An Emerging Opportunity: Recycling Postconsumer Plastics

As states and municipalities increase regulations on recycling growing amounts of postconsumer plastics, opportunities grow for scrap processors.

By Robert J. Garino

Robert J. Garino is director of commodities at the Institute of Scrap Recycling Industries, Washington, D.C.

Statistics about today's plastics industry--from consumption growth rates to absolute tonnage of resins in use to types of consumer and industrial products made from plastics--are impressive. According to the Society of the Plastics Industry, total annual plastics consumption in, the U.S. reached 59 billion pounds in 1988, up from 19 billion pounds in the 1970s--an average compound growth rate of more than 6 percent per year. This trend is expected to remain strong in the near term, with some sources predicting an average annual compound growth rate of 6 percent through the year 2000. No metal today can claim that kind of consumption forecast.

Meanwhile, as positive as the industry is in terms of production, new uses, and actual consumption, recovery of plastic scrap lags. Exclusive of "home scrap" (scrap generated and reused during the manufacturing process) and some industrial or "new" scrap being reclaimed, plastics recycling is mostly confined to postconsumer polyethylene terephthalate (PET) and high-density polyethylene (HDPE) containers. According to plastics experts, this reuse is primarily limited to the scrap recovered in the "bottle-bill" states: Connecticut, Delaware, Iowa, Maine, Massachusetts, Michigan, New York, Oregon, and Vermont.

The Environmental Protection Agency estimated that in 1984 some 63,000 short tons of soft-drink bottles (PET with HDPE base cups) were recovered. According to EPA, this represented 18 percent of the national production of plastic containers. This "plastics recycling rate" is sometimes erroneously compared with a 32 percent aluminum scrap recycling rate, 42 percent for copper scrap, 46 percent for ferrous scrap and 26 percent for waste paper. As will be shown, however, there is far more to plastic consumption and recycling than PET bottles. But more importantly: Given the potential scrap supplies expected in the future, is plastics recycling a viable option for today's scrap processor? Who will handle this relatively new scrap resource?

Perspective on the Plastics Industry

Since so many statistics and estimates are used to describe plastics production, consumption, and recycling, it helps to put some of them in perspective. As noted earlier, the total plastic resins market was approximately 60 billion pounds (30 million short tons) in 1988. This market is made up of two basic types of plastics: thermosets and thermoplastics. Thermosets include products such as epoxies and polyurethanes. Thermoplastics include the commodity and engineering plastics. It is in this area where potentially large-scale recycling could take place.

The packaging sector is generally believed to be the largest end-user of thermoplastics, accounting for approximately 30 percent of the total plastic resins market, or around 9 million tons, annually. Of this 9 million tons, approximately half is rigid containers, roughly half is flexible film packaging, and around 5 to 6 percent is exclusively PET, according to industry sources. Thus, sorting through the data, it appears that approximately 435,000 to 540,000 short tons of PET are used annually to make soft-drink bottles and other packages. (The market for soda bottles only was estimated by industry sources to be in excess of 375,000 short tons annually.)

Assuming that EPA is correct in that about 18-20 percent of the 435,000 to 540,000 tons used in PET packaging applications are actually recovered, this works out to be between 78,000 and 108,000 tons of PET plastics recycled for 1988. (This compares with an EPA figure of 63,000 short tons of soft-drink bottles recovered in 1984.)

Although a 20-percent recycling rate for plastic beverage containers is certainly significant, it is worth remembering that this one market segment represents less than 20 percent of the plastic resins produced last year. Also, at around 100,000 short tons reclaimed, that works out to be a 1.1 -percent recycling rate for the packaging segment--but, significantly, it is only 0.33 percent of the overall plastic resins market. Obviously, recycling rates have a long way to go before they can stand up to those of the scrap metals and paper stock industries.

Plastics in Municipal Solid Waste

Another statistic that is often cited is the fact that plastics account for only 7 percent, by weight, of the municipal solid waste annually generated in the U.S. As for the rest of the solid waste, according to published studies, paper accounts for around 42 percent of the total, with glass at 9 percent, steel at 8 percent, and aluminum at 1 percent (the balance consists of yard wastes and miscellaneous items). For the plastics industry, however, scrap weight is not the issue--it is volume that counts. The industry is very sensitive to the conspicuous amounts of postconsumer plastics being discarded: landfills do not close because they weigh too much. In fact, the percentage by volume of plastics in the municipal solid waste stream has been estimated by EPA at anywhere between two and four times greater than the percentage by weight. EPA assumes that half is plastic packaging.

Speaking at the Plastic Institute of America's (PIA) Recyclingplas IV Conference in May, Robert Leaversuch, senior associate editor of Modern Plastics magazine, discussed plastics in municipal solid waste. While the plastics industry tried to draw some comfort from the 7-percent weight figure, he said, industry members should instead have been working toward postconsumer plastics reclamation. He noted that postconsumer recycling is now a key item in the plastics industry agenda. He went on to point out that the industry has had to shift its position about recycling from a defensive one to a more proactive one. For the packaging industry, in particular, he observed, the issue is becoming a case of "recycle or perish."

Leaversuch's presentation discussed the plastics industry and plastics recycling as being part of the municipal solid waste problem and part of the solution. As a result of landfill closings, prohibitions against incinerators, trends aimed at reducing roadside litter, and now a national plan calling for a 25-percent source reduction/recycling goal by 1992, he observed, plastics recycling has "come of age." Resin manufacturers, for example, are aggressively working with consumers and waste management firms to develop recycling expertise.

Plastics industry members generally concede that legislation aimed specifically at reducing plastics in municipal solid waste has prompted the recycling effort. Although Leaversuch called such laws "myopic," he concluded that they cannot be ignored by the packaging industry. Suffolk County, New York, for example, recently banned the use of polystyrene for packaging, and some 20 other states have proposed bills that would either ban or restrict some plastic packaging. (The controversial ban in Suffolk County, which was due to take effect July 1, was struck down by the New York State Supreme Court, delayed by the county legislature to allow for appeals, and vetoed by the county executive--who submitted an alternate proposal,)

Waste Haulers Targeting Plastics

While it is not surprising that resin producers, such as Dow Chemical, Amoco, Mobil, General Electric, and others, are active in developing a recycling philosophy, it is also significant that two of the nation's largest waste haulers, Waste Management, Inc., and Browning-Ferris Industries (BFI), are actively involved with resin manufacturers in recovering postconsumer plastics.

For example, a Du Pont/Waste Management venture will reclaim plastics at a facility expected to start up in 1990. According to news releases, the proposed plant (to be built at a cost of about $5 million) will have an annual capacity of up to 20,000 short tons of plastic scrap. The plan calls for Waste Management to deliver postconsumer PET (plus other plastic scrap) and for Du Pont to clean, separate, and flake. Du Pont reports that it has developed various additives to upgrade scrap HDPE and PET so that it can be injection-molded or blow-molded to produce automobile and construction parts.

BFI recently signed an exclusive agreement to supply scrap plastic to Wellman, Inc. Wellman is recognized as the nation's largest reclaimer of postconsumer plastics. In 1988, Wellman reportedly accounted for 75 percent of all the PET bottles reclaimed in the U.S. By ReMA's calculations, Wellman would have handled more than 60,000 short tons of PET last year. Wellman's combined plant capacity (plants are in South Carolina and Pennsylvania) is 90,000 tons annually. Also covered in the agreement with BFI are HDPE beverage bottles.

Plastics Recycling Helps and Hindrances

More traditional multimaterial scrap processors are gearing up to recover postconsumer plastics. Also speaking at PIA's Recyclingplas IV Conference, Gregg Sutherland, vice president-business development, U.S. Recycling Industries, looked at the factors contributing to the development of a plastics recycling network and mentioned a few impediments to the process.

Sutherland noted that the scrap processing industry has evolved from a "scrap dealer business to a solid-waste-solution business." Rather than simply purchasing a scrap supply, recyclers must now cope with a situation where collection of material is mandated by law. He believes the industry is being restructured as recyclers meet the challenge of processing heretofore unwanted materials. Some companies, he observed, will find it increasingly difficult to stay in business--and not all will survive.

Sutherland's industry outlook pointed to several changes, including direct involvement in scrap by primary plastics producers and the level of recycling expertise that has developed in the past few years. Sutherland indicated that just two years ago, PET was foreign to most independent recyclers. Now, he said, it is common to see processors handling a wide variety of segregated and commingled plastics.

Sutherland listed several factors that may affect plastics recycling negatively. Two years of increasing resin prices stimulated plastics recycling, he said; but toward the end of last year, prices leveled off and have since begun dropping. HDPE, for example, which was at 25 cents a pound in the first quarter of this year, was less than half that at midyear.

Interestingly, observed Sutherland, another factor that could work against plastics recycling in the future is the current glut of old newspaper (ONP) on the marketplace. He reasoned that with 80 percent of curbside volume being ONP, paper mill capacity will soon be exceeded. He believes the lack of new markets for ONP will "dramatically slow the pace of curbside programs" nationwide. According to Sutherland, politicians who have staked their careers on recycling will be very hesitant to launch a curbside program that is doomed to fail because of deteriorating newspaper markets. Thus, while many citizens are guilty of "NIMBY" ("not in my back yard") when it comes to siting municipal solid waste incinerators, Sutherland believes politicians are guilty of "NIMTOF": "not in my term of office."

Another factor that could hinder plastics recycling, he went on, is the growing use of degradable plastics. He does not view degradable plastics as an effective solution because they could limit the products being manufactured and, therefore, have only limited market appeal. Further, degradable plastics are not a landfill solution. Studies have shown, for example, that even organic matter decomposes very slowly in a landfill. Most plastics experts firmly believe that biodegradable plastics attack only the litter problem, not the landfill problem.

Overall Sutherland sees a "stable, reliable business" for established grades, such as PET and HDPE bottles, but is less enthusiastic about mixed plastics.

Mixed Plastics Looking for a Home

Several organizations are meeting the challenge of handling and finding uses for mixed plastics. One such company, Innovative Plastic Products, Greensboro, Georgia, claims a processing capability of 1 million pounds per month of unsorted plastic waste, which it turns into ready-to-use products. The 63,000-square-foot plant, which opened in April, converts commingled plastic waste, containing impurities such as metal and paper, into a plastic alloy that can be molded into flat plastic sheets, modular drainage troughs, and other items. According to Ken Carrier, vice president-marketing, the technology is proven and is currently being used in two plants in West Germany. He noted that other plants are under construction in France, Italy, and Switzerland.

The Center for Plastics Recycling Research at Rutgers University, New Brunswick, New Jersey, has developed for commercial use a process for recycling mixtures of unsorted plastics previously believed to be incompatible. This research, plus similar efforts by the private sector, illustrate that plastics recycling represents an enormous business opportunity. Forecasts by the Plastic Recycling Foundation, for example, project potential demand for PET from recycled soft-drink containers at 700 million pounds by 1993; the potential demand for recycled HDPE is expected to hit 600 million pounds. Researcher R.M. Kossoff & Associates, New York City, projects that recycled industrial and postconsumer plastic waste will grow to 4.8 billion pounds by 1998. The firm predicts the annual growth rate for recycled plastics in the U.S. will be approximately 16 percent. Although the firm concludes that the industry faces certain problems, it also recognizes profit opportunities in recovering and recycling polymeric scrap. Thus, as impressive as some projections are for overall plastics consumption, forecasts on scrap such as this are eye-opening.

A Piece of the Pie

How this projected scrap demand will be handled, and who will process this material, are subject to some uncertainty and debate. Some favor the already established private sector: multimaterial scrap processors supplying prepared plastics to consumers. Others see consortia of private companies and local municipalities forming to collect and feed manufacturing plants. This is already occurring in some European countries. Still others think the bulk of plastics recycling will occur as a result of joint ventures such as the Du Pont/Waste Management scheme: resin manufacturers teaming up with waste-hauling corporations.

Whatever the future portends, it is clear that today there are only a few big players in plastics recycling, and that it is a relatively new endeavor. Because end-use markets are enormous and scrap potential is virtually unlimited, companies must now look seriously to be part of the solution to reduce the amounts of plastic scrap earmarked for landfill or incineration.•