2000 Annual Report: Market Development

Market Development Topics

Introduction RMDZ RMDZ Loan Program Jobs Through Recycling Private Buy Recycled Priority Materials  Organics  Construction & Demolition  Paper Minimum Content Programs State Agency Responsibility

Minimum Content Programs

Minimum content programs were established by the Legislature to foster markets for recycled postconsumer materials. The minimum content programs being administered by the Board are:

• Newsprint program, established by Public Resources Code (PRC) sections 42750-42756.
• Rigid plastic packaging containers program, established by PRC sections 42300-42345.
• Plastic trash bag program, established by PRC sections 42290-42297.

Through the rigid plastic packaging container and trash bag programs, the Board is addressing about 45 percent of the plastic that is landfilled in California.

Newsprint
California’s recycled-content newsprint law mandates that newsprint consumers use a minimum amount of recycled-content newsprint in their operations. Newsprint must contain at least 40 percent postconsumer paper fiber to be considered recycled content. Minimum use of recycled-content newsprint is a graduated requirement. The initial rate for recycled-content newsprint began at 25 percent in 1991 and gradually increased to 50 percent for the year 2000.

Several times, the Board has found it necessary to take enforcement action against newsprint consumers who failed to comply with the statute. During the enforcement proceedings, the Board discovered the statute gave the Board authority only to fine late filers and those that filed false or misleading certifications and not to fine those that failed to meet the basic recycling goals of the law. The Board has since developed a legislative concept requesting a statutory change to allow the Board to fine those that do not meet the recycled content use requirements.

The Recycled-Content Newsprint (RCN) Program achieved the best success in the year 1999 since it inception in 1993. The State's printers and publishers were required to use at least 40 percent RCN for the certification year 1999. The annual certifications indicated the highest compliance rate ever (86 percent), the highest overall RCN usage rate (64 percent), and the least late filings ever (14 percent). Only one consumer did not file their business' certification. There were no questionable 1999 certifications that would warrant an audit.

Rigid Plastic Packaging Containers
PRC section 42300 requires the IWMB to calculate an annual recycling rate for all rigid plastic packaging containers (RPPCs), which are used to package products sold in California. If this rate is 25 percent or more, then regulated companies are considered to be in compliance with law. If this rate is less than 25 percent, then regulated companies must comply with the law by using one of the other methods specified in the law. This includes using 25 percent postconsumer resin (recycled plastic) in RPPCs or source-reducing RPPCs by 10 percent. The IWMB is authorized to implement a certification process to determine compliance with the law and to levy fines of up to $100,000 per year per company if companies are determined to be out of compliance with the law.

All forms of plastics comprise at least 7 percent of the waste stream by weight and 20 percent by volume. The use of plastic in packaging is increasing dramatically. Plastic recycling, however, is not keeping pace. For example, the volume of polyethylene terephthlalate (PET) soda bottles sold nationally increased 50 percent from 1994 through 1997. However, the recycling rate for these containers increased by only 11 percent during the same time frame. According to the IWMB’s most recent 1999 waste characterization study, the disposal of RPPCs in California landfills increased 62.4 percent from 1995 to 1999. In addition, the median recycling rate for all RPPCs is trending downward, from 24.6 percent in 1995 to 23.2 percent in 1995 to 21.9 percent in 1997.

The expanded use of plastics is displacing other packaging materials that have historically had high recycling rates such as glass and aluminum. Most municipal collection programs allow for the collection of some plastics, primarily soda bottles, milk jugs, and detergent containers. Processors, however, have had great difficulty in locating stable markets for some of this recovered plastic, and particularly other types of plastic containers.

Another factor that will affect the RPPC recycling rate is SB 332 that passed in October 1999 (Sher, Chapter 815, Statutes of 1999). The bill expanded the types of containers that are covered by the California Beverage Container Recycling and Litter Reduction Act (AB 2020, Margolin, Chapter 1290, Statutes of 1986). This new legislation will result in more plastic being collected. According to the Department of Conservation, 2 billion new containers will be recycled as a result of this bill. This will increase the pressure on local governments and plastic processors to find markets for this recycled material. As a result, the IWMB must intensify its efforts to establish and expand markets for postconsumer plastics in order to assist local governments that have expended millions of dollars on the collection and processing infrastructure for plastics.

The IWMB will continue with its public education efforts aimed at product manufacturers using RPPCs by initiating and participating in conferences, workshops, and informal discussions. The IWMB sponsored and conducted an RPPC Conference on May 15-16, 2000, in San Diego, California. The purpose of the conference was to provide a forum for identifying and discussing issues of concern to the regulated and environmental communities, whose resolution would lead to greater compliance with the RPPC law. A “Draft RPPC Conference Findings: Interim Report” was established. This 12-page report summarizes both the informative presentations by various experts on the collection and use of recycled plastic, and the issues and challenges faced by manufacturers in using recycled plastic, which were identified in roundtable discussions. Staff believes there is a need to conduct further research to clarify and refine priority issues and challenges, and to find workable solutions to the challenges of increasing plastic recycling and of using more plastic in new products and packaging.

In the past, the IWMB has also supported research into efficient plastic packaging design through grants. In addition, staff developed a plastics Web site to provide information on resin prices, contacts for container manufacturers regularly using postconsumer resins in the production of containers, and links to other informative plastics Web sites. Most importantly, the IWMB offered financial incentives, such as low interest loans via the RMDZ program, to businesses interested in using postconsumer resin in the production of new products.

• The IWMB completed the first compliance certification cycle. For the 1996 compliance year, 45 companies were in compliance, 7 companies entered into compliance agreements, and 1 company was fined, through the first RPPC penalty hearing.
• The process of calculating the annual “all-container” recycling rate and implementing compliance certifications has been brought up to date and the process normalized.

In the past, the IWMB calculated the annual recycling rate two years after the fact. For example, the IWMB adopted the 1996 rate in 1998 and the 1997 rate in 1999. This was the result of lengthy and drawn out negotiations with stakeholders about the methodologies to be used in calculating the rate. During the year 2000, the IWMB doubled its effort and was able to calculate recycling rates for 1998 and 1999. This allows the IWMB to adopt the annual “all-container” recycling rate for the previous year at its July board meeting. This provides regulated companies with the most current information available, at the same time each year.

The IWMB was able to combine compliance certifications for 1997, 1998, and 1999. This allows regulated companies to more easily obtain compliance records. This also makes the law more relevant to the regulated community and should result in greater compliance, causing an increase in the collection and use of recycled plastic. Certification packets were mailed to 950 companies in four targeting industry sectors. The results of the combined certifications will be presented to the IWMB in the first quarter of 2001.

New Initiatives. During the coming year, the IWMB will consider developing a plastics “white paper” to identify issues and potential solutions to reverse the declining plastics recycling rate and increase the use of recycled plastics.

Plastics Recycling Information Clearinghouse. The Board established the Plastics Recycling Information Clearinghouse in 1992, as required by Public Resources Code 42520. The clearinghouse collects, analyzes, and disseminates information that is designed to increase the collection, effective management, and use of postconsumer plastics. The clearinghouse provides information to consumers, collectors, recyclers, reprocessors, and end users of postconsumer plastics. This information includes an identification of programs that are collecting postconsumer plastics, the availability of postconsumer plastics, and recent advances in plastics recycling technologies. The Clearinghouse also provides students and researchers with information that is useful in academic research and for publishing scholarly articles. The clearinghouse also helps consumers and businesses to locate sources of scrap material and develops public interest in plastic recycling.

• The California Directory of Plastic Reprocessors and Brokers was published. The directory increases markets for postconsumer plastics by facilitating communication between buyers and sellers of discarded plastic products. The Directory includes available materials, quality specifications, and company activities.
• Staff answered more than 300 technical and marketing calls in 2000, averaging 25 calls per month. Approximately 10 e-mail responses were sent per month. Inquiries included (in order of frequency) discussions on the recyclability of certain plastics, requests for the directory and lists of products with recycled content, referrals to scrap sellers, and dissemination of bibliographic lists.
• Staff also provided information on the management of plastics from end-of-life electronic products and participated in seminars, conferences, working groups, and meetings with representatives of the Japan Electronic Industry Development Association (JEIDA).

Trash Bags
It was estimated that around 850,000 tons of film plastics were generated in California in 1990. To increase the diversion of film plastics and other polyethylene plastics from landfills, trash bag manufacturers are required to use a specified amount of postconsumer material in their products. Both trash bag manufacturers and wholesalers are required to submit certifications annually to the Board. Wholesalers certify the names of companies from which they purchased trash bags from, while manufacturers certify to the Board the amount of postconsumer material used in their plastic products. To satisfy the legal requirements of the program, the postconsumer material should be either equal to at least 10 percent by weight of regulated bags offered for sale in California, or at least 30 percent by weight of all of its plastic products offered for sale in the state. A regulated bag is one with a thickness of 0.7 mil or greater. If a trash bag manufacturer does not manufacture a regulated bag (i.e., one thinner than 0.7 mil) or does not sell them in California, then it can request to be taken off of the Board’s list of manufacturers.

• The Recycled-Content Plastic Trash Bag Program had a successful 1999. The 1999 annual reports indicated 85 percent of manufacturers attained their minimum content goals. Of the 15 percent that did not meet the goal, 11 percent had valid exemptions, and 4 percent were in noncompliance.
• State agencies are prohibited from doing business with noncompliant companies. Therefore, all state agencies were provided a list of noncompliant companies by the CIWMB. This list is annually updated and distributed.