Industry sees new MRFs tackling hard-to-recycle plastic, but others not sure

One of the big challenges in plastics recycling is the tsunami of low-value materials like polypropylene yogurt cups or polystyrene food containers that cities say are very difficult for them recycle cost-effectively in their curbside recycling bins.

Now some in the plastics and waste management industries are saying that the U.S. should build a new network of specialized sorting facilities as a wall against that tsunami to try to collect more of those hard-to-recycle packaging materials.

They're called secondary material recovery facilities, and proponents see putting them in major metro areas or perhaps one for a state. The secondary MRFs would pool items from about 10 primary MRFs, which take the first pass at sorting recyclables, and run material they can't sort through specialized filters to pull out the lower-value plastics and paper cartons.

It's an idea getting a lot more attention, with at least one plastics group saying it merits a serious look in the new national recycling strategy being developed by the Environmental Protection Agency.

But it's also an idea that has not been proven on a commercial scale.

Several plastics industry trade groups funded a trial in 2019 in Oregon that they say shows it can work, and in November they announced another, more limited, trial in the northeastern U.S.

Supporters say secondary MRFs can be part of an effort to build up U.S. recycling infrastructure after export markets for low-grade mixed plastics collapsed in the wake of China's National Sword ban.

Some in the environmental community who have looked at the technology, however, point to earlier efforts that failed, and they say weak markets and challenging economics for recycling make the secondary MRF idea questionable.

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Supporters of secondary MRFs argue they can play a role in increasing recycling rates. But they also acknowledge that to be successful, they will probably need both money from industry and potentially financial or policy support from government.

"We're trying to educate people about secondary MRFs because that's a critical component to really achieving the type of recycling rates that we all desire," said Michael Westerfield, director of recycling for Dart Container Corp. in Mason, Mich. He wrote an op-ed on the idea in Plastics News in 2020.

One plastics industry trade group, the National Association for PET Container Resources, told EPA in formal comments in December that support for secondary MRFs should get a serious look in the agency's new national recycling strategy.

NAPCOR, based in Charlotte, N.C., urged EPA to support pilot efforts around secondary MRFs, saying they could also lead to more collection of PET bottles. With a U.S. recycling rate of 30 percent, PET bottles are not considered among hard-to-recycle plastics, but NAPCOR said it still sees the new type of MRFs as a way to increase their collection.

For other types of plastic packaging targeted by the secondary MRFs, recycling rates are much lower. Only around 3 percent of PP and PS packaging is recycled in the U.S., EPA figures show.

NAPCOR told the federal government that secondary MRFs could support development of new chemical recycling technologies by creating bigger material streams.

"We believe the EPA could play an important role in funding development of these new technologies by demonstrating a workable supply chain, prompting subsequent private investment development," NAPCOR said. "This would involve government study and pilot development in a secondary 'sorting/process facility' designed to provide feedstock to enhanced recycling facilities or traditional mechanical reclaimers."

Westerfield thinks the secondary MRF concept can work. His firm, Dart, has invested in Titus MRF Services, a Danville, Calif.-based company that ran the 60-day secondary MRF trial in 2019 in Oregon that was financially backed by the plastics industry, including the American Chemistry Council and the Plastics Industry Association.

A report from the trial estimated a secondary MRF could divert 100 million pounds of recyclables from Oregon and Washington annually, including 20 million pounds of PP, nearly 10 million pounds of PET, 4 million pounds of PE and 1.6 million pounds of PS. It would reduce greenhouse gas generation the equivalent of taking 27,600 cars off the road.

Westerfield called secondary MRFs one of the "new approaches" needed for plastics recycling, although he stressed not the only one.

He said the plans by major consumer product brands to use a lot more recycled plastics in their packaging in coming years lends urgency to secondary MRFs.

"If brands are serious about wanting to capture the material, if people in our industry are serious about it like we are, then we need some new approaches," Westerfield said. "Look at our [recycling] rates; they're not changing. We've got to think about things differently."

Westerfield and others say expanding secondary MRFs nationwide will, in many places, require more funding, whether from industry and governments, or they need changes in how waste management is paid for.

Executives at Titus estimate it would cost about $16 million for one secondary MRF that could cover the states of Oregon and Washington, for example.

They say in some parts of the country with high landfill costs, like California, secondary MRFs can be financed by private investment. That's because the costs of sending materials to the alternative MRFs compares favorably with landfills in those places.

But in other parts of the U.S. like Texas, cheap landfill disposal rates make it harder to make an economic case for secondary MRFs, said Mike Centers, founder and president of Titus.

A relatively modest increase in per-household costs, less than $10 a year, could tip the balance and strengthen the economic case for secondary MRFs, though, he said.

Centers said the equipment in a secondary MRF, like optical sorters, can recover 50 percent of the recyclables that slip through a primary MRF's sortation lines. In many cases, those primary MRFs were built decades ago when the packaging stream was much simpler.

Centers said Titus has been meeting with investors to build a full-scale secondary MRF on the West Coast, but he said the coronavirus pandemic has slowed down its plans.

"We expected to be funded and building our plants on the West Coast, basically making the announcements, about now, but we believe that COVID slowed everything down, especially at the government level because they've been overwhelmed," Centers said.

Part of what makes the business case different on the West Coast, Centers said, is better government recycling infrastructure. California's bottle bill system strengthens the investment case for using private funds to build secondary MRFs there, he said.

"The value of the material is higher because of the bottle bill," Centers said. "Those give us the ability to build these in the West Coast with private money."

He said Titus sees secondary MRFs as a cost-effective way to build on the current U.S. system.

"We believe the secondary MRF is still the least-cost way to build on the existing system that collects the plastics that have been discarded, either in multifamily homes or residences," Centers said.

But one environmental group that has examined the economics of MRFs questioned the track record of previous attempts at the secondary MRFs.

Jan Dell, founder of the group The Last Beach Cleanup and a member of the California Commission on Recycling Markets and Curbside Recycling, pointed to previous efforts, like a QRS Recycling facility in Maryland, that ran into problems.

The QRS plant launched in 2015 with much fanfare, receiving a $2 million loan from the Closed Loop Fund, an industry-backed social investment fund. At the time, Closed Loop executives called it a "game-changing solution" to build a market for the hard-to-recycle plastics Nos. 3-7. But in 2017, the facility shut down, blaming challenges in the post-consumer plastic resin market.

Dell also pointed to a mixed plastics sorting facility in Utah that closed in 2019, only two years after it opened.

The culprit in these cases, she said, is the low value and lack of viable markets for the materials, making it hard to justify the cost of sorting and collecting.

Similarly, Dell also pointed to another plastics industry-funded project at a primary MRF, a TotalRecycle Inc. facility in Birdsboro, Pa., to recycle thin plastic bags and film, as an example of the difficult economics. That project, which was not technically a secondary MRF but had a similar aim, was an "economic failure," Dell said.

A 2020 industry report on the project, however, took a more nuanced position. It argued the film recycling project found success showing it could work in a MRF. But it also pointedly noted that end markets for the recycled materials were "anemic."

It also suggested it could cost $300 million to $500 million to upgrade the 100 largest U.S. MRFs to process the plastic film.

"There is no economic driver for sorting plastics beyond what is sorted in primary MRFs," Dell said, mainly PET and high density polyethylene containers.

As well, she argued that a decision by Titus last year to close the small secondary MRF it had been operating in California pointed to the same economic problems.

Titus executives confirmed they are shutting down their Los Angeles secondary MRF but say the reasons are complex.

Centers confirmed the low prices of plastic scrap was one reason for the closing. But he also said changes in what people are throwing out in the coronavirus pandemic dramatically reduced scrap material flows into the plant, adding to its challenges. And the facility was facing a sizable rent increase, Centers said.

The company's secondary MRF business model remains economically viable, Centers said. Titus collects from a different sized waste shed than the QRS plant, for example, he said.

"We decided let's move to a full-scale facility and focus on that," Centers said.

Titus believes the push from consumer brand companies to use more recycled content, as part of efforts like the Ellen MacArthur Foundation's New Plastics Economy initiative will strengthen markets.

"With all the commitments that the plastics industry and packaging producers and brand owners have made to making these materials recyclable and actually having them be recycled and using them back into products, we hope that will help to create better markets for the materials," said Scott Farling, vice president of business development and research at Titus.