As Russell leaves ACC, he sees plastics recycling investments paying off

Washington — Steve Russell, who is stepping down after 12 years heading one of the plastics industry's two main trade groups in Washington, has a prediction on his way out: Investments in recycling will, in a few years, start to reap rewards for addressing plastic waste challenges.

Russell has led the plastics division of the American Chemistry Council since 2007, giving him a key role in developing the industry's strategy. ACC announced Dec. 5 that he is stepping down in February, a decision Russell said he made for personal reasons.

During his tenure, the resin companies that pay the bills at ACC have ridden a roller coaster. A shale gas boom reinvigorated the industry and sparked huge investments, but that's been followed by growing public worries about plastic.

A few major plastics customers like PepsiCo Inc. and Unilever plc have even responded to those worries by pledging to sharply cut their use of virgin plastic, potentially threatening bottom lines.

But Russell believes the investments in recycling — in both traditional mechanical operations and new chemical feedstock recycling — will start to help turn the corner.

"Whereas today we're talking about deals signed and groundbreakings, in five years' time we'll be talking about the first few years of performance and we'll begin to see the numbers in terms of recovery rates respond accordingly," Russell said.

He said he was "absolutely confident that we will have seen by then measurable reduction" in waste.

"I believe that because at their core what these investments are proving is that materials have value, and where there's value, then the business case for investment and collection exists and the capital markets will step in," Russell said.

He said China's stringent National Sword policy restrictions on imported plastic scrap that came into effect in early 2018 have helped push more investment in U.S. plastics recycling.

"If you look back, say, 24 months, pre-China sword, there wasn't the kind of investment that we see today in both traditional and advanced recycling," Russell said. "Even in the last few months, it has been a steady drumbeat of announcements, including our members and other companies in both mechanical and advanced recycling."

He thinks the market is responding to brand owner commitments for recycled content. That means, though, that collecting more material will become an even more critical challenge.

"Without a doubt, the challenge of the next few years is going to be addressing both post-use recovery rates and advancing quickly the systems and technologies that are going to be needed to achieve our circular economy goals," Russell said.

ACC set ambitious goals last year, to have all plastic packaging reused, recycled or recovered by 2040. But at the moment, plastics packaging is nowhere near that and lags other materials in recycling rates.

Overall, Environmental Protection Agency figures released in November show that plastic containers and packaging had a 13 percent recycling rate in 2017, compared with 73.3 percent for paper and paperboard, 32.8 percent for aluminum, 33.9 percent for glass and 73.1 percent for steel.

Russell said it's a good time both personally and for the association for him to step down.

"I am leaving now because we've just come off of a stretch of some really big things," he said, including developing ACC's plastics recovery goals and launching the $1.5 billion industry-funded Alliance to End Plastic Waste.

As well, he noted that ACC has a new CEO, Chris Jahn, who took over this year for Cal Dooley, who retired after 11 years in the job.

In a sign of how strong the pressures over environmental issues have been for ACC and the industry, Dooley had delayed his own retirement for a year to develop a plastic waste strategy, including the Alliance to End Plastic Waste.

"The moment just seemed right if I was going to make a transition to do that now, and I'm still at a point in my life where a lot of different things could be possible," Russell said.

Russell said he has no specific career plans to announce and wants to explore doing more with some personal causes. He said he wanted to "step aside, take a deep breath and see what might be next. I'm very intentionally going to take some time to think and maybe enjoy a beach."

In its short announcement on his departure, ACC said that Russell played a "crucial role" in bringing the Alliance to End Plastic Waste into operation. Jahn said that Russell's role in forming the alliance was "an extraordinary achievement in an exceptional career."

Part of his tenure also focused on building stronger global links within the industry. ACC said Russell was instrumental in forming the World Plastics Council and in the expansion of the industry's Global Plastics Alliance.

Russell is a longtime ACC staffer, joining in 1995 and working on chemical management issues and as senior legal counsel before taking over the plastics unit.

He said the plastics division has grown stronger in the last decade, doubling its membership to 20 companies, as shale gas has helped make the U.S. resin sector one of the low-cost production spots worldwide.

He said the plastics division refocused its mission, launching programs to give ACC companies research and analysis aimed at demonstrating the sustainability of plastics.

That included looking at the overall environmental footprint of plastics in products, including in packaging, in saving energy in buildings and in saving fuel by lightweighting cars, he said.

Despite growing public concern about plastic waste, Russell struck an optimistic tone for the plastics materials sector.

"The signs for the future of this industry are very strong," Russell said. "We are better integrated with our value chain. We remain a low-cost manufacturing environment. We have looked carefully at the threats and opportunities that the future has in store and we are, I believe, structured well."

He said executives at ACC's plastics companies have "very clear alignment … around the need to address post-use plastics," and he pointed to the Alliance to End Plastic Waste and what he called a willingness to engage with critics.

Russell revealed previously undisclosed meetings, held in 2017 and in August of this year, to trade views with large groups of stakeholders, including environmental groups Greenpeace, 5 Gyres and others.

He declined to talk about the specifics of the meetings, or if there will be a third meeting. But said the groups wanted to at least try to understand each other better. He termed it an evolution in the industry's thinking.

"We've had a couple of days where we sat in a room with a wide range of stakeholders, including some of our fiercest critics, to talk and understand and listen and learn," Russell said. "I think that's a change from where our industry has been previously."