Trending upward

The recycling volumes and rates for postconsumer plastics continue to trend upward; yet, significant challenges remain.

This article will look at where we stand with postconsumer plastic collection and how this correlates with demand for these commodities. It also looks at the barriers to increasing supply and building stable domestic markets.
 

Basic bottles

Postconsumer bottle collection totaled 2,785 million pounds in 2012, the most recent year for which data are available, according to “2012 United States National Post-consumer Plastics Bottle Recycling Report,” online at www.plasticsrecycling.org/resources/reports/rate-reports. Polyethylene terephthalate (PET) and high-density polyethylene (HDPE) bottles comprise the lion’s share of the total volumes recycled at 1,718 and 1,019 million pounds, respectively, comprising more than 96 percent of the total pounds of postconsumer plastic bottles recycled in the U.S. Polypropylene (PP) bottles and small volumes of other bottles primarily comprise the remaining percentage.

A total of 28 percent of collected plastic bottle material of all types was exported in 2012, down from 33 percent in 2011. Much of that was PET at 582 million pounds, or 34 percent of total PET collected. Yet, while still significant, PET export volumes began trending downward in 2011 before Operation Green Fence influences first seen in 2013. In fact, 2012’s export volumes were the lowest by relative percentage of the total since 2005, according to the “Report on Postconsumer PET Container Recycling Activity in 2012,” available at www.napcor.com/PET/pet_reports.html.

PET. Domestic PET bottle reclamation capacity continues to increase, with 28 reclaimers currently operating in the U.S. and Canada, representing a combined nameplate capacity of more than 2 billion pounds annually.

While PET collection continues to tick upward, supply is not keeping pace with domestic reclamation capacity, and end markets for recycled PET (RPET) arguably could absorb significantly more material if it was available. End markets consumed 1,312 million pounds of RPET in 2012. The leading applications are fiber, sheet and film and food and beverage bottles, according to the NAPCOR report.

PET thermoformed packaging offers a potential source of additional postconsumer PET and includes items such as clamshells, cake domes and cups and is used to package produce, baked goods, nuts, candy and other food and nonfood items. Some PET reclaimers currently accept a specified percentage of PET thermoforms in their PET bottle bales; the PET packaging industry is working diligently to overcome the remaining barriers to integrating this package type more routinely into PET recycling and reclamation streams. In 2011 and 2012 combined, 93 million pounds of PET thermoforms were collected for recycling in the U.S. and Canada, as reported in the Appendix of the “Report on Postconsumer PET Container Recycling Activity in 2012” and “2011 Report on Postconsumer PET Container Recycling Activity,” available at www.napcor.com/PET/pet_reports.html.

Pricing for baled postconsumer PET material was fairly stable in 2013, softening on the East and West coasts during the second half of the year and trending upward again during the first quarter of 2014, particularly on the East Coast. Despite strong end markets, there is downward price pressure on clean PET flake material of all grades, reflecting a drop in virgin PET resin prices and variability in end market use.

HDPE. The HDPE bottle recycling rate was 31.6 percent in 2012. Eight domestic reclamation companies continue to process 84 percent of all material collected, which totaled more than 847 million pounds in 2012, according to the “2012 United States National Post-consumer Plastics Bottle Recycling Report.” The strongest end markets for natural HDPE are nonfood application bottles, such as those used for detergent, motor oil and household cleaners. The leading end markets for pigmented HDPE bottles include pipe, plastic lumber, decking, railroad ties and nonfood application bottles.

Value and demand for natural HDPE bottles has increased significantly since the end of 2012, with a more modest increase in the value of colored HDPE. Domestic buyers are leading this price increase.

The percentage of material exported was up to 201 million pounds in 2012, a 30 million pound increase over 2011, but representing less than 20 percent of all material collected.

PP. While PP bottles make up a small percentage of total bottles available for recycling at just less than 2 percent in 2012, their total collection was up slightly to 47 million pounds, inclusive of segregated PP quantities and those reported as part of mixed bales. Domestic processors handled 43.5 million pounds of this total, 34.5 million pounds of which was made up of intentionally segregated PP bottles, an increase over the 27.7 million pounds in 2011, according to the “2012 United States National Post-consumer Plastics Bottle Recycling Report.” We emphasize this change since it reflects domestic market preference for more highly segregated materials. In light of the smaller relative size and recent emergence of this market, meaningful pricing trends for postconsumer PP bottles are very difficult to determine.
 

Rigid thinking

Nonbottle rigid plastics include plastic containers of all resin codes, types and sizes, except bottles. Capture of these plastics is growing with just more than 1 billion pounds of total postconsumer material recovered for recycling in 2012, an increase of more than 691 million pounds since formal measurement of this category began in 2007, according to the “2012 National Postconsumer Non-Bottle Rigid Plastic Recycling Report,” available at http://moorerecycling.com/m_02_00.html.

Collection methods for nonbottle rigid plastics are more varied than those of bottles, reflecting the diversity of the stream and developing markets. While collection includes curbside access in many communities—this helps enable the critical mass necessary for the successful sorting and marketing of nonbottle plastic packaging—not all communities or MRFs (material recovery facilities) collect nonbottle material. As the infrastructure to recycle this material develops, so will incentives for MRFs to include this material.

Complementing curbside collection of nonbottle material are successful drop-off programs for products not always suitable for (or allowed in) curbside bins. This suits many processors’ preference for clean, dedicated material streams.

The export market is the dominant buyer of resin-mixed material and remains significant, but the domestic / export mix has changed over time. In 2007, 65 percent of nonbottle rigid plastic was exported; in 2012, only 43 percent was sent overseas. During that time, the total volume purchased by U.S. and Canadian reclaimers grew from 121.4 to 579.4 million pounds.

In 2012, resin-segregated material made up 59 percent of the total material collected, e.g., HDPE injection drums and crates, PP battery casings and PET thermoforms. The second largest segment, at 26 percent of total collection, comprised all rigid, prepicked rigid (no No. 1 and No. 2 bottles) and bulky rigid plastics. Other segments include cap and label material from PET recycling and electronic scrap.

Clearly, material segregated by resin type is more readily marketed domestically. In terms of reclamation of this material, 81 percent of the resin-segregated material was reclaimed in the U.S. or Canada. Of the nonbottle rigid plastics from mixed bales, 84 percent was exported, primarily to China. We anticipate further changes to the sorting and marketing of this material for 2013 and beyond in large part because of China’s strict enforcement of bale quality.

Most of the U.S. capacity for reclamation of nonbottle rigid materials is for relatively clean, and often larger volume, PE and PP items, with some smaller capacity for mixed-resin bales going into products such as lumber, railroad ties, cart wheels, garden products and transport packaging.

The pricing trends for many nonbottle rigid plastics are tied to the changing export demand. Prior to the loss of some export markets in 2013, the trend was toward highly mixed, dirty material. For example, over the last decade, the contents of polyethylene (PE) injection-grade bales shifted to become a more highly mixed bulky rigid grade. During the period when most export pricing was increasing, the value of bulky rigid bales dropped. With the recent emphases on quality, bulky rigid plastics have again become predominantly PE and PP, and the value is recovering.

The tubs-and-lids grade also has seen a resurgence because of its higher value and broader markets compared with highly mixed material grades.

On film

Film includes plastic bags and all other thin, flexible plastic. Most plastic film is made from PE resin, such as low-density polyethylene (LDPE). Just more than 1 billon pounds of postconsumer plastic film were recycled in 2012, a 56 percent increase from the 652 million pounds collected in 2005, the first year of formal reporting of this category in the “2012 National Postconsumer Plastic Bag & Film Recycling Report.”

Film collection methods are an essential consideration for further market development. Drop-off sites facilitate most consumer film packaging and bag collection. With roughly 18,000 locations nationwide, more than 70 percent of the U.S. population have access to bag and film recycling. Steady growth in household film recycling is expected as more consumers become aware of other recyclable film, such as product overwrap. However, even without consumer-generated material, many large retailers would maintain film collection programs because they commonly contributes to their total recycling revenue.

Domestic demand for film collected at retail outlets is strong. With this sector generating far more scrap than the residential sector, capturing more film from the commercial waste stream is the acknowledged growth area for postconsumer film.

For the foreseeable future, commercial film collection will continue to depend primarily on existing infrastructures, such as distributor backhauling and paper recyclers accepting film with their paper and old corrugated containers (OCC).

The composite decking industry remains the lead market for scrap film at 38 percent, followed by film and sheet applications and “other,” which includes pipe, automotive products, lawn and garden products, buckets and pallets. This mix may change with increases in collected film quality. More brand companies and end users are expressing interest in using postconsumer resin in new film products, such as trash bags, provided they can source enough material at consistent quality.

Clean, dry bales of LLDPE (linear low-density polyethylene) film command the highest film grade value in domestic and export markets in light of the relative ease of processing and the range of end market applications. Historically, the highest prices are found on the West Coast, but with softer demand from exporters for all but the highest grades, domestic companies are becoming more competitive. Quality is key for all recyclables but is especially relevant to developing domestic film markets.
 

Export issues

In early 2013, China began to adhere rigorously to existing laws restricting plastic scrap imports as part of the country’s larger effort to regulate and shape its secondary materials processing industries and to address serious environmental issues. While the level of inspections under Operation Green Fence appears to have waned, markets for some scrap plastics have not rebounded, particularly those for dirty plastic film and some mixed plastic bales. Even as other regions in Asia fill some of the market void for these lower-end materials, this large-scale Chinese pushback has given domestic generators the incentive to improve quality; it also has provided domestic buyers with the leverage to enforce bale specifications to a greater degree.

The Green Fence also has provided a better opportunity to invest in plastic recycling facilities (PRFs), or secondary MRFs, facilities that take mixed plastic or other negatively sorted MRF materials and further sort and recover recyclables. These PRFs have the capacity to dig deeper into the plastic stream to recover grades that are not cost-effective for MRFs to sort.

With more mixed plastics being collected and domestic markets preferring segregated postconsumer materials, the growth of PRFs in the U.S. is encouraging. Although relatively recent, PRF investments are not solely the product of Green Fence market pressures but also are the result of a growing awareness of market need. The U.S. and Canada are home to at least six PRFs, including the new QRS Recycling / Canusa Hershman Recycling PRF slated to open in Maryland late this year.
 

Working model

Despite patchy public policy around recycling at federal and state levels, along with highly regionalized programs with varied incentives and disincentives, many of the key barriers to recycling remain shared.

David Cornell, consultant and long-time (now retired) technical director for The Association of Postconsumer Plastic Recyclers (APR), observes that successful plastic recycling relies on four basic requirements:

A consistent, clean supply of sufficient quantity—no less than 400 millions pounds per year of a given, identifiable material in the marketplace that is available to be recycled;

• technology to cost-effectively collect and convert the supply into clean raw material;
• profitable end products; and
• system funding.

Material supply is the result of many factors, design for recyclability being an essential one. Packages and related components—labels, adhesives, closures, liners, barriers and more—that do not incorporate recycling compatibility into their upfront design considerations can cause disruption to material streams, reduce the usable volumes necessary for viable recycling and add significant cost to a generally low-margin industry. (For specific information on design for recyclability by resin type, visit the Association of Postconsumer Plastic Recyclers website, www.plasticsrecycling.org.)

Bringing a common language to plastic recycling also is essential as we look to increase the supply of segregated, marketable postconsumer material. By using consistent terminology or a shared glossary of terms, communities can more clearly communicate with the public about what they accept in their programs; likewise, shared commodity terms will help more clearly identify and more accurately value plastic scrap material being bought and sold.

Lack of collection infrastructure remains a barrier to increased supply, particularly in away-from-home and commercial settings where collection is inconsistent; packaging used in these contexts currently is not well-captured, and significant potential remains in these areas.

Technology continues to develop, with improvements to automatic sorting technologies accommodating more complex needs of single-stream MRFs and PRFs wishing to market a wider range of segregated postconsumer plastic materials. However, these technologies require significant investments, and processors’ return on these investments relies on adequate material volumes and end market and pricing consistency.

End markets for recycled materials embody an inherent chicken-and-egg element: A market won’t commit to using recycled material if the supply is inadequate or unreliable, yet consistent recycled material supply relies on end market demand and a price per pound adequate to compensate for sorting and processing the material. Developing this relationship takes time, but we are seeing it emerge for materials such as nonbottle PP, film and expanded polystyrene.

Funding infrastructure is essential to move the needle on recycling. Unfortunately, most plastic scrap is currently sold on a spot-market basis. Without long-term contracts, it is very difficult for potential new facilities to procure the necessary capital funding. In addition, very little public or private research and development funding is available to expand plastic recycling and end market development.

It is certainly possible to significantly increase plastic recycling through more robust and diverse collection programs and also by combining clear education and outreach with design for recyclability guidelines, fostering increased use of recycled content back into new products. However, without a real commitment to plastic recycling in the form of long-term contracts and R&D, growth is likely to continue at the current slow pace.

Eagles is project director with Moore Recycling Associates, Sonoma, California, and can be contacted at kate@moorerecycling.com.