California's move to require an ever-increasing amount of recycled content in plastic beverage containers will add stress to a recycling system that's already facing challenges.
A new report from Independent Commodity Intelligence Services warns the nationwide availability of "quality recyclates" is uncertain as the first phase of California's recycled-content law kicks in this year at 15 percent.
And the situation is only going to become more acute as the California mandate will push to 25 percent recycled content by 2025 and 50 percent by 2030.
"Substantial growth in recycled resin production would be needed to square the gap between supply and demand in the U.S, which is implausible to occur within such a short period of time," said Paula Leardini, senior analyst for plastics recycling at ICIS, in the report.
"Under limited supply, large corporations are likely to dominate the market, challenging smaller manufacturers to comply with the mandate," the report states.
The latest ICIS observation comes at a time when some plastic recycling sector experts continue to raise questions about the nation's ability to supply enough recycled resin to meet corporate sustainability goals.
Many companies have come out with recycled-content goals for their packaging, often pegging them to 2025. But there is a growing belief that the current market does not have enough recovered resin to adequately meet all of the stated goals.
PET is the common resin used for beverage containers and has a nationwide recycling rate of 26.6 percent in 2020, according to the National Association for PET Container Resources, a trade group. That's the second-highest plastics recycling rate, behind only high density polyethylene. But the figure also means that more than seven out of 10 PET bottles used in this country still end up in the trash.
California, which has a bottle deposit program, saw a 68 percent PET bottle recycling rate in 2020, the report states. Bottle deposits in the state are 5 cents for containers under 24 ounces and 10 cents for those holding at least 24 ounces.
Despite the new minimum content standards for beverage containers starting this year, California actually has been trending downward in the use of recycled resin in bottle applications, according to Jan Dell, founder of environmental group The Last Beach Cleanup.
Dell crunched publicly available numbers released by CalRecycle, part of the California Department of Resources Recycling and Recovery, to show that the amount of recycled PET used to make beverage bottles in the state declined from 103 million pounds in 2020 to 71 million pounds in 2021.
Dell said increased prices for recycled resin used to make food-grade recycled PET likely played a role in the decreased use.
"This decline in usage proves that beverage makers are not willing to pay a high premium for food-grade recycled plastic," Dell said in an email. "One can't blame COVID or lack of production when there was a decline in usage from 2020 to 2021."
Dell believes using recycled plastic for food and beverage applications is a bad idea, claiming the reused material is toxic and absorbs contamination during its earlier use.
"I don't believe that plastic recycled-content standards are a good or safe approach to reduce plastic pollution and plastic waste, so the emerging failure does not surprise me," Dell said about the falling recycled PET usage in bottles in California.
ICIS created a model to calculate how much more recycled resin will be needed to meet the demand created by the California requirements.
"An additional output of 800,000 [metric tons] of food-grade PET and PE PCR [post-consumer resin] would be needed to achieve 15 percent PCR content rate in bottles by 2022. By 2025, over 80 new recycling plants with an average output of 18,000 tonnes/year would be necessary to achieve 25 percent food-grade PCR content in bottles," the report states.
With increased recycled resin costs — food-grade recycled PET has sold at a premium over virgin bottle grade PET since mid-2019 — ICIS said beverage makers will have to pay more or pay an administrative penalty of 20 cents for each pound of required PCR they do not use, the ICIS report states.
"Uncertainties remain on the supply of high-quality, food-grade PCR material to meet California's mandate as well as on the strategies beverage manufacturers are adopting based on the availability and price of recycled resins," the report states.
