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December 08, 2008 01:00 AM

PET recycling rate up, but questions loom

Mike Verespej
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    The big shadow China casts on plastics recycling markets in the U.S. looms large in the industry's new PET recycling numbers and in the bales of mixed plastics sitting in warehouses, waiting for that country to resume the frenzied buying pattern it put on hold two months ago.

    ``The Chinese pattern of buying more and more of the materials collected couldn't help but have a long-term negative impact. We are seeing the fallout of that today,'' said Mike Schedler, technical director of the National Association for PET Container Resources (NAPCOR) in Sonoma, Calif.

    Schedler wrote the 2007 PET container recycling report that was released Dec. 4 by NAPCOR and the Association of Postconsumer Plastic Recyclers in Washington. The PET Resin Association in New York also contributed funding for the report.

    U.S. reclaimers in 2007 purchased only 641.5 million pounds — or slightly less than 46 percent — of the record 1.4 billion pounds of PET bottles collected in 2007, said the NAPCOR report.

    By contrast, foreign buyers, largely from China, purchased 755 million pounds, or just over 54 percent of the PET collected — the second straight year they had purchased more than half of the PET bottles collected in the United States.

    Foreign purchases of PET have doubled from 372 million pounds in 2004 and are almost 75 percent higher than 2002 when foreign purchases of PET were just 275 million pounds.

    For several years, some in the U.S. recycling sector have been concerned that bales of mixed plastic collected for reprocessing would not have a home if China stopped buying because the U.S. PET reclamation industry only has the capacity to process 60 percent of the PET being collected today.

    ``That negative effect is exactly what is happening today,'' Schedler said. ``There are 600 million pounds of recycled PET looking for a home. China is only buying sorted PET bales and not buying any mixed bales [which represent the lion's share of bales] anywhere'' whether it is North America, the U.S. or Europe.

    ``The Chinese buying the last three to four years has greatly inhibited and put a damper on reinvestment'' by U.S. recyclers, Schedler said. ``We didn't see any significant investment in reclaiming capacity — particularly in merchant reclamation capacity'' even though the last three years were the industry's most profitable years ever.

    According to the NAPCOR report, PET reclamation capacity in the U.S. grew just marginally in 2007 from 817 million to 842 million pounds — all from minor de-bottlenecking — even as the pounds of PET bottles collected grew 10 percent.

    That increase in PET reclamation capacity was the first since 2004, when PET reclamation capacity was 937 million pounds, a level that virtually matched the 1.003 billion pounds of PET recycled that year.

    Part of the increase in recycled PET was a greater volume of available material, but for the fourth straight year, increased collection was the major reason for the larger amount of material, NAPCOR said.

    The PET bottle recycling rate rose for the fourth straight year to 24.6 percent. That is the highest PET recycling rate since it was 24.8 percent in 1998.

    Yet the U.S. PET reclamation industry isn't taking advantage of the greater volumes of material collected and is hesitant to make investments in new capacity because ``end users of recycled content are unwilling to make long-term commitments'' to purchasing recycled PET, said NAPCOR Executive Director Dennis Sabourin.

    ``Recycled content sustainability packaging initiatives go out the window when people can get bargains on virgin resin,'' an industry source said. ``At some point, if this industry is to survive, people have to take a long-term approach, commit to recycled content and leave some of these deals on virgin pricing on the table.''

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