DeAnne Toto

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A pioneer in plastics

Industry Report

Michael Biddle, founder of MBA Polymers, recounts his start in the plastics recycling industry as well as the challenges that remain for this sector.

September 2, 2014

Michael Biddle is a well-known name in the world of plastics recycling. His pioneering work in recycling complex mixed plastics streams has resulted in a patented 30-step recycling system that includes magnetically removing metals and shredding the plastics, which are then sorted by polymer type and made into pellets for use in new products. His work also has attracted the attention of a wider audience, with Biddle having delivered a TED Talk (www.ted.com/talks/mike_biddle) during the summer of 2011 on plastics recycling.

Biddle founded the plastics recycling research firm Michael Biddle & Associates (MB&A), the company that would become MBA Polymers, in Richmond, California, in 1992. His interest in plastics grew out of his work with General Electric and Cummins Engine in the late 1970s to mid-1980s developing high-tech plastic composites and high-temperature thermoplastics. In his quest to learn more about this material, Biddle went on to earn a Ph.D. in polymer science and engineering.

Upon graduating, he took a job with Dow Chemical, where he helped to develop hollow fiber membranes and high-tech composites.

“After a few years back in industry full time, I began to realize that the world would eventually run out of raw materials to make its ‘stuff,’” Biddle says. “I was also beginning to worry that plastics were ‘losing their cool’ and were seen to be ‘unrecyclable’ by the public and our customers. I told Dow that I wanted to figure out how to recycle plastics.”

Despite Dow’s initial response that it didn’t hire a Ph.D. in plastics to work on “garbage,” he was able to convince the company otherwise, starting a research group on plastics recycling.

“I guess I did OK because the company eventually sponsored me at Stanford Business School as a Sloan Fellow,” he says.

Dow closed the research facility where Biddle worked shortly after he returned from Stanford. Rather than transfer to another Dow location outside of California, he founded MB&A with the goal of “mining” plastics from mixed waste streams.

“The research went well and my consulting company evolved into MBA Polymers to begin to commercialize the plastics recycling technology we developed,” Biddle says.

“We have now demonstrated that it works both technically and commercially, and MBA has become the world’s largest and most advanced recycler of plastics from highly complex plastics-rich streams, like e-waste, auto shredder residue and mixed rigid plastics from household waste,” he continues. “It is also one of the few multinational plastics recyclers with plants in China, Austria and the U.K.”

MBA currently employees 300 people and has 300 million pounds of annual processing capacity.

While Biddle stepped down from his role as president of the company earlier this year to pursue a wider range of challenges and opportunities, he remains on MBA’s board and is an investor in and an advisor to the company.

Biddle has seen many developments in the plastics recycling sector in the last 25 years, but the one he finds most notable is the changed attitude toward plastics recycling. “I was told by many ‘experts’ 25 years ago that plastics would never be recycled at large scale because it was far too difficult and the material was designed to be ‘thrown away’ and had little value.

“We now know that there is no ‘away.’ We also know that plastics are rather valuable,” he continues. “For example, plastics are several times more valuable on a weight basis than steel, which has an extremely high recycling rate.”

Biddle shares more of his observations in the Q&A that follows.
 

Recycling Today (RT): How would you characterize the outlook for the global plastics recycling industry? How does this compare to the U.S. outlook?

MB: The last couple of years have been difficult for recyclers of many different materials from the standpoint of plant utilization and sales prices for their commodities. Their financial returns reflect this, and plant closures for some have been announced as they rationalize their businesses to meet the current economic climate. This makes it difficult for them to consider investing in additional processing technology in the very short term.

Recyclers of municipal solid waste (MSW) are also struggling with low commodity prices and other challenges. David Steiner, the CEO of the largest waste and recycling company in the U.S., Waste Management (WM), talked about this at Fortune Brainstorm Green in May 2014. Some example quotes from his panel discussion with Simon Lin, the CEO of Wistron, and me are summarized below (This 30-minute panel discussion on the circular economy can also be viewed at this link: http://bit.ly/1nTO7nS):

  • “With low commodity prices, we cannot profitably invest in the infrastructure we need to do recycling.”
  • “We generally invested $200 million to $400 million per year in infrastructure for recycling.”
  • “Last year in the fourth quarter we actually lost money in recycling.”
  • “We’ve been going down in profit in recycling for two straight years.”
  • “When you are a for-profit business and you lose money in a business, you aren’t going to put money into it, right?”
  • “2012 was the first year in 50 years in which recycling rates went down in the U.S.”
     

While some companies are looking to waste-to-energy conversion as the answer for hard-to-recycle streams, Mr. Steiner said: “Look, we put $400 million to $500 million into conversion technologies and got a 0 percent return. You don’t do that twice in a public company, right?”

Plastics recycling is also down a bit from its highs, like most materials industries, largely due to the slowdown in purchasing of materials by China. But my sense is that it has not been as great as with some other commodities, like steel, copper and paper.

Nevertheless … I believe that the outlook for plastics recycling globally has never been brighter in the 25-plus years I’ve been working in this industry.

Furthermore, I believe that the reshoring of manufacturing to North America will continue and possibly will accelerate for natural economic reasons, including energy and labor cost dynamics. This is a very positive sign for American manufacturing and plastics recycling in particular.
 

RT: How would you describe generation of and demand for plastic scrap?

MB: I see a large portion of the supply and demand situation for plastics recycling over the years as a classic “chicken-and-egg” problem. This has been particularly true for postconsumer recycled (PCR) plastics. Demand was somewhat limited by inadequate supply of PCR plastics of consistent and sufficient quantity and quality. On the supply side, investors were understandably reluctant to fund the required technology and infrastructure development to generate consistent and large volumes of high-quality recycled plastics unless market demand was clearly demonstrated.

The plastics recycling industry has really started to develop globally over the last five to 10 years, allowing both supply and demand to increase significantly. On the supply side, many large plastics-rich waste streams have emerged or grown dramatically, for example:

  • Municipal programs for single-stream recycling including mixed plastics expanded a great deal in the U.S. According to the American Chemistry Council (ACC) and the Association of Postconsumer Plastic Recyclers (APR). The collection of rigid plastics for recycling tripled between 2007 and 2012, passing 1 billion pounds in 2012. More than 60 percent of Americans now have access to a rigid plastics collection program.
  • Electronic waste (e-waste) recycling has increased dramatically, particularly in Europe and Asia, and there is a large amount of plastics now being recycled from these activities as plastics-rich byproduct streams are generated by the metal liberation and recovery activities.
  • The recycling of plastics from automobiles has increased for technology, policy and economic reasons, which is discussed later in more detail.
     

Companies like MBA Polymers have developed technology to recover plastics from these large complex waste streams and have established world-scale plants that can deliver products meeting the requirements of demanding customers, most notably: a) adequate quality, b) large volumes and c) consistency of both properties and supply.

Over the last five to 10 years, these sophisticated recyclers have also developed high-end markets for recycled plastics, which are now growing more rapidly as end users gain experience and confidence in the quality, supply and consistency of PCR plastics. The demand for PCR plastics and programs that can help manufacturers “close the loop” between end-of-life products and the birth of new products is also being pushed by the following factors:

  • the growing adoption by large purchasers (like the U.S. government and many other government agencies around the world) of procurement standards that require and/or reward PCR content, such as EPEAT for electronics;
  • a growing demand from consumers for products that address their ever-increasing concerns about a resource-constrained world and their desire to align themselves with brands that speak to environmental and social awareness;
  • concerns among producers to better “future proof” their supply chains (More and more manufacturers are concerned about the security of supply of raw materials and certainly don’t want to be disadvantaged to other producers that have locked up more reliable and/or lower cost supply chains.);
  • the growing adoption of EPR (extended producer responsibility) and circular economy policies and principles that, among other things, encourage manufacturers to take a more “cradle to cradle” view of their products.

     

RT: How might lower natural gas prices affect the plastics recycling industry?

MB: Recycled plastics prices and the demand for recycled plastics are often tied to the pricing for virgin plastics. And the pricing of virgin plastics are mostly tied to supply and demand dynamics. The cost of production of virgin plastics is of course influenced by feedstock and energy pricing (natural gas represents both for some plastics) and this influences pricing pressures as well as the likelihood of virgin plastics manufacturers to expand capacity.

It is expected the lower natural gas prices will lower the costs and, thus, the pricing of commodity thermoplastics, particularly polyethylene (PE), but also will lower some feedstock costs for a number of other plastics. For example, largely due to low natural gas prices, an estimated 16 billion pounds of additional PE capacity is expected to come online in the U.S., beginning to ramp up in 2016. And there appears to be a debate brewing among various industry players around how much low cost natural gas should be exported as LNG (liquefied natural gas) and how much as plastics and other value-added products. The lines are being drawn as you would expect, with plastics producers arguing to keep the natural gas for manufacturers in the U.S.

Polypropylene (PP) expansions are also being announced, with some industry analysts suggesting that another 9 billion pounds of PP capacity is expected to come online in the 2016-18 time frame.

This increased capacity is generally expected to put downward pressure on PE and PP pricing starting in 2016, but some analysts are not so sure, expecting the global supply-demand balance to keep prices supported, particularly as less economically viable assets are retired.
 

RT: What factors are currently inhibiting the postconsumer plastics recycling rate? How can companies address these factors to improve the recycling rate?

MB: It’s clear that we cannot continue to treat plastics waste with a casual short-term mindset. These resources are too valuable to “waste,” and we already know that littering and improper waste disposal lead to unsightly land and seascapes. More serious is the fact that marine litter threatens the health of our oceans and sea life, with significant implications for all life. Single-use, disposable and “out of sight, out of mind” are not sustainable in any sense. What we need to adopt is a mindset of resource conservation and recovery so we can realize the economic and environmental benefits a circular economy can provide.

A few numbers would be helpful for perspective. The U.S. Environmental Protection Agency (EPA) estimates that of the MSW America generates, more than 65 billion pounds per year are plastics. This is a big number by almost any standard, and it would be considerably greater if plastics from industrial sources and end-of-life durable goods, such as automobiles and appliances, were included.

While the United States has one of the highest per-capita generation rates of waste plastics in the world, it also has one of the lowest recycling rates for plastics, estimated to be about 8 percent by the EPA. Most of this is plastic containers.

Plastic bottles have been collected and sorted for many years, largely because they can be easily identified and segregated from mixed streams of materials by humans and/or machines. However, the recycling rate for PET (polyethylene terephthalate) and HDPE (high-density polyethylene) bottles is estimated to be only about 30 percent, and this is actually just the collection and diversion rate, not the actual recycling rates.

Actual recycling rates are lower because not everything in the bales is recycled. This is especially true with the mixed plastic bales, which are mostly sent to developing countries for “low-cost” recycling. The EH&S (environmental health and safety) practices and impacts on the workers and local ecosystems are frequently far below standards in most developed countries. And the byproducts and waste from these processors often ends up disposed of in ways that would be considered illegal in the countries where the waste originates.

The public clearly cares about how its stuff is made as evidenced by widespread outrage against companies such as Nike and more recently Apple regarding working conditions in outsourced factories in developing countries. However, the same attention is not given to the unmaking of our stuff, even though the “unmaking” of stuff can be much riskier business. Compared to the assembly of products, the material recovery and reprocessing of “end-of-life” products can be considerably more risky to humans and ecosystems if not carried out responsibly. While some may consider this the concern of the importing country and may even unconsciously have an “out of sight, out of mind” attitude, we now find that the practice of shipping our difficult-to-recycle waste streams to developing countries, a practice that I call “environmental arbitrage,” can come back to haunt us in a number of ways. One example: Researchers are finding that a large number of fish have ingested plastics waste that have preferentially absorbed toxins in the oceans (from other sources of pollution), and these toxins can leach into the fish and ultimately into the consumers of the fish.

Why don’t more U.S. recycled material processors build capacity to intercept this material and process it responsibly here in the U.S.? One big and not so intuitive reason is lack of secure supply. How can this be in a country that generates so much waste plastics?

U.S. MRF (material recycling facility) operators understandably demand long-term supply agreements, often 10 to 20 years, from local municipalities before they will make the investments necessary to build their MRF operations. Yet, these same companies are extremely reluctant to sign long-term sourcing agreements with their customers on the other side of their businesses, preferring to rely on a “trading to the highest bidder” model. This reluctance continues, even with the slowdown in export markets for mixed plastic waste and the fact that their trading models have generally turned against them (as noted earlier in the comments from Waste Management’s Steiner). Domestic material recyclers face the same need for supply assurances to raise the equity and debt financing necessary to build the sophisticated facilities necessary to recycle these materials responsibly.

So how do we change this situation? Firstly, we simply need to encourage two behaviors with more responsible, long-term and forward-thinking local policies:

  1. We need to consider our plastic waste as a valuable resource and make it easier to collect and aggregate mixed plastics from households and businesses.
  2. We then need to ensure that these collected and concentrated mixed plastics streams are only sent to processing facilities that meet, at a minimum, local regulations and preferably at standards we would consider minimum requirements for our own communities. This would allow domestic recyclers to play on a more level playing field.
     

The fear is that this will raise the cost of our “end-of-life (EOL) resource management.” (I prefer to think of it as resource versus waste management.) Europe and other regions that have developed more responsible waste management and export polices over the last decade or so are now discovering that their proactive EOL resource management policies have created jobs and promoted domestic economic development directly via their processing plants and by providing sources of PCR materials to domestic manufacturers.

In short, by viewing our waste as resources and acting responsibly and consistently, by essentially following the Golden Rule (We don’t want other countries dumping on us.), we can reap environmental, human health and safety and economic benefits.
 

RT: What have been among the most promising developments in the area of plastics recycling in recent years?

MB: In summary:

a. the significant increase in the amount of concentrated plastics-rich streams around the world;

b. step changes in the technology development and commercialization of that technology to sort, purify and upgrade PCR plastics from complex mixed waste streams;

c. a dramatic increase in demand for PCR plastics for the many reasons noted above; and

d. the natural evolution and professionalization of what was once considered only a “scrap industry.”
 

More specifically: In the last two years due to economic factors and China’s “Green Fence,” many recyclers, particularly in the U.S., found it difficult to move some of their mixed plastics, as it was these streams that were most under import scrutiny and pricing pressure. These are also the streams on which the U.S. has largely depended on an export market.

However, the volume of mixed plastics “residuals” from MRFs have increased at about the same time the market for the mixed plastics has become more difficult, so recyclers and the communities they serve are having to rethink their strategies for mixed plastics. Some have considered pulling back, while others are looking to new technologies, finding more reliable outlets for the mixed plastics and energy recovery for the residuals. Some specific examples include:

  • MRFs have begun to improve the quality of the “monostreams” they create (predominantly PET and HDPE, but now sometimes PP) from their single-stream MRF inputs by better tuning their systems, slowing them down, adding new and better bottle/object sorting technology and/or adding more hand-pickers on their lines.
  • Some companies are starting to work with secondary MRFs and PRFs (plastics recovery facilities) to help recover more monostreams from the residuals, which are then also creating cleaner and more interesting mixed plastics streams for companies that have the ability to sort them.
  • Companies like MBA have added mixed plastics streams from households to their supply strategies.
     

Until more reliable markets for mixed plastics appear, it will be difficult to convince communities to add or increase the plastics they collect in curbside collection programs, so adding more reliable domestic processing capacity seems key to me.

With the changes in market dynamics, more companies looking for PCR plastics and the ongoing reshoring, I’m optimistic about the future of plastics recycling in the U.S. and worldwide.
 

RT: How does the postindustrial recycling rate compare with that of postconsumer plastics? What factors are at play here?

MB: Recycling of postindustrial (PI) plastics has been going on for many decades, just as metal recycling started with relatively clean postindustrial streams. In fact, it’s often simply reused in the same manufacturing process as “regrind.”

Postindustrial recycling is quite straightforward as the streams usually don’t require complicated separation or cleaning before being reused, unlike PCR streams. The companies that recycle these materials are often called “reprocessors” and the materials they make is sometimes called “repro.”

The PI recycling rates are very high as they are normally easy to recycle and a valuable commodity. This is why most sustainability or environmental standards or labels don’t give credit for PI recycled plastics content. There is no need to “prime the pump.” As with recycled paper standards decades ago, this pump priming helps create a more clear market for PCR materials and make it easier for recyclers to attract the necessary debt and equity financing to build additional processing capacity.

Furthermore, while PI materials might have good quality, consistency of properties and supply is difficult because they depend on supplies of “scrap,” such as sprues and runners as well as mistakes from manufacturing. One day they might have access to one particular color, grade, melt index, etc., the next the scrap could be a different color and/or grade even if of the same type of plastic. For these volume and consistency reasons, repro is often sold at significant discounts to virgin to customers that have built their products around this more variable but lower cost raw material.

Finally, no manufacturer wants to make waste, so they have learned to make less by using technologies such as runnerless molds (which generate much less scrap) as well as better process control to reduce mistakes. And growing numbers of manufacturers have learned to reuse their own scrap internally as plastic prices have climbed along with other commodities. So PI streams are often too small or variable to satisfy the requirements of large customers looking to secure reliable and consistent supplies of recycled plastic feedstock.
 

RT: What effect with the EPA’s approval of reuse of plastics from ASR (auto shredder residue) have on the industry?

MB: This was a major breakthrough and now allows the US to go after this source of more than 1 billion pounds of plastic per year, just in the U.S., which has been largely landfilled up to now.

ASR is the material remaining after a car has been shredded to small bits, typically by a very large (up to 10,000-horsepower) hammermill and the majority of the ferrous and nonferrous metals recovered using a number of readily available techniques. The metal recyclers (often called “shredders” in the U.S.) process more than just automobiles, including appliances, C&D (construction and demolition) scrap, so the mix of plastics and nonplastics in the ASR can be quite complex.

The ASR might contain between 20 to 25 percent mixed plastic, the rest being glass, textiles, rubber, foam, wood, wires and other missed metals, stones, dirt/fines and other nonplastics. It’s not economic to ship this material very far for additional processing, so most large shredders have put in more specialized ‘downstream’ equipment at each large shredder location to recover more of the metals they missed. And now, more shredders are also adding steps to concentrate the plastics for shipment to processors like MBA Polymers.

Europe has been recycling plastics from automobiles for a number of years, driven by economics and ELV (end-of -life vehicle) legislation that requires increasing amounts of recycling for automobiles. MBA Polymers has built in the U.K. the largest plastics recycling facility designed specifically for ASR in the world (www.mbapolymers.com).


RT: What accomplishment are you most proud of in your career?

MB: Doing what I was told was impossible: demonstrating that industrial-scale recycling of plastics from some of the largest and most complex plastics-rich waste streams in the world is possible.

Creating a multinational business to commercialize the technology and business model.

Helping create new markets and high-end customers for these new materials and helping leading companies come closer to building businesses that imbed the cradle to cradle and circular economy principles.
 

RT: What concerns keep you up at night?

MB: Mostly two:

  1. Figuring out how to “run faster” to make sure that these rapidly growing opportunities materialize into a large-scale sophisticated PCR plastics industry—like the minimill did to revitalize the steel industry and make it more sustainable. I see the PCR plastics recycling industry at a similar inflection point.
  2. Related to No. 1, but on a broader scale, I want to be able to look my kids in the eye and tell them that I did everything I could to deliver to them the same or better amazing opportunities I had coming out of school: to realize an increasingly better quality of life for myself and my family. I believed wholeheartedly in the American Dream growing up. My version went like this: All I had to do was work hard, intelligently, responsibly, honestly and ethically and then I could do well by doing good.
     

The path was not nearly as easy as I imagined, but it was there, and I managed to find my way through the briar patches and around many of the cliffs. And I am extremely grateful that I was given the chance to follow my dreams. I hope it’s there for my kids and the billions of other kids that will literally define our future (over 25 percent of the world’s population is under 15).

We have many challenges, especially as a rapidly growing segment of the worlds’ population understandably demands many of the things we in the “developed world” take for granted.

We have no choice but to use our finite resources more efficiently and responsibly than we have in the last few decades. And I am looking to leverage my 20-plus years of ‘garage to multinational leader’ experience to help other CleanTech entrepreneurs/businesses do the same—and faster.

 


Michael Biddle is the founder of MBA Polymers and currently serves as a member of the U.K.-based company’s board. He can be reached via email at mbiddle@mbapolymers.com.

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