Market Status Report:
Postconsumer Plastics

Table of Contents

Preface

I.  Introduction

• Plastic Waste Generated, Diverted, and Disposed

II.  Supply of Plastics

• Virgin Resin Supply
• Postconsumer Resin Supply
• Efforts to Increase Supply of Postconsumer Plastic

III.  Demand for Plastics

• Global Demand Summary
• Efforts to Increase Demand for Postconsumer Plastic

IV.  Market Barriers

• High Cost of Collection, Sorting, and Cleaning
• Lack of Long-Term Market Planning
• Contamination of Postconsumer Plastic
• Perception of Recycled-Content Products as Inferior
• Uncertainty About What is Recyclable

V.  Strategies to Overcome Market Barriers

VI.  Summary

I.  Introduction

Plastic Waste Generated, Diverted, and Disposed

Some types of plastic containers are being recycled in significant amounts. For example, over 70 percent of PET soda bottles are recycled in California, and 25 percent of HDPE milk jugs are recycled nationally. However, the overall recycling rate for plastics, which includes a variety of plastic resins used in containers, packaging, and durable goods, is small.

Specifically, the United States Environmental Protection Agency (U.S. EPA) estimates that 19.3 million tons of plastic waste were generated in the U.S. in 1993. Of that amount, only 0.7 million tons were diverted from disposal, only 3.5 percent of the amount generated. In comparison, the recycling rate for paper was 34 percent, for glass, 22 percent, and for aluminum, 26 percent. The remainder of the plastic waste, 18.6 million tons, was disposed (see Table 1).

Table 1: U.S. Generation and Recovery of Plastic Products in MSW
by product type, 1993

Source: U.S. EPA, Characterization of Municipal Solid Waste in the United States, 1994 update.

The California Integrated Waste Management Board (Board) has also collected data on the amount of plastic waste generated, diverted, and disposed in California. Cities and counties collected the data through waste characterization studies conducted in 1990. The results of the California study are similar to the U.S. EPA findings in regard to the overall recycling rate for plastics. Specifically, California reported a plastic waste diversion rate of 2.9 percent in 1990 (see Table 2). Both the Board and U.S. EPA estimates are indicative of the low diversion level for plastics in general.

Table 2: California Plastics Waste Generation Data, 1990

Source: California Integrated Waste Management Board, 1990 interim database.

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II.  Supply of Plastics

Virgin Resin Supply

World production of plastics is projected to increase by almost 4 percent annually to 152 million tons by the year 2000 (Modern Plastics, Encyclopedia '96). Polyethylene production is projected to increase by 3.9 percent annually to more than 46 million tons. Polypropylene production is projected to increase by 5.5 percent annually to more than 23 million tons. In addition, polyvinyl chloride is projected to increase by 3.7 percent annually to nearly 26 million tons.

Postconsumer Resin Supply

Modern Plastics also reports that the amount of postconsumer resins (PCRs) produced in the U.S. increased from 0.7 million tons in 1993 to 0.9 million tons in 1994; this is a 22 percent increase. Most of the PCRs were derived from PET and HDPE bottles; 0.5 million tons in 1994. Over 15,000 communities have collection programs (curbside, drop-off and buy back) nationally, and over 1,300 companies are involved with the PCR business.

Efforts to Increase Supply of Postconsumer Plastic

The California Integrated Waste Management Board provides assistance to both local government and private businesses for implementing recycling programs through a variety of sections within the Waste Prevention and Market Development Division. These sections include the Recycling Business Assistance Team (R-Team), the Market Analysis and Services Section, and the Buy Recycled Section. In addition, the Board has prepared the Directory of Plastics Brokers and Reprocessors to link suppliers and buyers of postconsumer plastics.

The American Plastics Council has undertaken a number of efforts to increase the supply of PCRs. These include funding of an automated optical plastic container sorting facility in Lane County, Oregon; a guidebook and companion video on how to begin curbside collection programs; and a "state of the art" durable goods recycling research center in Berkeley, California.

Major computer manufacturers, such as Hewlett-Packard (HP) and IBM, have begun recycling programs for their hardware as well as other companies' machines. The computers are disassembled and plastic and metal components are separated for recycling. In addition, HP and Apple currently incorporate 25 percent PCR in their computer housings. HP is also designing future generations of its hardware with recycling in mind by eliminating, wherever possible, components which cannot be recycled. For example, some gears, manufactured with bonded metal and plastic, are impossible to recycle. In future models, such non recyclable items will be replaced with single-material recyclable ones.

To promote the recovery of plastics from auto bodies, Chrysler, Ford, and General Motors have formed the Vehicle Recycling Partnership to examine methods for recycling plastic from scrap autos. Manufacturers are developing a hand-held automatic, plastic identification device utilizing infrared sensors to identify resin types. They are also looking to improve the recyclability of components, make them easier to disassemble, and use fewer resin types. Some examples of auto parts currently incorporating PCRs are bumpers, instrument panels, door panels, and seat foam. In addition, the Du Pont Corporation has developed a prototype "green seat" which uses only one resin for the seat cushion, upholstery, seat structures, and frame. Such designs reduce disassembly costs, thereby making recycling economically feasible.

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III.  Demand for Plastics

Global Demand Summary

Worldwide consumption of plastics is expected to increase by 3.8 percent per year to over 148 million tons by the year 2000 (Modern Plastics, Encyclopedia '96). More specifically, Modern Plastics projects consumption in the U.S. to increase at an annual rate of 3.3 percent to 43 million tons by the year 2000. Over the same time period, consumption in Western Europe is also projected to increase at an annual rate of 3.3 percent to 42 million tons; consumption in Asia is projected to increase at an annual rate of 5.2 percent to 40 million tons. A strong global and domestic economy should maintain anticipated increases in demand for plastic products. Strong demand for virgin resins should keep prices up and thus provide suppliers of postconsumer resins with a cost advantage over virgin.

Efforts to Increase Demand for Postconsumer Plastics

Since 1990, several market development initiatives have been implemented by both the public and private sectors to increase plastics recycling. These initiatives have not resulted in a dramatic increase in the overall recycling rate for plastics, but they have demonstrated that plastics recycling is economically feasible and have helped to boost public awareness that plastics can be recycled. As a result, the outlook for postconsumer plastics markets is more optimistic. A synopsis of selected market development efforts in plastics recycling is included below.

California Integrated Waste Management Board

The Board has implemented several programs to develop markets for PCRs and/or establish new or expanded businesses involved with plastics recycling. These programs are based upon two minimum content laws enacted by the Legislature requiring specified products to contain a minimum amount of postconsumer material. One program seeks to increase demand for postconsumer materials by specifying that plastic trash bags of 1.0 mil (0.0254 mm) or greater thickness must contain at least 10 percent postconsumer plastic. In 1995, the minimum content requirement applied to all plastic trash bags of 0.75 mil or greater thickness, which must contain at least 30 percent postconsumer material.

The other law to increase demand for postconsumer plastics is the Rigid Plastic Packaging Container (RPPC) Program. The RPPC Act requires that specified plastic containers be either source-reduced by 10 percent, contain 25 percent postconsumer resin, be reusable or refillable, or meet specified recycling rates.

Other State Programs

The California Beverage Container Recycling and Litter Reduction Act (AB 2020) established a beverage container recycling goal of 80 percent. The purpose of the law is to increase the supply of used beverage containers including plastic. The annual recycling rate for PET beverage containers is shown in Table 3.

Table 3: Annual Recycling Rate For PET Beverage Containers (annual percentage)

Source: California Department of Conservation, Division of Recycling, Biannual Report of Beverage Container Sales, Returns and Redemption and Recycling Rates.

Chicago Board of Trade Recycling Partnership

The Chicago Board of Trade (CBOT), in partnership with the National Recycling Coalition Recycling Advisory Council, the Clean Washington Center, the New York State Office of Recycling Market Development, and the U.S. Environmental Protection Agency, has developed a system that links buyers and sellers of postconsumer materials on an electronic cash exchange. By providing an electronic bulletin board for trading secondary materials, the CBOT provides buyers and sellers access to more markets, better product quality, and more reliable price information. The CBOT began operating the electronic bulletin board for PET and HDPE in the fall of 1995.

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IV.  Market Barriers to Postconsumer Plastic Recycling

Based on supply and demand forecasts discussed earlier, increases in virgin resin production capacity will keep ahead of, or at least keep pace with, increases in demand for plastic resins. Therefore, barring any unforeseen events, such as factory upsets or sporadic export markets, prices for virgin resin should not experience any wide price variations. However, in order for postconsumer resins to maintain or expand their current market share, advances in collection, sorting, and processing techniques will be necessary in order to maintain or increase price competitiveness with virgin resin.

Maintaining price advantage over virgin resins is important because, in general, businesses use PCRs only when they represent a price advantage over virgin.

In general, plastic industry representatives believe that fabricators of plastic products would use a significant amount of postconsumer resins if the prices were at least 20 percent lower than that of the competing virgin resin.

High Cost of Collection, Sorting, and Cleaning

One of the elements adding to the cost of PCRs is the labor-intensive process of collecting, sorting, and cleaning plastics recovered through curbside or drop-off programs. Since plastics have a high volume-to-weight ratio, the cost of collecting plastics is higher than for other residential waste types. Once delivered to a recycling center or material recovery facility, the plastics are generally manually sorted, although automation will be the trend of the future.

Typical costs for postconsumer plastic handling and processing are shown in Table 4.

Table 4: Costs Associated with Processing of Postconsumer Plastics (¢/lb)

Source: U.S. Department of Commerce, National Technical Information Service. Postconsumer Mixed Plastics Recycling: Characterization, Collection, Costs and Markets. PB91-196774. January 1991.

These costs may result in postconsumer resin prices that are only marginally less than virgin resin prices. However, in the past, unexpected supply shortages have increased the prices for virgin resins, making the PCRs more price-competitive. In addition, automated sorting systems, using computer-controlled vision, infrared and x-ray resin identification, and color and optical density identification technologies offer the possibility of reducing sorting costs. However, this technology is still in the developmental stage and is expensive. To help address the issue of collection costs, the Board has developed a computer cost model for local government and the private sector to evaluate collection/processing cost. The model allows the user to evaluate costs based on a variety of parameters which affect the operating cost of a collection program.

In addition, the Board is working on a computer database (which should be available by early 1997) detailing "yield factors," which will allow local governments and businesses to assess how much material is available for collection from different types of industries. Furthermore, in the near future the Board may also consider legislation to revise the plastics coding system to improve sorting efficiency.

Lack of Long-Term Market Planning

Currently, prices for PCRs closely follow prices for virgin resins. Long-term contracts at guaranteed prices would help smooth short-term price variations for PCRs and help to build more stable markets for PCRs.

Contamination of Postconsumer Plastic

Public Health Concerns

Since plastics are often collected from residential and commercial mixed waste sources, the plastic can become contaminated with hazardous chemicals and/or pathogens from other waste.

Recognizing this health risk, the Federal Food and Drug Administration (FDA) has issued guidelines for the use of recycled plastic in food containers and packaging. These guidelines only pertain to chemical contaminants in mechanically reprocessed postconsumer plastic. The general regulations state that packaging material contacting food "shall be of a purity suitable for its intended use." Therefore, it is incumbent upon the manufacturer to demonstrate that the container or packaging meets FDA guidelines.

However, with sufficient substantiation by the container manufacturer, the FDA may issue a "Letter of Non-Objection" for the use of PCR in a container or package. For example, Johnson Control, Inc. recently announced Federal Food and Drug Administration approval for its proprietary process for cleaning PET bottles for food contact applications. PCRs are currently being used in food contact applications in soda bottles, containers for fruits and vegetables, and egg cartons. However, despite FDA non-objection, the container and product manufacturer assumes all liability for the safety of the packaging.

Incompatible Resin Types

In addition to contamination issues relating to public health impacts, product and container manufacturers are sensitive to problems associated with mixed resin types. Different resins have different molecular structures and hence dissimilar physical properties, such as melting point, impact resistance, elasticity, and strength. Thus, it is critical that PCRs be as homogeneous as possible to minimize the problems associated with packaging quality. If resin types become mixed during reprocessing, manufacturing equipment can become damaged and the recycled plastic is not usable for new products.

Perception of Recycled-Content Products as Inferior

Another market barrier to increased plastic recycling is the lack of knowledge on the part of the public and businesses about plastics recycling in general. People may perceive products manufactured with recycled content as inferior because they believe that recycled content products are not as durable or as reliable as products made from virgin materials.

On the manufacturing side, some product designers prefer to use virgin resin with well-known physical properties, and are hesitant to use PCRs because of supply and quality concerns. However, many reprocessors have proven that they are able to meet supply and quality specifications.

Uncertainty About What is Recyclable

The general public is not familiar with the industry resin coding system and is not sure what plastics are being collected locally for recycling. This lack of knowledge can lead to increased contamination since resins types not targeted for collection may be included in the curbside and drop-off bin. In addition, many commercial and retail businesses which have homogenous and clean sources of postconsumer plastic are unaware of the value these materials have and the savings they can realize by reducing their disposal costs.

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V.  Strategies to Overcome Market Barriers

To increase the amount of plastics diverted from disposal the Board should encourage the use of postconsumer plastic in durable plastic products by increasing industry awareness regarding the supply and quality of postconsumer plastic, and by providing information about design for recycling.

To accomplish this goal the Board should implement the following strategies:

• Conduct workshops targeting postconsumer plastic reprocessors and durable goods manufacturers to promote minimum recycled content and design for recycling.
• Conduct public information and education campaign to promote buying recycled or purchasing of recycled products.
• Target Board Recycling Market Development Zone loan funds to support establishment of reprocessors and recycled content product manufacturers.
• In addition, the Board should assist business compliance with the Rigid Plastic Packaging Container Program and the Minimum-Content Trash Bag Program.
• Annually calculate the all-container and PETE recycling rates for plastic packaging containers and, if necessary, expand compliance of the program requirements.
• Continue to certify plastic trash bag manufacturers' compliance with the program. As necessary, expand education and compliance of the program requirements.
• Continue to assist plastic product manufacturers by providing lists of postconsumer resin collectors and processors, distribute cost models to reduce plastic collection costs, and facilitate contacts to link resin producers and users.
• Track FDA issuance of letters of nonobjection to container manufacturers for use of postconsumer resins in food contact applications.

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VI.  Summary

The amount of plastic used in automobiles, electronics and other durable goods and in containers and packaging continues to increase. Sales of virgin plastic resins in the United States in 1994 totaled 78 billion pounds a 10 percent increase over 1993. This increase in the demand for plastics reflects not only an increase in the gross amount of products being manufactured but also in the plastic content of those products. In addition, the proportion of plastic in the waste stream will continue to grow both in real and relative terms. In relative terms, the percentage of plastic in the waste stream will increase as other materials (such as paper, yard waste, and construction/demolition materials) are diverted in larger amounts.

The supply of postconsumer resins should continue to increase as more residential, commercial, and industrial collection programs are implemented. Demand should also increase, as the domestic and global economy is expected to maintain a healthy growth rate through the year 2000. To further increase markets for postconsumer markets, barriers such as the high cost of collection, sorting, and processing; contamination; and uncertainty about the quality of recycled content products will need to be addressed. In addition, to stimulate demand for postconsumer plastics, efforts should be made to increase the use of recycled resins in durable goods such as appliances, electronics, and in automobiles and lawn and garden equipment.

In conclusion, while plastic recycling has lagged behind that for other commodities, market conditions in 1994 demonstrated that plastics recycling is economically feasible and results in a valuable resource. The potential exists to greatly increase the amount of plastic that is currently being recycled. While there is room to increase the amount of bottles and containers recycled, the greater emphasis should be placed on increasing the number of recycled plastic used in durable goods. By working together to address supply issues, and to stimulate demand for postconsumer plastics, government and industry can create jobs, conserve energy, and save natural resources and scarce landfill capacity.

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Last updated: November 01, 2007