A significant increase in the amount of high density polyethylene bottles collected in the U.S. but exported to other countries is putting pressure on U.S. reclaimers to find sources of supply elsewhere.
Compounding that problem, the HDPE bottle recycling rate dropped to 26 percent in 2007, from 27.1 percent in 2005 and 26.4 percent in 2006.
“We're constantly purchasing a substantial volume of material from Central and South America and from Canada,” said KW Plastics General Manager Scott Saunders. The Troy, Ala., firm is the largest HDPE recycler in the U.S. “We also have to fight with other reclaimers over a smaller pie,” Saunders said in a March 2 phone interview.
More than 23 percent of the HDPE bottles collected in the U.S. in 2007 were exported, taking 214 million pounds of supply out of domestic recyclers' hands — 50 percent more than the 145 million pounds that were exported in 2004, according to a recently released report on HDPE recycling.
That marks the second straight year that the amount of HDPE exported has increased by nearly 15 percent. The trend has some HDPE recyclers claiming foul.
“We can't pay the prices [that recyclers outside the U.S.] pay for recycled HDPE because we don't have the subsidies they have and there is not an economic advantage to our customers to use recycled content,” said Tamsin Ettefagh, vice president of Envision Plastics in Reidsville, N.C., the nation's second-largest HDPE reclaimer. “We are hurting domestically, because we are not subsidized and don't have mandates to use recycled content outside of California.”
To call attention to the situation, Ettefagh sent a letter last month to Sen. Richard Burr, R-N.C., outlining the situation.
“Every pound of HDPE scrap that leaves our country must be replaced by a virgin pound of fuel-derived HDPE,” she wrote. “The Chinese understand this. With the removal of scrap tariffs [by China's government] and the addition of freight subsidies, they are able to compete at much more attractive scrap pricing that we can pay domestically. The exporting of our feedstock to China and other Asian countries threatens the security of our country. If this trend continues, we will be forced to use more fuel-derived primary feedstocks.”
Running at full capacity, U.S. HDPE recyclers could use nearly 1.1 billion pounds of material — almost 200 million pounds more than is collected annually.
“The domestic industry has the capacity to transform all of our curbside collected HDPE back into reusable resins,” Ettefagh said. “We could handle all the pounds collected.”
Lack of supply has contributed to an excess unused capacity of between 322 million pounds and 378 million pounds annually since 2003, the report said.
The latest HDPE report was unveiled Feb. 25 at the Plastics Recycling Conference in Orlando, Fla., by Patty Moore, president of Moore Recycling Associates Inc. in Sonoma, Calif., which conducted the survey of HDPE reclaimers for the first time, replacing R.W. Beck Inc. The report was officially released by the plastics division of the American Chemistry Council in Arlington, Va., and the Association of Postconsumer Plastic Recyclers in Washington.
Part of the 2007 decline in the recycling rate and in material collected (from 928.1 million pounds to 920.6 million pounds) can be attributed to a change in methodology. “I'm not surprised by the decline, because we made some corrections to stop the double-counting of bales,” Ettefagh said.
Regardless, the continued reduction in the amount of recycled material is a concern, she said. “It is a scary thing because it is an actual step backward.”
KW's Saunders agreed, adding he is skeptical the amount of HDPE collected in 2007 was even as high as the report claims. “The report might be a little generous, if anything,” he said.
To compensate for exports, the report said U.S. recyclers imported 54 million pounds of material in 2007. But industry sources suggest the actual number is three times that amount.
Recyclers do not expect the HDPE recycling rate to improve.
“The material we need is almost exclusively collected at curbside, and that infrastructure hasn't expanded in 10 years and is not fully utilized,” Saunders said.
Add in the economic climate and 2009 is shaping up as “an extremely difficult year,” he said.
“Before the economic meltdown, there was a lot of interest in the use of recycled content. But that has slowed because everyone is interested in the bottom line. I would not be surprised to see our industry contract a little bit,” Saunders said.
That may have already started. HDPE recycler Sundance Products, which shut down operations in December, then reopened for less than a week in January before closing again, officially announced in late February that it was going out of business after failing to find a buyer.
The ACC/APR report also gives recycling data for other plastics, including 2007 statistics for PET that were released in October by APR and the National Association for PET Container Resources.
HDPE and PET bottles accounted for 96.3 percent of the plastic bottle market and 99.2 percent of the pounds of plastic bottles recycled in 2007, the report said. The seven largest HDPE bottle reclaimers recycled 81 percent of the HDPE in the U.S, the same as the year before.
The ACC/APR report said 17.6 million pounds of polypropylene were recycled in 2007, down from 18.4 million pounds in 2006 and 10.1 million in 2005. The report also estimated that 400,000 pounds of PVC were recycled in 2007, as were 300,000 pounds of low density PE.
For materials other than PET and HDPE, said the report, “the actual level of recycling is limited by the continuing challenge to reach a critical mass of readily recognizable bottles for economical collection and processing.”
Recycled HDPE is used in a variety of applications. The report categorized them as nonfood bottles, 43 percent; pipe, 23 percent (up from 17 percent in 2006); automotive, 11 percent (up from 2 percent); lumber, 7 percent; lawn and garden products, 5 percent; film and sheet, 4 percent; and buckets, pallets and crates combined, 3 percent.