(Bloomberg Opinion) -- Is plastics recycling a lie? That’s the question at the heart of a new investigation into whether Americans have been filling up their blue bins with misplaced hope.The evidence on the side of recycling doesn’t look good. As far back as 1974, industry insiders were doubting whether plastics could ever be recycled economically. More recently, China’s decision to severely restrict its import of recyclables has left much of the world looking for new places to send used plastics — and falling short. Most damaging of all, waste plastics aren’t valuable, and “never have been,” according to authors of the investigation (a joint undertaking by National Public Radio and PBS’s “Frontline”).It’s a disturbing story that’s roiling the industry and upsetting environmentalists. But Americans shouldn’t turn their backs on plastic recycling just yet. The production and use of plastics in emerging markets is growing rapidly, and there’s no reason to think that demand will weaken. Without a recycling solution, those tonnages are bound for landfills and incinerators. Fortunately, the global recycling industry has a history of transforming what was previously “unrecyclable” into useful products. It’s poised to do so again.Recycling is as old as manufacturing. Garments have long been repurposed into rags; swords have been remelted into plough shares. The Industrial Revolution, which created new demand for raw materials to feed factories, transformed this act of personal thrift into a commercial enterprise. In early 19th-century Yorkshire, a shortage of wool for the mills led Benjamin Law to develop a process for producing new fabric from old rags that had accumulated in homes and businesses. By 1855, 30 million pounds of rags were being used in the region each year.But perhaps the industry’s most important innovation emerged in reaction to one of the 20th century’s biggest — and now forgotten — environmental crises: abandoned cars. In 1970, an engineer at General Motors estimated that over the previous 15 years Americans had abandoned between 9 million and 40 million cars in fields, rivers and city streets. Among other problems, the cars leaked oil and gas into soil and water, and were such a blot on the landscape that they inspired Lady Bird Johnson’s highway beautification campaign. In 1970, President Richard Nixon told Congress that “few of America’s eyesores are so unsightly as its millions of junked automobiles.”The problem was that cars are a pile of various metals and other materials that are expensive to separate for recycling, and the auto companies had made almost no effort to promote the reuse of their products (in the 1930s, Ford built, and quickly abandoned, a disassembly plant). So owners took matters into their own hands, dumping their vehicles or occasionally burning them (in the 1950s, auto fires accounted for about 5% of ambient air pollution).Fortunately, a few scrappy entrepreneurs in Texas, seeing an opportunity in all that abandoned metal, sought an alternative. Their solution was a complex shredding machine that reduced cars to fist-sized chunks that were separated via magnets and other processes (the second-ever shredder has been declared a National Historic Mechanical Engineering Landmark). Today, there are hundreds of auto shredders in the U.S., and nobody spends much time thinking about abandoned cars.In many respects, plastics present a similar problem. Manufacturers developed them without any plan for disposal or recycling. Worse, different plastics are often used together and separating them can be uneconomical. Plastics aren’t impossible to recycle — a decade ago, China was home to tens of thousands of small, profitable businesses doing just that — but recycling them in a safe and environmentally sound manner is challenging and expensive.Five years ago, Chinese demand for American plastics allowed consumers and regulators to overlook these problems. But thanks to China’s restrictions, as well as heightened awareness of ocean plastics and other negatives associated with the material, manufacturers, regulators and — most important — innovators are finally paying attention. According to one recent analysis, reuse and recycling could be a $60 billion market for the petrochemicals and plastics sector, representing almost two-thirds of its profits growth by 2030.As a result of all of these factors, the most intensive research-and-development effort in the 200-year history of the recycling industry is underway. Some of this investment comes from the U.S. government, including from a research fund established by the Trump administration. But several intensive commercial efforts are also underway, including the development of plastics engineered to be recycled repeatedly, and enzymes that help to separate different plastics more easily. Chevron is backing an effort to scale-up existing recycling technologies. Perhaps most crucially, other organizations are helping to provide waste collecting and recycling infrastructure to the one-third of the globe that still lacks it.Some of these efforts won’t get beyond the research stage. Some may turn out to be too expensive to deploy. And some may take years to have an impact. But the world won’t stop producing and consuming plastic any time soon; total waste volumes are expected to nearly double by 2030. Recycling will be essential to managing all that trash — and that’s no lie.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Adam Minter is a Bloomberg Opinion columnist. He is the author of “Junkyard Planet: Travels in the Billion-Dollar Trash Trade” and "Secondhand: Travels in the New Global Garage Sale."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The outlook of AgEagle Aerial Systems (NYSE:UAVS) stock is actually quite complicated at this point. As many others have pointed out, it does appear that Amazon (NASDAQ:AMZN) plans to test the company's drones.Source: Rocksweeper / Shutterstock.com But regulatory restrictions could prevent the e-commerce giant from deploying drones on a massive scale anytime soon. Despite that potential obstacle, however, I do recommend that risk-tolerant investors buy a small amount of AgEagle's stock. Amazon Probably Intends to Try AgEagle's DronesAnother InvestorPlace columnist, Luke Lango, recently wrote an article which convinced me that Amazon likely does indeed plan to try out AgEagle's drones.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Education Stocks to Buy for the Fall School Season Among other points, Lango noted that the company had reported "follow-on purchase orders for its drones from an unnamed 'major e-commerce company' and that AgEagle had moved its headquarters and factory very close to the site of a planned, large Amazon warehouse.Further, a leaked video that showed a logo with both companies' name on it and included footage of "AgEagle's founder unloading an Amazon drone from its crate" surfaced, Lango noted. This May Be Only a TestOn Aug. 31, CNBC reported that the FAA had approved Amazon's application to use drones for delivery. Moreover, according to the website, the agency gave the company a waiver of regulations which require operators to remain within the physical line of sight of drones.However, Amazon said that, for now, it only plans to test using drones for deliveries.There are many other federal regulations which could make it difficult for the e-commerce giant to launch drone deliveries on a massive scale.Specifically, drones are not permitted to fly over people who are not in a covered vehicle or building, and they cannot "fly near other aircraft, especially near airports." Finally, they are not allowed to fly more than 100 miles per hour.Another possible limit on Amazon's use of AgEagle's drones for delivery is the fact that the two drones currently marketed by the company can apparently only fly for a maximum of 400 acres or one hour, whichever comes first. Moreover, the company's drones are primarily used in agriculture, and its website indicates that it has only recently begun developing delivery drones. Since farms tend to be isolated, AgEagle probably doesn't have much experience with developing drones that can avoid people and planes.I think it will take Amazon and AgEagle time to develop and launch effective delivery drones that comply with all federal regulations. Consequently, it will likely be at least two or three years before Amazon uses AgEagle's drones on a massive scale. Walmart's Example and Self-Driving CarsEncouragingly for the owners of UAVS stock, Walmart recently unveiled plans to launch "on-demand deliveries of select health and wellness products in the U.S. early next year." The retail giant is also launching "a pilot project for delivery of grocery and household products."But the two companies that are supplying drones to Walmart for these projects -- Flytrex and Zipline -- appear to have meaningfully more experience with using drones to facilitate deliveries than AgEagle. Further, Walmart's stores tend to be located much closer to residential areas than Amazon's warehouses. It is likely making it much easier and cost-effective for Walmart to use delivery drones than Amazon.Even though it may take years for AgEagle to secure a big drone order from Amazon, UAVS stock is likely to climb. Especially over the next year or two as the two companies partner to develop delivery drones.I believe that because of the precedent set by companies that develop technology which enables self-driving cars. For example, Cruise, the start-up which developed self-driving technology and was ultimately bought by General Motors (NYSE:GM), was valued at $19 billion in May 2019, even though its products had not yet generated meaningful revenue. And Argo, which also developed autonomous-driving technology and was ultimately acquired by Ford (NYSE:F), received a $7.5 billion valuation in July, even though its products have also not generated significant sales.Drones are not as cool as self-driving vehicles and in all likelihood will not be as lucrative as robotaxis. Investors are still likely to bid up UAVS stock in anticipation of an eventual big deal from Amazon. The Bottom Line on UAVS StockInvestors who expect AgEagle to get a huge order from Amazon within six months are likely to be disappointed. And Amazon could, after testing AgEagle's drones for awhile, decide to turn instead to a company that has more experience developing delivery drones.Nonetheless, if Amazon does stick with UAVS stock, the shares are likely to rally as the two companies work together.On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. Larry has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel's largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post AgEagle Stock Can Rally Despite Obstacles appeared first on InvestorPlace.
General Motors' (GM) big plans to capture the EV market are indeed intensifying competition for all major auto players and especially the EV behemoth, Tesla (TSLA).