SEATTLE (Recycling Monster): The waste industry dealt with considerable uncertainty last year, as federal policy led to some instability in the macroeconomic environment. But despite those challenges and the following economic impacts, garbage and recyclables were mostly picked up as usual and investment continued to flow.
As grant funding was paused or in some cases cut off for public sector actors in waste and recycling, states began to step in. That’s expected to continue in the new year.
In 2026, the industry can look toward what’s predicted to be a less tumultuous economic environment. Regulations at the state level are also expected to tighten on issues like per- and polyfluoroalkyl substances, extended producer responsibility, landfill emissions and food waste, creating both positive and negative impacts.
Meanwhile, operators are expected to continue remaking their fleets with diesel alternatives, the biogas market will see new action on incentives and safety will remain a priority for the industry and our coverage.
M&A continues to consolidate the industry
Last year, an analysis from the Waste Business Journal found that waste and recycling was officially a $100 billion industry. But peek underneath the hood, and you’d see that major publicly traded companies — namely WM, Republic Services, Waste Connections and GFL Environmental — also now account for about half of all industry revenue, according to RBC Capital Markets.
That consolidation trend is expected to continue this year. What’s more, the industry continues to attract outside investors who increasingly view waste and recycling collection as a stable play.
In recent years, the waste and recycling industry has seen strong growth. Its compound annual growth rate has averaged around 7% since 2020, compared to 3% between 2012 and 2019, according to RBC. That’s due in part to the majors setting price growth slightly ahead of the post-pandemic era’s higher inflation rate. With inflation expected to cool slightly this year, the majors are likely to continue to drive organic revenue growth through price increases at a slightly reduced pace.
But that cool-off period may also be the result of increased macroeconomic stability. If that happens, the industry’s counter-cyclical nature could work against it. In the third quarter of 2025, the number of deals in the broader environmental services industry was down slightly as investors grew more tolerant of risk, compared to the first half of the year when those dynamics were flipped, according to a November report from Houlihan Lokey. That downturn also came as public waste companies reported softness in their manufacturing and construction business lines, demonstrating where they’re still exposed to the vicissitudes of the broader market.
Any dampening of interest from outside investors is unlikely to weigh too heavily on transaction volume this year. Public companies are still committed to spending capital on M&A, and private equity firms will continue to spin up new platforms and flip those that have matured. Already, major deals like Veolia’s purchase of Clean Earth from Enviri are scheduled to close this year, a landmark deal for the environmental services sector. The waste and recycling industry remains poised for a year of dealmaking.
Commodity and market trends
2025 was an uncertain year for recyclers in the United States due to interconnected influences from tariffs, labor constraints and waning consumer spending. Ongoing commodity price headwinds complicated operations further.
2026 will still see some similar influences, and waste industry analysts have mixed opinions on how exactly these factors will play out. Some analysts predict persistent overall commodity price headwinds to drive prices slightly lower in the early part of 2026, while others say combined recycled commodity prices could stay somewhat flat.
A lagging economy could continue to hurt recycled commodity markets. Recent data from the Purchasing Managers’ Index, a monthly indicator of a country’s manufacturing sector health, showed U.S. manufacturing activity dropped to its lowest point of 2025 in December. The report pointed to continued tariff uncertainty and overall weak demand as factors.
Some analysts are expecting tariffs may continue to cause some element of uncertainty in recycling markets in the beginning of 2026. Some recycled commodity-related tariffs imposed last year include country-specific tariffs on rPET.
Most major publicly traded waste companies are expected to release full-year 2026 guidance during Q4 earnings calls later in January and February, which should give more insight into how such companies are further adjusting for winter and spring commodity price trends. WM, for example, reported in October that it expects commodity price declines to affect its previously estimated 2026-2027 blended commodity price range of between $75 a ton and $150.
Several waste companies have said their long-term investments in recycling equipment and technology were designed to get more value out of recycling streams regardless of commodity price headwinds, and automation has cut down on operational costs.
Companies like WM and Republic Services say they are expecting stronger pricing and volume demand in 2026 as a result of infrastructure investments at MRFs and polymer centers. But some regions are still grappling with facility closures that wreaked havoc on recycling supply chains for some plastics last year, creating further unknowns. A recent closure included Phoenix Technologies shutting its Ohio rPET plant last month, and rPlanet Earth closed in California in September.
New extended producer responsibility for packaging laws could create some tailwinds for the industry, some analysts pointed out. Such laws in places like Canada, Oregon and Colorado could help boost their earnings from recycled commodities this year and beyond.
Courtesy: www.wastedive.com
