RePallet Co.Denver · Circular by design
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Guide · Recycling

What actually happens to a pallet at a recycling yard

Most explanations of pallet recycling stop at "we grind them into mulch". That is the last three per cent. Here is the other ninety-seven.

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Pallet recycling is a sorting problem before it is a processing problem. Incoming cores are graded, then routed to reuse (about 46%), repair (31%), remanufacture (12%), lumber recovery (8%) or fibre and metal recovery (3%).

Every stage recovers less value than the one before it, which is why a well-run yard invests heavily in grading accuracy at the gate. Grinding a repairable pallet destroys roughly 23 board feet of usable lumber.

Station by station

  1. 1

    Intake and weigh

    The trailer crosses the scale, the load is photographed and a batch reference is opened. Everything downstream is tied to that number.

  2. 2

    Grade sort

    Every unit is handled individually. Sorters route to reuse, repair, remanufacture or dismantle. This is the highest-skill job in the yard.

  3. 3

    Repair line

    Four stations: board replacement, companion stringers, plugging and de-nailing. Roughly 31% of intake.

  4. 4

    Remanufacture

    Units cut down to smaller footprints — half pallets, skids, display bases — using their own lumber.

  5. 5

    Dismantle

    Band-saw separation of decks from stringers, with nails still in the boards.

  6. 6

    De-nail and detect

    Boards are de-nailed and passed through a metal detector. A single missed nail destroys a planer blade.

  7. 7

    Grind and screen

    What remains is hammer-milled, magnet-separated and screened into mulch, playground fibre and bedding.

Real yields from a real year

These are our own figures from last year across 186,000 incoming cores. They move with the season — winter intake is wetter and repairs more — but the shape is stable.

RePallet Co. intake disposition, last full year, 186,000 cores.
RouteShare of intakeUnitsValue recovered per unit
Reuse after inspection only46%85,560$7.20 – $12.40
Repaired to Grade A or B31%57,660$5.40 – $9.80
Remanufactured to another footprint12%22,320$4.10 – $8.00
Lumber recovered for resale8%14,880$1.60 – $3.20
Fibre, bedding and mulch3%5,580$0.35 – $0.80
Landfilled0%0—
The steep value drop is the whole story. A pallet worth $9 as a repaired unit is worth about $0.55 as mulch. Every percentage point we move up that table is worth roughly $16,000 a year — which is why we would rather employ a skilled sorter than a bigger grinder.

The parts nobody photographs

Nails

A 48x40 pallet contains 70 to 90 nails weighing about 1.1 lb in total. Across our intake that is roughly 90 tonnes of steel a year, of which we recover about 14 tonnes as saleable ferrous scrap — the rest stays in boards that get reused with the nails still in them. Magnet separation happens twice: before grinding and after.

Moisture

Wood arriving from an outdoor stack can be 40% heavier than the same pallet dry. It grades worse, bands worse and grinds worse. Yards that buy by weight rather than by unit love wet pallets; yards that buy by unit, like ours, do not.

Stencils and paint

Painted stringer ends are an ownership mark, not decoration. Blue, red and brown painted blocks usually indicate pool property. Any recycler worth using pulls those out and returns them rather than grinding someone else's asset.

The rejection pile

Every yard has one, and an honest yard will show it to you: mould-bloomed pallets, chemical-stained units, MB-stamped wood and anything with a live infestation. Ours goes to licensed disposal, which is the one and only wood stream we do not recover — and we count and publish it.

What this means for your own reporting

If you are writing a sustainability report, the useful number is not "we recycled our pallets". It is the disposition split — how much was reused, repaired, recovered and ground — because those have very different footprints. A recycler who cannot give you that split is giving you a weight ticket and calling it data.

  • Ask for the disposition split, not just the tonnage
  • Ask what percentage went to landfill, and whether that number is audited
  • Ask what carbon factor they use and where it comes from
  • Ask whether pooled pallets were returned or processed
  • Ask for a batch-level record you can cite, not an annual summary

Ours is on the Pallet Passport page, and the factors are documented on carbon methodology.

The equipment, and what each machine is for

Plant in a working pallet recycling yard.
MachineJobThroughputWhy it matters
WeighbridgeIntake and dispatch weightsEvery loadEvery downstream figure ties to it
Band-saw dismantlerSeparates decks from stringers60 – 90 units/hrCuts through nails rather than prying
Pneumatic de-nailerRemoves fasteners from boards300 – 500 boards/hrTurns waste into saleable lumber
Metal detectorCatches missed fastenersEvery board soldOne nail destroys a planer knife
Nailing guns / jigsRepair and rebuild40 – 90 sec per repairThe profit centre
Re-squaring jigCorrects racked pallets60 – 90 secCheap fix for a common fault
Hammer millGrinds residual wood4 – 8 t/hrThe last resort, deliberately small
Overhead magnetSeparates ferrous from fibreContinuousDecides whether fibre is saleable
Trommel / deck screenSizes the fibreContinuousProduces three grades from one stream
Colour tumblerApplies pigment to mulchBatchRaises value without more grinding
Notice what is missing: nothing on this list sorts pallets. That decision is made by a person, and it is the one step that determines whether all this equipment is recovering value or destroying it.

Why recovery rates vary so much between yards

Published recovery figures in this industry range from about 60% reuse to about 15%, on nominally similar intake. The variation is almost entirely explained by four things.

  1. Sort accuracy at intake. A yard that mis-sorts 8% of repairable pallets to the grinder destroys roughly nine dollars of value on each one. Ours runs at 1.4%.
  2. Repair capacity. You can only route to repair if you have a line that can absorb the volume. Yards without one grind by default and call it recycling.
  3. Local core quality. A yard fed by a grocery distribution corridor receives better cores than one fed by construction sites. Ours is the former, and we should not take credit for geography.
  4. Whether the fibre line is a profit centre. If grinding makes money, there is an incentive to grind. Ours loses about 87 cents a unit before overhead, which keeps the incentive pointing the right way.
The same 1,000 incoming cores through three differently configured yards.
Reuse-first yardBalanced yardGrind-led yard
Reused as-is460380210
Repaired31024090
Remanufactured120600
Lumber recovered80140180
Ground to fibre30140480
Landfilled04040
Value recovered$8,940$6,120$3,410
CO₂e avoided4.3 t3.0 t1.4 t

Three yards, identical input, and the difference between the first and the last is 5,530 dollars and 2.9 tonnes of carbon on a thousand pallets. When you compare recyclers, this is the comparison that matters.

What happens to everything that is not wood

A pallet is mostly timber and not entirely timber. The rest has to go somewhere, and where it goes is a fair test of whether a zero-landfill claim is real.

Non-timber fractions and their routes.
MaterialSourceAnnual volumeRoute
Ferrous fastenersNails, staples, seals≈ 14 tColorado scrap smelter
Steel bandingIncoming loads≈ 2 tSame smelter
Poly strappingIncoming loads≈ 0.6 tPlastics recycler
Shrink filmIncoming loads≈ 1.1 tLDPE film recycler
Plastic pallets, crackedIntake≈ 4 tResin regrind processor
Labels and paperDeck surfacesSmallRemoved before grinding; mixed paper
Rejected timberMB, CCA, contaminated≈ 6 tLicensed disposal — the one stream we do not recover

That last row is published deliberately. Six tonnes a year of material we are not permitted to recover goes to licensed disposal at our cost. Our zero-landfill claim covers the wood stream and we say which stream it covers, because a claim without a boundary is not a claim.

Questions people actually ask

How many times can a pallet be recycled?
A hardwood 48x40 in a managed loop with repair typically sees six to eight lives. Our yard average across all cores is about seven. Softwood pallets manage three to five.
What percentage of pallets are actually recycled?
Industry-wide in North America, estimates put recovery above 90% — pallets are one of the genuinely successful recycling streams, largely because the wood has resale value. The variation is in how much is reused versus ground.
Is grinding pallets into mulch good or bad?
It is the last resort and it beats landfill comfortably. But it should be a small percentage of any yard's throughput. If a recycler's headline service is grinding, they are destroying value.
What happens to the nails?
Magnet-separated from the fibre stream and sold as ferrous scrap. We ship about 14 tonnes a year to a Colorado smelter.
Can pallets be composted?
Ground wood is a useful carbon source in composting, but nails and any treated or painted timber must be excluded first. Our natural-grade fibre is suitable; dyed mulch is not.
How much of a pallet is actually recoverable?
Essentially all of it. Timber goes to reuse, repair, remanufacture, lumber or fibre; steel to a smelter; the small non-timber fractions to their own routes. The only genuinely unrecoverable material is timber we are not permitted to handle.
Is grinding pallets bad?
It is the honest end point for wood with no life left, and it beats landfill comfortably. It becomes bad when it is the default rather than the last resort, which is why the percentage matters more than the practice.
How long does a pallet spend in the yard?
Reuse stock, a few days. Repair stock, one to two weeks depending on line scheduling. Dismantling happens within a month of intake because standing timber outdoors degrades it.
Can pallet wood be composted?
Ground natural-grade fibre is a useful carbon source, provided all metal is removed and no treated or painted timber is included. Dyed mulch is not suitable for composting.
What does a recycler do in a downturn?
Intake falls before demand does, because cores lag goods movement by six to twelve weeks. The yards that struggle are the ones whose economics depend on grinding volume; repair-led yards are more resilient because their margin is per unit rather than per tonne.

Let's keep your pallets in the loop

Whether you have 40 broken cores behind the dock or need 4,000 Grade A pallets a month, the conversation starts the same way.