Free Money Quote of the Day On the Next Big Thing, Garbage
The Next Big Play Is Garbage
The Wall Street Journal comments Wall Street’s Next Big Play Is Garbage
Shares of the biggest players in the U.S. trash business, Waste Management and Republic Services have traded at record highs since President Biden signed the climate, tax and healthcare bill in August.
“They’re sitting in this extraordinary position,” said Michael Hoffman, an analyst at investment bank Stifel. “Garbage will be on the forefront.”
WM and Republic are building plants to isolate methane from the fumes emitted by rotting garbage and pipe it into the natural-gas grid to be burned in power plants, furnaces and kitchens. They are also equipping recycling facilities with the latest in automation to better sort and process materials for the consumer-goods companies that are under pressure to keep their packaging out of landfills and the ocean.
“Yes, there’s a year-over-year impact, but recycling is still profitable,” said Tara Hemmer, WM’s chief sustainability officer. “It still is one of our highest return-on-capital investments.”
A lot of hard-to-fill jobs will be replaced by optical sorters, which use infrared cameras to spot valuable materials in the jumble and blow the desirable bits into separate bins with pinpoint puffs of air, Hemmer said.
“In the past we might have had mixed-paper bales that had cardboard embedded in them,” she said. “Now we’re able to pull more of that cardboard out, it goes in the cardboard bale, and the price point on cardboard is much higher than mixed paper.”
Last year’s climate bill sweetened the economics of trash gas. A federal proposal to offer additional credits for biogas projects that produce power for electric vehicles could make the incentives even stronger.
Source: Mish Talk
