Creating a new value proposition for recycled content

Today’s market conditions have created a challenging time for plastic recyclers. One of the biggest problems recyclers face is low oil and natural gas prices, which have reduced the pricing of prime resin and, at times, lowered the prime resin cost below that of recycled material. With the cost advantages of recycled plastics no longer being reliable, some plastics consumers are choosing to use prime over recycled content. While cost is an important factor to consider when making purchases, consumers should know that the benefits of choosing to use recycled content go far beyond a pricing advantage, including:

• honoring previous, publicly stated commitments to using recycled content, which consumers will hold companies accountable to;
• creating opportunities to use recycled content as a market differentiator, appealing to consumers who want recycled content; and
• supporting ecolabels and environmentally preferable purchasing (EPP) policies that award using recycled content.

SPI is committed to promoting recycling benefits in plastics manufacturing, and our Recycling Committee is exploring, more in depth, EPP policies and how they affect our members. We wanted to examine how these policies are being used to drive preference for products containing recycled content, particularly for plastics, and see how this information might be used to incentivize increased use of recycled content and, perhaps even find new uses for recycled content that will create competitive advantages.

History of EPP policies

EPP policies have been around for nearly three decades. In 1988, the U.S. Environmental Protection Agency (EPA) issued the “Guideline for Purchasing Paper and Paper Products,” available at http://bit.ly/2b6hckM, which included the first federal recycled-content guideline.

In 1993, President Bill Clinton signed an executive order that triggered the General Services Administration (GSA) and EPA to pilot an EPP project on cleaning products.

While putting products on the EPEAT registry is voluntary for original equipment manufacturers (OEMs), it becomes rather compulsory if you’re an OEM hoping to sell to the federal government, which happens to be the largest institutional purchaser in the world.

By 1994, the EPA drafted a concept paper that created national EPP momentum at the federal, state and local levels and gave preference to the purchasing of recycled-content paper products. This paper has had a lasting effect, helping to normalize the presence of recycled content in paper products.

EPP policies have continued to expand to include a wide variety of products. Support for EPP policies historically has been bipartisan, with President George W. Bush signing an executive order in 2007 requiring federal agencies to place preference on purchasing electronic products that are on the Electronic Product Environmental Assessment Tool (EPEAT) registry. EPEAT is an ecolabel that also incentivizes use of recycled content and that has helped promote the use of recycled content in products such as desktop computers, printers and televisions.

You might be asking, “Why are EPP policies particularly important?”

According to the Sustainable Purchasing Leadership Council, Washington, institutional purchasing accounts for $10 trillion annually in the U.S. alone. With collective purchasing power like that, it becomes very apparent how advantageous it can be to achieve any sort of preferential purchasing status with federal, state and local governments and institutions such as universities.

Let’s consider the impact of President Bush’s previously mentioned executive order creating the federal procurement preference for EPEAT registry products. While putting products on the EPEAT registry is voluntary for original equipment manufacturers (OEMs), it becomes rather compulsory if you’re an OEM hoping to sell to the federal government, which happens to be the largest institutional purchaser in the world. Designing your products so they qualify for the EPEAT registry is increasingly the norm. And, including some amount of post-consumer recycled content in electronic equipment is an incentive for some product categories, such as desktops and laptops, while it is required in other product categories, such as imaging equipment.

A similar success story exists for copy paper. Before EPP policies, standard office copy paper containing recycled content represented a small percentage of the paper being purchased, and it was sold at quite a price premium. When EPP policies required recycled content in copy paper, it completely changed how paper manufacturers viewed recycled content. It was no longer a niche consumer base seeking recycled content. Because recycled content paper was being purchased at such high volumes, economies of scale helped drive down the price. The result is that today options abound for copy paper containing recycled content that can often be found at cost parity with many virgin copy paper options.

Leveraging the EPP policies of today

EPP policies are now well-established at the federal and state levels in the United States These federal and state programs provide agencies with a variety of resources to find products and services that meet the agencies’ sustainability and financial goals.

Federal EPP efforts. Federal agencies are required to purchase products that meet designated criteria. Under Executive Order 13423, “Strengthening Federal Environmental, Energy and Transportation Management,” signed by President Bush in 2007, and The Resource Recovery Act of 1976, agencies are required to purchase products with certain “green” criteria.

The EPA has seven designated categories for green purchasing, available online at www.epa.gov/greenerproducts/epas-recommendations-specifications-standards-and-ecolabels, including:

• cafeteria;
• construction;
• custodial;
• electronics;
• grounds/landscaping;
• office; and
• operations/fleet/shipping/shop.

To help agencies better evaluate the impacts and costs of products and services, the federal government established five EPP principles—environmental impacts, price and performance; pollution prevention; life-cycle perspective/multiple attributes; comparison of environmental impacts; and environmental performance information—available at www.epa.gov/greener products/about-environmentally-preferable-purchasing- program. These five principles are a reference for many federal agencies’ EPP policies.

Conveniently, the GSA provides resources for agencies to find products and services that meet the requirements of each category. Formally titled the GSA’s “Green Procurement Compilation,” available at https://sftool.gov/green procurement, this resource provides federal contractors a one-stop database to find environmentally friendly products and services that meet the federal green purchasing guidelines. The products listed in the database consist of appliances, biomedical equipment and supplies, traffic control products, plumbing systems and a variety of other types of products. Similarly, the GSA offers another opportunity to find green products through the GSA Advantage! program. This program has a branch titled Environmental Program aisle, where federal agencies can find products to meet their environmental procurement needs. Many of the preferred products listed have “Energy Star,” “Recycled” and “EPEAT” labels. (See https://www.gsaadvantage.gov/advantage/main/start_page.do.) Purchasers can search for products based on the certifications the products have or the specific category of good or service. The convenient directory of green products gives agencies the ability to compare and to purchase goods and services to meet the EPA’s requirements. Some federal agencies take it a step further and publish their own set of requirements.

Many federal agencies’ procurement departments, such as the Department of Commerce (DOC), Department of Defense (DOD) and Department of Energy (DOE), all refer to the EPA’s EPP policies. For example:

• The DOC’s Green Procurement Program designates EPPs and services to be purchased following the EPA guidelines per the “Commerce Acquisition Manual,” available online at www.osec.doc.gov/oam/acquistion_ management/policy/commerce_acquisition_manual_cam.
• The DOD is the largest purchaser within the federal government, and its Electronic Mall provides a database of environmentally friendly products that have a special label. (See www.responsiblepurchasing.org/UserFiles/File/DoD_GreenProcurementGuidelines_2006.pdf.)
• The Department of Transportation (DOT) specifies its own requirements, listing certain products’ preferred biobased content, referring to the U.S. Department of Agriculture (USDA) for information. Some plastic products include carpet, plastic lumber and disposable cutlery with between 7 to 90 percent biobased content. (See www.fhwa.dot.gov/legsregs/directives/orders/gppg041910.htm.)

The “SPI EPP Guide” that will be released in October 2016 attempts to capture information on each of these above-mentioned agencies.

State EPP efforts. Many states have their own sets of EPP guidelines or refer to the EPA’s guidelines, with some states having more extensive guidelines than others. In total, 35 states have general EPP guidelines. Of those 35 states, 12 specifically have recommended the use of products containing recycled plastic material; some states offer a range of recycled content. For example, South Carolina’s EPP policy (www.procurement.sc.gov/webfiles/MMO_POL_GD/2009-1.pdf) states that 25 percent of all products purchased must contain recycled content.

The most frequent products mentioned in state EPP programs are office supplies, such as binders and desktop accessories, ranging from a recommended 25 percent to 100 percent post-consumer recovered material content. Landscaping materials are another category of products mentioned frequently in state EPP guidelines, with 30 percent to 100 percent post-consumer content specified.

Leveraging the incentive

So what can industry do with this information? There has been much talk about the disconnect between supply and demand for recycled content and the challenge this creates for the recycling industry. Understanding how to leverage the power of preferential purchasing for recycled content products can help overcome that disconnect for your business.

The first stop for everyone should be visiting the EPA’s site on EPP and becoming familiar with the product categories listed. The site has targeted areas for institutional purchasers, federal agencies, consumers and those in manufacturing. A similar check can be done with each state or by referencing the “SPI EPP Guide,” which will detail state initiatives. Brand owners and recyclers have a few unique opportunities to put this information to work to their advantage.

Brand owners manufacturing products that qualify for preferential purchasing under an EPP policy could seek to get their products qualified for the registry. If you are selling a product that falls into one of the EPP categories and does not currently contain recycled content, consider the business opportunity that might exist if you began to manufacture that product with recycled content.

To help agencies better evaluate impacts and costs of products and services, the federal government established five EPP principles—environmental impacts and price, pollution prevention, life-cycle perspective/multiple attributes, comparison of environmental impacts and environmental performance information.

For recyclers, become familiar with the EPP categories. If you have existing customers that are making products in those categories and that may not be using recycled materials for all of them, show them the strategic advantage that might exist if they expanded use of recycled content to other product categories. Alternatively, consider creating a sales strategy to target new customers to buy recycled content using the EPP value proposition as a selling point. Even if recycled content is at a slight cost premium to virgin, the price difference might be far outweighed by the marketing advantage created among institutional purchasers.

EPP policies create powerful incentives to drive manufacturers to create various products with environmentally beneficial attributes. The plastics industry, as well as others, should seek to exhaust those benefits, particularly as we seek to close the gap that currently exists between supply of and demand for recycled materials.

We encourage those interested in leveraging advantages of EPP to review the “SPI EPP Guide,” as well as to visit the following websites for additional resources:

• GSA, www.gsaadvantage.gov;
• EPA, www.epa.gov/greenerproducts and also www.epa.gov/epp;
• Sustainable Purchasing Leadership Council, www.sustain ablepurchasing.org; and
• National Association of State Purchasing Officials, http://naspo.org/green/index.html.

Kim Holmes is senior director of recycling and diversion and Bridget Callahan is research and program specialist at SPI: The Plastics Industry Trade Association, Washington.