Producers of plastic and manufacturers that use the material have long been aware the recycling rate for plastic lags far behind that of metal and paperboard. Investments made to boost that rate have not always been forthcoming, but this decade could signal the start of a new era.
Plastic goes into numerous applications, but perhaps none are more visible or involve being more quickly discarded than packaging. Partly for those reasons, environmental advocacy groups and the governments they lobby have pressured plastic packaging producers to invest in making what they manufacture recyclable.
Whether to get ahead of a regulatory curve, as in Europe or California or to ally with corporate sustainability goals, several packaging producers have pulled the trigger on big-ticket projects designed to close the loop on the objects they put on store shelves.
Currently operating and planned projects have taken many different forms, with some including a role for traditional plastic scrap collectors, processors and traders, and others potentially bypassing these established networks.
Packaging producers have not been alone in making recycling-related investments in the past several years. Polymer producers, petrochemical companies and some brand owners also have decided the time is right to help fund a more circular model for plastic.
Global brand owners including Unilever, Procter & Gamble, Coca-Cola, PepsiCo and Nestlé have made recycling-related investments. On the polymers and petrochemical side, Dow, TotalEnergies, SABIC, Repsol and Indorama Ventures are among the companies making sizable investments designed to add recycled-content resins to their portfolios.
Publicly traded companies in both sectors have been the target of shareholder activism designed to draw attention to their previous perceived lack of investment in recycling. Activist groups contend petrochemical polymer producers have been all too happy to retain a virgin plastics-centric business model, and brand owners have historically done little to request changes to that model.
In the era of ocean-bound plastics concerns, activism has spurred regulatory and legislative measures increasing the pressure on companies to raise the recycling rate of plastic or face bans on certain types of plastic packaging.
Although automotive components or the plastic in electronics might not have a recycling rate any higher than that for packaging, the term “single-use plastic” has been used to turn up the heat on plastic recyclability in the packaging space.
Packaging producers—the companies that design and produce plastic bottles, tubs or pouches from resins—do not necessarily carry the same high profile as petrochemical firms or brand owners. But they, too, have been confronted with pressure to help convert a formerly linear disposal model into a circular model.
Several packaging companies have investment strategies that line up with collecting, processing and converting discarded packaging into postconsumer resin they can then use.
Bottle to bottle
The large-volume polyethylene terephthalate (PET) water and soda bottle market has enjoyed a healthy percentage of the initial investments in plastic packaging recycling. Sorting plant operators and household consumers increasingly have been made aware that No. 1 plastic bottles are highly recyclable, and a global market for recycled-content PET (rPET) subsequently has developed.
In the past several years, producers and users of other types of plastic packaging have been putting research and investment dollars into pursuing a similar outcome. Many of these investments have been in Europe for regulatory reasons or in Asia for “ocean plastic” prevention reasons, though North American investments also have been made.
Based in Austria in the heart of Europe, Alpla Group has a global reach in its production of plastic packaging. The company has issued a steady stream of announcements in the past three years pertaining to investments it is making to collect and mechanically recycle packaging of the same type it produces.
PET beverage bottles are one target of Alpla’s efforts, but so too is high-density polyethylene (HDPE) scrap. Last November, Alpla made an investment of nearly $23 million to open a plant in Mexico.
The facility has been designed to produce up to 15,000 metric tons annually of recycled-content HDPE pellets, but a planned expansion project could lift that capacity to 30,000 metric tons annually starting in the second half of the year.
The recycled-content HDPE pellets will be used to make packaging for personal care and household cleaning products. “The demand for recycling material is so high in Mexico and Central America that the majority of the output will be used regionally,” according to Alpla.
Switzerland-based global packaging maker Amcor was represented in a panel discussion that took place at the Plastics Recycling World Expo in early November 2021 in Cleveland. At the event, Amcor Vice President of Sustainability David Clark said collaboration among stakeholders, including packaging producers, will be critical to boost the plastic recycling rate.
Clark also said he is optimistic about recyclable packaging solutions emerging in part because more consumer packaged goods (CPG) companies are designing for recyclability. “Up until two years ago, recyclability was not part of design criteria.”
Amcor’s investments have included research at its Michigan-based subsidiary Amcor Rigid Packaging that yielded a materials design change it says will enable as many as 1 billion 50-milliliter (1.7-ounce) spirits bottles to be more identifiable to material recovery facility equipment and, ultimately, recycled.
The small PET bottles are used in quantity by airlines and hotels. However, according to Amcor, the bottles often are “lost in the recycling process due to their small size.” The bottles tend to slip out of the sorting process when broken glass is filtered out for separation or disposal, Amcor says.
Subsequently, Amcor’s researchers began designing a container that “collapses in a controlled way to maximize its width,” the company says. With a collapsed width greater than 5 centimeters (nearly 2 inches), the bottles would be far less likely to slip through the cracks at most U.S. recycling facilities.
Beyond PET and HDPE, polypropylene (PP) is the other predominant resin used in the consumer goods sector, while polystyrene (PS) often is used as protective packaging in its expanded form. Each of these resins is sparking investments in mechanical and alternative recycling methods referred to most often as chemical or advanced recycling.
Alchemy or major advance?
Advocates of chemical recycling say it will be necessary to overcome reverse logistics hurdles to genuinely boost the landfill diversion rate for plastic. The method also has skeptics who either are not convinced of its economic viability or who do not view it as closing a loop in the way mechanical recycling does.
In the PS sector, the Ineos Styrolution business unit of global petrochemical firm Ineos has been a growing investor in mechanical and chemical recycling capacity. In the past three years, Ineos Styrolution has sought out partners and collaborators to help aggregate and recycle PS scrap.
In Italy, packaging maker Sirap was an early collaborator with Ineos Styrolution as it sought to offer recycled-content PS packaging to customers sensitive to the material’s reputation as a single-use, difficult-to-recycle material.
Florida-based PureCycle Technologies is playing a prominent role in efforts to raise the PP recycling rate. The company’s roots are in R&D work by Ohio-based global CPG company Procter & Gamble.
PureCycle plans to open a plastic recycling prep facility in Winter Garden, Florida, to sort and grind PP that will then be introduced into its solvent-based PP recycling system in Ironton, Ohio, or at a facility it is constructing in Augusta, Georgia.
In 2020, the Berkeley, California-based Global Alliance for Incinerator Alternatives issued a 40-page report questioning the financial viability of chemical or advanced recycling methods.
The organization also said its report “reveals that what industry in the United States calls ‘advanced recycling’ is largely the opposite—turning plastic into fuel to be burned.”
Netherlands-based Rabobank weighed in with its own report October of last year. The bank pointed to criticisms of the process, writing, “The critical voices are not the only challenge. There are many practical, financial and economic hurdles that the advanced recycling industry needs to deal with in order to become a large-scale and commercially viable industry.”
Rabobank saw nonetheless that investment dollars were flowing into such projects around the world. “It remains a highly attractive investment opportunity for key industry players and investors,” wrote the report’s authors. They calculate some 4 million tons of chemical recycling capacity could be in place by the end of 2025.
“The outlook is optimistic in terms of investor interest, yet companies will need to increasingly balance a growing level of criticism and prepare to build more transparent supply chains. This is needed to continue to attract financing to scale up technology and roll out facilities,” said Susan Hansen, a Rabobank supply chain global strategist, last October.
Packaging producers likely will help calibrate the roles mechanical and chemical recycling play in the coming years.