by MAURA KELLER
Like many industries, the ongoing pandemic has had a significant impact on the medical waste industry – requiring waste and recycling companies to alter Walmart announced that it increased the percentage of post-consumer resin (PCR) used in its private label packaging from about 7 percent in 2019 to 9 percent in 2020. They have established a new goal of 20 percent PCR being used in its packaging in North America by 2025. Last year, Walmart used about 2.87 billion pounds of plastic in its private label packaging.
Walmart is not alone in shifting its focus on post-consumer plastic sustainability and recycling initiatives. As consumers’ attention continues to focus on the most sustainable handling of plastics, companies in a variety of industries are modifying their plastic recycling initiatives.
Houston-based Rick Perez is chief executive officer of Avangard Innovative, a recycler in the Americas, offering full service waste management and recycling optimization solutions including post-consumer resin manufacturing facilities. Perez said the demand for post-consumer recycled plastic continues to grow as consumer, investor and government environmental pressure continues to rise.
“These pressures come from the endorsement and preference of consumers for environmentally conscious brands and products, investors pegging higher enterprise financial value for those companies with clear sustainability goals and high environmental, social, and governance (ESG) scorecards, and increased government regulation across the board,” Perez said.
Don Gambelin, head of business developed at EverestLabs, has worked in recycling for years and has extensive experience inside materials recovery facilities (MRFs) –including experience at Republic Services, Allied Waste and Norcal Waste Systems.
Gambelin stressed that the post-consumer plastic recycling industry is in need of help simply because people do not have good information about what is occurring in recycling plants related to plastics.
“There is a glaring blind spot in the system from the time a consumer scans a container until it gets to a materials recovery facility,” Gambelin said. “We are trying to hold producers responsible with extended producer responsibility legislation like that just instituted in Maine – but in reality, business and industry can’t truly be responsible without data to guide them.”
Called Extender Producer Responsibility, the law recently passed in Maine charges corporations that do not use sustainable packaging materials. This forces companies that use less than eco-friendly packaging materials, such as plastics, to pay for each ton of those materials that they send into the state. That money then gets passed along to cities and towns to pay to recycle those materials.
Pricing Trends
According to Sebastian Sajoux, chief executive officer of Arqlite, a company that takes plastic waste, stops it from going into landfills, and turns plastic into smart gravel, it’s difficult to generalize the status of the post-consumer plastic recycling market as it varies from city to city.
“It’s far from becoming a real solution due to the inefficient design,” Sajoux said. “Just imagine people mixing all recyclables at home and then sending that mix to a $150M facility to separate it back with a 50 to 70 percent efficiency. That makes no sense and is a waste of time and money.”
The plastics Arqlite takes to process are free, as they are of no value once mixed and would otherwise be sent to landfills.
“However, companies in the standard recycling industry suffer from frequent price variations, especially because there’s no incentive or subsidy from the state to maintain standardized pricing,” Arqlite said.
Indeed, the pricing of post-consumer plastic waste has fluctuated over the last few years. As Perez noted, there will always be some cost difference from prime, but as demand in quality improves, it will follow the prime resin pricing trend.
Several factors have impacted this including the COVID pandemic, weather events, supply chain interruptions and logistics.
“Historically, post-consumer resin has priced higher than prime resin due to the costs associated with the circular economy operation, from collecting single-use plastics, to transporting them to a recycling facility, to the capital investments required for the ‘transformation’ infrastructure – from used plastic to reusable pellets, for example,” Perez said. “However, due to the current high primer resin prices, post-consumer resin is now much more attractive in the market. As supply and demand continues to improve, post-consumer resin will follow prime resin pricing trends.”
Consumers Are In Control
Experts agree that consumers are in the driver’s seat in terms of knowing that what was put in a recycle bin is actually being recycled.
“According to the EPA, from 2017, the latest figures available, Americans generated more than 267 million tons of solid waste. Only 94.2 million tons of that waste was either recycled or composted,” Gambelin said. “The consumer demand for responsibility will grow, which will drive more money into solving our dismal performance in recycling. Yet, demand alone will not solve the issue – we need technology to keep up.”
A study by Toluna, a tech company operating in the market research space, on American’s attitudes about the environment and sustainability surveyed 1,000 people in the U.S.
The key finding of the study show that most Americans (58 percent) are concerned with plastic packaging and avoid (68 percent) buying these items. Although one third of respondents feel it’s easier to shop plastic free than it was 5 years ago, 43 percent find there aren’t enough plastic-free options available while 42 percent find that plastic-free is more expensive.
Who is responsible for reducing plastic? Most respondents feel that plastic reduction falls on brands/manufacturers (62 percent), everyday people (59 percent), supermarkets/retailers (49 percent) and government (43 percent), respectively. And while 1/4th feel that supermarkets have done a good job tackling plastic, 41 percent feel they’d like to see more progress.
Following are the top issues surrounding plastic packaging:
•Plastic pollution in oceans – 57 percent
•Plastic pollution on land – 51 percent
•Lack of incentive to recycle – 46 percent
•Lack of recycling facilities available – 39 percent
•Lack of available of alternative packaging to plastic – 37 percent
•Environmental cost to produce plastic – 34 percent
•Plastic alternatives not being affordable – 33 percent
Sajoux pointed out that plastic recycling is related to regulations, so if the state pushes for more sustainable industries and cities, then the solutions will bloom.
“Right now, because waste management and recycling is a scale business, it’s only limited to a few players. The real solutions are coming from companies bringing in new technologies to tackle this problem,” Sajoux said. “I think big companies should stay alert and partner with innovative startups to scale that positive impact and widen their reach.”
The COVID Impact
Needless to say, the ongoing pandemic is causing a lot more people to eat at home, and getting individual meals that are sealed in plastic containers. From a physical standpoint, a lot more plastic packaging is coming into MRFs. And with the sheer increase in the number of objects entering a plant, MRFs simply cannot install robotics and automation fast enough to keep up.
“There is a huge need for technology that helps MRFs recover more recyclable objects, and enables consumer packaged goods (CPG) manufacturers and package manufacturers to use more recycled content allowing them to excel at Environmental, Social and Corporate Governance (ESG) initiatives and Extended Producer Responsibility (EPR) goals,” Gambelin said.
The ongoing COVID pandemic has led to very erratic pricing impacts for recycled plastic as the pandemic has impacted the supply chain, and as companies were shut down during the height of the pandemic, it decreased the volumes by sector, and the cost of logistics increased dramatically.
According to Gambelin, the price fluctuation has been attributable to supply and demand – and right now we have a significant curtailment of supply.
“Discarded milk jug volume tripled from a year ago. COVID was the leading factor. We turned supply off for institutional sized packaging and could barely meet demand for consumer sized,” Gambelin said. “As we saw, turning on and off the type of packaging and supply has been tough. Tied to this is, obviously, the price of oil. The recent rise in oil prices has affected the cost of virgin materials.”
Perez said the demand for post-consumer resin will shift from low-end applications into higher-end applications which will require cleaner recycling streams. “I believe the market for recycling will only get stronger as the demand for a circular economy and lowering carbon footprints increase.
Legislation will affect consumer demand, requiring post-consumer content, and major brands continue to improve their ESG scores,” he added.
And while there are many technologies percolating in labs around the world, unfortunately, every bit of plastic ever produced is still with us and continues to impact the environment in landfills, dumps, waterways and incineration.
“It’s only a matter of time until these technologies become cheaper and are able to scale up,” Sajoux said. “The question is, do we have that kind of time?”
Published in the October 2021 Edition