In A Tale of Two Cities, Charles Dickens writes: It was the best of times, it was the worst of times to paint a picture of Europe around the time of the French Revolution.
That paradox also fits today's plastics recycling industry, which is faced with record demand, a raw materials supply problem and an infrastructure that's not growing fast enough to collect the material the industry needs.
We have never had the kind of support we are getting from the market, said Tom Busard, vice president of global procurement for Plastipak Holdings Inc. and president of its affiliated company, Clean Tech Inc., which recycles 100 million pounds of PET and 100 million pounds of high density polyethylene a year.
There is a tremendous amount of push by consumer product goods companies to put recycled content into their packages, he said.
Indeed, demand for recycled resin and the commitment by consumer goods companies is better than it has ever been, prompting investments in new capacity and in changing over existing production to higher-valued food-grade resin.
At the same time, the industry is rushing toward a troubling supply problem as higher prices continue to push more bales of recycled plastic materials overseas, particularly in the recycled PET market, where record-high cotton prices are creating a rapid demand for polyester staple fiber in emerging economies.
Add to that a collection infrastructure that struggles to meet the industry's needs and you have a crisis waiting to happen.
We have this consistent market push for the first time, but this is fairly close to doomsday because we are doubling capacity [for recycled PET] and sending half of what we collect to export, Busard said at the Plastics Recycling Conference, held March 1-2 in New Orleans.
Capacity for PET reclamation is expected to reach 1.88 billion pounds sometime in 2011. That's more than double the 847 million-pound PET reclamation capacity at the end of 2008. What's more, capacity for PET reclamation in 2011 would be higher still except for tight supplies that forced the cancellation of three capacity expansions this year. One of those canceled expansions is a second 120 million-pound-per-year line planned by of Clear Path Recycling LLC, a Charlotte, N.C., company that began operations last year.
Even more alarming is that PET capacity now is nearly three times the amount of PET that's available to U.S. companies when you subtract the amount that's exported. After exports, only 642 million pounds of the 1.44 billion pounds of PET collected in the U.S. in 2009 was available to U.S companies; that is only slightly higher than the 615 million pounds available in 2008 and virtually identical to the 641 million available in 2007.
The top issue is a lack of supply, said Byron Geiger, president of Custom Polymers PET LLC, which is tripling its recycled PET bottle-washing capacity at Athens, Ala. Custom Polymers expects that expansion to be completed by late April and reach nameplate capacity by late June or early July.
The new plant, under construction since last April, will have capacity to recycle and wash 100 million pounds of PET bottles and produce 70 million pounds of recycled PET flake a year. That will boost the company's wash capacity in Athens to 150 million pounds, and boost its output to 70 million pounds of recycled PET flake and 30 million pounds of recycled food-grade PET pellets.
We need to be active in trying to promote recycling and do everything we can to educate U.S. consumers that there is a good end market for recycled materials, Geiger said in an interview.
Supply was the hot-button issue [when the Association of Postconsumer Plastic Recyclers was formed in 1995] and the hot-button issue today is supply, said Scott Saunders, chairman of Washington-based APR and general manager of KW Plastics Recycling. KW, of Troy, Ala., is one of the two largest HDPE recyclers in the U.S.
We are at a crossroads in this industry because of supply issues, Saunders said. We are limited in growth by the supply we can get.
Even worse, the barrier to growth is occurring when demand is at an all-time high.
Scott Mouw, recycling director of the state of North Carolina, said: The pace and the amount of business getting done in plastics recycling is incredible. Reclaimers are getting good signals from the marketplace they sell into and seeing more commitment on the part of brand owners.
But the looming cloud of supply issues is more present than in the past, Mouw said. The supply issue is becoming more acute. You can sense that.
The market is not working, said environmental specialist Kent Foerster, who works on recycling, waste reduction and sustainable materials strategies for the U.S. Environmental Protection Agency.
It is dysfunctional, as you are not getting the materials you need, Foerster told those gathered for the Plastics Recycling Conference.
The dreaded feeling in the recycling industry stems from a growing sense that the current infrastructure for plastics collection doesn't hold much promise for adding materials at levels needed to meet demand, despite several recycling association-sponsored initiatives under way to expand supply.
Since late 2008, the National Association for PET Container Resources has been working with recyclers and materials recovery facilities in the U.S. and Canada to address technical issues associated with recycling the huge variety of sizes and shapes of thermoformed PET clamshells, boxes, trays, cups and lids.
APR is working to increase the recycling of non-bottle rigid plastics by developing specifications for seven different types of bales in that market, with the first two of those specifications completed and released earlier this month.
In my mind, we've reached the limits of what the current infrastructure can produce, said Mouw. If you look at the growth curve in recycling rates, it's moving up and creeping up by small percentage points and that's what we face if we don't do something different.
If we're going to just keep doing what we've been doing, we are only going to get incremental progress, Mouw said. He added that local communities don't have enough of an incentive or benefit to grow their recycling programs, particularly given the budget crunches at both municipal and state levels.
Ted Siegler, a partner in DSM Environmental Services Inc. in Windsor, Vt., agreed. It is difficult for states and cities to define recycling as essential when compared to education, highways, Medicare and Medicaid.
Siegler also said it's time for industry to fund not just the reclamation plants needed to reprocess recycled plastics, but the collection infrastructure itself to get the recycled resin it needs.
If the industry wants more plastics and is serious about significantly increasing the supply of plastics, they are going to have to fund the infrastructure the collection, processing and reclamation of plastics, Siegler said.
Mouw isn't so sure the industry will or should single-handedly fund the collection infrastructure. He thinks there are other avenues, such as collaboratively working together with municipalities, waste-haulers, government and brand-owners to develop a solution that works for all.
But he did agree with others that the collection problem could be solved if the industry put the same $350 million into collection infrastructure that it spent on PET reclamation plants and expansions the past two years.
We need industry coming to the table with real dollars to make infrastructure happen, said Mouw. The 1-year-old Canadian Beverage Container Recycling Association, for example, will spend several-million dollars over the next two years starting this spring to place thousands of bins in Winnipeg, Manitoba, city parks, arenas, recreation centers, public buildings and other high-traffic areas, he said.
That is funded by a 2-cent container recycling fee paid by CBCRA members to fund beverage collection efforts.
That's illustrative of what's possible when a responsible party steps up, Mouw said.
Mouw also wonders whether the time may be right for the plastics recycling industry to expend the political capital and political will to achieve some solutions legislatively.
Companies are motivated by recycled-content requirements, disposal bans and mandates, such as extended producer responsibility, he said. But to get those measures enacted in states, or at the federal level, you have to have political will and the plastics industry hasn't expressed it at all.
They want more supply, but is it wishful thinking or is there something behind it? Mouw said. We need an investment of political capital by the reclamation industry. The question is: Are they going to step forward and spend the political capital to get those programs passed?
He said more collaboration is necessary. The plastics industry has to has a conversation with [waste haulers] to learn what kind of things can and would motivate them to pick up more plastics, he added.
Also, consumer product companies have to step into the equation. That is where the persuasion is going to come from to change consumer behaviors, because they are in the business of marketing to, and educating, consumers, Mouw said. Governments are the least likely to persuade someone to do anything.
Geiger of Custom Polymers PET seconded that need for collaboration.
The answer to these supply issues is that we just need to get everyone from each industry into a room and make sure everyone understands everyone else's issues and make some headway, said Geiger.
The challenge is to get them all in the room.
Joan Pierce, vice president of packaging sustainability at Colgate-Palmolive Co., and president of the newly formed American Institute for Packaging and the Environment agreed. Pierce also expressed her opposition to government involvement.
I do not feel legislation is necessary to resolve this issue, she said during a discussion on extended producer responsibility at the conference. We certainly do have a problem, but if you have every stakeholder sitting at a table with an open mind, you will get a solution. We have the technology, the desire and we will achieve the results. We don't need a legislator to tell us what to do.
The 10 founding companies of Ameripen are large consumer goods brand-owner companies, raw materials companies and packaging converters.
The New Orleans conference was organized by Portland, Ore-based Resource Recycling Inc., which publishes Plastics Recycling Update.