2024 Sustainability Report

Every pallet that enters our recycling program follows a carefully designed process that maximizes environmental value at every stage. When a pallet arrives, it is sorted by size, type, and condition. Pallets in good structural condition are cleaned, inspected, and returned to commercial circulation — this is the highest-value environmental outcome because it eliminates the need to manufacture a replacement pallet from virgin timber.

Pallets that need repair are routed to our refurbishment line, where skilled technicians replace damaged boards and reinforce weakened stringers using reclaimed lumber from other pallets. This repair-and-reuse approach extends the average lifespan of a pallet by two to three additional use cycles, multiplying the original environmental investment of growing and harvesting the wood.

Wood that has reached the end of its structural life is processed into secondary products. We produce landscape mulch, animal bedding, and biomass fuel pellets from reclaimed pallet wood. Metal fasteners are extracted and sent to steel recyclers. The result is a true zero-waste operation where every gram of material finds a productive end use.

Our delivery and pickup fleet is the largest single source of our direct carbon emissions, which is why fleet efficiency has been a primary focus area. In 2024, we deployed advanced route optimization software that analyzes pickup and delivery locations in real time, grouping stops into the most fuel-efficient sequences. The result was an 18% reduction in fuel consumed per pallet moved — a significant improvement that translates to fewer gallons burned and fewer emissions released.

We also implemented a load consolidation strategy that increased our average truck utilization from 78% to 91%. By combining pickups and deliveries on the same routes and scheduling backhauls, we reduced the number of partially loaded trips and eliminated unnecessary dead-heading. Every mile our trucks travel is now more productive than ever before.

Looking ahead, we are evaluating compressed natural gas (CNG) and electric vehicle options for our fleet. While the infrastructure for heavy-duty electric trucks is still developing in Michigan, we are committed to transitioning to lower-emission vehicles as the technology matures and becomes commercially viable for our operation. Our target is to pilot two CNG-powered delivery trucks in 2025 as a first step toward a carbon-neutral fleet.

We believe that sustainability claims without verification are just marketing. That is why we are committed to increasing the transparency and verifiability of our environmental metrics. Currently, our zero-waste-to-landfill status is documented through waste stream audits and material flow tracking that accounts for every pallet, board, nail, and wood chip that enters and exits our facility. Our carbon offset calculations use EPA-recognized methodologies and industry lifecycle analysis data from peer-reviewed sources.

As part of our 2027 long-term goals, we are working toward engaging an independent third-party auditor to verify our sustainability metrics annually. Third-party verification adds credibility to our reporting and provides our customers with the confidence they need to include our data in their own ESG disclosures. We are evaluating several verification frameworks, including the GHG Protocol Corporate Standard for carbon accounting and ISO 14001 for environmental management systems.

In the meantime, we are transparent about our methodology. Our carbon offset calculation assumes that each recycled pallet avoids 5.0 kg of CO2 compared to new production — a figure derived from averaging multiple published lifecycle analyses of wood pallet production in North America. Our tree preservation equivalency uses the EPA standard of 1 tree = 0.06 metric tons CO2 per year, applied to our total carbon offset. Our water savings estimates are based on published data on water consumption in the timber harvesting and sawmill processing industries.

We welcome questions about our methodology and are happy to share detailed calculation documentation with any customer, partner, or stakeholder who requests it. Transparency is not a weakness — it is the foundation of trust.

The pallet industry in the United States processes approximately two billion pallets per year. Despite growing awareness of recycling and reuse, hundreds of millions of pallets still end up in landfills annually. At Ace Pallet Service, we believe this represents both a profound environmental challenge and a significant business opportunity.

Our vision for the next three to five years is to scale our operation from regional leader to statewide model — demonstrating that a zero-waste, sustainability-first pallet operation can be profitable, scalable, and replicable. We want to prove that the circular economy is not just an aspiration but a viable business model for the pallet industry.

We are investing in technology (lifecycle tracking, automated sorting, predictive maintenance), infrastructure (expanded yard capacity, solar energy, CNG fleet), and partnerships (municipal waste diversion programs, corporate sustainability initiatives, industry coalitions) to make this vision a reality. Every pallet we save from a landfill is a step in the right direction, and we are committed to taking more steps every year.

We invite our customers, partners, and community to hold us accountable. This report is our commitment to transparency, and we will continue to publish our progress — successes and shortfalls alike — every year. The road to a circular pallet economy is long, but every mile matters, and we are grateful to walk it alongside the businesses and communities that share our vision for a more sustainable future.