With the number of PET reclamation plants growing rapidly, U.S. recycling capacity for the material exceeded the total amount collected domestically by almost 10 percent. But more dramatic, U.S. capacity was almost double the amount of that PET that stayed stateside, with more than two-fifths of it going to export markets.
“The U.S. now has the capacity to process more post-consumer PET packaging — both bottles and thermoforms — than the amount of PET packaging collected,” the National Association for PET Container Resources said in its annual recycling report, issued Oct. 10.
Even if no PET bales are exported in 2012, U.S. reclaim capacity will still exceed the total pounds of PET collected, said Sonoma, Calif.-based NAPCOR.
“Without additional collection efforts or new streams of material, the increased capacity will only serve to drive prices [of recycled PET] to unsustainable levels, as too many operations chase too few bottles,” the report said.
The number of PET recycling plants in the U.S. increased from 19 at the onset of 2011 to 23 by the end of 2011, NAPCOR said. The result: Total annual capacity increased by more than 27 percent, from 1.38 billion pounds to 1.76 billion pounds.
That's troubling for two reasons.
First, nearly 43 percent of the 1.6 billion pounds of PET collected in 2011 was exported, most of it to China, greatly diminishing the supply for U.S. companies.
Second, four new U.S. plants under construction soon will add close to 200 million more pounds of PET reclamation capacity — that doesn't even include a Mohawk Industries Inc. expansion that's set to double its reclaim capacity in Summerville, Ga., in 2013 and, in time, add 500 jobs.
“It is a challenge to have increased capacity and not have it immediately followed by increased supply,” NAPCOR's executive director, Dennis Sabourin, said by phone. “But the investments send a strong signal about the continued sustainability of PET. ... It shows we need to collect more PET and feed these U.S. companies and create U.S. jobs.”
But that's easier said than done.
“I wish I was a little more optimistic,” said NAPCOR technical director Mike Schedler, “but we're not even close to what we need in terms of collected recycled PET.”
By the numbers, the recycling rate in 2011 inched up ever so slightly from 29.1 percent to 29.3 percent. It is the eighth straight year the rate has risen, dating back to 2003 when it stood at 19.6 percent, and it is closer to the 31.6 percent rate of 1995.
One thing hampering the rate is the continued lightweighting of PET packaging. NAPCOR calculated that unit sales of PET containers and jars rose by 4 percent in 2011, but the amount of resin used in them increased by only 2.4 percent. As a result, total PET used in those applications in 2011 — 5.48 billion pounds — still remained below the 5.68 billion pounds used in 2007. Similarly, the volume of PET collected for recycling increased minimally in 2011 — about 47 million pounds — after increasing 113 million pounds in 2010.
“We are experiencing the full impact from lightweighting,” said Schedler. “We did pretty well in bottle sales, but the weight is down.”
Lightweighting is indeed an issue for the “near-term,” said the NAPCOR report. “There is general agreement that innovation will continue to reduce package weight. But most observers feel we have already experienced the largest impacts,” it noted.
Another obstacle for U.S. PET reclaimers has been the volume of domestic material that ends up in China. Even so, 2011 saw the lowest amount of post-consumer PET purchased by China and other Far East countries since 2005, the report said. And NAPCOR expects the amount of PET purchased by China to decline again in 2012, at least giving U.S. reclaimers the chance to buy more.
“It is hard to believe the Chinese will get much out of California” with all the domestic capacity in that state, said Schedler. “They [Chinese buyers] have not shown much willingness to climb the price ladder.”
To help overcome the shortfall of material, the industry is looking to PET thermoformed containers — which were recycled in “a significant amount” for the first time in 2011, NAPCOR said.
“2011 saw the first significant amount of PET thermoformed packaging moving through the system in both the U.S. and Canada,” said NAPCOR. The association launched an initiative in 2009 to remove obstacles to recycling thermoformed PET packaging.
In fact, most of the 47 million-pound increase in recycled PET in 2011 came from 45.8 million pounds of alternative PET feedstock, including 24.9 million pounds from bales of thermoformed PET packaging. NAPCOR sees that as “a small, but important beginning.”
“These efforts are now bearing fruit,” the report said. “All purchasers and processors of curbside PET bottle bales are allowing some level of thermoforms mixed in with the bottles,” typically around 10 percent, with some accepting as much as 20 percent.
NAPCOR called the collection of PET thermoforms the industry's “best hope” for addressing supply issues that continue to vex the rapidly growing PET reclamation infrastructure.
“That's going to be the one place we get relief from supply,” said Schedler. “I see that more than doubling in 2012.”
NAPCOR hopes three model PET thermoforming projects under way in Omaha, Neb.; Montgomery County, Md.; and in the Pennsylvania counties of Elk and Lebanon will demonstrate that the recycling of thermoformed PET containers presents a “viable business model,” Sabourin said.
To further augment domestic post-consumer PET supplies in 2011, U.S. reclaimers purchased 105.8 million pounds of PET bottles — mainly from Canada, Mexico and South America.
Still, PET recycling capacity utilization remains low, at 67 percent, and that situation could worsen with new plants and other possible expansions — such as CarbonLite's plan to add a second 100 million-pound line, or Clear Path Recycling LLC's plan for a second 120 million-pound PET wash line in Fayetteville, N.C., which it had hoped to bring on line last year.
Low capacity utilization is compounded by increasingly lower bale yields of good material.
“U.S reclaimers reported yield losses ranging from 25 percent for deposit bottles to 35 percent for curbside material and 28.9 percent” for bottles redeemed under the California Refund Value program, according to the report.
“These contamination levels are higher in all categories than in 2010 and have reached crisis levels,” it said.
It cited two specific sources of contamination: single-stream recycling and two specific types of labels — full-wrap bottle labels that sink in hot water and bleed inks, and pressure-sensitive labels, mostly on thermoformed packaging, that cannot be removed or leave too much adhesive residue on the flake after the wash process.
Another culprit: Companies that don't follow the design-for-recycling guidelines developed by the Association of Postconsumer Plastic Recyclers, said both Sabourin and Schedler.
If collections can increase and yields improve, the market exists for recycled PET.
U.S. reclaimers purchased a record number of pounds in 2011, Sabourin said. “And the end-use of [recycled] PET continues to grow,” he added, climbing to 1.04 billion pounds in 2011.
Fiber applications remain its biggest end market in the U.S./ Canada. Recycled PET in sheet for packaging, and in food and beverage bottles has also grown since 2008. Those three applications account for 81 percent of the recycled PET used in the marketplace.
This is the seventh year that NAPCOR and APR have partnered to produce the annual PET recycling report.