This does not relate to efficiency of this sorting plant. Instead it defines how efficiently your island converts waste into recyclables in places like maintenance depots and settlement. So for instance 40% efficiency means that 40% of the iron used in maintenance ends up in recyclables. What is not converted into recyclables gets wasted. Note that postponing processing of recyclables due to expectations of future increase in efficiency won't help as the conversion is done when recyclables are created not when they are sorted. Efficiency can be increased via research and edicts.
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