WM Recycling Services is committed to providing customers with safe and reliable recycling services at a reasonable price, but fuel prices and environmental compliance-related costs are something we cannot fully control. Our standard Fuel and Environmental Charges for recyclable processing services are meant to help our recyclable processing companies cover these costs and achieve an acceptable operating margin.
Fuel Surcharge for Recyclable Processing Services
The Fuel Surcharge for recyclable processing services allows our processing companies to recover the cost of diesel, natural gas and other hydrocarbon-based fuels and products that WM uses (through its WM recyclable processing companies) to operate equipment and run its facilities in connection with its recyclable processing business, above a baseline cost. For our recycling processing business, that baseline cost is measured in diesel cost @$1.81/gallon. This charge allows our recyclable processing companies to keep up with the changing costs of diesel, natural gas and other hydrocarbon-based fuels and products and allows them to achieve the operating margin they need to maintain the high level of recycling service that customers expect.
Our Fuel Surcharge for recyclable processing services is applied on a per-ton basis based on the number of tons of material delivered by a customer for processing. The calculation is tied directly to the national average price of diesel fuel as reported weekly by the Energy Information Administration of the U.S. Department of Energy ("EIA/DOE") in its Retail On-Highway Diesel Prices Index. This index is objective, publicly available and widely recognized in the trucking and transportation industries. Tying our standard Fuel Surcharge for recyclable processing service to this index ensures customers are assessed a fuel surcharge that is currently adjusted and easy to calculate. EIA/DOE publishes each month’s diesel price on the last Monday of such month, which is used for invoices or tickets generated during the next month. The WM Recycling Fuel Surcharge Table shows what the Fuel Surcharge for recyclable processing services, per ton of recyclable material, would be based upon the last reported EIA national diesel price.
The amount or percentage of the Fuel Surcharge for recyclable processing services is not specifically tied to the direct or indirect costs to process recyclables for a specific customer account. By contract or at a WM processing company’s discretion, some recycling customers pay a nonstandard fuel surcharge or are exempt from any fuel surcharge. Through the Fuel Surcharge, WM recyclable processing companies attempt to collectively recover all costs for diesel, natural gas and other hydrocarbon-based fuels and products used by WM recyclable processing companies above the $1.81/gallon diesel cost baseline, from only those recycling customers subject to a fuel surcharge, excluding any exempt customers.
Environmental Charge for Recyclable Processing Services
The Environmental Charge for recyclable processing services is $5.00 per ton of material received for recycling and will be deducted from any rebate or added to any charges.
The Environmental Charge for recyclable processing services allows our recyclable processing companies to cover all of our environmentally-related costs incurred in connection with providing recycling processing services, including, but not limited to, those costs for environmental permitting, engineering and maintenance to maximize the recoverability of processed material, improving the quality of recyclables collected, and the safe, environmentally responsible operation of all WM recyclable processing facilities, and to achieve an acceptable operating margin. The amount of the Environmental Charge for recyclable processing services is not specifically tied to the direct or indirect costs to process recyclables for a specific customer account or at a particular facility. By contract or at a WM recyclable processing company’s discretion, some recycling customers pay a nonstandard environmental charge or are exempt from any environmental charge. Through the Environmental Charge for recyclable processing services, WM recyclable processing companies attempt to collectively recover all applicable environmental costs of its recyclable processing companies from only those customers subject to an environmental charge, excluding any exempt or non-paying customers. To the extent required by your applicable customer service terms, the assessment of the Environmental Charge for recyclable processing services, or any change to such charge, is effective upon your acceptance of rebate payments from us or your payment of any such charges to us.
Recyclable Material Offset
The Recyclable Material Offset (RMO) is a price adjustment that applies to recycling collection customers that allows our WM operating companies to achieve an acceptable operating margin despite increased recycling costs and/or declines in the value of processed recyclables in the global commodities market. The RMO is usually a charge but could be a credit to the customer’s bill and is calculated based on the amount that (a) our applicable WM operating company’s processing cost per ton, including costs of disposal for contamination and profit margin, exceeds (b) an amount equal to the blended value per ton of processed recyclables, minus an amount for profit margin. In October 2023, WM refined the RMO calculation for customers in the US by incorporating objective index values for blended commodity prices which increased the charge modestly at that time but allows the value of the charge to increase or decrease over time in a manner more reflective of changes in the market price of recyclable commodities as reflected by those indices. If the recyclables’ blended index value exceeds processing costs, plus profit margin, an RMO credit may apply, at the company's sole discretion. The RMO, including profit margin, processing and disposal costs, and recyclables blended value shall be determined by WM from time-to-time, in its sole discretion, based on applicable operating data and market information. The RMO is subject to a customer's applicable service agreement terms.