW, most hazardous waste is sent to landfills. Various types of toxic waste are also incinerated and even recycled. Solid waste landfills differ from MSW fills in that they are usually built to contain the waste for a long period of time, and a greater effort is made to break down or neutralize the refuse, thus making hazardous waste fills more expensive to build and operate. Highly radioactive waste may be sealed in special drums or tanks where it can be held indefinitely.

Background and Development

Municipal Solid Waste. Prior to the industrialization of the United States, most people managed their own waste. Garden and organic waste was composted and used as fertilizer and soil conditioner. Scrap wood, glass, metal, and other debris were often taken to a local dump or burned on one's property. A garbage collection and land-fill industry emerged, however, as industrialization occurred and large urban areas began to develop in the 1800s. In fact, WMX Technologies, Inc., one of the largest refuse companies in the world, originated in 1894 as a collector of Chicago's waste.

The waste disposal industry flourished after World War II. As the U.S. economy and population expanded, so did the amount of garbage produced per capita. By 1960, in fact, Americans were discarding a combined total of over 100 million tons of garbage per year, prompting some people to call the United States the "disposable society." In order to handle mass quantities of garbage created by the new suburban consumer society that evolved in the 1950s and 1960s, municipalities began building large numbers of landfills and incinerators. By the early 1970s, 300 to 400 municipal landfills were opening each year.

During the 1970s, the MSW environment began to change. In addition to the fact that many landfills were becoming saturated, environmental problems began to plague landfill operators. Some landfills were emitting hazardous gases and fluids that were seeping into the air and water. Americans became more conscious of the need for safer and more attractive waste management. Federal initiatives that impacted the refuse industry included the Clean Air Act, the Clean Water Act, and the Safe Drinking Water Act. Recycling programs, such as the "one-bag" and "blue-bag" programs, emerged in several states. Consumers also became less receptive to landfill development, thus coining the acronym NIMBY (not in my backyard).

In the 1980s North American landfill capacity began to shrink. Public opposition to new landfills posed major barriers to refuse organizations. Furthermore, new federal and state environmental regulations made it increasingly difficult and expensive to operate existing landfills. During the 1980s, the number of landfills opened each year declined to between 50 and 200 while existing landfills closed at a high rate. The total number of dumpsites dropped from 14,000 in 1980 to 6,000 by 1990 and then to only 3,000 by 1996.

Despite society's apparent concern over MSW and the environment in the 1970s and 1980s, both personal and commercial waste volumes continued to grow at a record pace. By 1992, the average American was producing four pounds of trash per day. Landfills were further stressed by curbside collection of yard waste, which was not commonly practiced until the mid-1980s. The total amount of U.S. trash had ballooned to over 280 million tons per year.

Waste companies responded to refuse growth and market demands for safer, less conspicuous disposal by stepping up recycling operations and by developing other disposal options, such as WTE. By the late 1980s, recycling programs processed 15 percent of all MSW, and about 125 WTE plants consumed nearly 15 percent of all refuse. The future importance of innovative waste management companies seemed clear to investors. Many refuse companies enjoyed skyrocketing stock prices and healthy profit growth.

Hazardous Waste. At the same time that the MSW industry was rapidly growing, government and industry began producing large amounts of toxic and radioactive waste that would eventually result in the proliferation of an entire hazardous waste industry. New synthetic chemical products that were developed during the war, for instance, were offered to the public on a broad scale in the 1950s and 1960s. Industrial wastes that resulted from production of these chemicals were often carelessly dumped in waterways, landfills, and wells. Furthermore, the Department of Defense, which was busy creating a nuclear defense system, jettisoned mass amounts of highly radioactive materials.

By the 1970s, the refuse industry began to respond to societal concerns about the environment. Toxic substances, including some that had seeped into aquifers or had been used to produce children's clothing, resulted in a new category of refuse called "hazardous waste." Prompting the formation of the hazardous waste industry were federal mandates regarding toxic refuse. The Resource Conservation and Recovery Act (RCRA) of 1976, for instance, was implemented to control the creation and disposal of hazardous materials.

Laws that followed RCRA in the 1980s included the 1984 Hazardous and Solid Wastes Amendments (HSWA); the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund), which designated billions of federal dollars for clean up; the Toxic Substances Control Act; and the 1986 Superfund Amendments and Reauthorizations Act (SARA). CERCLA earmarked over $9.6 billion for hazardous waste cleanup in the 1980s, much of which went to contractors in the refuse industry. In addition, the federal government required companies to spend additional billions to recover toxic waste sites.

Like MSW, the creation of hazardous waste continued to grow during the 1980s and early 1990s. By 1985 10 times more chemicals were in use than in 1970. In the early 1990s, synthetic chemical manufacturers were producing 220 million tons per year of about 58,000 different chemicals. In addition to growing amounts of hazardous waste produced in the United States in the early 1990s, refuse companies also benefited from ongoing CERCLA cleanups. By 1990, the Environmental Protection Agency had identified 1,224 priority cleanup sites, as well as over 31,000 sites that needed attention. In addition, the General Accounting Office estimated that 130,000 to 425,000 potentially hazardous sites existed. The average bill for a Superfund site cleanup in the early 1990s exceeded $26 million.

Stock prices of refuse companies during the late 1980s and early 1990s reflected the surging demand for both MSW and hazardous waste services. The average earnings per share for the ten largest companies, for instance, jumped from 59 cents to over 70 cents in 1990 alone. Stock prices of those firms peaked in 1990 as well, rising from about $22 to an average to almost $30. In the early 1990s, however, most refuse firms were stalled by an industry recession.

Several factors contributed to the slowdown in the early 1990s. MSW tonnage dropped to around 280 million tons per year by 1993. The amount of money spent on hazardous waste cleanup also declined in the weak economy. In addition, larger amounts of garbage were being collected for recycling. Because recycling is labor-intensive and there is relatively little demand for recycled products, it offers low profit margins. A weak economy also played a role in keeping prices down, as stagnant waste growth created a more competitive business environment.

Adding to the plight of the refuse industry in the early 1990s was a proliferation of the NIMBY attitude and increasingly stringent environmental regulations. These two factors were reducing the number of new landfills that were opening and were forcing many operators to close their fills or comply with expensive new regulations. In 1991 for example, an average of 63 land-fills per state were shut down, while an average of only 10 new dump permits and six landfill expansion permits were allowed.

Regulations and public opposition also squelched the WTE market for waste in the early 1990s. Although the number of plants in operation grew from 30 in 1991 to 61 by 1993, the number of plants planned for future construction fell from 220 in 1988 to only 48 in 1993. Furthermore, by 1993, some 50 plants had been shut down for environmental reasons, up from 37 in 1991 and 27 in 1988. More WTE closings were expected as the cost of retrofitting existing plants for cleaner operation spiraled.

Privatization became more prevalent, with municipal ownership of solid waste landfills falling to 70 percent by 1996 and private firms picking up the formerly public operations. This shift was largely due to municipal budget cuts and increased regulatory compliance costs.

Overall, the waste management and disposal industry experienced less than five percent growth annually for the latter years of the decade. In early 1999, the industry reported annual revenue of $40 billion, with private industry controlling approximately 67 percent. The industry also reported a 20 percent annual decline in disposal volume. However in 1997, the EPA increased the goal for recycling to 35 percent of total volume, and by 1999, several communities had reached or surpassed that goal. (The national average in 1999 was 28 percent.) Some states were taking more drastic measures. California had hoped to cut its overall refuse by 50 percent but missed that goal even though it did accomplish an impressive 33 percent. Minnesota was considering a law to ban all dumping in landfills.

But no state caught the attention of the industry more than New York, which planned to close its Staten Island landfill by the end of 2001. For 50 years, the landfill had been home to New York City's 13,000-ton daily trash load. Of concern to citizens of neighboring states, as well as to legislators, was the absence of laws preventing interstate dumping, and many Americans living in the East were wary of their states taking on New York's trash, even if they had the room and could use the money. For example, in 1997, Pennsylvania imported 6.3 million tons of trash from other states and buried it in its landfills for a fee. Virginia had also been a high-volume trash importer. However, in 1998, barges of trash traveling the historic James River on their way to landfills began spilling and leaking their loads into the river. At about the same time, New York papers featured Governor James Gilmore wearing latex gloves and showing the press items of medical and human waste that had been mixed with Brooklyn garbage. A shocked citizenry began to mobilize its political support, and as of early 2000, several state legislators had bills pending which addressed the potential ban of imported trash. Continuing negotiation of a proposed international hazardous waste treaty might result in bans on shipments of certain wastes to developing nations, which could otherwise become dumping grounds for other nations' unwanted and dangerous refuse.

On November 8, 1999, the EPA published its plan to implement emission guidelines for MSW landfills, focusing on the recovery of methane gases released into the atmosphere. Emissions from MSWs and industrial land-fills had increased almost 20 percent between 1990 and 1997. EPA's stated goal was to reduce landfill methane emissions by 50 percent by 2000.

Current Conditions

According to survey research conducted by Biocycle as reported by Journal of Soil and Water Conservation, municipal solid waste totaled 26.4 million tons in 2001, up 7 percent from the previous year. Of the 41 states that replied to the survey, 10 had no change in their recycling rates, 14 showed an increase, and 17 reported a decrease. Landfill trends included nine states that reported no change in landfill rates, 20 states reported in increase, and 12 states reported a decrease. According to the Biocycle report, the United States had 132 incinerators located in 35 states. Nationally, 7 percent of the country's municipal solid waste was incinerated in 2001.

In the early twenty-first century, waste management firms are exploring and expanding ways to harness the power of landfill gases. Under EPA regulations, landfills are required to collect and burn landfill gases to be in regulatory compliance. Usually, landfill gases are burned off by flares installed in the landfill; however, the industry is discovering that the gases, composed primarily of methane and carbon dioxide, can be used to produce a viable energy source. "Almost every community across America has a landfill, and that landfill is generating landfill gas," Brian Guzzone of the EPA's Landfill Methane Outreach Program told American City and County. "So, when feasible, why not do something with it?" Guzzone added. By capturing the gases and using them as a fuel source for such purposes as heating and motor fuel, greenhouse emissions are reduced and otherwise-wasted energy is used.

Industry Leaders

The multinational waste management and environmental services firm Waste Management Inc. remains the largest in the industry. With $11.1 billion in annual revenues in 2002, it serves 25 million residential and two million commercial companies and owns 319 landfills and 650 hauling operations across the country. After posting significant losses during the late 1990s, the company rebounded to record a net profit of $822 million in 2002.

Allied Waste Industries is the nation's second largest waste management firm, with 10 million total customers in 39 states. Its nonhazardous solid waste operations include 340 collection companies, 175 transfer stations, 169 active landfills, and 66 recycling facilities. The company posted a net income of $215 million on $5.5 billion in revenues for 2002.

Research and Technology

The industry is increasingly affected by new technologies related to packaging, waste transportation, and hazardous waste disposal. Recycling services are becoming a more important part of waste management services, even though residential recyclables recovers only a fraction of the cost necessary to collect and process them. Therefore, new recycling technologies, such as the development of papers and inks that are easier to process, could play a critical role in MSW profitability.

Additionally, great strides were made in the development and promotion of refuse-derived fuel under what has been referred to as waste-to-energy (WTE) technology. In 1999, the United States had 103 WTE facilities, which operated mostly as joint ownerships/partnerships with local governments.

National Environmental Technology Applications Corp. was one firm on the technological edge. This firm devised a mile-deep tube that could pressurize hazardous sludge for use as bricks, road base material, and structural fill. Importantly, advances in scrubber technology could revive the ailing WTE sector, allowing cleaner emissions at reasonable costs for energy plants. WMX had already developed new fabric filters and dust collectors that allowed it to convert trash to energy more efficiently and cleanly.

Further Reading

"1999 Timeline." Waste News, 20 December 1999.

Callan, Scott J. and Janet M. Thomas. "Economies of Scale and Scope: A Cost Analysis of Municipal Solid Waste Services." Land Economics, November 2001, 548-60.

Brown, Bob. "IESI Buys 14 Firms." Waste News, 23 August 1999.

——. "Stericycle Moves to Front of Line." Waste News, 19 April 1999.

"By the Numbers." National Geographic World, April 2001,6.

Duff, Susanna. "Boom Goes Waste." Waste News, 3 September 2001, 1.

——. "Generators, Waste Firms Try to Cut Cost." Waste News, 20 August 2001, 13.

Ewel, Dexter. "Garbage: Can't Keep it Out, Can't Keep It In." BioCycle, March 1999.

Goldstein, Nora, and Celeste Madtes. "That State of Garbage in America." BioCycle, December 2001, 42-53.

Hickman, Lanier. "Garbage: Bin There, Done That." American City & County, November 1999.

Hood, Julia. "Growing Pile of Tech Waste Prompts Push for Cleanup." PR Week, 4 March 2002, 2.

Johnson, Jim. "Food Waste Soars." Waste News, 19 August 2002, 1.

Malbin, Joshua. "Wasting Away." Audubon, November-December 2001, 15.

Reagin, Misty. "Turned on by Trash." American City & County, January 2002, 34-39.

Sanders. "Trash Haulers' Prices Going Up With More Hauler Consolidation." New Hampshire Business Review, 5 November 1999.

"The State of Garbage in America." Journal of Soil and Water Conservation, March-April 2002, 35A.

Truini, Joe. "Trash Bags Lots of Cash." Waste News, 12 July 1999.

"Trash Timeline: 1000 Years of Waste." Waste News, 3 May 1999.

"Valuation of the Waste Management Industry." Weekly Corporate Growth Report, 1 February 1999.

"Waste News Stock Market." Waste News, 20 December 1999.

Wood, Daniel B. "Recycling Revolution Loses Its Fervor." Christian Science Monitor, 9 November 1999.

"A Year Best Forgotten." Waste News, 20 December 1999.



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