Collecting Before it's Buried

Plastic packaging is being consumed, but capturing it for recycling can be tricky.

Americans are a thirsty bunch. And how they meet that thirst is changing the face of the plastics recycling market. Consumers find the 16-, 20- and 24-ounce sizes of soft drinks are convenient: they can “super-size” their drinks to meet a major thirst better than they can with small bottles. Two people can share a soda and not worry about the rest of a two-liter bottle going flat. To top it off, 20-ouncers are easier to store and handle.

The challenge facing the plastics recycling industry is that the contents of those new containers generally are consumed away from home or other places where recycling programs are handy. The growth in popularity in the beverage bottles comes at a time when PET (polyethylene terephthalate) usage in other applications is slowing.

Meanwhile, change in the color makeup of HDPE (high density polyethylene) milk cartons is creating some challenges in that segment.

According to a report made public this summer by NAPCOR (National Association for PET Container Resources, www.napcor.com) on the U.S. PET bottle industry, overall growth of PET resin use for bottles and jars slowed in 1999. This reflects a mature market for overall soft drink (CSD) applications.

However, the Charlotte, N.C.-based group found 9% growth in 20-ounce. packaging of CSDs. The 24-ounce bottle, which was in its second year on the market, saw whopping growth— more than 30%. But that growth came at the expense of other sizes. The boom in 24-ounce CSD containers cost market share in the half-, one-, and 3-liter sizes. As a result, for the first time in nine years of consistent double-digit growth, the market growth for PET bottles was less than 9% in 1999. Still, that’s nothing to cry about.

Production of the popular two-liter size was flat. Overall growth in pounds used for larger-size applications was less than 2%. According to Luke Schmidt, president of NAPCOR, the size difference makes no difference in the processing of the material for recovery. “The issue with the smaller-sized bottles is collection,” he says. Most two-liter size bottles are consumed at home. It is relatively simple to collect them through curbside programs. The 20-ounce sizes, however, are consumed all over the place: the kid’s soccer games, airport terminals, bus stations, sports arenas, in the car. So NAPCOR has developed a couple of programs to boost collection.

This is doubly worrisome in a market which has seen the rate of recycling drop by almost 40% between 1995 and the present.

COLLECTING PET

One answer is PETE’s Big Bin—a green bin made from recycled material. It looks a bit like a 7-Up or Mountain Dew bottle. These bins are currently in use at 14,000 U.S. venues and 5,000 in Canada to collect plastic bottles. Schmidt says it is a low-cost, highly effective program. The bins themselves help recycle 20-ounce bottles: each is made from 150 such recycled containers. Businesses and recyclers can buy the bins through NAPCOR, either singly or in large quantity. Sets of 100 bins are available for $1,500 through the association.

A second initiative is the OMG Media program. These are larger boxes made of stainless steel and generally placed at airports and train stations. “They generate revenue two ways,” Schmidt points out. First, from collecting recyclable plastic; second, there are advertising panels on the sides of the box which can be sold to interested parties. A minimum of 10 bins must be placed, but the program insures the user against liability for $1 million. The placement agreement must run three to 10 years.

Another area with high growth is the custom container market. Bottles for water grew at 30% over 1998. People are pouring juice and juice drinks at a rate 16% faster than last year. Isotonic drink applications seemed to reach the end of the hockey-stick curve, posting a more modest 10% increase.

End users like Tom Bradley-Norton, president of Turtle Plastics, Lorain, Ohio, find they can get all the recycled material they need, although the price continues to edge up. Turtle Plastics manufactures flooring for locker rooms, cribbing and hose bridges for fire companies, and the like.

“We’ve seen a bit of a run-up in price,” Bradley-Norton says. “But if we were using virgin material, it would be higher yet.” The company buys reground material.

“We’ve had to become more selective in what we get,” Bradley-Norton continues. “As we get bigger, we are being more particular with colored material.”

COLORED MATERIAL

The market is keeping a close watch on non-traditional uses—any major growth in packaging beer in plastic bottles, the use of colored milk containers or other packaging decisions—will change the way consumers buy beverages and eventually will change the look of this segment of the recycling industry.

Pigmented containers are a concern for Alan Logan, in the plastics purchasing division of Ensley, Corp., North Canton, Ohio. Ensley has HDPE operations in Baltimore and in Reidsville, N.C. “We’ve seen some of the pigmented dairy bottles, but it hasn’t effected us too much yet,” he says. However, he is aware that the supply of clear HDPE could be diminished down the road. “It’ll decrease the number of pure, natural dairy bottles,” he predicts.

By mid-summer, Logan was dealing with an eight-cent spread between clear HDPE and the pigmented material in favor of clear.

Arthur Ferguson, general manager of KW Plastics, Troy, Ala., says the price of materials has been going up for about nine months. He also noted the difference between colored and clear HDPE. “A year ago, mixed colored material was five cents and clear was eight cents,” he says. “Now there is a 10-cent differential. But even though the difference between clear and colored HDPE has increased to 10 cents, percentage-wise the differential is the same as it was a year ago,” Ferguson figures.

“I don’t know if the volume of pigmented containers is where the dairies want it to be,” Logan says. “The consumer is used to clear bottles. They want to see white milk in clear containers.”

However, Ferguson believes that the volume of both natural and of colored HDPE is up in his area. But the increase in colored material makes little difference in his operation. “The colored HDPE comes in a co-mingled bale. They segregate the clear from the colored. The colored HDPE is mixed in with orange detergent bottles, green, yellow and other colored plastics,” he explains.

Another non-traditional application is the use of PET beer bottles at stadiums and ballparks. If consumers are willing to accept beer in containers other than glass and aluminum, PET beer bottles could just be the boost needed to provide a critical mass required to allow for better economics and more recycling. Other areas also are growing.

“We are seeing good growth in the dairy industry, especially in the single-serve arena,” Schmidt says. He notes significant growth in 16-oz milk bottles and in wide-mouth, hot-filled containers for processed foods. For the first time in 1999, NAPCOR saw slightly more PET resin used for custom container applications like these, as opposed to CSD bottles.

BILLIONS AND BILLIONS

NAPCOR says the total number of pounds of PET bottles and jars available for recycling in 1999 was 3.25 billion. This includes all of the PET bottle resin used by U.S. bottle manufacturers from any U.S., foreign or recycled sources minus the sum of scrap generated and not reused, exported bottles and pre-forms and bottles less than 8 oz. in size. NAPCOR uses this number as the denominator in determining both recycling and utilization rates.

The amount of post-consumer PET bottles collected and sold in the U.S. increased to 771 million pounds in 1999. Domestic purchases lead the lot, accounting for 586 million pounds. The export market was a distant second, taking 183 million pounds.

Composite applications made up the remaining consumption of post-consumer materials, according to NAPCOR.

On the international scene, Canada again lead in consumption, with 23 million pounds going to markets north of the border. Less than one million pounds went to Mexico, Korea, India and Indonesia and the balance to China. Aggressive export pricing and the inability of some U.S. reclaimers to compete led to the single annual largest amount of post-consumer bottles shipped out of the country. This represents a bit of a turn-around in the export market where the gross recycling rate in 1999 was 23.7%, the fifth straight year of decline.

Early in 1999, the market was as flat as a week-old Coke. In fact, the first nine months were pretty poor price-wise for PET bottle bales.

Demand was high for the vertically integrated reclaimers, but low prices in the competing market segments, especially in the off-spec markets, kept a cap on bale prices. The inventory draw-down seemed complete by the fourth quarter and increases in the price of virgin material (combined with export pressure) added some fizz to the prices at all bale grades and across most market segments.

FEAST OR FAMINE?

The market is confusing. On the one hand, prices for baled or flaked plastic containers fetch a decent price based on weight—generally rising from a dime to 25 cents per pound ($200 to $450 per ton). Yet municipalities regularly moan that they are not making any money in their plastics collection efforts. Perhaps they are looking at old figures.

While collection suffers—sometimes from neglect—many of the consumers of recycled plastic say they can’t round up enough material to build up their inventories to a comfortable level.

“We see a critical shortage in supply both for PET and HDPE,” says Logan. “That is definitely what is driving the prices up.”

Logan notes that recycling is no longer front-page news. “It’s a time of prosperity and excess,” he continues. “The interest level is down with the public. We see stories in the news about collected material going straight to the landfill and people say, ‘why bother?’” He also says he feels that companies which have dissimilar interests to recyclers are doing their best to undermine recycling efforts.

Still, NAPCOR found 20 plants producing clean PET flake from post-consumer bottles during 1999—a total gross in capacity of 890 million pounds.

The upshot is that bales were up a couple of cents per pound by mid-2000.

TOWARD NEW MARKETS

In Concord, N.H., work at the Northern New England Mixed Plastics Manufacturing Facility is investigating the feasibility of developing a program to recycle mixed plastics, numbers 1-7 included.

According to project coordinator Betsy Blaisdell, the project is underwritten by Region 1 of the Environmental Protection Agency (EPA), the American Plastics Council, the New Hampshire Governor’s Recycling group, the Northeast Resource Recovery Association, and the Vermont Agency of Natural Resources.

Blaisdell says that, while early indications are positive, it is premature to speculate on possible markets or end products until the engineering is proven. One of the technologies would sort materials and produce pellets. The others would take the plastic through to an end product.

The study grant goes until December 2000. The result would be licensing and commercialization of technology for recycling. If the technology can be taken to market, it would be another year before it came on line.

Bradley-Norton notes that he used to be able to obtain recycled materials for nothing or next-to-nothing. Since he is being more particular about the quality and color of the materials he uses, he is purchasing from inter-mediaries who work to assure quality.

“They have to make money on what they do,” he acknowledges. Like others in the business, he notes there has been a run-up in prices. However, he adds, “We haven’t been alerted to any more price rises.”

KW’s Ferguson says he feels the price of plastic has peaked. “It should be flat for a while and then, before the end of the year, it should go down,” he expects.

“We see recycled prices bumping the virgin price, so it has to go down,” Ferguson figures.

Logan predicts supply will remain tight. The only thing he can see driving prices sharply downward would be an unexpected dive in the price of virgin material; that, as Ferguson notes, would drive the recycled price down. “The spread is close for most processors,” Logan notes. “It is two to three cents closer on feedstock versus pellets and that means less margin for the processor.”

His answer to keeping the price of recycled plastic materials firm starts at the front end of the equation—build the market and industry by pumping up recycling collection efforts nationwide.

“Something needs to be done to get the public interested again in recycling,” Logan concludes.

The author is an environmental writer and Recycling Today contributing editor based in Strongsville, Ohio.