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the PLASTIC REDESIGN PROJECT

PET Barriers, Tints and Recycling

Challenges and Potential Impacts on the RPET Stream

EXECUTIVE SUMMARY

November 2001

SPONSORING PUBLIC AGENCIES
Alameda County Recycling Board (CA) Mid-America Council of Recycling Officials
Association of Oregon Recyclers Mid-Continent Recycling Association
City of Berkeley (CA) Nebraska Department of Environmental Quality
City of Flagstaff (AZ) New Jersey Department of Environmental Protection
California Integrated Waste Management Board North Dakota Solid Waste Management Association
California Department of Conservation Ohio Department of Natural Resources
Colorado Association for Recycling Oregon Department of Environmental Quality
Florida Department of Environmental Protection Portland Metro Regional Environmental Management (OR)
Kentucky Recycling and Marketing Assistance Program San Francisco Department of the Environment (CA)
City of Madison Department of Public Works (WI) San Luis Obispo County Integrated Waste Management Authority (CA)
City of Milwaukee Department of Public Works (WI) Santa Cruz Department of Public Works Solid Waste Section (CA)
Four County Solid Waste District (AK) Southwest Public Recycling Association

 

PET Barriers, Tints & Recycling

EXECUTIVE SUMMARY

ACTIS, Producing Plastic Beer Bottles
ACTIS™, one of
several technol-
ogies for pro-
ducing plastic
beer bottles

PET is a popular and versatile resin for packaging carbonated soft drinks and many other beverages, foods and cleaning products that require moderate barrier properties or a clear container. However, until recently, PET has not had the high degree of barrier performance for the three-month shelf lives demanded by oxygen sensitive products such as beer and fruit drinks. Nor has it had the ability to retain CO2 when carbonated beverages are bottled in sizes less than 16 ounces. Consequently PET's market has been constrained. Companies with beverages currently packaged in glass or aluminum, which otherwise would prefer to do so, have been unable to convert some of their lines to plastic bottles.

In order to provide a plastic package for these uses, a number of vendors have developed technologies to apply additional non-PET barrier material onto the surface or to co-inject a barrier layer into the middle of the wall of a PET bottle in order to enhance its capability to keep oxygen out and carbon dioxide in.

Barrier bottles
expand the
market for PET,
but may also
increase
recyclers'
processing costs
and lower their
revenues

This innovation offers enormous growth opportunities for the PET industry and wider packaging options for beverage producers. But the barrier layer is not PET and 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 approximately 8¢ per pound. Eight cents is only 2¢-3¢/lb. above the 5¢-6¢/lb. that market players in an informal survey pegged as the minimum viable price for PET. That leaves scant room for recyclers to absorb additional costs from new difficult-to-handle designs that fail to incorporate design for recyclability™ principles.

The packaging industry understands the potential downside for recycling and, commendably, is working to develop a barrier system to minimize these potential impacts. Until now, however, the recycling industry has not advanced a testing method that packagers can use to determine whether any of the new barriers are economical to recycle. This has left the analysis of recyclability to a wide array of tests done by the vendors themselves.

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 themarket. 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-

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 Charts of Market Saturationrecyclers. However, as the volume of these bottles increase, at some point they may reach a cross-over 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 0.8¢ to
3.5¢/lb., and
decrease
revenues by
about 0.5¢/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 approximately 3.5¢/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 0.8¢/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 0.5¢/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 about 1¢
to 1.9¢ per
pound

The three major types of barrier applications, materials and vendors with products currently in the U.S. market that were evaluated are shown in the next TABLE.

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 1¢ 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% recycled content by 2005 indicates that the potential bottle market could increase demand for RPET by 13% 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 1.9¢ 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

Bar Chart of Impact of Amber and Barrier on Bale PricesThe combined loss of between 2.3¢ and 5.9¢/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 5¢-6¢/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 full 75 page report , "PET Barriers, Tints & Recycling: Challenges and Potential Impact on the R-PET Stream," is available from Packaging Strategies on the web at www.packstrat.com, email at info@packstrat.com or phone at (800) 523-7225.

The cost of the full report is $2,500.

 


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