The Honolulu City Council wants to kill a controversial recycling subsidy that has saved a single scrap yard millions of dollars.

All eight council members at Wednesday’s meeting said they support the new bill, which was first introduced last Thursday.

The current arrangement gives private recycling companies a 50 percent discount on the tipping and disposal fees they pay for recycling residue dumped in Oahu’s landfills.

Schnitzer Steel, one of the largest recycling companies on Oahu, is the most obvious beneficiary of the discount.

Marissa Capelouto, who is running to represent the Makakilo and Kapolei district in the state House, testified that the current arrangement gives Schnitzer an unfair advantage over other, smaller companies.

“Schnitzer is our neighbor,” she said, adding that the company has continued to thrive while small businesses in the area have gone under. “The mom-and-pops are gone. They’re still up…Don’t give away stuff like that ‘cause it’s not fair for everybody.”

In 2010, when the discount was 80 percent, the company was spared $1.9 million in recycling fees. The arrangement saved private recycling operation $2.1 million total that year.

The council has garnered much criticism over what some have called an erratic and confusing approach to the subsidy. Council members last May unanimously voted to eliminate the discount but then reinstated the current 50-percent discount less than a month later.

Council Members Ernie Martin and Ann Kobayashi, who in the past have supported the subsidy, on Tuesday published an Op-Ed in the Honolulu Star-Advertiser explaining their reasoning behind the new bill. They argued that the money would help fund the city’s bus service.

Natalie Iwasa, a member of the public who testified in support of Bill 61 at Wednesday’s council meeting, said overturning the subsidy would save the city roughly $500,000.

Critics of the subsidy have said it’s too generous, particularly in light of evidence that the company is not financially dependent on it.

Councilman Tom Berg, who has opposed the subsidy, on Wednesday asked testifiers commenting on the bill whether they thought it would result in increased garbage left on Oahu streets.

A few said they thought it would not.

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