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The plants that sort the recycling bin: materials recovery facilities (MRFs) that take mixed dry recycling and separate it into paper, card, plastics, metals and glass. Not a regulated network but a processor with two revenue streams (a contracted gate fee on every tonne accepted, plus the merchant sale of the recovered commodities), in effect a gate fee with a commodity-price call. Pick a real operator below to see the development, the model and a working returns model.
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Drag the sliders to see what earns the money: the capacity of the sorting line, the contracted gate fee on every tonne, and how fully the line is utilised, plus the merchant commodity sales.
A materials recovery facility is a processor with two revenue streams. First, a gate fee, a charge per tonne of material it accepts, usually contracted with councils or collectors and indexed to inflation. This is the stable core, and it is effectively the margin. Second, the merchant sale of the recovered commodities: baled paper, plastics, aluminium and steel, priced off volatile global markets. The commodity revenue largely offsets the cost of sorting, so the gate fee is what's left as margin. That makes the MRF a gate fee with a commodity-price call attached: the contracted floor protects the downside when commodity prices fall, while the upside is the merchant price. The risks are contamination and residue (material that can't be recovered and must be disposed of) and offtake: where the bales can be sold, especially after China's National Sword closed the export market. It is less capital-heavy than energy-from-waste, but the margin is thin and the commodity exposure is real.
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See also the MRF sorting simulator, where you build and run a sorting line, and the Cash-flow & DCF model.