Report Finds Caution for PET Recycling

According to a new report by the Plastic Redesign Project, a method being developed to enhance the capability of PET bottles to keep oxygen out and carbon dioxide in may result in increasing the cost of processing these bottles.

Until recently, PET bottles had had a difficult time increasing its barrier performance for the three-month shelf life needed for oxygen sensitive products such as beer and fruit drinks. Additionally, PET bottles have struggled with retaining CO2 when carbonated beverages are sold in sizes less than 16 ounces.

A new method being tested applies an additional non-PET barrier to the surface, or to co-injected a barrier layer into the middle of the wall of a PET bottle to preserve the CO2 and keep out the oxygen.

While this process could result in enormous growth opportunities for the PET plastics industry, due to the material not being made from PET plastic the recyclability of the product could decrease significantly.

According to the report, the introduction of non-PET material may represent a difficult-to-remove contaminant that could adversely impact recycling. If the new packaging is not designed for recyclability, downstream costs may increase due to the problems washing or marketing the new bottle with its non-PET components. Moreover, some products such as beer that require enhanced barrier protection also use amber tinting for light protection and branding. There may be increases in costs and a deterioration in revenues due to the problems separating and marketing amber bottles unless designers engineer around that problem.

Either impact would eventually be reflected in lower bale prices paid to local recyclers. When revenues are pushed below a minimum viable price, that can become a serious concern for recycling's future. Piercing the point of price resistance for prolonged periods may lead some programs to cease collecting plastics. This sort of erosion may, over time, weaken the infrastructure needed to process recovered plastic and increasingly jeopardize plastic recycling's long-term future.

Historic bale prices for clear and green PET have averaged about $.08 per pound. This total is only $.02-$.03 more than the $.05-$.06 per pound that market players in an informal survey suggested as a minimum viable price for PET. The spread leaves little room for recyclers to absorb additional costs from more difficult to process PET plastic bottles.

The Plastic Redesign Project, a coalition of state and local recycling officials, understands and accepts that packaging innovation is an important ingredient in a modern economy, and, indeed, that some innovations will advance recycling. But, the Project also believes that the different packaging innovations should be independently and objectively evaluated on a comparable basis to each other in order to evaluate and rank their impact on recycling before they are commercialized in the market.

However, the Project does not seek to arbitrate which of the alternative technologies available to provide new container attributes should enter the market. Rather, it believes that the free market works best when all stakeholders have complete information upon which to base their decisions about downstream impacts, along side the better understood front-end attributes of a new package. They also are of the opinion that reliable testing guidelines, independently applied, may provide packaging innovators with the necessary information to sculpt their designs to best accommodate recycling's needs. Past experience suggests that this can often be done without detracting from the purpose for which the new package has been developed.

The two issues for recyclers are whether 1) amber tint will increase sort costs and lower revenues, and 2) barriers in clear bottles will degrade clarity 

This report proposes a testing methodology that, by showing how an evaluation can be quantified using industry standards, is completely objective and fair to all parties. The report then proceeds to demonstrate how this new protocol can be applied, shows the results for those vendors which have provided data to date, and relates those results to recycling's long term economics.

Two issues are raised by the barrier bottles that require such an objective analysis be done-

The first is how much additional costs reclaimers will incur to sort the amber colored barrier bottles used by many brands of beer and how much revenues will be reduced because of problematic markets for amber tinted PET.

The second is whether the addition of residual barrier material from clear beer and fruit drink bottles will cause hazing, yellowing or black specs in the clear flake that could preclude its sale into high paying bottle markets and reduce recyclers' revenues.

Market Saturation

When the proportion of amber and barrier bottles in the PET stream is very small, in general there will probably not be any significant impact on recyclers. However, as the volume of these bottles increase, at some point they may reach a crossover or failure point after which the impacts of poor designs become a matter of concern. Whether that point might be reached in the foreseeable future is a question of the size of the market for each barrier bottle. Determining the failure point and the likelihood of crossing that boundary is the task of an informed analysis.

Amber tinting and barriers will each have their own failure point. However, the common question for both is the proportion of amber and barrier bottles that are anticipated. An exhaustive analysis from data provided by Business Development Associates was undertaken. The results suggest that the maximum theoretical saturation of amber beer bottles in the PET stream would be 24% of all PET bottles, and the maximum level of barrier bottles in the clear PET stream, 63%.

However, this is the outer boundary of possibility. Most likely, fewer amber and barrier bottles will actually be sold, and for some products, substantially less will be in the market. Although how much less is not objectively answerable, the lower the failure point is relative to the maximum potential saturation, the less the level of concern and visa-versa.

Amber Tinted Bottles

The Project's protocol for projecting the economic impact of amber tinted bottles - distinct from the barrier issue - recommends determining the separate impact on sorting costs and on the possibility of lower prices paid for the new color by the end markets at the point in time after the tinted bottle reaches market saturation.

Amber beer bottles may increase sorting costs by $.08 to $.035/lb., and decrease  revenues by about $.05/lb.

Additional Sorting Costs. Extensive analysis using those procedures found that after amber bottles exceed 10% of the PET stream, they will have to be separated from the other PET bottles into their own stream. Prior to that point, they will be discarded with other contaminants. The initial cost to sort amber bottles manually at intermediate processing facilities would be about $.035/lb. when the cost is spread over all PET processed. Later, after the amber market solidifies, large reclaimers will probably make the investment in autosort systems capable of detecting amber tint. The cost to sort amber with optical equipment will be approximately $08/lb.

Lower Market Revenues

Currently, there are no established markets for amber PET bottles. If amber becomes a significant fraction of the PET stream, new markets should be created. However, because amber is a dark tint and will be heavily contaminated with barrier residues, the probability is that those markets would be in low-end, black dyed applications that pay less than today's markets. The lost revenues in that case could be in the order of $05/lb.

Barrier Residues

The Plastic Redesign Project guidelines for projecting the impact of barrier PET bottles on recycling are intended to insure that comparable data is independently compiled on the salient measures of performance used by recycled plastic end markets after the barrier bottle reaches market saturation. The results for each type of barrier and among different barriers can then be compared to the performance requirements for each grade to determine whether barrier residues preclude RPET's sale into higher paying markets.

Barrier residues could limit the markets willing to accept PET bottles with some yellowing caused by nylon, lowering bale prices between $.01-.019 per pound

Each of the vendors with barrier products currently in the U.S. market was asked to provide the data from which the protocols could be applied. Continental PET Technologies and PPG provided data, but only Continental's was found usable in our report.

The calculation of barrier's impacts are more difficult to determine than amber's impacts, but Continental's data suggest that eventually these losses could be about $.01 per pound due to the inability to sell into higher paying bottle market. This is because the yellowing caused by the residue of the barrier material, at the levels of barrier bottles likely to occur over time, would not be acceptable for higher paying bottle applications.

Also, because the potential bottle market is so large, there could be additional significant losses recyclers would incur if the quality of their supply degraded to the point where the yellowing or specking caused by barrier residues precluded the use of RPET as a feedstock for new bottles.

Recent commitments by Coca-Cola to use 10 percent recycled content by 2005 indicates that the potential bottle market could increase demand for RPET by 13 percent from this company alone if uncontaminated, bottle-quality supplies of RPET can be maintained. Losing that market because of contamination might raise revenue losses to $.019 per pound.

There is a related possibility that pricing would improve further due to the sheer growth in aggregate demand from expanding bottle markets, but only if barriers do not cause yellowing or specking. The loss of these possible gains have not been quantified in this report, but analytical work continues to provide that data later.

Combined Impact

The combined loss of between $.023-.059/lb. in the bale price paid to recyclers for PET, due to amber and barriers suggested by Continental's early data, would be significant.

Not only is the partial and preliminary data between one-quarter to more than two-thirds of the current trended price for clear/green PET bales, but also, even when using the low end of that range, bale prices over time would probably be pushed below the $.05-.06/lb. minimum viable price.

However, absent the issue of amber tinting, which apart from beer is not related to barrier technologies, the consequences would be important, but not as significant.

Conclusion

Now that recyclers have set forth technical guidelines to project the impacts of new plastic bottle designs on downstream recovery efforts, each of the vendors seeking to roll out their barrier technology and new tints should provide all the necessary information from which the impacts on recyclers can be objectively estimated by an independent review.

In conclusion, there is a cause for hope and there is reason for concern. Hope, in that many in industry are dedicated to working to redesign bottles to eliminate impacts to recyclers. Concern, in that more work appears needed to provide enhanced barrier and light protection in ways that have less impacts on recycling.

The above is part of an executive report by Plastic Redesign Project. For more information on the full report contact the group at its web site