32
Packaging Recycling Markets
Jerry Powell
Resource Recycling
Portland, Oregon
www.resource-recycling.com
What we’ll look at today
• A review of market conditions for plastics, glass and metal packaging. This will include transport packaging (corrugated boxes, etc.). Because of the amount and quality of the data, the analysis of plastics markets will receive the most attention.
• Answers to several key questions.
Recycling’s progress
After two decades of important growth, packaging recycling’s rate of increase has declined. We are capturing the easiest tons, thus making growth harder and more expensive than in the past.
MSW recycling volumes and rate
5.6 6.5 8.0 9.3 14.5 16.7
33.2
55.8
69.4
79.2 84.2
82.9 82.0
6.4% 6.2% 6.6% 7.3% 9.6% 10.1% 16.2%
26.0% 29.0%
31.7% 33.1% 33.2% 33.80%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2007 2008 2009
Perc
ent o
f gen
erat
ion
recy
cled
Tota
l MSW
recy
clin
g (m
illio
n to
ns)
Total MSW recycling Percent recycling
Recycling rates for selected products, 2009
95.7
74.2 66
59 54.2
35.3 29.2 31.1 28
0
20
40
60
80
100
120
Auto Batteries
Office-type Papers
Yard Trimmings
Steel Cans Aluminum Beer & Soda
Cans
Tires HDPE Natural (white
translucent bottles)
Glass Containers
PET Bottles & Jars
Recy
clin
g Ra
te (P
erce
nt)
Recycling’s progress
Yes, more than 10,000 communities, where 63 percent of Americans live, now collect recyclables curbside. Yes, 193 million Americans can set out recyclables weekly.
But our progress has slowed. Packaging recycling rates have flattened out.
UBC recycling rate
0
10
20
30
40
50
60
70
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
HDPE recycling rate
0
5
10
15
20
25
30
35
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
PET recycling rate
0
5
10
15
20
25
30
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Paper recycling rate
0
10
20
30
40
50
60
70
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Steel recycling rate
0
10
20
30
40
50
60
70
80
90
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
And yet, we have record prices
We have learned there is little correlation between the value of recovered packaging and the amount collected. Recycling rates have remained flat while prices have soared.
Aluminum can prices
0
20
40
60
80
100
120
Homopolymer HDPE bale prices
0 5
10 15 20 25 30 35 40 45 50
PET bale prices
0
5
10
15
20
25
30
35
40
45
Recovered paper prices (18 grades combined)
0
50
100
150
200
250
And domestic reclaimers have lost market share
PET recycling market share by U.S. firms
2006 49%
2007 54%
2008 58%
2009 56%
Plastics exports
0
500,000,000
1,000,000,000
1,500,000,000
2,000,000,000
2,500,000,000
3,000,000,000
3,500,000,000
4,000,000,000
4,500,000,000
5,000,000,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Plastics Total Weight (pounds)
Ferrous scrap exports
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Ferrous Total Weight (million metric tons)
Recovered paper exports
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Paper Total Weight (in million metric tons)
Key packaging recycling questions
Are the packaging wars over? Packaging share volatility is far less today than in previous decades, with several materials (glass, steel cans, aluminum) having essentially reached market maturity.
Key packaging recycling questions
Do we see large amounts of nonrecyclable packaging on the store shelf? Not really. Brand owners have improved their practices, and groups such as the Association of Post Consumer Plastic Recyclers have developed design-for-recycling testing protocols.
Key packaging recycling questions
Are domestic reclaimers operating at capacity? No. Our annual plastics reclaimer survey last year showed domestic processors operated at 68 percent of capacity in 2009. For PET, this will only worsen, as four new reclamation plants are under construction and seven existing plants are expanding.
Key packaging recycling questions
As a result, PET reclamation capacity will increase 50.3 percent in the next three years. These new investments are directly linked to increase recycled-content levels in new bottles. Twelve of the current 20 PET reclamation plants in the U.S. and Canada produce RPET for use in new containers.
Key packaging recycling questions
What do reclaimers say about current conditions? Some 60 percent say bale quality is declining, with bale yields being just 71 percent for PET. Of various barriers to business, plastic bottle reclaimers say PCR demand is the lowest problem, while bales costs is the highest, as they scramble to secure a sufficient supply of bottles.
Key packaging recycling questions
Does the packaging recycling industry have recommendations regarding the lack of supply? All packaging recycling sectors have launched supply-growth initiatives (Aluminum Association, APR, Glass Packaging Institute, Steel Recycling Institute, etc.).
Key packaging recycling questions
For example, 83 percent of plastics reclaimers believe EPR should be pursued and 85 percent believe deposits on beverage bottles should be used. The following graph from our survey shows when reclaimers were asked what needs to be done, expanded collections is the key issue.
Focus on the future Pe
rcen
t
What do you think should be the focus of the broader recycling industry?
0 10 20 30 40 50 60 70 80 90
100
Developing markets
Improving collection
Producer responsibility
Consumer education
Legislative advocacy
Research and technology
2009 2010
Key packaging recycling questions
And finally, what are the consequences of our not addressing this lack of supply? In the short term, we’ll see weak profits and little new investment due to the current excess of operating capacity. In the long term, we will not attain sustainability goals and we’ll see little new innovation.
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