The plastics recycling industry has only officially put its support behind expanding bottle-deposit laws for the past few years. But more than four out of five plastics reclaimers believe extended producer responsibility programs prevalent in Europe and spreading throughout Canada are beneficial to plastics recycling and should be pursued.
In addition, 76 percent support container-deposit legislation and 62 percent support single-stream collection. However, the level of support for those two initiatives does differ between PET and high density polyethylene reclaimers, according to the fifth annual survey of plastics reclaimers by Plastics Recycling Update, a publication of Resource Recycling Inc.
The survey results were unveiled on the second day of the Plastics Recycling Conference, held March 1-2 in New Orleans.
The high levels of support for initiatives that could increase the supply may reflect the growing concern of reclaimers that continue to see more than half of the recycled PET bottles, and almost 25 percent of the HDPE containers exported to China, even as end markets in the U.S. are expanding.
The support for initiatives to expand supply also reflects how capacity for recycled PET resin in the U.S is doubling, as a result of $350 million in investments the past two years, said Mike Schedler, technical director for the National Association for PET Container Resources, based in Sonoma, Calif.
Those investments boosted PET reclamation capacity from 847 million pounds at the end of 2008 to 1.25 billion pounds at the end of 2009, said Schedler at the conference.
PET recycling capacity in the U.S. increased again in 2010 when several plants, including the PET recycling operations of Clear Path Recycling LCC in Fayetteville, N.C., started operating, Schedler said. U.S. PET recycling capacity is expected to reach 1.88 billion pounds later this year, he said, when three or four plants now under construction begin operations, adding another 210 million pounds of capacity.
What's more, Schedler said capacity would have been even higher except that tight supplies have caused some PET capacity expansions to be canceled or delayed. The biggest postponement: Clear Path has temporarily shelved plans for another 120 million-pound line that would have boosted its capacity to 280 million pounds, from 160 million.
Right now, with supplies tight and not enough material to fill existing plants, PET recycling capacity utilization has dropped. In 2010, it fell to 69.5 percent compared with 81 percent in 2009 and 88 percent in 2008, according to the Plastics Recycling Update survey.
The survey also underscored how plastics recycling markets bounced back in 2010. And a number of key indicators point to growth in 2011 and 2012 as the economy improves.
Firms are saying they've cut way back on operations waste, streamlined their business and have new equipment coming online, said Henry Leineweber, managing editor of Plastics Recycling Update. Indeed, 57.7 percent of the more than three dozen reclaimers surveyed said they invested in more-efficient equipment in 2010, up from 39.5 percent in 2009.
There's also a sense that a lot of the negative trends we saw as a direct result of the economic collapse have stabilized. As demand for consumer goods picks up, plastics should come along for the ride, he said.
While there was little actual growth in 2010 for reclaimers the amount of pounds they processed increased by just a little more than 0.8 percent the declines of 2009 largely ended.
About 48 percent of reclaimers surveyed said conditions were better in 2010 than in 2009, but 36 percent said conditions were worse. Similarly, 40 percent reported improved margins in 2010 and 24 percent said operating margins were worse just one year after there was an across-the-board drop in operating margins.
Reclaimers are most optimistic about the food and beverage, and the film and sheet end markets as they have been since 2007. But, in addition, the fiber market has re-emerged as a strong end market, they said.
The same issues tended to be the top trouble spots for both PET and HDPE reclaimers in 2010: bale costs, contamination much of it from labels and resin additives and recycled resin pricing. But reclaimers said that there was a significant year-over-year increase in contamination in 2010, and that bale costs and logistics barriers historically higher for HDPE reclaimers were problems for both in 2010.
Obtaining bales and bale yields continues to plague PET reclaimers more than HDPE reclaimers.
Asked what they thought should be the focus of the broader recycling industry, 75 percent of reclaimers cited the tasks of improving collection and consumer education. Just one year ago, only 38 percent named consumer education a key focus.
In addition, more companies said there is a need to develop markets 50 percent compared with 31.3 percent in 2009 and 54.2 percent said legislative advocacy should be a focus, up from 43.8 percent in 2009.
That's reflected by the 82.6 percent that think extended producer responsibility programs are beneficial to the plastics industry and should be pursued, and the support for container-deposit programs and single-stream municipal collection.
Overall, 76 percent of reclaimers said they supported container-deposit legislation, which had the backing of 80 percent of PET reclaimers, and even more support from HDPE reclaimers 89 percent compared with 60 percent in 2009.
With regard to single-stream collection, that had the support of 55 percent of the PET reclaimers, up from 43 percent in 2009; 67 percent of HDPE reclaimers, down from 88 percent in 2009; and 62 percent of all reclaimers, the same as in 2009.