Using mandates to boost demand for postconsumer recycled (PCR) content in packaging is a compelling argument for lawmakers. Increasing recycled content is beneficial not only for our environment, but also for our industry. However, a closer look at recent legislative activities reveals that lawmakers are not considering the full implications of these requirements across the packaging value chain and the other industries that compete for demand.
Over the past two years, at least 20 bills in 10 states plus two federal bills related to recycled content have been introduced. In January 2022, New Jersey Governor Phil Murphy signed into law some of the most aggressive PCR requirements in the country for rigid plastic containers, glass containers, paper and plastic carryout bags, and more. We saw four more PCR mandate bills introduced in Washington State this year after the law enacted last year that made it the second state requiring recycled content in plastic beverage containers. That new law also covered plastic trash bags and household and personal care products. Meanwhile, the Northeast Recycling Council (NERC) has proposed model legislation for increased PCR minimums on plastics and glass that may influence future legislation.
Many of the bills currently under consideration lack the necessary detail to make them effective. For example, several create mandates for plastic beverage containers, which can be made from PET, polypropylene, or polystyrene—each of those resins has its own capacity for recycling. And while some of these PCR measures do offer some level of flexibility—such as the New Jersey law that authorizes the state department of environmental protection to review and amend the PCR content requirements based on market conditions—lawmakers also need strategies to address supply issues, reduce contamination, and increase recycling capacity if these mandates are to be successful. Without such plans, the measures will be doomed to fail.
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When AMERIPEN commissioned a 2020 study to examine corporate goals for recycled content against supply and domestic capacity, researchers discovered that, across all plastic resin types except high-density polyethylene, demand in the U.S. actually exceeds the domestic supply and capacity. Looking specifically at PET clearly demonstrates the supply shortfalls: Of more than 6.3 billion pounds of PET bottles sold in the U.S. in 2018, only 1.8 billion pounds of PET bottles and 0.1 billion pounds of thermoforms were collected for recycling. And because recycled content from PET bottles and thermoforms requires specific quality requirements above and beyond that of other end markets, analysts say that “PET reclamation capacity in the U.S. would, at a minimum, need to increase by 50% from current reprocessing capacity to meet CPG company brand commitments for their PET packaging.”
In 2020, brands and retailers participating in the Ellen MacArthur Foundation Global Commitment had achieved 2% of their goals toward 20% PCR content by 2025. Rates are expected to accelerate in the next few years, but their data indicates that increasing recycled content in packaging will require more change than just increasing demand.
In evaluating end markets for PCR resins for our supply-demand study, we also learned that packaging made up less than 50% of total sales; demand typically goes to products that have lower quality expectations. Because packaging has some of the highest quality requirements for reuse, the best place for PCR content may not always be in closed-loop processes. It is possible that redirecting recycled content to other products that require less processing can yield a greater environmental impact than creating mandates for packaging. The APR Demand Champions program is one example of how companies are committing to increase PCR content across their product portfolios, not just within their packaging. This affords them the flexibility to use PCR resins in lower-quality products.
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In examining the New Jersey law, the Glass Packaging Institute (GPI) argues that the law borrows language from California law regarding glass containers made in the state. GPI points out that California’s law is tied to that state’s bottle bill, which ensures quality, single-stream glass collection. It’s important to note that New Jersey does not have a bottle bill, and their new law lacks changes to reduce contamination and enhance the quality of recyclables. GPI contends that the law will not improve glass recycling in the state.
Additionally, lawmakers need to understand that the market needs more recyclers that can manufacture PCR resins to meet U.S. Food and Drug Administration (FDA) regulations for food-contact packaging. Strict regulations require “letters of no objection” from the FDA certifying that recyclers have been evaluated to ensure their recycled content is safe for direct food contact. Due to a significant backlog in processing these letters, the opportunity to increase capacity for food-contact recycled content is diminished.
Although mandates can help to stimulate demand for PCR content, more industry collaboration is needed to address challenges with supply, capacity, and quality for them to be successful. AMERIPEN continues to work closely with stakeholders to increase investment and educate policymakers and the public on the value of packaging.
AMERIPEN represents the U.S. packaging value chain by providing policymakers with fact-based, material-neutral, scientific information. Contact Dan Felton at email@example.com.