1640s, "payment for saving a ship from wreck or capture," from French salvage (15c.), from Old French salver "to save" (see save (v.)). The general sense of "the saving of property from danger" is attested from 1878. Meaning "recycling of waste material" is from 1918, from the British effort in World War I.
An allowance or compensation to which those are entitled by whose voluntary exertions, when they were under no legal obligation to render assistance, a ship or goods have been saved from the dangers of the sea, fire, pirates, or enemies. [Century Dictionary]
"to save" (from shipwreck, flood, fire, etc.), 1889, from salvage (n.). Related: Salvaged; salvaging.