ABA, beverage makers launch $100M PET recycling fund

The American Beverage Association and large soft drink makers announced a $100 million joint investment on Oct. 29 to boost PET bottle recycling in the United States and reduce the industry's use of virgin plastic.

The "Every Bottle Back" initiative will be investing those funds through the Recycling Partnership and Closed Fund Partners and aims to leverage another $300 million in investment to modernize recycling and bottle collection.

"Our industry recognizes the serious need to reduce new plastic in our environment, and we want to do our part to lead with innovative solutions," said ABA President and CEO Katherine Lugar. The initiative is being launched with the Coca-Cola Co., Keurig Dr. Pepper and PepsiCo Inc.

At a Washington press conference to kick off the program, Lugar and executives from the three companies said it includes having the World Wildlife Fund measure the industry's progress in "reducing its plastic footprint."

ABA said in materials distributed to reporters that the effort will directly impact 23 million people in 9 million homes in the U.S. and estimates it will capture an additional 80 million pounds of recycled PET bottles per year.

That compares with 1.72 billion pounds of PET bottles collected for recycling in 2017, according to an annual U.S plastic bottle recycling report from the American Chemistry Council and the Association of Plastic Recyclers, the most recent figures available.

"This is a serious and a sustained effort," Lugar said. "Some of the challenges in the U.S. around recycling go to the fact that it's a heavily fragmented local system, so by working with our partners and our experts in adopting regions of the country, we look forward to bringing innovation and improvements and technology."

But collecting an additional 80 million pounds of recycled PET in 2017 would likely have only resulted in a very small boost in the U.S. PET bottle recycling rate, according to an analysis of industry figures.

It would have increased the PET bottle recycling rate from 29.2 percent to about 30.5 percent, based on the industry report that showed total PET bottle resin sales of 5.91 billion pounds in 2017.

One member of Congress, Rep. Alan Lowenthal, D-Calif., responded to the announcement by saying he welcomed the initiative but wanted to see more concrete action.

"We are glad these beverage companies have acknowledged that they must play a role to prevent more damage from plastic pollution," Lowenthal said in an Oct. 29 statement. "But we've seen initiatives and goals like these from industry before that shirk their real responsibility by placing the burden of action on consumers and taxpayers."

Lowenthal said he and Sen. Tom Udall, D-N.M., plan to release draft plastic pollution legislation shortly. An earlier draft floated in the summer included a national container deposit system, traditionally something that the beverage industry has opposed.

At the Washington launch, executives with the ABA's partner groups said they believe that the beverage industry funding can help to unlock bottlenecks and build stronger recycling systems.

Bridget Croke, vice president of external affairs at Closed Loop Partners, said the group will take its portion of the $100 million and use it to help others, like materials recovery facilities (MRFs), attract more investment on a three-to-one funding match.

"A MRF might come to us and say we want to do this upgrade, and we have some banks that are interested but the risk is too high," Croke said. "Our capital, being below market rate, will catalyze that additional capital."

The Recycling Partnership said that $50 million of the beverage industry funding will go towards a $250 million "Unlocking Supply" initiative the partnership announced Oct. 22.

It calls for upgrades to residential recycling systems over the next five years to capture 340 million pounds of post-consumer plastic and other packaging materials.

"Right now it's on the backs of local governments to pay for recycling," said CEO Keefe Harrison. "How do they handle a 200, 300 percent increase in costs? How are we supporting them in that?"

Harrison said fixing recycling will need to look at challenges like cheap landfill costs, sustainable financing and the role of innovation in building recycling systems that create feedstocks to be used again.

She said funding delivered through the partnership has helped local recycling programs in Ohio and Florida, for example, collect more material and reduce contamination of materials already collected.

ABA said its new initiative will also include public education campaigns to remind consumers that PET bottles are 100 percent recyclable and can be made into new bottles. Lugar said the three beverage companies will also introduce "clear and uniform" messaging around recycling on their bottles next year.

Each of the three companies in the ABA initiative have announced sizable commitments to increase the amount of recycled content in their plastic packaging, to between 25 and 50 percent between 2025 and 2030.

Several analyses of the plastic recycling market said the U.S. PET recycling rate would have to increase dramatically, however, to meet the recycled content targets from those companies and others in the soft drink and bottled water industries.

Consulting firm Wood MacKenzie, for example, said the U.S. PET recycling rate would have to double, to 60 percent by 2030, to meet that, bringing the U.S. rate up to the current European PET bottle recycling rate of 58 percent.

Other industry consultants, like former APR technical director David Cornell, have argued that the need to collect that much material will lead to much more pressure for nationwide container deposit laws.

While declining to address deposits specifically, Lugar said ABA wants to be "a constructive part of the solution."

"The goal is to create a circular economy, to optimize our collection," she said "Because when we get every bottle back, we'll use less new plastic. And we will work with policy makers at every level of government to achieve that."