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Bottle to bottle: a guide to achieving closed loop recycling for California's PET beverage containers
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Bottle to bottle: a guide to achieving closed loop recycling for California's PET beverage containers
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Content
BOTTLE TO BOTTLE: A GUIDE TO ACHIEVING CLOSED LOOP RECYCLING
FOR CALIFORNIA’S PET BEVERAGE CONTAINERS
by
Greg Haskin
A Dissertation Presented to the
FACULTY OF THE SCHOOL OF POLICY, PLANNING,
AND DEVELOPMENT
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF POLICY, PLANNING AND DEVELOPMENT
December 2009
Copyright 2009 Greg Haskin
ii
TABLE OF CONTENTS
LIST OF TABLES iv
LIST OF FIGURES v
ABSTRACT vii
CHAPTER ONE: PLASTIC BEVERAGE CONTAINERS: A PROBLEM
WITH A SOLUTION 1
What is PET? 4
What is a Reprocessing Plant, and Why Should California Care? 11
Summary 17
CHAPTER TWO: A SHORT HISTORY OF BEVERAGE CONTAINER
RECYCLING REGULATIONS 19
Deposits 32
Changing Times for Bottle Bills 33
Recycled Content Drivers 40
Beverage Industry Initiatives 44
Recycling Issues for PET 45
Summary 47
CHAPTER THREE: A CONTEXT FOR RECYCLING 48
CHAPTER FOUR: CALIFORNIA: ENVIRONMENTAL TRENDSETTER 64
Summary 71
CHAPTER FIVE: THE CASE FOR RECYCLING PET BOTTLES 73
Closed-Loop Recycling vs. Recycling for Other Uses 80
Summary 85
CHAPTER SIX: EMERGING ISSUES 86
Bottled Water 86
Marine Debris, Urban Runoff 88
Plastic Bags 94
Increased Bottle Bill Regulation 96
“Biodegradable” Plastic 98
Foreign Market Dependency: Should California Clean Its Own Mess? 102
Summary 108
iii
CHAPTER SEVEN: THE NESSESSARY INGREDIENTS 109
Capital 110
Location 115
The Players 122
Supply 133
Market 134
Summary 135
CHAPTER EIGHT: WHAT NEEDS TO HAPPEN? 137
Mandates and Regulations 137
Capital and Investment 142
Conclusion 148
REFERENCES 153
APPENDIX 164
iv
LIST OF TABLES
Table 1: SPI Resin Identification Codes 7
Table 2: Energy Required to Produce Beverage Containers 79
Table 3: Incentives and Finance 119
Table 4: Costs and Benefits of a California PET Reprocessing Facility 150
v
LIST OF FIGURES
Figure 1: Bottle grade PET 4
Figure 2: Total per unit sales of CRV covered beverage containers for 2007 10
Figure 3: Plastic bottles recycled in California 12
Figure 4: The Erema Process 16
Figure 5: The Bühler Process 17
Figure 6: Disposable goods 20
Figure 7: Typical Oregon reverse vending machine 28
Figure 8: DOC CRV budget details 29
Figure 9: Beverage container redemption fund balances 31
Figure 10: PET plastic bottle sales, recycling, and wasting 1995-2002 in millions
of pounds 42
Figure 11: The Berkeley Ecology Center logo 66
Figure 12: Three examples of Prop 65 warning labels 68
Figure 13: One of many documents designed to implement GHG reduction
regulations 72
Figure 14: Market share of beverage container sales calendar years 2000-2007 74
Figure 15: Categories of products made with or packaged in recycled plastic 75
Figure 16: Energy savings per container type 77
Figure 17: Greenhouse gas reductions per container type 78
Figure 18: Beverage container recycling scorecard 85
Figure 19: Examples of water bottled outside the U.S. 89
vi
Figure 20: Pacific Gyre 90
Figure 21: COPC logo 92
Figure 22: Thank you ocean 93
Figure 23: Primo Water bottling company 99
Figure 24: Compostable bottle 102
Figure 25: Allan Company Price Analysis chart 112
Figure 26: Baled PET bottles 113
Figure 27: Material price adjustment graph 114
Figure 28: 2008-2009 DOC grant awards distribution 116
Figure 29: CALED and CCCEWD conference advertisement 121
Figure 30: PRCC’s goals 126
Figure 31: Recyclable bottle 147
vii
ABSTRACT
This project examines the process by which PET beverage containers from
California are “recycled,” and explores how that process might be improved upon to
achieve the highest and best use of recycled bottles. California scrap bottles are among
the highest quality available and are ideal to be turned back into bottles via a closed-loop,
or “bottle-to-bottle” reprocessing system. To explore the benefits of such a system, and to
understand the obstacles preventing such a system from being implemented, this project
focuses on the current process of shipping most of California’s scrap bottles out of state
(usually overseas) and the steps required to shift to a closed-loop system. The role of
various actors and agencies involved is explained, including environmental activists; the
California Department of Conservation; the recycling, plastics, and beverage industries;
and other groups that would potentially play a role. Included is a brief history of beverage
container development and recycling, background on California legislative efforts to
support recycling, and a look at emerging trends in recycling. The goal of this project is
to provide anyone who would pursue establishing closed-loop PET recycling in
California with a comprehensive understanding of the steps that would need to be taken
in order to successfully do so.
1
CHAPTER ONE
PLASTIC BEVERAGE CONTAINERS: A PROBLEM WITH A SOLUTION
Would the California beverage container recycling industry benefit from having a
full-scale polyethylene terephthalate (PET) plastic reprocessing facility located in the
state, and, if so, what are the conditions necessary to create such a facility? With
day-to-day policy crises in California such as multi-billion dollar budget shortfalls, health
care, infrastructure, transportation, jobs, economy, air quality, and education, the issue of
plastic beverage containers could seem almost trivial. However, dealing with the 8.5
billion plastic (PET) beverage containers consumed annually in California involves a
state agency with 250 employees, a budget of over $800 million, and significant concerns
about landfills, roadside litter, marine runoff, and energy. In many ways, California’s
beverage container redemption system is considered to be the finest in the country.
However, despite a program with enormous resources, the best California can do with the
4.8 billion PET containers that are “recycled” is bale them up and ship them thousands of
miles away to be truly recycled. A lack of any full-scale reprocessing facilities in the
western United States has created a situation where prime scrap PET, perfect for
bottle-to-bottle reprocessing, is being squandered while a dependence on foreign markets
has grown to potentially disastrous proportions.
A reprocessing plant in California would serve a public good by ensuring that
California consumers get their money’s worth and enabling a highest and best use for the
billions of scrap PET bottles collected annually. An industry good would be served by
2
establishing a reliable stream of food-grade recycled PET (RPET) for bottle-to-bottle use,
as well as a market hedge against foreign supply price spikes. A public policy good
would be served by creating a win-win solution that is responsible, practical, and
innovative.
Determining whether a PET reprocessing facility should be built in California is
both a business and a policy decision. Two recent attempts to build a reprocessing center
in the state, while unsuccessful, helped to delineate the potential benefits, as well as the
impediments. Since those attempts, related issues have begun to change the dynamics.
This paper examines past attempts and current potential for locating a PET plastic
reprocessing facility in California. Included is an exploration of both the business and
policy elements that will play a role in any future attempts. Expected benefits of a
California reprocessing plant include the following:
• take cost out of the recycling process by reducing shipping expenses
• reduce the carbon impact of shipping oversees or across the nation
• expand collection options
• reduce dependency on foreign markets
• create a closed-loop supply of food-grade recycled plastic for reuse in bottles
• reduce the resources and energy used to produce virgin plastic
• make recycling plastic more profitable for California recyclers
• address the moral obligation of California dealing with its own trash
A cornerstone of this study is recent attempts by Floyd Flexon and PET LLC,
with the support of the Plastic Recycling Corporation of California, and Stephen Young,
3
CEO of Allan Company, to each establish a state-of-the-art reprocessing facility in
California. To put this project in context, this study examines the following:
• What is PET
• What a reprocessing plant is, and what it does
• The case for recycling PET beverage containers
• Closed-loop recycling
• California’s historical environmental and recycling efforts
• A history of the beverage container recycling movement
• A detailed look at contemporary plastic bottle recycling issues
• Attempts to establish a reprocessing facility in California
• What changes would need to happen to ensure that a reprocessing facility
would become a reality
The subject of reprocessing PET beverage containers anywhere is, at best, an
emerging issue. Reprocessing California PET beverage containers is a topic that has been
overlooked almost entirely in academic and industry literature. Very little has been
written on the subject, and what has been published is mostly limited either to highly
scientific articles dedicated to the chemistry of the process, or to advocacy-minded
literature intended to encourage recycling. The issue is relevant in every state; however,
California is unique because of its redemption system for beverage containers, its
volume, the quality of its scrap, and the markets that it serves. It is possible that a
successful reprocessing plant located in California could function as a model for other
states.
4
What is PET?
According to Bellis (2009),
Polyethylene Terephthalate was first created by British chemists John Rex
Whinfield and James Tennant Dickson in 1941 as they expanded upon the work
of American chemist and inventor of nylon and neoprene, Wallace Hume
Carothers. DuPont bought the rights to PET in 1945 and opened its first
production facility in 1950 in Seaford, Delaware. (p. 1)
For the next few decades, the primary use was in textiles. It wasn’t until 1973 that
bottle manufacturers began working with soft drink companies to package product in
PET, and it would be several years before the package became a regular staple of the
industry. A PET bottle starts as a dense, preformed cylinder with a hollow center. The
preform is inserted into a blow molding machine which heats the preform and blows the
bottle as if it were a balloon. Figure 1 illustrates a preform resting on a pile of PET flake.
Figure 1. Bottle grade PET. From What is PET, by Kenplas Industry Limited, 2009,
retrieved March 3, 2009, from http://www.kenplas.com/project/pet/
5
While the popularity of PET grew, so did environmental awareness about the
need to recycle as many products in the waste stream as possible. In 1988, as
communities across the country were establishing recycling programs, confusion began
to mount about what plastic type various bottles were made of, and how to sort them to
avoid contaminating the recycling stream. A national organization representing plastics
companies, the Society of the Plastics Industry, Inc. (SPI), developed a coding system to
be embossed on all plastic containers. Great care was used in developing a system that
would avoid giving one type of plastic an appearance of being superior to another. The
following explanation of the conditions that SPI put on the numbering system is
indicative of how difficult it was for competing resin manufacturers to agree on a
universal identification code:
The SPI resin identification code has been developed to provide a consistent
national system to facilitate recycling of post-consumer plastics through the
normal channels for collecting recyclable materials from household waste.
Improper use of the SPI resin identification code can have serious ramifications
for individual manufacturers and could jeopardize the integrity of the coding
system. Therefore, all users of the code are encouraged to adhere diligently to the
following guidelines:
• Use the SPI code on bottles and rigid containers in compliance with the 39
state laws now in effect.
• Use the SPI code solely to identify resin content.
• Comply with the FTC Guides for the Use of Environmental Marketing Claims
whenever the SPI code is used.
• Make the code inconspicuous at the point of purchase so it does not influence
the consumer's buying decision.
• Do not modify the elements of the code in any way (i.e., do not replace the
resin acronym in the code and do not use other types of chasing arrows).
• Do not make recycling claims in close proximity to the code, even if such
claims are properly qualified.
• Do not use the term "recyclable" in proximity to the code. (SPI, 2009, p. 1)
6
Each plastic type has its own characteristics. Without the number code insignia,
most consumers wouldn’t be able to distinguish one from the other. Some communities
request only certain numbered plastic products—usually ones and twos—be included in
recycling bins, while others take all types. Table 1 provides the specific numerical plastic
codes along with detail about each of the resin codes and their useful applications for
recycling.
Figure 2 is a compilation of the most recent California Department of
Conservation report on redemption and recycling rates, from May 9, 2008. The
significance of this chart is found in the column that lists gross sales of each category.
The sum of all #2 through #7 plastic beverage container sales makes up a tiny proportion
of #1 PET sales.
Understanding the distinctions between the seven different resin codes is
complicated. They each have a unique look and texture. Some are more useful for
holding certain products than others. Aside from price, factors such as whether the
product that they contain needs to be filled hot or cold, requires certain sealant methods
to reduce oxygen in the container, or needs to be shielded from UV will determine the
type of plastic used for specific applications. Some are more ridged or can be tinted for
different colors, even though colors can present a challenge for recycling. The most
important fact regarding the various resin types is that most don’t mix for recycling
purposes, and none mix with PET.
7
Table 1
SPI Resin Identification Codes
Codes Descriptions Properties
Packaging
Applications
Recycled
Products
Polyethylene Terephthalate
(PET, PETE). PET is clear,
tough, and has good gas and
moisture barrier properties.
Commonly used in soft drink
bottles and many injection
molded consumer product
containers. Other applications
include strapping and both food
and non-food containers.
Cleaned, recycled PET flakes
and pellets are in great demand
for spinning fiber for carpet
yarns, producing fiberfill and
geo-textiles. Nickname:
Polyester.
Clarity, strength,
toughness,
barrier to gas and
moisture,
resistance to
heat.
Plastic soft drink,
water, sports
drink, beer,
mouthwash,
catsup and salad
dressing bottles.
Peanut butter,
pickle, jelly and
jam jars.
Ovenable film
and ovenable
prepared food
trays.
Fiber, tote bags,
clothing, film
and sheet, food
and beverage
containers,
carpet, strapping,
fleece wear,
luggage and
bottles.
High Density Polyethylene
(HDPE). HDPE is used to make
bottles for milk, juice, water and
laundry products. Unpigmented
bottles are translucent, have
good barrier properties and
stiffness, and are well suited to
packaging products with a short
shelf life such as milk. Because
HDPE has good chemical
resistance, it is used for
packaging many household and
industrial chemicals such as
detergents and bleach.
Pigmented HDPE bottles have
better stress crack resistance
than unpigmented HDPE
bottles.
Stiffness,
strength,
toughness,
resistance to
chemicals and
moisture,
permeability to
gas, ease of
processing, and
ease of forming.
Milk, water,
juice, cosmetic,
shampoo, dish
and laundry
detergent bottles;
yogurt and
margarine tubs;
cereal box liners;
grocery, trash
and retail bags.
Liquid laundry
detergent,
shampoo,
conditioner and
motor oil bottles;
pipe, buckets,
crates, flower
pots, garden
edging, film and
sheet, recycling
bins, benches,
dog houses,
plastic lumber,
floor tiles, picnic
tables, fencing.
Note. From “Resin Identification Codes—Plastic Recycling Codes,” by IDES, n.d.,
retrieved April 11, 2009, from http://www.ides.com/resources/plastic-recycling-codes.asp
8
Table 1: Continued
Codes Descriptions Properties
Packaging
Applications
Recycled
Products
Vinyl (Polyvinyl Chloride or
PVC). In addition to its stable
physical properties, PVC has
excellent chemical resistance,
good weatherability, flow
characteristics and stable
electrical properties. The
diverse slate of vinyl products
can be broadly divided into
rigid and flexible materials.
Bottles and packaging sheet are
major rigid markets, but it is
also widely used in the
construction market for such
applications as pipes and
fittings, siding, carpet backing
and windows. Flexible vinyl is
used in wire and cable
insulation, film and sheet, floor
coverings synthetic leather
products, coatings, blood bags,
medical tubing and many other
applications.
Versatility,
clarity, ease
of blending,
strength,
toughness,
resistance
to grease,
oil and
chemicals.
Clear food and
non-food
packaging,
medical tubing,
wire and cable
insulation, film
and sheet,
construction
products such as
pipes, fittings,
siding, floor tiles,
carpet backing
and window
frames.
Packaging, loose-leaf
binders, decking,
paneling, gutters, mud
flaps, film and sheet,
floor tiles and mats,
resilient flooring,
cassette trays,
electrical boxes,
cables, traffic cones,
garden hose, mobile
home skirting.
Low Density Polyethylene
(LDPE). Used predominately
in film applications due to its
toughness, flexibility and
relative transparency, making it
popular for use in applications
where heat sealing is necessary.
LDPE is also used to
manufacture some flexible lids
and bottles and it is used in
wire and cable applications.
Ease of
processing,
strength,
toughness,
flexibility,
ease of
sealing,
barrier to
moisture.
Dry cleaning,
bread and frozen
food bags,
squeezable
bottles, e.g.
honey, mustard.
Shipping envelopes,
garbage can liners,
floor tile, furniture,
film and sheet,
compost bins,
paneling, trash cans,
landscape timber,
lumber
9
Table 1: Continued
Codes Descriptions Properties
Packaging
Applications
Recycled
Products
Polypropylene (PP).
Polypropylene has good
chemical resistance, is strong,
and has a high melting point
making it good for hot-fill
liquids. PP is found in flexible
and rigid packaging to fibers
and large molded parts for
automotive and consumer
products.
Strength,
toughness,
resistance to
heat,
chemicals,
grease and
oil, versatile,
barrier to
moisture.
Catsup bottles,
yogurt containers
and margarine
tubs, medicine
bottles.
Automobile battery
cases, signal lights,
battery cables,
brooms, brushes, ice
scrapers, oil funnels,
bicycle racks, rakes,
bins, pallets,
sheeting, trays.
Polystyrene (PS). Polystyrene
is a versatile plastic that can be
rigid or foamed. General
purpose polystyrene is clear,
hard and brittle. It has a
relatively low melting point.
Typical applications include
protective packaging,
containers, lids, cups, bottles
and trays.
Versatility,
insulation,
clarity,
easily
formed
Compact disc
jackets, food
service
applications,
grocery store meat
trays, egg cartons,
aspirin bottles,
cups, plates,
cutlery.
Thermometers, light
switch plates, thermal
insulation, egg
cartons, vents, desk
trays, rulers, license
plate frames, foam
packing, foam plates,
cups, utensils
Other. Use of this code
indicates that the package in
question is made with a resin
other than the six listed above,
or is made of more than one
resin listed above, and used in a
multi-layer combination.
Dependent
on resin or
combination
of resins
Three and five
gallon reusable
water bottles,
some citrus juice
and catsup bottles.
Bottles, plastic
lumber applications.
10
Figure 2. Total per unit sales of CRV covered beverage containers for 2007. From Report
of Beverage Container Sales, Returns, Redemptions and Recycling Rates, by California
Department of Conservation, 2008, Sacramento, CA: Author, p. 17-19, retrieved March
23, 2009, from http://www.bottlesandcans.com/pdf/BiannualLong.pdf?
phpMyAdmin=SNwipYERqHbZX3jreShERea0uK8
PET is sometimes referred to as PETE. The reason for the additional acronym is a
little-known story involving Floyd Flexon (the principal in an attempt to establish a PET
reprocessing plant in California) and a pet food company. Flexon was the environmental
affairs director for Johnson Controls as the industry was developing the 1 through 7
codes. Flexon was working to create a die stamp for #1 PET bottles to identify them as
complying with the newly created SPI code. The die stamp would be replicated for use on
all of the machines manufacturing PET bottles across the country. A pet food company
11
called PET Pet Foods, a subsidiary of the Carnation Food Company, objected to the use
of the acronym based on trademark rights. Very late in the process, in an attempt to
salvage as much of the work that had gone into the die manufacturing process as possible,
Flexon had the die maker add a + at the end, resulting in the moniker PET+. Shortly
before the die went into production, the issue with the pet food company was resolved,
and the + was temporarily turned into an E. Some #1 plastic did carry the PETE mark for
a short time, just as the literature was being developed to explain the numbering system.
After the trademark issue was resolved, the E was dropped in order to revert to the
original SPI classification. Thus the ongoing reference to what has become a phantom
plastic type (F. Flexon, personal communication, December 8, 2008).
What is a Reprocessing Plant, and Why Should California Care?
A reprocessing plant is a facility where used bottles are actually transformed into
their useful second life. Scrap bottles are subjected to a complicated process that converts
them back into a form of polyester that is once again useful. Some reprocessing plants
have the capability to turn used bottles back into food-grade plastic for use in new bottles,
but most are of the industrial grade type that turn used plastic bottles into sheet, fiber fill,
or polyester fiber for textile products. In California, there are a couple of small-scale but
promising facilities that reprocess used PET bottles into sheet and clamshell packaging
(Eco2 and Global PET), but, for the most part, a California “recycling plant” is simply a
location where used bottles are collected and prepared to be sent to a true “reprocessing
center,” most likely located in Asia.
12
Converting used PET containers from California into something useful involves a
number of mechanical steps and a long trip. The mechanical steps typically include
collection from the consumer, sorting from other forms of waste then other types of
plastic, baling into giant cubes of crushed bottles (see Figure 3), hauling the bales to a
shipper, shipping thousands of miles, hauling the bales from the port or terminal to the
reprocessor, unbaling, washing, sorting, and grinding. Each of these steps comes with its
own set of complications, challenges, and costs, but they are integral to the process.
Figure 3. Plastic bottles recycled in California. From “Plastic Bottles Pile Up as
Mountains of Waste,” by M. Llanos, March 3, 2005, p. 1, retrieved March 22, 2009, from
http://www.msnbc.msn.com/id/5279230/ (photo by Rich Pedroncelli/AP file)
13
Once each of these steps has been carried out, the real transformation from scrap
to useful new material can take place. This is a procedure where the clean ground-up
bottles, known as flake, are transformed into polyester pellets or fiber that can be used for
new products. For California, this whole process is complicated because the nearest
full-scale reprocessing plant is thousands of miles away. According to Patty Moore,
director of the Plastics Recycling Corporation of California (PRCC), approximately 70%
of California’s “recycled” PET beverage containers are shipped overseas to reprocessing
plants in Asia, leaving most of the remainder (Eco2 and Global utilize a portion) to be
trucked or shipped by rail to eastern domestic reprocessing facilities (P. Moore, personal
communication, April 14, 2009). At this time, it appears that none of California’s PET
containers are turned back into food-grade beverage containers.
Some experts believe that locating a bottle-to-bottle reprocessing plant in
California would simplify the process, take cost out of the system, and provide an
excellent opportunity to create a closed-loop true recycling source for the bottling
industry.
Bottles that have been collected need to be crushed and compacted into “spec”
bales before they can be shipped. The term “spec” means that the bales are of standard
size and weight for marketing to reprocessors located primarily in Asia and in the eastern
U.S. The size and weight requirements to meet PRCC standards are as follows:
a. Bale size (preferred): 30” x 60” x 48”
b. Bale size (maximum): 48” x 72” x 36”
14
d. Bale Wire: Bales should be held together with 10-12 gauge, non-corrosive
galvanized metal wire, with all bale wires wrapped in one direction. A
minimum number of bale wires should be used that maintains bale integrity.
This number will vary with bale size. Metal bands or strapping in lieu of wire,
and the use of paper, plastic or metal headers, is acceptable on a case-by-case
basis.
e. Bale Integrity: Bale integrity should be maintained throughout loading,
shipping, unloading and storage. (P. Moore, personal communication, April
14, 2009)
Additional PRCC standards address the quality of the materials in the bales:
Requirements. All PET containers sold to Buyer shall (a) be free of contents or
free-flowing liquids, and (b) be 100% free of each of the contamination materials
specified in Section 3 below. PET Containers without caps are preferred. Bale
weight, density, integrity and overall bale quality will improve when caps are
eliminated. Seller should request all of its suppliers to remove caps prior to
returning bottles for redemption/recycling. In addition, the bales of PET
Containers shall not contain contamination of the types specified in Section 4
below in excess of the applicable maximum percentage by weight as specified in
Section 4 below.
Prohibited Contaminants. All PET Containers and the bales of PET Containers
sold to Buyer shall be 100% free of each of the following contaminants:
a. Plastic microwave trays, dishes, bakery trays, covers, deli containers, drink
cups, and “clamshells”
b. PS (SPI #6) plastic – rigid and foam
c. Plastic bags and Plastic film
d. Wood
e. Glass
f. Motor oils and grease
g. Rocks, Stones, Mud, Dirt
h. Medical and Hazardous Waste
In addition, any PET Container that previously contained hazardous or
potentially hazardous material, including but not limited to agricultural
products, pesticides, herbicides, automotive fluids, medical products (drugs,
IV solutions, syringes/hypodermic needles), flammable, corrosive or reactive
liquids, grease and solvents are expressly prohibited. This rule applies even if
the aforementioned material was not the original contents of the HDPE
Container.
i. Maximum Level of Contamination. Each of the bales of PET Containers sold
to Buyer shall comply with the following:
15
a. Maximum level of total contamination of any kind per bale shall be 4% by
weight.
b. Maximum level of contamination of any kind per bale shall be 2% by
weight for any of the following individual contaminants:
(i) HDPE Rigid Plastic Containers (SPI #2)
(ii) LDPE Rigid Plastic Containers (SPI #4)
(iii) PP Rigid Plastic Containers (SPI #5)
(iv) Aluminum
(v) Tin Food Cans or Beverage Containers
(vi) Paper/Cardboard
(vii) Opaque (non-translucent) PET Containers
(viii) Colored PET Containers other than green
c. Maximum level of contamination per bale shall be 1% by weight for any
kind of polyvinyl chloride (PVC) (SPI #3), including but not limited to
containers, tamper proof seals, cap liners, and labels. (P. Moore, personal
communication, April 14, 2009)
A key element in reprocessing PET to food-grade material is obtaining a form of
certification from the U.S. Food and Drug Administration (FDA) known as a “Letter of
Non-Objection.” Several companies in the U.S. have received the FDA nonobjection, and
have done so using different techniques. The different methods involve the chemical
process utilized. Some use hydrolysis with acids, caustic sodas, or alkalis, while others
use methanolysis or glycolysis. The standard, by any process, is to clean the plastic in a
way that no other chemicals or contaminants can remain to potentially adulterate the
contents of packaging containing recycled content. Once the process is complete, the
product is referred to as re-processed PET, or RPET.
The schematic in Figure 4 depicts the Erema Process for preparing PET to be
converted to food-grade quality. In Figure 5, the Bühler Process, which does the final
conversion, is depicted. Both systems have been utilized in European applications and
both have received EPA nonobjection letters.
16
Figure 4. The Erema Process. From “Recovered Plastics Market Solutions Report,” by
WRAP, n.d., p. 11, retrieved April 3, 2009, from http://www.wrap.org.uk/downloads/
Food_grade_recycled_plastic.479d329f.245.pdf
Naturally, the process and required equipment for food-grade PET reprocessing is
highly specialized, patented, and licensed. Machinery is custom built to the specifications
of the application and can take up to two years to construct.
Several food-grade reprocessing plants are in operation in Europe, including one
operated by Amcor in Beaune, France. Floyd Flexon was the project manager for the
construction of this plant, which serves as his model for an attempt to create a California
plant. Also following the Beaune model, a company called PetStar (part of Avangard,
Inc.) has very recently opened a bottle-to-bottle reprocessing plant in Mexico. Another
17
Figure 5. The Bühler Process From “Recovered Plastics Market Solutions Report,” by
WRAP, n.d., p. 12, retrieved April 3, 2009, from http://www.wrap.org.uk/downloads/
Food_grade_recycled_plastic.479d329f.245.pdf
recent opening was a plant operated by United Resource Recovery Corp. in Spartanburg,
South Carolina, for the Coca Cola Company.
Summary
Polyethylene terephthalate, PET is by far the most popular plastic beverage
container for manufacturers and consumers. Its dramatic growth in the marketplace over
18
the last decade has outpaced domestic efforts and ability to reprocess used plastic. In
California, over eight billion PET bottles are being sold annually. Reprocessing those
bottles into a useful second life is possible, but the degree of reprocessing and the effort
required to get the job done involves a challenging set of circumstances. The following
chapters examine the challenges and potential solutions to creating a bottle-to-bottle
reprocessing system for PET beverage containers in California.
19
CHAPTER TWO
A SHORT HISTORY OF BEVERAGE CONTAINER
RECYCLING REGULATIONS
When the soft drink business was established in the late 1800s, the beverages
offered were fountain products served in drug stores and ice cream parlors. Twenty years
later, soft drink customers were bringing home their own fizzy beverage in borrowed
heavy glass bottles, which were the property of the beverage manufacturer. Until the
mid-1940s, it remained standard practice to return bottles to the manufacturer (via the
neighborhood grocery store) to be washed, refilled, and reused. A small deposit usually
insured the return of the bottles.
Emerging from World War II, notions of guilt-free disposability for all sorts of
items in everyday use offered a fresh approach for the marketing industry. Plastic
utensils, paper napkins, paper clothes, razors, diapers, feminine products, and many other
items were marketed especially for their disposability. One of the more revolutionary
disposable items was the beverage container. The term “no deposit, no return” was seen
as a selling advantage. The August 1, 1955, edition of Life Magazine contained a story
that summed up the sentiment of the day. Titled “Throwaway Living,” the story
highlighted dozens of consumer products that are designed to be disposable so that the
modern housewife can cut down on chores. It features a young couple jubilantly tossing
dozens of new disposable items into the air in celebration of saving 40 hours of clean up
(see Figure 6).
20
Figure 6. Disposable goods. From “Throwaway Living,” August 1, 1955, Life Magazine,
p. 43.
21
The shift from refillable glass bottles to steel cans first began in the beer business.
Several brewers experimented with canned beer in the mid to late 1930s, with mixed
results. The war interrupted further development of beverage cans, and it wasn’t until the
late 1940s that soft drink companies first seriously tested steel canned beverages. It took
another decade of development before consumers had the option of buying some of the
smaller brands in cans, with the major brands holding out until the early 1960s. The slow
adaptation among the big brands was due to resistance from the bottling networks to
invest in new machinery, as well as slow development in can lining practices that
prevented the taste of steel from leaching into the product. While cans were attractive to
consumers worried about deposits or breaking glass bottles, they weren’t exactly
convenient. They required a special tool, often referred to as a church key, which would
punch triangular openings into the top of the can. While the soft drink industry was slow
to put a toe in the water, the beer industry was moving to the second generation of
beverage cans. In the late 1950s, the beer industry began working with aluminum
containers. By the mid-1960s, the beverage market had gone through a package
revolution. Various changes would occur to the aluminum can, including light weighting
and improvements in pull tabs, making it more popular than ever (Can Manufacturers
Institute, 2006).
By 1973, the fashion industry was embracing a new fabric that swept designs and
styles. Polyester had a distinctive look, creating genres such as leisure suits and slacks
without belts, but with permanent creases. In that year, polyester producers created
22
another new revolution: PET bottles (Packaging Today, n.d.). PET is the acronym for
polyethylene terephthalate. According to Designboom (2009),
PET is derived from oil and is formed by a polymerization reaction between an
acid and an alcohol. Its initial uses were as a synthetic fibre with excellent wash
and wear properties as well as a substrate for video, photographic, and x-ray film.
As its use grew, PET was modified for application in injection moulded and
extruded products, and in the early 1970’s the first three dimensional structures
were produced by blow moulding techniques, initiating the rapid adoption of PET
as a material for beverage bottles. Its properties as a lightweight, tough material
with excellent optical properties and adequate gas barrier performance [made it a
hit with manufacturers and consumers alike]. (n.p.)
PET was first used in large two-liter bottles where the flimsy container could be
supported by heavy plastic bases. Improving the structure, caps, and labeling processes
took more than a decade before PET bottles could really compete with aluminum cans
and glass bottles for smaller serving sizes. When the plastic industry finally got it right,
though, the PET bottle had a profound impact on the beverage business. Now, consumers
could take a 20-ounce bottle with them in purses, backpacks, or briefcases, and
consumption could be anywhere at any time. The resealable aspect, along with the
flexible and unbreakable properties of the bottle, created a new channel for the soft drink
industry called “on the go.” This new channel enhanced vending and gas station food
mart sales, but also created a new challenge for recycling. The containers are often
consumed outside of the house, and don’t make it into recycling bins as often as those
consumed at home.
With three types of containers, and three types of container industries competing
against each other for attractive pricing, the beverage industry was in a position to offer
consumers choice, versatility, and value. But with three distinct containers comes triple
23
the recycling challenge. Each material is a different commodity, and two of them have
subcategories. Colored glass is more complicated to recycle and less valuable than clear.
The same is true for plastic, but it is even more complicated because each of the seven
plastic types needs to be sorted from each other before they can be recycled.
The recovery of beverage containers is done in three modes in the U.S. The first is
through voluntary methods. Consumers collect their empties and take them to recycling
centers (known as drop-off or buy-back centers), usually earning “scrap value” money for
their troubles. Aluminum is always the most valuable, but the nice part of this system is
that recycling centers typically take other bottle types along with other recyclables such
as newspaper and cardboard. Some even provide convenient toxic material handling for
items such as household paint, heavy-duty cleaners, pesticides, and fluorescent bulbs.
The next mode is through waste handlers. According to the U.S. Census (2005), about
8,900 communities across the U.S. have curbside programs to help sort recyclable
materials, and most also have a material recovery facility (MRF) where the trash is
further sorted. Usually the waste hauler will sell the recyclable materials as scrap for
additional revenue. In these first two modes, one key factor determining how many
beverage containers get recycled is the scrap value. When values are high, consumers and
waste haulers have incentive to keep beverage containers out of landfills. The third mode
of beverage container recovery is through bottle bills, where the incentive for the
consumer is to get the deposit returned.
When bottle bills were first proposed, they were primarily directed at managing
litter. They called for a deposit on every soda and beer bottle as an incentive for the
24
consumer (or anybody picking up empties) to bring them back to the point of purchase
instead of letting them accumulate in the environment. At that time, most beverage
containers were glass, and broken glass presented huge problems in the environment. A
redemption system was first proposed in Vermont in 1953, but failed largely due to
beverage industry opposition. The first bottle bill to become law in the U.S. was in
Oregon in 1971. Despite heavy opposition from the beverage and grocery industry,
Oregonians, proud of their free spirit and dedication to environmental issues, imposed a
nickel deposit on carbonated soft drink and beer bottles.
Since that first bottle bill, ten additional states have adopted a redemption, or
“forced deposit” program. Here is a list of all bottle bill states:
• California
• Connecticut
• Delaware
• Hawai'i
• Iowa
• Maine
• Massachusetts
• Michigan
• New York
• Oregon
• Vermont
An interesting point about the list of bottle bill states is that they all have fairly
large urban centers (perhaps Vermont would be proud, as it often is, to play the outlier).
Redeeming bottles and cans in or near an urban area is naturally easier for the consumer
and recycler due to the logistics of the high concentration of redemption cites and higher
volume at those cites. Sustaining an efficient redemption system in rural states could be
an entirely different story.
25
Advocates for bottle bills are often frustrated by the beverage industry’s
opposition to redemption systems, and industry typically reacts with equally unhappy
sentiments to proponents’ efforts to put what industry sees as a penalty on just one item
in the waste stream. Advocates suggest that deposits are typically charged at the point of
sale, and are reasonably easy to redeem. They further assert that deposits are so
insignificant that they have little or no impact on consumer decisions. They insist that
deposits should help the beverage industry access clean streams of postconsumer material
for reuse, which should in turn reduce the need and costs involved in acquiring new
packaging materials. Further, bottle bill advocates make the case that soft-drink volume
far exceeds that of other consumer products, justifying a deposit on beverage containers.
Combine this practical argument with the concept of product stewardship or
manufacturers’ responsibility and the result is the classic case for a bottle bill advocate.
The argument goes further to detail the fact that glass, aluminum, and plastic all last for
hundreds of years in landfills, while other forms of packaging, such as paper or
cardboard, break down much sooner, and the already huge volume of beverage containers
is growing. Advocates point out the fact that a redemption system can be designed to put
very little responsibility on the beverage industry or grocers, such as the California
model. Their most compelling point is that recycling in bottle bill states is considerably
higher than nondeposit states.
Equally steadfast in its opposition to redemption systems, the beverage industry
sees deposits as drags on its pricing. The industry worries that consumers will make
buying decisions based on which products have deposits, and how complicated it is to
26
redeem the deposits. The industry sees a basic nickel deposit as a considerable burden for
a consumer buying a multi-pack such as a 12-pack of sodas. At a nickel per container, the
$2.99 12-pack really ends up costing the consumer $3.59, an increase of over 16%. In
Michigan, where the deposit is 10 cents per container, that $2.99 12-pack becomes $4.19.
In California, where the sales tax applies to soft drinks, the $2.99 12-pack becomes at
least $3.83 (the sales tax varies among counties). Beverage companies wonder why so
many other products in the waste stream are exempted, including other types of food
packaging such as cans, clam shells, tubs, gable top cartons, and boxes, as well as
nonfood packaging such as soap and detergent containers, shampoo bottles, newspapers,
and magazines. Each of these items is a significant contributor to the waste stream, and
each is nearly always exempted. Further, intellectual honesty often takes a walk when it
comes to milk and liquor containers. Why it is important to recycle a bottle that contains
one product, but not important to recycle the same container when it contains a different
product is a mystery. The dairy industry doesn’t seem to ever have been criticized for
demanding that its containers be exempt from container redemption systems. In fairness,
some would suggest that milk is a product offered within programs such as Women
Infant Children (WIC) support services, and that a nickel, no matter how easy it is to
redeem, could dissuade low-income mothers from buying the dairy products that their
children need.
Grocers have their own reasons for objecting to traditional bottle bills which call
for return to the point of sale. They argue that their stores (and employees) are expected
to maintain the highest possible standards of cleanliness in order to ensure that the food
27
products in their stores are fit for consumption. They point out the conflict that occurs
hundreds of times each day when customers bring in boxes and bags full of old empty
containers (that were probably stored outdoors) to an otherwise sanitized environment
within the store for redemption. Further, grocers are expected to warehouse the used
containers until they can be picked up by some sort of recycling agency. This, they say,
attracts (and often carries) pests that aren’t conducive to the sale of food. Large grocers
are frustrated when this obligation is imposed on them, but not on smaller stores. In some
instances, grocers are paid a small portion of the transaction for their troubles, but even
then, they would prefer to be out of the redemption system all together.
In Oregon, grocers have “reverse vending machines” at the entrance to their stores
so that customers can redeem the containers before entering the store (see Figure 7). This
prevents customers from dragging the empties through the line for cashier redemption,
but creates expense for obtaining, supporting, and servicing the machines. Another
problem—one which cannot be talked about in public, but which can be very
troublesome for grocers and retailers—is patronage by people lacking access to regular
hygienic facilities. Collecting bottles and cans is a simple way to earn a few dollars,
along with providing a useful system for diverting empties from the waste stream. No one
wants to be unkind, but some of the people showing up with carts full of empties—often
harvested from nearby trash cans and dumpsters—can be somewhat incompatible with
other customers shopping for dinner. Oregon grocers are currently involved in crafting
legislation that would update the bottle bill, including taking grocers out of the
redemption loop.
28
Figure 7. Typical Oregon reverse vending machine. From “What is reverse vending?” by
Envipco, 2004, retrieved March 18, 2009, from http://www.envipco.com/reverse.asp
California’s bottle bill was passed into law in 1988, largely because opposition
from grocers was eliminated by establishing a system of “redemption centers” separate
(mostly) from grocery stores. Hawaii followed the same model and eliminated grocer
opposition by promising that grocers would not be required to redeem used beverage
containers when the bottle bill was passed in 2003. While California and Hawaii grocers
are exempt from redemption directly, considerable pressure has been put on them to
provide space in their parking lots for redemption centers. These centers take up six to
eight parking spaces, and float in a grey area when it comes to things like zoning laws
and Americans with Disabilities Act requirements. Most need electrical power and are
required to be staffed a minimum of 36 hours per week. Questions about bathroom
facilities, weather protection, lighting, and security are generally dealt with on a
case-by-case basis, but some grocers worry that more demands will be put on them for
increased costs and resources. They also worry about some of the clientele that
redemption centers attract. A recent attempt by a grocery store in Huntington Beach,
29
California, to establish a redemption center in its parking lot was rebuked by neighbors
complaining that it would draw homeless people wandering the streets with shopping
carts full of empties. After a controversial session of the City Zoning Commission, the
grocery store was not allowed to place the redemption center in that neighborhood. The
Orange County Register covered the story, writing, “Ralph’s application for an outdoor
recycling center was denied by the city's zoning administrator in June after police Chief
Ken Small expressed concern that the center would attract transients and city staff heard
from residents opposing the project” (Burris, 2008, p. 3).
Figure 8 illustrates the operating budget of the California Beverage Container
Redemption Fund.
Figure 8. DOC CRV budget details. From California beverage container recycling
program and fund management options, by California Department of Conservation,
Division of Recycling, 2007, Sacramento, CA: Author, p. 6.
30
The DOC should be credited for administering the fund in a way that keeps
legislators and administration officials from micromanaging in an attempt to divert
revenue to unrelated projects. The intent of AB 2020 was to protect DOC funds and
dedicate the revenue entirely to recycling bottles and cans. Figure 9 illustrates the fund
balance and expenditures over the last decade.
Grocers in Hawaii have been chastised by environmental groups and newspaper
editorials for not taking a more active role in the redemption process, including
voluntarily running in-store redemptions. The very senator that exempted grocery stores
from the process has since taken up criticizing them for not participating. A 2005
Honolulu Star story on bottle redemption cited the senator: “’If you're frustrated, go to
your (grocery) store manager’ and ask for a redemption center, said Bottle Bill author
Rep. Mina Morita (D, Kauai)” (Leone, 2005, p. 4).
For the past couple of sessions of Congress, Rep. Edward J. Markey (D-Mass) has
offered up federal legislation requiring those states that do not currently have a bottle bill
to implement one. Recently, Markey has added a global warming perspective to his
efforts:
“Recycling is an everyday action that we can all take to cut global warming
emissions and be good environmental stewards,” continued Rep. Markey. “Our
national goal should be to one day recycle every single bottle we use, and this bill
will get us closer to that goal and that day.” (Select Committee on Energy
Independence and Global Warming, 2007, n.p.)
31
Figure 9. Beverage container redemption fund balances
32
While the legislation has not been taken seriously on Capitol Hill, largely because of
states’ rights questions, practical implementation problems, and/or unfunded mandate
issues, connecting the proposed legislation with global warming provides activists with
something to focus on and rally around.
Deposits
Of the 11 states that currently have container redemption systems in place, all but
one charge a nickel for the deposit (in California and Hawaii, it’s a dime for containers
over 24 ounces). The State of Michigan charges a dime per container. As one would
expect, redemption rates are highest in Michigan. That fact has inspired bottle bill
proponents all over the country to call for increasing the amount of deposits, which is
exactly the slippery slope that the beverage industry cites in its opposition to bottle bills.
If a dime is better than a nickel, then why not charge a quarter instead of a dime? And,
why not skim a few pennies for the state? Some bottle bill advocates suggest that
consumers putting down a dime probably wouldn’t notice so much if they only got a
nickel or seven cents back. The Hawaii system charges six cents, and returns a nickel to
the consumer, with the extra penny going to the state’s overhead. In April 2009, the
Hawaii legislature passed legislation to raid the unredeemed fund for $20 million in an
attempt to balance its general fund budget, thus converting the deposit system into a
hybrid form of taxation. Legislation proposed in Washington in January of 2008 called
for a bottle bill featuring a 13 cent deposit, with a dime refund.
33
Little data exist to measure whether deposits influence consumer buying
decisions. However, beverage manufacturers are extremely sensitive to anything that
impacts their pricing. Generally, costs added on at the point of sale that are not reflected
on the package price are less troubling to the beverage industry for obvious reasons.
However, since the early days of bottle bills, several things have changed in the beverage
industry—and deposits have complicated those changes. For example, the vending
business, which used to be a relatively small sideline for the industry now accounts for as
much as 11% of overall sales in some regions (Vencoa, n.d.).
Building a nickel (or dime) deposit into vending prices creates havoc with price
points. Consumers like simple vending. A soda for a buck is an easy concept; a soda for
$1.05 isn’t.
Another big change since the ’70s and ’80s is the multi-packs that leverage
economic scale to offer better deals to consumers. Twelve-, 24-, and 36-packs are now
more common than the old standard six-packs. The influence of deposits on multi-packs
can often be greatest on bargain brand bottled water, where it is common to see 24-packs
in the $2 to $3 range. The extra $1.20 in deposits presents a substantial increase over the
“perceived” price.
Changing Times for Bottle Bills
Opposition to bottle bills could present a dilemma to the beverage industry in
coming years. As commodity prices for virgin aluminum and PET climb, the concept of
creating a steady stream of high-quality recycled materials could become very attractive.
34
If recycling could be done with reliable and predictable cost, and if those costs can be at
or below virgin costs, long-term benefits begin to look promising. Interestingly, one of
the ways to keep costs down and quality up is to have a bottle bill. Bottles and cans
collected in a redemption system are cleaner than those removed from the regular waste
stream through Material Recovery Facilities (sorting systems known as MRFs). The extra
expense in cleaning and sorting non-bottle-bill state containers, combined with the
additional potential for contamination, make them less desirable.
Another problem for beverage companies is the growing popularity of anything
“green.” Bottle bills are enacted either by legislation or by ballot measure. The two most
recently adopted bottle bills were done through legislation (California 1988 and Hawaii
2002). Oregon’s bottle bill expansion—to include bottled water in the existing bottle
bill—was also done by legislation in 2007. In 2008, 14 new statewide bottle bills were
proposed around the country, all by legislation, and each was defeated. A growing
question is whether consumers are becoming so green that a bottle bill could be passed
through a ballot measure.
Whether by legislation or by ballot measure, bottle bills become political
campaigns. Debate occurs at public forums, in the editorial pages, and amongst
policymakers. At some point in a bottle bill campaign, beverage companies usually turn
into the bad guys opposed to saving the environment from certain doom. Like many
hard-fought political arguments, some relevant facts are left out of the dialogue. For
bottle bill proponents, one fact often overlooked is that an average of 33% of the bottles
and cans in the waste stream are recovered in states without bottle bills (CRI, n.d.). The
35
follow-up claim, backed up by a great deal of undisputed documentation, is that a quality
curbside program can usually bring that average up. Opponents of bottle bills don’t
suggest the 33% is a healthy number, but they question the incremental costs of raising
the rate with a bottle-specific program versus a more comprehensive curbside program
that would not only increase the bottle recycling rate, but also the recycling rate of many
other types of waste. Addressing the additional recyclable products that a good curbside
program will divert is usually either dismissed as irrelevant or proponents suggest that a
curbside program is an excellent compliment to a bottle bill. Bottle bill opponents often
create the impression that redeeming bottles and cans is an uncomfortable, complicated
process that requires a lot of work for little personal benefit, to which proponents will
usually suggest that the system can be made more convenient and rewarding through
more redemption sites and higher deposits. Bottle bill supporters are usually members of
a coalition of environmental groups, which can quietly include those government
agencies that are either responsible for environmental issues and/or benefit from the
revenues that a bottle bill would generate. Opponents are usually made up of grocers,
retailers, and beverage industry players, but occasionally waste haulers, fearful of losing
a valuable commodity, have joined in opposition. In some cases, anti-tax groups have
joined in opposition to bottle bills as well.
Aside from the potential for bad PR, bottle bill opponents face another challenge.
For most of the late ’90s and up to the Hawaii bottle bill in 2003, bottle bills were not
taken seriously. A few were proposed, but none were viable from a political standpoint.
In 2008, however, the 14 bills proposed around the country were serious pieces of
36
legislation with solid backing. Fighting each bottle bill is expensive. Coalitions on either
side need to raise significant funds to get their message out. The bottle bill opponent
coalition in Hawaii spent $300,000 in 2002 to fight the bill that was eventually passed
and adopted into law (J. Thorman, personal communication, April 24, 2009). Fundraising
is tough when the battle is in one state, but truly challenging when spread between
several states. If a trend develops where 5 or 10 serious bottle bills come up each year,
the likelihood that 1 or 2 could pass grows much stronger. It’s not out of the realm of
possibility that opponents could find themselves working to devise a bottle bill that they
could live with rather than deal with one that is poorly designed.
Several recent bottle bill movements have shifted their motivation away from
litter prevention and recycling, and have focused more on the potential for revenue.
Currently, deposits are handled in two ways. In most states, the unredeemed deposits are
held by beverage manufacturers, who manage the redemption process by picking up
redeemed empties from grocers, baling them, and shipping them to recyclers. The
unredeemed funds are used to pay for the handling of the returned containers. This
process was fine with everyone concerned when the focus was on diverting bottles and
cans from litter and landfills. However, when it came time for California to design a
bottle bill, the deposit system saw a big change. Rather than having bottlers responsible
for their product, California chose a state-managed system. The key feature was that the
deposits would remain in the state’s coffers, and the state would do the collections
through redemption centers.
37
The concept for the state handling the deposit is that those who choose not to
recycle help finance those that do. Hawaii adopted this system in its 2003 bottle bill, and
several other states have either attempted to, or are in the process of, adopting the
“California model” redemption system. The inference in such circumstances is that the
state would use any leftover unredeemed funds for environmental protection projects.
Unfortunately, that is rarely the case. In Connecticut, Governor Jodi Rell has targeted
what she estimates as $13.8 million in unredeemed deposits for revenue to help in
balancing her budget. The funds are currently used by bottlers to finance the reclamation
system that they manage and operate. A story in the Hartford Courant detailed the
following:
Gov. M. Jodi Rell says that money belongs to the state, not to the beer and soda
distributors who now pocket every nickel not redeemed by consumers. . . . The
battle over the bottles and cans has been a perennial issue at the Capitol for at
least 17 years, but now the state is facing a deficit as high as $391 million in the
current fiscal year and nearly $6 billion over the next two years. “We're in a
severe budgetary crisis,” said Senate President Pro Tem Donald Williams, a
Brooklyn Democrat who favors Rell's proposal. “We need a new approach, and
we have to take a look at areas like [bottle deposits] that we haven't looked at.
There's never been the fiscal necessity to take that money.” (Keating, 2009, n.p.)
The story goes on to state the beverage industry’s objection to turning the unredeemed
funds over to the state:
But the powerful beer wholesalers and soda companies—with high-paid
lobbyists—are fighting the proposal hard in the Capitol corridors, saying they are
not making a windfall at all. They said it's actually a wash because expensive
crushing machines, shredders, warehouse space and union-paid truck drivers eat
up all those nickels that go to the distributors. (n.p.)
Motivation to enact forced deposit programs has gone from attempts to control
litter and promote some recycling to strong support for recycling, and now to raise
38
revenue from those who fail to recycle. Supporters of bottle bills in the early stages were
purely environmentally minded with straight foreword approaches. By the time
California’s bottle bill was drafted, bottle bill advocates had to be much more political.
Now, different packaging material would be treated differently through processing fees.
Unredeemed funds would be retained by the state, which had the somewhat conflicting
goals of encouraging a high recycling rate, while at the same time quietly hoping that the
recycling rate wouldn’t go so high as to eat into the overhead costs.
Few realize that bottle bills do have a point where they no longer pay for
themselves. California does not publicize a total overhead, but insiders have hinted that
the program begins incurring costs at an overall recycling rate nearing 80%. Hawaii has a
trigger in its program that automatically increases the handling fee from 1 cent to 1.5
cents when the overall recycling rate reaches or exceeds 70%. This 50% increase in the
handling fee is explained by the extra overhead in administering that much work: “Fee
funds redemption center operations. Fee based on the previous quarter's recycling rate: if
previous quarter's rate is less than 70%, the fee is 1¢/container, otherwise 1.5¢”
(Container Recycling Institute, 2009, n.p.). Whether paying more for increased recycling
serves as a disincentive has not been thoroughly explored.
Recently, a new motivation for deposits has emerged from the industries that
actually manufacture the containers. These industries are typically aligned with their
biggest customers, which include the beverage business. However, in recent months, the
Aluminum Association has departed from such loyalties in the interest of higher
39
recycling rates, and has announced its interest in supporting new deposit legislation. On
November 18, 2008, the association issued the following statement:
To raise the recycling rate, the Aluminum Association plans to increase public
education, help expand the recycling infrastructure and explore new policies.
Areas of focus will include both voluntary and mandatory recycling programs
such as curbside recycling and landfill bans, and deposit legislation. States with
deposits on recyclables have the highest can recycling rates, around 74 percent or
higher. (GreenBiz, 2008, n.p.)
In response to the Aluminum Association’s new position, the American Beverage
Association issued the following talking points to beverage industry personnel via e-mail
also on November 18, 2008:
The beverage industry believes that the Aluminum Association’s position on
deposits is a mistake. Considering new deposit legislation or expanding existing
deposit laws would damage the very industry that buys the cans produced by
Aluminum Association’s members. Furthermore, this advocacy for deposits is
inconsistent with the aluminum industry’s other pro-recycling initiatives.
• The Aluminum Association’s consideration of deposits will harm its
customers.
o Deposits significantly increase bottlers’ operating costs. Those cost
increases lead to higher prices, decreased margins, plant
closures/consolidations, and job losses.
o Deposits reduce sales. Per capita beverage sales in deposit states are much
lower than in non-deposit states. Advocating for policies that will lead to
fewer cans being sold is not very sensible.
• Support for deposits conflicts with the Association’s other stated
objectives.
o Deposits undermine the voluntary recycling programs that the beverage
industry and the Aluminum Can Council already support.
o Aluminum provides a significant share of the revenue on which these
programs depend.
o The consequence of more deposits is lost revenue for municipal recycling
and higher recycling costs for local taxpayers.
• Deposits are not, as the Aluminum Association claims, “sustainable”
programs.
o These programs require massive subsidies from beverage companies,
retailers, and consumers.
40
o The high costs inherent in a deposit system and inefficiencies that result
from establishing a duplicate recycling infrastructure.
o Deposit systems also carry a heavy carbon footprint, with extensive
consumer travel required to return containers for refunds. The energy
consumption and emissions add to the burden of deposit systems.
(American Beverage Association, personal communication, November 18,
2008)
The Aluminum Association case is especially timely and illustrative because it
highlights the steadfast opposition of the beverage industry at a time when traditional
bottle bill supporters are finding support from channels that, in the past, were not
interested in backing such measures. Whether for pure environmental reasons, for
monetary reasons, or for internal business reasons, a growing number of forces are
softening to bottle bills, and they are doing so in the name of recycling.
Recycled Content Drivers
Packaging containing recycled content is becoming a regularity in the
marketplace. In some cases, the use of recycled content is an economic decision based on
lower material costs. Examples might include filler and padding for shipping boxes and
packages, or fairly rough materials such as fiberglass. However, in many cases, the use of
recycled content is done to comply with regulations. In California, the Integrated Waste
Management Board oversees mandates that rigid plastic containers (except those covered
by the bottle bill) contain minimum amounts of recycled content. This law, adopted in
2005,
Was enacted as part of an effort to increase the use of recycled plastic and reduce
the amount of plastic waste disposed in California landfills. The law regulates
companies that produce or generate products that are held in [plastic containers]
that are sold or offered for sale in California. The law is enforced by the
41
California Integrated Waste Management Board through an annual certification
process of regulated companies. (CIWMB, 2009a, n.p.)
Another driver for recycled content is the initiative led by Wal-Mart to reduce
packaging waste. With tremendous authority in the market due to sales volume, the retail
giant is in a strong position to influence product manufacturers in the types of packaging
that they employ. According to Wal-Mart (2006), their scorecard has a purposeful
structure:
Wal-Mart’s packaging scorecard is a measurement tool that allows suppliers to
evaluate themselves relative to other suppliers, based on specific metrics. The
metrics in the scorecard evolved from a list of favorable attributes announced
earlier this year, known as the “7 R’s of Packaging”: Remove, Reduce, Reuse,
Recycle, Renew, Revenue, and Read. (n.p.)
One of the prominent points on the scorecard is the use of recycled content. Ten
percent of its overall scorecard rating is dedicated to recycled content, meaning that
packaging containing the prescribed amount of recycled material has an advantage over
those that do not.
Even before Wal-Mart began its scorecard program, groups of “green investors”
and environmental activists were calling for beverage companies to utilize recycled
content. Organizations such as the Natural Resource Defense Council (NRDC) and the
Container Recycling Institute (CRI) have pushed for recycled content. CRI released the
following statement in 2003, accompanied by Figure 10:
Washington, DC—The Container Recycling Institute, a non-profit environmental
group that studies container sales and recycling trends, has called on Coke, Pepsi
and other beverage makers to halt attacks on laws that could reverse a trend of
increasing plastic bottle waste.
42
Figure 10. PET plastic bottle sales, recycling, and wasting 1995-2002 in millions of
pounds. Data derived from “2002 Report on Post Consumer PET Container Recycling
Activity,” by the National Association of PET Container Resources, 2003, Charlotte, NC:
Author, retrieved from http://www.container-recycling.org/ documents/PETgraph.xls
“Coke, Pepsi and all those who are profiting from the sale of beverages in
plastic bottles, must accept responsibility for the mounting quantities of bottle
waste,” said Pat Franklin, the Container Recycling Institute’s executive director.
“They could start by halting their thirty-year war against bottle bills.”
Deposit laws, or “bottle bills,” place deposits ranging from 2.5 to 10 cents
on beverage cans and bottles. Deposit systems have achieved recycling rates over
70% in 10 U.S. states.
CRI’s announcement comes on the heels of a new industry report showing
a decline in the PET plastic bottle recycling rate in the United States from 22.1%
in 2001 to 19.9% in 2002. This recycling rate is exactly half that the rate achieved
in 1995 (39.7%), and represents the seventh consecutive year of decline. In
absolute terms, PET bottle recycling declined from 834 million pounds in 2001 to
797 million pounds in 2002.
The report, released this month by the National Association of PET
Container Resources (NAPCOR), also announced a 6% increase in resin sales,
due primarily to the continued growth in single-serving, non-carbonated
beverages. NAPCOR is the trade association representing resin producers, PET
recyclers, beverage brand owners including Coke and Pepsi, and companies that
manufacture or purchase PET bottles, including Proctor and Gamble.
According to CRI, what NAPCOR does not stress in its report is that
plastic bottle waste is increasing at an alarming rate.
“Wasting is the flip side of recycling,” said CRI research director Jenny
Gitlitz. “While PET sales are going through the roof and recycling volumes
43
stagnate, the quantity of plastic bottles being littered, land filled, or incinerated is
climbing.” Gitlitz said the 3.2 billion pounds of PET bottles wasted in 2002 was
almost three times the amount wasted in 1995.
“Another way of looking at it,” said Franklin, “is that for every ton of
plastic bottles recycled, another four tons are being wasted.”
According to Franklin, the PET beverage bottle has been very profitable
for Coke and Pepsi, who own the bottled water brands Dasani and Aquafina,
respectively. Non-carbonated bottled water is the fastest growing segment of the
U.S. beverage market.
CRI and NAPCOR agree that an “immediate consumption” trend is partly
to blame for declining recycling rates. Bottled water and other beverages are
increasingly consumed away from home, and away from the convenience of
residential curbside recycling bins.
The groups disagree on how to address the problem. “The two beverage
giants have given lip service to recycling, said CRI’s Pat Franklin. “Their Pete’s
Big Bins and recycling programs at stadium events are token measures, and their
support of taxpayer-funded curbside recycling programs is a way to pass the buck
to cities and towns. These companies have failed to take sufficient steps to ensure
that PET recycling keeps pace with skyrocketing sales. On the contrary, from
Hawaii to New York, they are lobbying against bottle bill legislation, despite its
proven success at recovering beverage containers.”
Franklin concedes that Coke and Pepsi have committed to a goal of using
10% recycled content in its plastic bottles by the end of this year. “It’s a baby
step, said Franklin, “but it’s a step in the right direction. Unfortunately,” she said,
“this positive move is overshadowed by their efforts to repeal existing deposit
laws and prevent new ones.”
According to CRI, states that have a refundable deposit on beverage
containers recycle plastic bottles at 2 to 4 times the rate of non-deposit states.
“The beverage and grocery industries do a disservice to their customers and
shareholders by denying the proven success of bottle bills and allocating company
profits to defeat or repeal container deposit legislation,” Franklin concluded.
Gitlitz cited the environmental damages that result from this plastic bottle
waste. “Had the 3.2 billion pounds of PET bottles wasted in 2002 been recycled,”
she said, “an estimated 6.2 million barrels of crude oil equivalent could have been
saved, and over a million tons of greenhouse gas emissions could have been
avoided.”
“The impacts of PET wasting will only grow unless new collection
systems or additional container deposit systems are adopted,” Gitlitz said. (n.p.)
Three years later, CRI continued to apply pressure for recycled content:
Only a small percentage of PET bottles sold are used to make new plastic
bottles—approximately 4%. The paucity of closed-loop recycling means that new
44
water bottles must be manufactured almost entirely from virgin petroleum resin,
consuming vast amounts of energy and resources. Increasing the quantity of
bottles containing recycled content would greatly reduce energy usage,
greenhouse gas emissions and pollution. (Franklin, 2006, n.p.)
Whether in response to green investor stakeholders, organizations like NRDC and
CRI, or just out of their own senses of responsibility and practicality, Coke and Pepsi
both took steps to utilize recycled content in their PET containers. The current Pepsi
position on recycled content is as follows: “In 2002, PepsiCo committed to include 10%
recycled content in our carbonated soft drink plastic bottles in the U.S. by 2005. Thanks
to our bottlers, PepsiCo met that goal on schedule” (PepsiCo, 2007, n.p.). The Coca Cola
Company made a similar commitment in the same timeframe.
Beverage Industry Initiatives
There seems to be a point of view within segments of the environmental
community that suggests the beverage industry is the villain in the whole recycling issue.
The implication is that beverage manufacturers are exploiting the market and are
irresponsibly foisting billions of plastic containers onto an unaware public at the expense
of the environment, all for profit. Without wading into the hyperbole of the issue, it
should be noted that the beverage industry has made great efforts to create some of the
most recyclable PET packaging available.
Examples include avoiding the use of coatings, barriers, and linings that are
incompatible with recycling. The use of such devices could increase shelf life, simplify
packaging methods, and/or make bottles more attractive. The industry generally also
avoids the use of nonstandard colors, as well as noncompatible labels and label
45
adhesives. Again, if these restraints weren’t exercised, the recycling process would be
compromised. Recent industry initiatives include light-weighting of bottles, resulting in
less plastic content per container, and shifting more product out of other plastics and into
#1 PET.
The beverage industry isn’t required to do any of these things. However, the
industry view is that the term “Extended Producer Responsibility” should apply as much
to the manufacturing process as it does to the postconsumer reclamation process.
Recycling Issues for PET
Starting at the consumer level, recycling PET bottles is a little more difficult than
aluminum, due to the extra space required to store them. It takes more bags to haul them,
and it takes more room in the car to get them to a redemption center. There is always a
difference of opinion about whether the top should be left on or removed. Those
concerned about marine runoff know that the caps float, and therefore believe it better to
keep the cap on the bottle. Others note that the cap is made of a different type of plastic
that is incompatible with PET recycling, and thus will need to be removed at some point
in the process anyway. Fortunately, the PET recycling industry has become adept at
separating caps from bottles.
The question of finding a redemption center often arises. California DOC
requirements call for redemption centers within a three-mile radius of all large-scale retail
or grocery stores that sell CRV-covered containers. The problem is that one needs to
know what to look for in order to actually find a redemption center. They are often
46
located in corners of store parking lots or behind store buildings, but they rarely have
clear signage. Learning the operating hours and individual practices can also be a
complicated task. Redeeming bottles and cans in rural areas can be even more difficult
because the centers are fewer and further apart.
From the redemption center position, the space issue is even more challenging
because the center is probably paying rent. It’s also difficult to pinpoint the value of bags
of PET containers because some of the bottles may still have liquid in them, which
influences measuring by weight. Again, the caps also impact weight estimates. There is
also the question of whether all of the plastic bottles in a bag are #1 PET. These last few
issues can be addressed by hand processing each individual bottle, but that generates
efficiency issues. The same challenges hold true for other container types as well.
Keeping a redemption center clean can be difficult. Customers can show up with lots of
different types of bottles, and have been known to abandon those that aren’t covered by
CRV. Further, customers have been known to drain partially full bottles on the spot, as
well as abandon the boxes and bags used to carry the bottles. Since many redemption
centers are located in grocery and retail parking lots, it is important to the stores that
customers have clean places to park. Also, cleanliness is important to encourage use of
the redemption centers by a broad range of the public. Unfortunately, most centers cannot
afford cleaning personnel, so in busy times the centers can become somewhat
unattractive.
47
Summary
Keeping bottles and cans out of landfills has become big business. Starting out as
a humble and innovative approach to preventing bottles and cans from being discarded on
roadsides, in parks and on beaches, bottle bills have turned into multimillion-dollar
“revenue sources.”
Opponents of bottle bills are confounded by the fact that bottle bill states have
recycling rates that are double the national average. Proponents, however, are finding
new partners in the movement, and are seeing a growing likelihood that more states may
adopt bottle bills in the near future. As energy costs, environmental concerns, and budget
deficits rise, policymakers are taking a more aggressive look at bottle bills. It is likely
that more bottle bills will be proposed and, in those states that already have bottle bills, it
is highly likely that efforts to enhance the revenue stream will come into play.
48
CHAPTER THREE
A CONTEXT FOR RECYCLING
Why should anyone be interested in building a PET reprocessing plant in
California?
Business models show that such an endeavor would probably be marginally
successful, but not without risk. Why not instead invest in something more promising,
secure, or fashionable? If the recycling and beverage industries are to rely purely on
business potential alone, a reprocessing facility might be much farther in the future than
some would hope. What additional motivation could be found to augment the basic
business approach, and are there parallels in the academic literature?
One of the most obvious additional motivations is the greater good achieved
through recycling items that would otherwise go into the waste stream. The concept of
recycling goes as far back as the manufacture and recycling of tools for the building of
the Egyptian pyramids around 2550 BC, when “recycling was focused primarily on
metals, which were the most expensive ingredients employed in making objects useful to
man” (Nijkerk, 2008, p. 11). Like many early forms of recycling, melting worn-out metal
chisels to make new ones was probably driven more by practicality than concern about
the environment.
Recycling has clearly become a key component of the contemporary conservation
and environmental movement, which can be traced to the mid-19th century. George
Perkins Marsh (1864/2003), in his book, Man and Nature: Or Physical Geography as
49
Modified by Human Action, is often credited for inspiring the conservation movement
that has grown into modern environmentalism. His statement, “Man is everywhere a
disturbing agent. Wherever he plants his foot, the harmonies of nature are turned to
discords” (p. 36), could easily have been said by any number of contemporary
environmentalists or politicians. Marsh wasn’t faced with the question of what to do
about environmentally sound manufacturing processes or how to deal with billions of
PET beverage containers, but he was driven to make conservation part of the planning
and decision-making process as people undertake actions with environmental impacts.
Today, the connection between manufacturing and environmentalism would
appear obvious to even the most tepid of environmentalists. Greenhouse gas reduction,
landfill reduction, petroleum-based fuel dependency reduction, and a great many other
impact reduction efforts are all tied to industrial actions, whether they be in the design
and manufacturing process itself, the materials used, or the product afterlife. Indeed,
recycling is dependant on the bigger picture manufacturing process through the choice of
virgin materials used, the manufacturing methods, use of recycled content, and various
forms of regulation of all of the above. That connection and its many facets is a
constantly evolving process that has roots in the early questioning of the impact of
production on labor and social balance that emerged in the 1950s (Galbraith, 1958) and
the connection to health with the environment in the early 1960s (Herber, 1962).
Around the time that the nation’s consciousness about a connection between
industry and the environment was being raised, the term “no deposit no return” was
becoming a sales pitch for the beverage industry and “disposable” was a highly touted
50
feature of a growing number of consumer goods. Rachel Carson’s Silent Spring (1962)
established a legitimate concern for “corporate responsibility” in the context of influence
on the public and the environment. In a narrow interpretation, Silent Spring was about the
impact of DDT on birds, insects, and humans in the environment. And on that level, the
book inspired a critical look at the subject, resulting in bans on its use and regulations of
other forms of pesticides and herbicides. A broader interpretation, though, would suggest
that Carson’s work raised awareness of the unintended consequences of industry as it
rolls out new products, along with the relationship between industrial actions and the
responsibility of government to oversee those actions in the interest of the public good.
Within a few years, environmental disasters such as the Cuyahoga River fire in
1969 and the Santa Barbara oil spill also in 1969 seemed to put an increased credibility
factor behind the previously budding (mostly intellectual) environmental movement.
Mainstream recycling, as it is known today, had yet to become a component of
environmentalism, but awareness about the scarcity of resources and the issue of waste
was growing. In Oregon in 1971, that awareness resulted in the first bottle bill to be
passed in the United States, partnering consumers and the beverage industry in a system
designed to keep empty bottles out of the environment. Oil shortages in 1973 provided a
catalyst to the opinion that neither industry nor consumers were exercising enough care in
preserving resources. In the same year, the practice of curbside sorting of recyclable
materials was born in the communities of Berkeley, California; Somerville,
Massachusetts; and Marblehead, Maine, further including consumers in deferring
recyclables from the waste stream.
51
With the first bottle bill in place and curbside sorting underway, Americans began
to have options that supported recycling, as well as other related issues such as water and
air quality. Exercising those options was at times difficult and controversial. The history
of recycling tells us that there are a number of key components to the cause; survival,
necessity, preservation, wisdom, cost, and, hopefully, reward. But how could the cause of
recycling be raised to a level that encompasses more forethought? How could recycling
advocates enact those values in an organized method that is as comprehensive as
possible?
The notion of “meeting the needs of current generations without compromising
the needs of future generations” (Mazmanian & Kraft, 2009, p. 17) became a philosophy,
mantra, motto, and an industry in 1989 when the term “sustainability” was established as
a metric to determine the long-term wisdom and practicality of seemingly everything that
creates an environmental impact.
There are semantic questions about whether recycling in general qualifies as true
example of sustainability. Recycling, like perpetual motion, needs a little nudge to keep it
going. The resources required to recycle create costs that often exceed the value of the
product in virgin form. Those costs include building awareness, collection, preparing the
product, and the actual converting of the old product into something useful. In the case of
California PET beverage containers, the costs of building awareness and collection are
subsidized by the California Department of Conservation (DOC). Despite the subsidy, it
remains a challenge for industry to produce reprocessed PET at a cost less than virgin. If
one were to add in other costs to the system, such as impacts to the waste stream, impact
52
to the environment due to litter, and costs to consumers who do not redeem their bottles,
the expense of recycling becomes considerably more complicated.
Post consumer PET is a commodity whether it is purchased contaminated as a soft
drink bottle from a bottler or a MRF, as discarded X-ray film from a de-silverer,
or as clean recycled PET in flake or pellet form from a recycler. However, selling
prices of these materials do not necessarily follow the selling price of virgin PET.
Recycled PET has its own markets. (Ehrig, 1990, p. 66)
Despite the costs required to make it work, recycling beverage containers does
play a role in the overall sustainability of municipal waste programs through
Curbing environmental impacts of current consumption by reducing the need for
virgin materials, reducing the need for taking land around urban communities for
landfill use and decreasing pollution from expanded land fills by reducing the
waste placed into land fills. (Weinberg, Pellow, & Schnaiberg, 2008, p. 17)
Brower and Leon (1999) stated,
Ironically, beverage deposits have come under attack in recent years as
community recycling programs have grown. The beverage deposit systems, which
require consumers to keep their bottles and cans out of regular recycling
containers, represent a duplicative and competing recycling program. Not only are
they more expensive per recycled item than community recycling programs, but
the community programs can suffer financially, in part because they can not make
money from selling the high-value aluminum. On balance, however, bottle bills
remain worthwhile because the extra cost is small and they do increase recycling
rates and reduce litter. (p. 158)
Further, a study of 17 communities that have established successful recycling programs
showed that 60% of them are diverting 40% or more of their of their waste from landfills
(Tammemagi, 1999).
According to Mazmanian and Kraft (2009), “The sustainability approach
envisions a complex web of human and natural systems interaction and linkages, without
starting or end point” (p. 25). Even though the role of regulation, collaboration, and
53
cooperation is an evolving element in the move toward sustainability, the effort impacts
the dynamic of the same decision-making processes that Marsh sought to influence
almost 150 years ago. Mazmanian and Kraft continue, “As important as these new
decision-making processes are as educational devices and ways of resolving disputes,
they have not fully eliminated the suspicions and conflicts among contending parties, nor
are they always well suited to resolving fundamental conflicts” (p. 29).
Sustainability is fast becoming many different things to many different people.
Questions such as whether sustainability is purely environmental, technological,
financial—or a conglomeration of all these elements—are hotly debated. When it comes
to industry sustainability programs, critics wonder whether some corporate concepts of
sustainability “allow governments and industry to embrace environmentalism without
commitment” (Hoffman, 1997, p. 193). Industry, however, is continuing to find that
disingenuous programs don’t provide the level of commitment their customers expect,
and that transitioning to meaningful and substantive measures requires significant effort.
Hoffman continues,
They argue that sustainable development represents a new institutional framework
that challenges not only existing institutions on environmental management but
also underlying assumptions of the market economy. In challenging both,
sustainable development calls into question the social and physical autonomy of
both of the firm, the profit motive as a singular objective, the prominence of
technology in solving environmental problems, and the necessary imperative of
economic growth. (p. 193)
An age-old practice for considering how transitions can be made more effectively
is to compare how other communities have done so. For recycling packaging materials,
including PET beverage containers, Germany has become a popular standard for such
54
comparisons. German content regulations connect recycling to waste management by
mandating the use of recycled content as a key component for increasing sustainability in
waste streams. Hawken (1993) states, “By mandating percentages of packaging that had
to be reused and recycled by producers of consumer products, Germany placed the
problem of throw-away society squarely on the shoulders of the creators of package
waste” (p. 72). Ackerman (1997) agrees,
The high cost and difficulty of disposal, combined with active environmental
awareness and concern, made producer responsibility for waste a natural principal
to adopt. In Germany, as in all industrialized countries, packaging accounts for a
substantial share of household waste. Yet individuals have little choice about the
amount of packaging surrounding the products they buy. While some packaging is
required for protection of products during transportation and distribution, many
packaging decisions are made by producers for marketing purposes. If packaging
is selected by producers for their own benefit, perhaps they should be held
responsible for managing the resulting waste. (p. 107)
A contrasting view to mandating specific practices and content is that such
requirements can be detrimental to the system in the long run. According to Holliday,
Schmidheiny, and Watts (2002),
Properly framed markets founded on respect for basic rights and obligations
promote the most efficient and cost-effective use of resources. They encourage
innovation and competition, they offer freedom of choice and greater
transparency and they are the primary vehicle for wealth creation and the
improvement of the quality of life. (p. 41)
The role of recycling as a component of sustainability seems to be widely
accepted. However, exactly what that role is, how to make it as productive as possible,
who should bear the responsibility, and whether it works best as a mandate or as a part of
the free market is the subject of a debate that may never end. One of the cornerstones of
sustainability in the PET beverage container recycling arena is the role that soft drink
55
companies play in the process. The two biggest soft drink companies are actively
participating through the design of the original container and through the use of
reprocessed material. Whether their efforts are enough or whether they should take a
greater role is the subject of a debate regarding Extended Producer Responsibility (EPR).
One strong advocate for EPR is the Organization for Economic Cooperation and
Development (OECD) which is an international organization represented by many
countries around the world including the United States. OECD’s publication entitled,
Extended Producer Responsibility: A Guidance Manual for Governments, states,
A policy framework for EPR should be viewed in terms of product policy (design
for the environment) and waste management policy. Product policy focuses on the
composition of the product itself; waste management comprises a range of
instruments for preventing, minimizing and treating waste. EPR can function as
an integrating mechanism or a link to both of these policy areas. (p. 93)
Another OECD (2004) publication, Economic Aspects of Extended Producer
Responsibility, explores various methods of calculating costs and charging those costs to
the actors involved. The publication states, “It is important to consider whether EPR
policies are appropriately targeted on internalizing the environmental impacts of products
at the end of life stage, or on internalizing the environmental impacts throughout products
lifecycle” (p. 57).
As attractive as EPR is to some policymakers, the concept tempts the image of
going beyond reason. European communities seem to be more comfortable with
far-reaching regulation than are Americans. INFORM, Inc., a national nonprofit
organization that identifies sustainable ways of doing business has published Extended
Producer Responsibility: A Materials Policy for the 21st Century (Fishbein, Ehrenfeld, &
56
Young, 2000). This book examines how EPR policies from other countries might work in
the United States. One point focuses on the difficulty of implementing EPR regulations:
“The strong US traditions of individualism and unfettered capitalism limit the types of
government intervention that are acceptable politically. This has certainly been the case
when attempts have been made to legislate EPR at the national level” (p. 56). It goes on
to point out one fact often overlooked by American advocates seeking to require greater
industry participation in EPR programs: “Antitrust laws impose additional constraints on
the possibility of cooperation and consensus among companies competing in the
management of post consumer products” (p. 56).
Faced with a growing effort to apply EPR to industry in ways that industry might
not find attractive, and also a growing awareness and interest in environmentally
sensitive products by consumers, many companies are seeking ways to become “green.”
The soft drink industry has taken several steps in this direction, including using recycled
content, “light weighting” its packaging, investing in postconsumer bottle collection
enhancement programs, buying carbon credits, improving efficiencies in manufacturing
and transportation, and a number of additional measures.
Even though the soft drink industry is voluntarily taking these legitimate and
meaningful steps to become more “green,” the general public gives them very little credit
for the effort. One reason might be that an empty container is perceived as waste, and
society is expected to hold the beverage industry solely responsible for such waste.
Therefore, anything that the industry does short of addressing that single iconic image is
insufficient, or perhaps “greenwashing.” Evidence supporting this hunch is nonexistent,
57
but if the hunch were true, soft drink companies could find themselves more susceptible
to mandated EPR than they ever suspected. If so, one logical question would be whether
getting involved in direct bottle-to-bottle closed-loop recycling would alleviate such a
threat.
Green washing companies implement their projects with little or no effort to
measure their outcomes, a kind of spray and prey method of implementation with
the hope that if they give a generalized message or change their web site to
include children, grass and mountains (with no real change in product or
services), someone will buy from them. (Estes, 2009, p. 21)
Estes (2009) demonstrates that industry-wide efforts to address challenges, such
as recycling, can be complicated due to antitrust laws, but it is also possible that such
measures may turn out to be more attractive to individual companies as competitive
marketing tools. In the words of de Bruijn and Norberg-Buhm (2005), “Voluntary,
collaborative, and information-based programs can play a useful role in a comprehensive
environmental strategy if they are carefully designed to fit with and compliment the other
elements of a nation’s environmental policy system” (p. 382). Prioritizing the greening of
products or management systems within a particular soft drink company will likely occur
only when it either offers protection from regulation (cost savings) or when it promises
greater profitability (cost savings or increased customer loyalty). Prakash (2000) believes
that “this discussion has important implications for the environmental policy discourse
since ‘greening’ can occur at the level of the firm as well as the level of the product; and
one may not always lead to the other” (p. 151).
The soft drink industry, like many industries, maintains it own trade association.
Such associations are useful in addressing antitrust issues and in combating legislative
58
and image threats without involving individual brands. The American Beverage
Association (ABA), formally known as the National Soft Drink Association, has been
extremely active in fighting concepts, such as some EPR proposals, when the result is too
much strain on the industry. The ABA also promotes soft drink industry participation in a
number of recycling programs such as Keep America Beautiful, the National Recycling
Coalition, and the American Plastics Recyclers.
Balancing ABA efforts with those of individual companies can become difficult,
and can draw criticism. Beder (1998) states,
The use of such “front groups” enables corporations to take part in public debates
and government hearings behind a cover of community concern. These front
groups lobby governments to legislate in the corporate interest; to oppose
environmental regulations and to introduce policies that enhance corporate
profitability. A new wave of environmentalism is now called for: one that will
engage in the task of exposing corporate myths and methods of manipulation. One
that opens up new areas and ideas to public debate rather than following an old
agenda set by corporations. (p. 243)
The point that is attempted, that corporations are driving policy because they have “front
groups” is naive, but probably representative of the views of a significant portion of the
population. Vestal (1993) agrees,
The National Soft Drink Association is using economic, translatable into political,
muscle to buy a profit to which they are not entitled by virtue of any investment
of capital or labor or creativity or enterprise or entrepreneurship that will be paid
for out of the pockets of its consumers. (p. 4)
This suspicion creates a devaluation of any legitimate efforts that may be
underway by the soft drink industry or its individual companies, “Of course, the powerful
corporate interests in the system, at the root of the crisis, tell us that there is nothing to
worry about because they are leading the move towards environmental responsibility”
59
(Welford, 1997, preface). These points raise the question of how far beverage makers
need to go to satisfy environmental policymakers and whether the efforts of individual
beverage companies might appear to the public and to policymakers as more legitimate
than those taken as industry-wide initiatives.
Despite a lack of clear answers, the soft drink industry is taking these questions
seriously. Like most manufacturing firms, beverage makers are fast recognizing the
long-term threat presented by lack of engagement on environmental issues. Kertola
(1997) found the following:
Nearly all companies consistently exceed the limits of the ecosystem. They are
rarely punished for this infringement immediately. In the long term, however, the
companies’ poor environmental performance builds up to a huge liability to the
eco-system, the business environment and the companies themselves. (p. 99)
As competitive as the soft drink industry is, it is likely that individual companies
will eventually engage environmental efforts as marketing tools. Lyon and Maxwell
(2004) found,
Empirical research shows that superior environmental performance and superior
financial performance are positively intertwined. US financial markets reward
firms that go beyond legal mandates for the reduction of toxic emissions, and
punish firms that have unexpectedly high levels of toxic releases. (p. 21)
This is a clear “value added” point in favor of involvement in PET reprocessing.
Making a commitment to PET reprocessing in California involves an investment
of millions of dollars and a great deal of valuable time, whether by an individual
company or by the industry. As previously mentioned, factors beyond just the business
metric should be considered. But few companies are structured to encourage a
decision-making process that cuts across different divisions, seeking long-term,
60
company-wide benefits that might cost some divisions in the short term. Press and
Mazmanian (2003) maintain that “leading-edge firms share several characteristics,
including visible involvement of corporate leadership in developing and promoting new
management philosophies and infiltration of upper management by younger executives
and women” (p. 287). In soft drink companies, decisions about capital investments in
reprocessing facilities would probably be made by the procurement division, with the
blessing of the business planning and accounting divisions. If this process found a way to
make reprocessing work on a stand-alone basis, the reprocessing industry in California
would be well underway.
However, if the industry (or an individual company) were to get serious, a new
decision-making process would probably need to be created in order to reach the point of
commitment. Piasecki and Amus (1990) believe that “the key to these successes is not
just technology, but institutional innovations in management. An organizational structure
that puts the environmental dynamic in corporate decision making is needed in many
firms today” (p. 144). This concept is becoming a model for companies and industries
seeking to break away from procedures and policies that could impede progress toward
more sustainable practices. According to Kasperson and Kasperson (1993),
All the value trade-off decisions accompanying a particular technology transfer
take place within a complex multicultural environment. Each actor’s behavior is
influenced by the culture(s) of his or her home nation and his or her home
institution (corporate, regulatory agency, and so on). The internal and external
value conflicts result, in large part, from conflicts between the value elements of
these multiple cultural elements. (p. 25)
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A reprocessing plant would certainly be a departure from the core competency
and internal values of the soft drink industry. Esty and Winston (2006) agree,
The companies who “get” the interface between environmentalism and
business—the ones that are on their way to reducing their environmental impacts,
or “footprints,” while generating significant profits and sustained
Eco-Advantage—have no single profile. They range from global conglomerates to
niche textile makers. However, we found certain patterns. The leading edge
companies go beyond the basics of complying with the law, cutting waste and
operating efficiently. They fold environmental considerations into all aspects of
their operations. (p. 21)
The monetary cost of investing in a reprocessing plant is just one aspect of
determining potential benefits. As pointed out earlier, an accurate determination of
benefits would need to include the value of deflected regulation such as EPR as well as
the value of improved image and customer loyalty. There is another facet to determining
value, “Rather than asking how much new approaches will cost or how much can be
saved, business managers must begin to ask themselves what will happen if they take no
action to improve environmental quality and conserve natural resources” (Kamieniecki,
2006, p. 35).
The soft drink industry, while perhaps taking less than adequate action, is at least
engaged. However, Kamieniecki’s question could be applied to firms or industries that
either do too little, or do the wrong things, presenting a both a difficult situation and a
great opportunity for company leadership. And if the current leadership isn’t up to the
task, the next just might be. Savitz and Weber found,
The rising generation of leaders is uniquely positioned to respond to today’s
sustainability crisis. They are highly educated, globally conscious, technology
savvy, and the most diverse generation of corporate chieftains in history. As they
enter their forties and fifties and assume leadership in business, politics, social
62
causes, academia, religion, the arts, and every other sphere, they bring along their
generational sensibility, forged in the political, social and economic crisis of the
1960s and 1970s as well as, more recently in the epoch-making traumas of
September 11, 2001, the tsunami of 2004 and Hurricane Katrina in 2005. (p. 65)
Recycling has a perception of being wholesome, good, and both the right and the
responsible thing to do. Getting people to take what is often a small extra step to recycle
is a huge challenge. Making recycling fit in a sound business model can be equally
challenging. McDonough and Braungart (2002) state,
Finding markets to reuse wastes can also make industries and customers feel that
something good is being done for the environment, because piles of waste appear
to go “away.” But in many cases these wastes—and any toxins and contaminants
they contain—are simply being transferred to another place. (p. 55)
One of the benefits of a California PET reprocessing system would be that such criticisms
would not be applicable. Another benefit could be achieved by addressing the growing
concern about bottled water. Webb (2008) agrees,
It’s a $15 billion per year industry. Over 18 million barrels of oil and 130 billion
gallons of fresh water are used yearly, according to the Salem News, to create this
wide-spread fad that’s becoming the trendiest thing since sliced bread. And that’s
just to make, transport, refrigerate and bury the bottles. (p. 1)
The issue is complex and a bit schizophrenic because some speak out against wasted
water, others speak out against the energy spent transporting it, and yet others decry the
use of plastic bottles. Still, turning used PET water bottles back into new water bottles
would probably go a long way toward satisfying some current detractors.
Aside from the business model, the threat of increased regulation, the potential for
goodwill with policymakers and costumers, and the shift in management approaches,
another point in favor of a reprocessing facility is the growing demand for reprocessed
PET from industries outside of the beverage industry. All of the afore-mentioned issues
63
apply as much to the non-food-packaging industry in one way or another as they do to the
soft drink industry. This means that the packaging industry will be managing similar
pressures and will likely move to the utilization of increasing amounts of recycled
content. Graedel and Allenby (2003) agree,
A sometime impediment to the recovery and reuse of recycled materials is the
specification by a designer of virgin material, generally in an attempt to avoid
receiving unsuitable product. Such concerns should be addressed not by
specifying the source of the material, but by specifying its properties.
Alternatively, one can in many cases require suppliers to provide a fixed
percentage of purchased materials from post-consumer scrap sources. If these
steps are taken, a more informed design will often emerge, and the number and
type of suppliers of recycled material will emerge. (p. 126)
The simple fact is that this approach is now under way, and it is working.
In summary, words from Lester R. Brown (2001), in Eco-Economy: Building an
Economy for the Earth, provide an excellent finish for this brief (but pointed) review with
the following observation:
No sector of the global economy will be untouched by the Environmental
Revolution. In this new economy, some companies will be winners and some will
be losers. Those who anticipate the emerging eco-economy and plan for it will be
the winners. Those who cling to the past risk becoming part of it. (p. 95)
64
CHAPTER FOUR
CALIFORNIA: ENVIRONMENTAL TRENDSETTER
Californians have high expectations about policy and regulations designed to
protect their environment. Since the founding of the Sierra Club in San Francisco in
1892, Californians have created many trendsetting policies, agencies, and organizations
designed to protect the environment. While it has expanded its sphere of influence
considerably since its inception, the Sierra Club has become an icon in a state that has
taken an aggressive approach to preservation and stewardship. Its first 50 years were
devoted almost exclusively to protecting special portions of the landscape through
designations as state and national parks, but post World War II it expanded its activities
to include advocacy for properties and protective regulations throughout the nation
(Sierra Club, 2008).
The post World War II Sierra Club was both active in and symbolic of a state that
began earlier to take more seriously the protection of its environment than did any other
state in the nation. That California has stepped up to so many significant environmental
issues indicates that it is only a matter of time before it focuses on its own plastic bottle
situation. The following section outlines just a few of the historic steps that the state has
taken in the last six decades.
In 1947, California Governor Earl Warren signed into law the nation’s first
statewide Air Pollution Control Act, establishing an air quality district in every county.
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California led the nation in requiring smog equipment on motor vehicles beginning in
1961, which was enhanced in 1966 (Air Resources Board, 2009).
In 1969, a California disaster sparked a national environmental movement that
continues today. An oil spill in Santa Barbara—as tragic as it was—happened at a perfect
time to catalyze an environmental sentiment across the nation. Evening news stories
featured film footage of sea birds and other wildlife, dead or dying, coated with crude oil.
This catastrophe served to draw together the many varied environmental calamities
around the state and nation in a way that put a new focus on environmentalism. The
editor of the local newspaper put the newfound determination into perspective:
Santa Barbara News Press Editor Thomas Storke: “Never in my long lifetime
have I ever seen such an aroused populace at the grassroots level. This oil
pollution has done something I have never seen before in Santa Barbara—it has
united citizens of all political persuasions in a truly nonpartisan cause.” [The
sentiment was shared by] President Richard Nixon: “It is sad that it was necessary
that Santa Barbara should be the example that had to bring it to the attention of
the American people. . . . The Santa Barbara incident has frankly touched the
conscience of the American people.” (Clarke & Hemphill, 2002, p. 3)
In 1970, the California Environmental Quality Act (CEQA) established
environmental impact evaluations for the state’s building and construction industry. As
the first of 15 states to require an environmental impact assessment (modeled after the
National Environmental Policy Act of 1969), California restated its position as a leader in
environmental protection.
In 1972, California voters approved Proposition 20, calling for the creation of a
Coastal Commission that would oversee building permits for projects along the coast,
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with the goal of preserving as much of the coastline as possible. The original
commission’s 4-year life was made permanent by legislation in 1976, which stated,
The mission of the California Coastal Commission is to protect, maintain,
enhance and restore the coastal environment with its natural and man-made
resources; to assure orderly, balanced utilization and conservation of coastal
resources; to maximize public access and recreational activities at the coast; and
to encourage cooperation and coordination in the planning and development of
the coastal zone. (California Regional Environmental Education Community,
2003, n.p.)
Also, in 1972 California submitted its first State Implementation Plan to the U.S.
Environmental Protection Agency (for air quality standards), where the plan was rejected.
The concept of curbside recycling came to fruition in Berkeley, California, in
1973, at about the same time that two other communities—Somerville, Massachusetts,
and Marblehead, Massachusetts—established what is now a standard practice in
thousands of cities across the country. The Berkeley Ecology Center (see Figure 11)
helped the city to make history by asking residents to sort their recyclable materials
before the trash truck arrived, thus diverting newspaper and other materials from the
landfill.
Figure 11. The Berkeley Ecology Center logo. Retrieved April 11, 2009, from
http://www.ecologycenter.org/
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California set a bold new precedent in 1986 when it passed Proposition 65 into
law, calling for warning labels on consumer products that contain ingredients known to
cause cancer or reproductive harm. After several years of both increasing concern and
regulatory efforts around chemical toxins primarily in pesticides, Californians passed into
law requirements that would ostensibly provide notice when they were considering
consumption or utilization of products that could cause cancer or reproductive harm.
While the proposition would seem to be more of a cause for health advocates than
environmentalists, it was the latter that drove the campaign for what was known as the
Safe Drinking Water and Toxic Enforcement Act of 1986. The new law was heralded by
many as a landmark victory for the environmental community. Its detractors, however,
suggest that the warning labels have become ubiquitous and ineffective, while costing
businesses and consumers in the state billions of dollars in legal fees resulting from
bounty hunter lawsuits over technical compliance issues. Unlike so many other California
trendsetting firsts, Proposition 65 has not been replicated in any other states.
Figure 12 shows just a few examples of Prop 65 warning labels, which can be
found on a wide array of products and on the walls of locations such as gas stations, bars,
and parking garages. Critics argue that the labels have become so ubiquitous that they are
essentially invisible to consumers, but advocates continue to win increasing coverage of
Prop 65 rules on an ever-expanding list of products.
In 1988, the state legislature approved Assembly Bill (AB) 2020, officially named
the California Beverage Container Recycling and Litter Reduction Act, but better known
as “the bottle bill.” AB 2020 was different from the other nine bottle bills around the
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Figure 12. Three examples of Prop 65 warning labels
country at the time because it established, for the first time, redemption centers as
opposed to requiring grocers and retailers to carry out redemptions.
A year later, the legislature created the California Clean Air Act, which created a
framework for 20 years of air quality management throughout the state. The act opened
the door for industrial and automotive emission standards and set off an entirely new
industry designed to assist industries and auto manufacturers with associated compliance
challenges.
AB 939, passed in 1989, mandated municipal solid waste reductions through the
following:
Diversion of 25 percent of all solid waste from landfill or transformation facilities
by January 1, 1995 through source reduction, recycling, and composting
activities; and, diversion of 50 percent of all solid waste by January 1, 2000
through source reduction, recycling, and composting activities. (Sher, 1989, as
cited in CIWMB, 2008, n.p.)
69
In the same year, AB 1843 established a 25 cent Advance Disposal Fee (now up
to $1.75) on tires purchased in California. According to the California Board of
Equalization (1989), the fee is used to accomplish the following:
• Operate a tire recycling program
• Administer a waste tire hauler registration program
• Pay for cleanups related to the disposal of used whole tires
• Conduct research directed at promoting and developing alternatives to landfill
disposal of used whole tires
• Operate a statewide tire shredding program
• Cover the regulation of the storage of waste tires (p. 1)
In 2000, the California Redemption Value system was expanded to cover
noncarbonated soft drinks, teas, water, juices, and sports drinks. The expansion brought
in deposits from hundreds of beverages that weren’t previously covered and left
consumers somewhat uneducated about the new coverage. In 2003, the California
Department of Conservation (DOC) issued a report that suggested consumers were
unaware of the redemption significance of their water bottles. When the annual recycling
report was finished for 2002, the DOC became so concerned about the lack of awareness
that they undertook a multimillion-dollar campaign to educate California consumers
about the fact that their bottled water was covered by the deposit system and that the
water bottles needed to be recycled. In a May 29, 2003, press release announcing the
awareness program, the DOC highlighted the issue:
According to the report, more than 1 billion water bottles are winding up in the
trash in California each year. That translates into nearly 3 million empty water
bottles going to the trash EVERY day and an estimated $26 million in unclaimed
California Refund Value (CRV) deposits annually. If recycled, the raw materials
from those bottles could be used to make 74 million square feet of carpet, 74
million extra large T-shirts or 16 million sweaters, among other things. Instead,
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they are swallowing landfill space, increasing air pollution and destroying the
ozone layer. (n.p.)
It is worth noting that even the California DOC, in 2003, did not include new bottles as
one of the uses for the bottles that were going to waste.
The legislature established e-waste policy with SB 20 in 2003, and clarified the
language with SB 50 in 2004, which stated:
Beginning January 1, 2005, the law requires that at the time of retail sale,
California consumers must pay an “electronic waste recycling fee” ranging from
$6 to $10, depending on screen size. No recycling fee is assessed on the resale or
reuse of a covered device. Retailers are required to transfer the collected fees to
the Board of Equalization, which in turn deposits the money into an account
managed by the California Integrated Waste Management Board (CIWMB). The
CIWMB distributes the funds from this account to approved recyclers or to
registered manufacturers that are collecting and recycling CEDs. (Luther, 2007,
p. 16)
Despite the adoption of this legislation, Californian’s remain unclear about what
to do with their electronic waste. A 2005 San Jose Mercury News story covering the new
legislation summed up the problem:
Yet confusion sets in when a consumer wants to find out how to safely and
conveniently recycle that hazardous old monitor or TV in the attic. There's a
daunting patchwork of 212 state-approved e-waste collectors out there—25 in
Santa Clara County—and nearly every one has a different policy for handling
your trash. Some will take it off your hands for free, others will charge you $20 a
tube. One local collector charges to take the monitor, but waives that fee if you
throw in the rest of the old computer's system. Another charges piece by piece to
collect the central processing unit, keyboards and mouse, but takes the monitor for
free. (Schoenberger, 2005, n.p.)
Even though California was the first state to pass e-waste legislation, few would
suggest that the state remains in the lead on the issue. Several subsequent bills from other
states are more comprehensive than SB 50. Rumblings are loud in Sacramento that new
71
legislation is due, with a strong likelihood that California will attempt to retake the high
ground. The term “Extended Producer Responsibility” is frequently used when exploring
potential next steps.
The list of California firsts for environmental legislation continues at a strong
pace, with recent legislation regulating heavy-duty truck emissions, Supreme Court
challenges for the right to mandate stricter emission standards for cars sold in California,
and, of course, the groundbreaking first of its kind, AB 32 which is better known as the
California Global Warming Solutions Act of 2006. A 2006 press release from the Office
of the Governor of California explained the following:
AB 32 requires the California Air Resources Board (CARB) to develop
regulations and market mechanisms that will ultimately reduce California’s
greenhouse gas emissions by 25 percent by 2020. Mandatory caps will begin in
2012 for significant sources and ratchet down to meet the 2020 goals. (n.p.)
Figure 13 shows the cover of a 297-page document produced by the California
Energy Commission and the California Public Utilities Commission that is just one of
dozens of California State documents designed to figure out how to implement sweeping
environmental legislation that didn’t come with the instructions.
Summary
California has been a trendsetter in environmental regulations for as long as there
has been an American environmental movement. Both through legislation and by
referendum, Californians continue to call for higher standards and stricter rules designed
to protect the environment. This long history, combined with contemporary momentum,
proves without a doubt that Californians hold themselves to a very high measure of
72
Figure 13. One of many documents designed to implement GHG reduction regulations.
From “Final Opinion and Recommendations on Greenhouse Gas Regulatory Strategies,”
by the California Energy Commission and Public Utilities Commission, 2008, retrieved
April 2, 2009, from http://www.energy.ca.gov/ghg_emissions/index.html
proactive environmentalism. Any industry that is impacted by California environmental
policy should anticipate a growing movement to increase standards and expand the scope
of regulation.
73
CHAPTER FIVE
THE CASE FOR RECYCLING PET BOTTLES
Of the seven plastic types used for making containers, polyethylene terephthalate,
known as PET (also known as #1), is by far the most utilized container by volume.
Growth in PET packaging has been dramatic. Figure 14 illustrates the growth in PET
volume between 2000 and 2007, which went from a 20% market share to nearly 40%. In
the same period, the overall dominant beverage container material, aluminum, diminished
in market share from the mid 50% range to a low of just over 40%. These trends are
significant because they illustrate the shift in the complexity of the California scrap
market. The supply of a valuable and easy-to-handle commodity, aluminum, is
diminishing while the more complicated commodity, PET, is growing.
Reasons for such rapid growth include attractiveness with consumers due to the
ability to reseal the bottle, simplicity of personal transport in purses and backpacks, and
generally larger content size than cans. Bottlers’ preference for container type is dictated
by a number of factors, including cost, consumer preference, and ease of handling. PET
performs well in each category. One additional factor for bottler preference is the fact
that materials can be played off of each other to maintain optimal pricing. If, for example,
aluminum prices creep up too much, portions of production can be shifted to plastic to
impact demand. Conspiracy theorists allege that the beverage industry has foisted plastic
onto the market in an attempt to increase profits. In a sense, they are correct.
74
Figure 14. Market share of beverage container sales calendar years 2000-2007. From
Report of Beverage Container Sales, Returns, Redemptions and Recycling Rates, by
California Department of Conservation, 2008, Sacramento, CA: Author, p. 9, retrieved
March 23, 2009, from http://www.bottlesandcans.com/pdf/BiannualLong.pdf?
phpMyAdmin=SNwipYERqHbZX3jreShERea0uK8
Beverage companies are in business to perform for their shareholders. Naturally,
beverage companies are faced with the challenge of balancing their fiduciary
responsibilities with other civic responsibilities, including environmental; but without a
strong profit potential, beverage companies would not be in a position to incorporate
newer, more environmentally sound products and practices.
PET is a petroleum-based product that is essentially the same material found in
polyester clothing and textiles, and much of the market for recycled PET (RPET) is for
polyester fiber for those industries. The plastics division of the American Chemistry
Council (ACC) and the Environment and Plastics Industry Council of Canada (n.d.)
75
maintain a “U.S. and Canadian Recycled Plastic Products Directory” to assist in
identifying and locating products made with or packaged in recycled plastic (see Figure
15).
Apparel & Accessories Industrial, Shipping & Warehouse
Aprons, Backpacks, Boxer Shorts . . . Baskets, Caster Wheels, Foam Packing…
Automotive Accessories Janitorial Supplies
Funnels, Ice Scrapers, Mud Flaps . . . Buckets, Wringers, Pails . . .
Bags & Liners Landscape & Garden Design
Dispensers, Can Liners, Trash Bags . . . Decking, Fencing, Rakes . . .
Bins & Containers Marine
Bus Boxes, Carts, Dumpsters . . . Bollards, Decking, Sea Walls . . .
Building & Construction Office Supplies
Bulkheading, Insulation, Shingles . . . Badges, Clipboards, Paper Clips . . .
Carpet, Fabric & Fiber Packaging
Carpet, Geotextile Fiber Bottles, Carryout Containers, Trays . . .
Custom Products Planting Materials & Accessories
Molded, Structural Foam . . . Planters, Window Boxes . . .
Farming & Agriculture Premium & Promotional Items
Egg Filler Flats, Feed Carts, Sheds . . . Bookmarks, Can Openers, Key Chains. . .
Film & Sheet Recreational Products & Toys
Pallet Covers, Sheet, Slip Sheets . . . Bicycle Racks, Cameras, Sandboxes . . .
Furniture & Accessories (Indoor) Road, Highway & Parking
Desks, Lamps, Love Seats . . . Barricades, Parking Stops, Speed Bumps
Furniture & Accessories (Outdoor) Signage
Benches, Hammocks, Tables . . . Sign Posts, Signs
Housewares
Blankets, Clocks, Pillows . . .
Figure 15. Categories of products made with or packaged in recycled plastic. From “U.S.
and Canadian Recycled Plastic Products Directory,” by American Chemistry Council
(ACC) and the Environment and Plastics Industry Council of Canada. Retrieved April 16,
2009, from http://www.americanchemistry.com/s_plastics/
sec_rppd.asp?CID=1592&DID=6054
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The chemical structure and physical properties of PET make it more conducive to
some applications than others. For example, RPET is useful as a component for “plastic
lumber,” but the preferred recycled plastic for plastic lumber is high-density polyethylene
(HDPE), which is found in milk jugs. According “Plastic Lumber” (n.d.), “100% plastic
lumber can be made with recovered plastics such as HDPE, PET or several commingled
recovered plastics. The HDPE raw material comes from post-consumer waste (primarily
milk jugs) and PET comes primarily from post-consumer soda bottles” (n.p.).
PET is complicated to recycle, not just because of the cumbersome steps of
collecting and transporting it to the reprocessing plant, but also because reprocessing
involves a great deal of electricity and water. However, without some sort of diversion,
bottles will end up as litter, in landfills, or in marine environments. As untenable as the
trash aspect may be, an even worse aspect is that used plastic bottles sitting around as
trash are a waste of energy. Eco Water (2009) states,
Recycling a ton of plastic bottles saves approximately 3.8 barrels of oil. Recycling
one pound of PET (polyethylene terephthalate) plastic bottles, which include soft
drink and water bottles, saves approximately 12,000 BTUs (British thermal unit)
of heat energy. And, producing new plastic products from recycled materials uses
two-thirds less energy than is required to make products from raw (virgin)
materials. (n.p.)
According to the California Department of Conservation (DOC), current PET
beverage container recycling in California creates a savings of over 15 million barrels of
oil annually (see Figure 16).
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Figure 16. Energy savings per container type. From Report of Beverage Container Sales,
Returns, Redemptions and Recycling Rates, by California Department of Conservation,
2008, Sacramento, CA: Author, p. 13, retrieved March 23, 2009, from
http://www.bottlesandcans.com/pdf/BiannualLong.pdf?phpMyAdmin=SNwipYERqHbZ
X3jreShERea0uK8
78
Recycling PET also reduces greenhouse gas emissions, albeit on a much smaller
scale than recycling aluminum containers (although PET requires less energy to make
than aluminum), as illustrated in Figure 17.
Figure 17. Greenhouse gas reductions per container type. From Report of Beverage
Container Sales, Returns, Redemptions and Recycling Rates, by California Department of
Conservation, 2008, Sacramento, CA: Author, p. 12, retrieved March 23, 2009, from
http://www.bottlesandcans.com/pdf/BiannualLong.pdf?phpMyAdmin=SNwipYERqHbZ
X3jreShERea0uK8
Table 2 illustrates energy requirements to produce both virgin and recycled
materials. One compelling point in the chart is the fact that it takes less energy to both
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create and recycle PET than it does to create or recycle aluminum. Another point is that
the number of containers per ton of PET is far higher than glass. According to the most
current DOC calculations, there are, on average, 29.8 aluminum containers per pound,
compared to 1.92 glass containers and 15.8 PET containers per pound.
Table 2
Energy Required to Produce Beverage Containers
Energy needed to produce one ton of product from
Material Virgin materials Recycled materials
(in millions of BTUs)
Aluminum
PET
HDPE
Steel
Glass
Newsprint
194.0
97.2
73.0
56.1
14.5
33.5
45.0
32.2
13.0
44.8
13.2
31.0
Note. Adapted from Energy Implications of Recycling Packaging Materials, by L. L.
Gaines and F. Stodolsky, 1994, Argonne, IL: Argonne National Laboratory.
One of the more prominent impediments to recycling plastic bottles is the cost of
sorting them from the waste stream, and cleaning the detritus from them once they have
been sorted. California (along with other bottle bill states) has a recycling advantage in
the fact that the redemption system automatically starts the sorting process and insulates
most of the bottles from contact with trash. California scrap also contains a higher than
usual concentration of water bottles, which are both cleaner and more often clear, verses
that from other states (clear PET is more valuable than colored due to the complexities of
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mixing to form consistent hues). Also, the efforts of the Plastics Recycling Corporation
of California (PRCC) to maintain the strongest possible market for PET ensure a healthy
future for PET recycling. All of this makes California scrap cheaper to process, more
reliable from a performance standpoint, and the end-product quality is known to be
higher than that sourced from other states.
Recycling PET containers diverts nondegradable plastic from landfills, reduces
litter, saves energy, reduces greenhouse gases, and reduces demand for virgin product.
These are all obvious reasons for attempting to increase the rate at which they are
currently recycled. That said, if the rate is to increase substantially, it may come down to
one additional element: cost. The cost of RPET needs to be lower than the cost of virgin
PET if it is ever going to be used widely. Currently, producing RPET at a cost that is
competitive with virgin is a challenge, but new technologies are making the process more
efficient.
Closed-Loop Recycling vs. Recycling for Other Uses
Some environmentalists make the case that recycling plastic bottles into polyester
fiber for carpet, clothing, and/or sheeting is not true recycling. The point made is that this
type of recycling is simply a system for deferring landfilling, because the product that is
made from the RPET is less likely to be recycled after its useful life. As an example,
RPET bottles that are turned into fiberfill for a jacket or a sleeping bag live on for a
while, but, ultimately, that jacket or sleeping bag will be tossed into the trash when it is
worn out or damaged. Recovery for textile products containing RPET is very limited.
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Recycling that produces an item of lesser utility is sometimes referred to as
“down-cycling,” which the Dictionary of Sustainable Management (2008) describes as
this:
Most recycled industrial nutrients (materials) lose viability or value in the process
of recycling. This means they can only be used in a degraded form for
components other than their original use. White writing paper, for example, is
often downcycled into materials such as cardboard and cannot be used to create
more premium writing paper. (n.p.)
Recapture methods for materials containing PET, particularly in fiber form, are
rarely practical. One of the highest forms of RPET in the waste stream is carpet. Some
waste haulers have worked with the carpet industry to recapture and recycle used carpet.
A memo of understanding was drawn up in 2002 between principals in the carpet
industry to attempt to drive up the value of used carpet in order to maintain market value
for recycled carpet. The plan is outlined as follows:
Carpet America Recovery Effort (CARE) is a joint industry-government effort to
increase the amount of recycling and reuse of post-consumer carpet and reduce
the amount of waste carpet going to landfills. CARE was established as a result of
a Memorandum of Understanding for Carpet Stewardship (MOU), a national
agreement signed by members of the carpet industry, representatives of
government agencies at the federal, state and local levels, and non-governmental
organizations.
CARE is funded and administered by the carpet industry, which agrees to
use CARE to:
• Enhance the collection infrastructure for post-consumer carpet.
• Serve as a resource for technical, economic and market development
opportunities for recovered carpet.
• Develop and perform quantitative measurement and reporting on progress
toward the national goals for carpet recovery.
• Work collectively to seek and provide funding opportunities for activities to
support the national goals for carpet recovery. (CARE, 2008, n.p.)
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According to the CIWMB (2009b), “CARE intends to divert 40 percent of waste
carpet by 2012. CARE provides technical and financial assistance to entrepreneurs
working to make products from post consumer carpet” (n.p.).
Closed-loop recycling with aluminum beverage containers has become standard
practice. According to the Ball Corporation (2008), manufacturers of cans and bottles, the
following points support a recycling system for aluminum cans that is largely closed
loop:
• Average recycled content of an aluminum can is 41 percent—the highest
recycled content of any beverage container.
• Since 1970, the weight of the 12 oz. can and end package has been reduced by
approximately 40 percent.
• Cans are the lightest weight beverage container at 34 cans per pound enabling
savings in shipping and handling costs for the entire supply chain.
• Using recycled aluminum requires 95 percent less energy and generates 95
percent less greenhouse gas emissions than when producing can sheet material
from bauxite ore.
• The energy saved in recycling just one aluminum can will power a TV for 3
hours.
• Recycling 40 aluminum beverage cans has the energy-saving equivalent of
one gallon of gasoline.
• In 2006, 51.9 billion cans were recycled saving the energy equivalent of over
15 million barrels of crude oil—America’s entire gasoline consumption for
one day.
• Aluminum helps to subsidize municipal recycling—the scrap value for the
aluminum can (per pound) is higher than anything else in the curbside
recycling bin
• It takes as little as 60 days to turn empty cans in the recycling bin into new
cans on retailers’ shelves. (n.p.)
A closed-loop system for PET means that the recycled product would logically go
almost exclusively into new bottles, which is a good thing. Unfortunately, the market for
new bottles is dominated by just a few companies, struggling in a highly competitive
market to shave a few tenths of a penny against their rival. Also, RPET competes not
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only with the price but the performance as well of virgin plastic, which tends to be more
reliable and durable in the manufacturing process.
An editorial posted on Treehugger.com on January 24, 2008, addresses the
frustration that recycling advocates feel about the lack of closed loops:
Recycling is a complete loop. A joined circle. You are only recycling when you
are buying recycled. For example, it is a cop-out for Apple to claim as part of the
green credentials for their new MacBook Air that its enclosure is “highly
recyclable” aluminum. Products touting “recyclable” materials are eco-poseurs,
unless those materials are also already recycled. (McLaren, 2008, p. 1)
One of the key points in a 2002 GrassRoots Recycling Network (GRRN)
Multi-Stakeholder Recover Project study aimed at reducing beverage container waste was
closed-loop recycling: “A deposit system should encourage bottle-into-bottle recycling in
order to reduce environmentally damaging emissions from virgin material extraction and
production and minimize market disruptions during periods of rapid increase in container
recovery” (n.p.).
It is currently impossible to gauge the amount of recycled content being used for
bottle-to-bottle recycling. In 2002, both Coke and Pepsi pledged to utilize a minimum of
10% recycled content in their bottles. Pepsi continues to live up to that pledge, while
Coke has taken a different approach to recycling by building its own reprocessing plant in
Spartanburg, South Carolina. Other beverage manufacturers seem to be exploring the use
of recycled content, but few have actually stepped up to any sort of real production. In
October of 2006, the nonprofit groups Container Recycling Institute and As You Sow
combined efforts to produce a report called WASTE AND OPPORTUNITY; US Beverage
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Container Recycling Scorecard and Report. Figure 18 shows the report card around
which the document is designed.
The report challenges beverage companies to do the following if they wish to
demonstrate a true commitment to the use of recycled content in beverage containers:
1. Commit to using the highest possible levels of post consumer recycled content
in beverage containers;
2. Commit to a measurable, sustainable national recovery goal for beverage
containers;
3. Support public policies that increase recycling of beverage containers;
4. Commit to source reduction and improved recyclability of beverage
containers; and
5. Publicly report on their progress each year. (Container Recycling Institute and
As You Sow, 2006, p. 5)
Summary
Californians are consuming more PET bottles each year, and while they
“recycled” 4.8 billion of them in 2008, 3.7 billion were discarded into landfills. The
waste goes beyond the landfill issue itself due to the loss of energy stored in the empty
bottles combined with the loss of the resources needed to create new bottles. Despite the
fact that Californians pay a high premium (through deposits and waste hauling fees) to
ensure that their bottles are recycled, all they really get for their money is a system that
ships most of the bottles far away to be down-cycled. Reprocessing technology is in place
today in other locations around the world to create bottle-to-bottle recycling systems.
Pressure is growing on the beverage industry to utilize new opportunities to increase the
use of RPET in its containers. The industry is responding, but are its responses sufficient?
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Figure 18. Beverage container recycling scorecard. From WASTE AND OPPORTUNITY;
US Beverage Container Recycling Scorecard and Report, by Container Recycling
Institute and As You Sow, 2006, p. 4, retrieved April 2, 2009, from
http://www.container-recycling.org/assets/pdfs/reports/2006-scorecard.pdf
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CHAPTER SIX
EMERGING ISSUES
California’s tradition of protecting the environment is clearly continuing at a
strong pace. As a state that prides itself on being the leader, recent environmental firsts in
California include the mandate requiring a portion of all vehicles sold in California to be
electric powered (later repealed), the first to provide special privileges to hybrid car
drivers and the first to pass greenhouse gas emission regulations in AB 32.
Several issues are emerging that could have an impact on the way plastic waste is
seen in California, and ultimately on whether the likelihood of building a polyethylene
terephthalate (PET) reprocessing plant changes. Even though each of these issues is
unique and not always directly related to PET beverage containers, the public and
policymakers don’t appear to be very discriminating when it comes to separating one
plastic type from another. As the “buzz” grows around plastic, policymakers’ awareness
will grow, and the concern for finding solutions will follow.
Bottled Water
On June 21, 2007, a national movement, exported from California, to dissuade
consumers from buying bottled water was born. On that day, San Francisco Mayor Gavin
Newsom introduced a resolution at the U.S. Conference of Mayors. Resolution 90 states
that “the resolution calls on the Conference of Mayors to conduct a detailed study of the
importance of municipal water and the impact of bottled water on municipal waste” (U.S.
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Conference of Mayors, 2007, p. 7). Along with his resolution, he issued an Executive
Directive for the City of San Francisco calling for the following actions:
• Beginning July 1, 2007, there will be a prohibition from any city department or
agency purchasing single serving bottles of water using city funds, unless an
employee contract specifies usage. This prohibition will apply to city
contractors and city funded and/or sponsored events. There will be no waivers
from this prohibition.
• By September 30, 2007, all city departments and agencies occupying either
city or rental properties will have completed an audit to determine the viability
of switching from bottled water dispensers to bottle-less water dispensers that
utilize Hetch Hetchy supplied water. City departments will work with the San
Francisco Public Utilities Commission (SFPUC), Department of Real Estate
(DRE) and the City Purchaser to conduct the audit. Staff from the SFPUC will
contact you shortly to begin the audit for your department.
• By December 1, 2007, all city departments and agencies occupying either city
or rental properties will have installed bottle-less water dispensers that utilize
Hetch Hetchy supplied water. Waivers will only be granted by the SFPUC
based on legitimate engineering, health and fiscal concerns. (Newsom, 2007,
p. 2)
Since that resolution, at least 30 cities and other municipalities in the U.S. have
banned the purchase of bottled water for city purposes. This amounts primarily to a ban
on the purchase of, or the sale of, bottled water in city hall and at city offices.
On May 5, 2009, New York Governor David A. Paterson, by executive order,
banned all bottled water by the state. "Bottled water, while the water may be pure, is no
friend of the environmental community," Paterson told a group of environmentalists near
the Capitol (Logomasini, 2009, p. 1). The ban applies to all branches of New York state
government, including the courts, universities, and even the legislature.
One consequence of such bans has been a great deal of press on the subject of
bottled water. Much of the coverage has focused on extreme examples, such as the
environmental impact of bottling water in faraway places, such as South Pacific islands
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or extreme out-of-the-way ice caps, and shipping the water all the way to the local corner
grocery store. Often, the coverage is diligent to rehash urban legends about potential
health risks associated with plastic containers, but rarely does the coverage attempt to
balance with scientific or Food and Drug Administration positions on the subject. Neither
do media stories often cite the fact that some bottled water is of tap water quality, while
others are of much higher quality. The quality issue, especially significant for pregnant
women and people with low immunity systems, is often passed off by suggesting,
incorrectly, that all bottled water is the same.
Figure 19 shows examples of water brands that are bottled thousands of miles
away from the U.S., and shipped to retail outlets across the country. They are from
France, Fiji, and Norway, respectively. Critics suggest that water is readily available from
local taps, and that consumption of bottled water is wasteful. Few critics distinguish
between these brands and domestic brands that have been bottled in the region where
they are marketed.
The recent national focus on bottled water has raised awareness about wasting
plastic, but unfortunately while the dialogue has centered on discouraging the
consumption of bottled water, it has left out the significance of recycling the bottles,
should someone—as millions do—desire to consume bottled water.
Marine Debris, Urban Runoff
An emerging issue in the world of plastics is the growing concern about marine
debris. The issue isn’t simply one of containers and other plastic items floating around on
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Figure 19. Examples of water bottled outside the U.S.
the surface of rivers, lakes, bays, estuaries, and oceans. Plastic has become so invasive in
the marine environment that much of it becomes ground down to tiny granules, which, in
turn, contaminates food supplies, carries contaminates, and threatens countless species.
Concern for marine debris is beginning to garner international attention. One
group working on the large scale international problem of the Pacific Gyre has chosen to
name itself after the problem. The Great Garbage Patch (GreatGarbagePatch.org) is a
project of the Sea Studios Foundation to raise awareness about the Garbage Patch, make
it personally relevant, and inspire solutions. Their description of the problem:
It is roughly the size of Texas, containing approximately 3.5 million tons of trash.
Shoes, toys, bags, pacifiers, wrappers, toothbrushes, and bottles too numerous to
count are only part of what can be found in this accidental dump floating midway
between Hawaii and San Francisco. (“Stop Trashing the Ocean,” 2009, p. 1)
Figure 20 displays a chart of the Pacific Gyre as produced by the Great Garbage Patch.
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- Charles Moore, Natural History v.112, n.9, Nov03
Figure 20. Pacific Gyre. From “Stop Trashing The Ocean,” 2009, page. Retrieved April
11, 2009, from http://www.greatgarbagepatch.org/
Another group, key to California water quality issues is Heal the Bay. Its mission
statement describes an organization working to improving water quality in Southern
California: “Heal the Bay is a nonprofit environmental organization dedicated to making
Southern California coastal waters and watersheds, including Santa Monica Bay, safe,
healthy and clean. We use research, education, community action and advocacy to pursue
our mission” (Heal the Bay, 2009, p. 1).
Heal the Bay’s (2007) description of the marine debris problem includes the
following points:
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*An estimated 80% of marine debris comes from land-based sources, while only
20% comes from sea-based sources, like shipping and boating.
*Roughly 60–80% of all marine debris, and 90% of floating debris is plastic.
*Plastic resin polymers are so durable that it can take hundreds of years for
plastics to break down at sea, and some may never truly biodegrade in the
marine environment.
*Plastic marine debris can also carry dangerous chemicals, like PCBs byproduct
of DDT), which are not water-soluble and adhere to plastic.
*Marine debris is ubiquitous and can be found from remote arctic regions to
highly populated urban beaches.
*The North Pacific Gyre is home to the world’s largest floating island of trash
that is estimated to be 5 million square miles—larger than the entire United
States
A study conducted by the Algalita Marine Research Foundation of the North
Pacific Gyre found six more times the mass of plastic particles than plankton in
these waters. (p. 1)
Marine debris concerns have recently gone beyond special interest groups
dedicated to the issue. In a public policy move to begin addressing the problems of
marine debris, the California Ocean Protection Act was signed into law in 2004 by
Governor Schwarzenegger. The first of its type, this act called for the establishment of a
formal council, consisting of the Secretary for Resources, Secretary for Environmental
Protection, State Lands Commission Chair, two public members, and two nonvoting
members. The commission is charged with a number of duties, including:
• Coordinate activities of ocean-related state agencies to improve the
effectiveness of state efforts to protect ocean resources within existing fiscal
limitations.
• Establish policies to coordinate the collection and sharing of scientific data
related to coast and ocean resources between agencies.
• Identify and recommend to the Legislature changes in law.
• Identify and recommend changes in federal law and policy to the Governor and
Legislature. (California Marine Life Protection Act Initiative, 2007, p. 137)
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The California Ocean Protection Council is an indication of the image that the
COPC hopes to convey, but for those who miss the benevolence in the title, the logo
seems to be designed to drive the point further (see Figure 21).
Figure 21. COPC logo. Retrieved April 11, 2009, from ftp.sccwrp.org/.../
oceanProtectionCouncil.jpg
The Ocean Protection Commission released its first set of formal proposals
dealing with marine debris on November 20, 2008. The report, entitled An
Implementation Strategy for the California Ocean Protective Council Resolution to
Reduce and Prevent Ocean Litter called for three steps:
• Priority Action #1 – Implement a producer take-back (EPR) program for
convenience food packaging
• Priority Action #2 – Prohibit single-use products that pose significant ocean
litter impacts where a feasible less damaging alternative is
available
• Priority Action #3 – Assess fees on commonly littered items. (p. 6)
Legislation related to the findings of the Ocean Protection Council was introduced
in February of 2009. Assembly Bill 925 calls for a requirement that caps on single-serve
beverage containers be leashed to the bottle, so that they don’t become separated and
float into the marine environment. The implications of this legislation are currently
unknown. The concept seems simple, and, indeed, there are caps currently in the market
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place known as “sports caps” that are leashed. However, sports caps are currently only
used for noncarbonated beverages. Whether leashed caps would work on carbonated
beverages, what the cost impact will be, and how recyclers will react to them remains to
be seen. Further, it is natural for a national company to resist state-specific requirements
because of compliance complications. In the case of beverage manufacturers, product is
regularly shipped across state lines. Should the cost of compliance become prohibitive,
the industry will fight the legislation. On the other hand, if compliance is reasonable, AB
925 could offer beverage companies an opportunity to make a proactive move that has
both positive environmental implications and pleases policymakers.
The Ocean Protection Council has developed a highly sophisticated website with
a variety of information sources, video and graphic presentations and opportunities to
sign up for events, pod-casts and surveys. The site, called thankyouocean.org appears to
be a tremendous resource for anyone seeking information about the marine environment,
from school children writing a report, to policy advocates seeking to build awareness (see
Figure 22).
Figure 22. Thank you ocean. Retrieved April 11, 2009, from http://www.thankyouocean
.org
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The subject of marine debris is much like the issue of air quality in that the more
information that comes to light, the more complicated the issue becomes. While the
commission can only make recommendations, its opinions are taken seriously. It would
not be surprising to see more legislation proposed in the 2009 or 2010 legislative sessions
that addresses each of the three priorities of the council. Further, it would not be out of
the question to anticipate that the stature and authority of the California Ocean Protection
Council increases over time, in consort with new understanding about the impact of
debris in our oceans.
Plastic Bags
What might seem like a simple problem has vexed California policymakers for
the last couple of years as the question of what to do about plastic bags has gone largely
unanswered. Debate rages between interest groups as to whether plastic or paper bags are
better for the environment. Aside from the environmental question, plastic bags create a
compounding situation when they move through Material Recovery Facilities at trash
sorting venues. They clog the rollers and augers that keep trash moving through sorting
lines, causing expensive delays and ruining efficiencies.
Several municipalities throughout California have established their own local
policies, including bans, per-bag fees, and recycling programs. The first city in the U.S.
to ban plastic shopping bags was San Francisco. In March of 2007, the city adopted
regulations that one local policymaker had been pursuing for 2 years. According to David
Gorn (2008),
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San Francisco politician Ross Mirkarimi didn't know just what a stir he was going
to cause. On March 27, 2007, the city passed his bill to eventually ban plastic
bags from all the city's grocery stores and pharmacies. And now, cities across the
United States, including Boston, Portland, Ore., and Phoenix, are considering
similar bans. (p. 1)
Statewide legislation, AB 2449, passed in the 2006 session of the California
legislature, requiring large grocery and retail outlets to collect and recycle plastic bags
(Sorum, 2008). Despite the adoption of this regulation, awareness continues to be a
problem, and debate continues on both the municipal and statewide level about special
charges and/or bans on plastic bags.
Whatever the outcome, the debate has raised awareness about the issue. Most
grocery stores currently offer reusable bags for sale at reasonable prices, and some go so
far as to offer incentives to customers who utilize them. For example, Trader Joes (2009)
offers customers who reuse their bags a raffle ticket for a $100 grocery drawing.
One on-line cause-marketing organization dedicated to reducing dependency on
plastic bags, ReusableBags.com, makes the following claim:
As of this year, we've enabled our 190,000+ customers to reduce their
consumption of use-and-toss items by more than 700 million units. Part of our
mission is to provide consumers with a wide range of "reusables," including
reusable bags and safe, reusable bottles. (Cobb, 2009, p. 1)
Consumers and policymakers alike are experiencing the bag debate on numerous
levels. They hear about the problem on nationally broadcast television and radio shows,
they hear about proposed state legislation, they hear from their local county supervisor
and/or city council member and when they shop at the local grocer and retailer. This
dialogue is a strong contributor to the bigger question of what to do about plastic.
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Increased Bottle Bill Regulation
In 2006, a wide range of environmental organizations and the California
Department of Conservation supported AB 3056, a bill to modify AB 2020 by increasing
the deposit under California’s California Redemption Value system to a nickel for all
containers under 24 ounces, and a dime for those over. Beverage manufacturers remained
neutral for two reasons. First, the deposit was simply aligned with those in other states,
and opposing such an alignment would appear to be unreasonable. Second, the bill
provided relief for one year from the PET processing fee payments that beverage
manufacturers are charged to assist with the “cost to recycle” subsidy that makes up for
low scrap values. This savings amounted to roughly $1.5 to $2 million each for the two
big soft drink companies, and about $2.5 million spread among the other beverage
companies covered under the CRV program. The higher deposit is credited for a
significant increase in the recycling rate in California (no credit is given for the lag time
following bottle bill expansion in 2000).
In 2008, SB 1625 sought to again modify California’s Beverage Container
Redemption program by expanding the types of containers covered by CRV. The
legislation was introduced at the request of Californians Against Waste (CAW), a grass
roots environmental organization that has been involved with California’s bottle bill since
the original AB 2020 legislation. CAW’s position is that the CRV program does not
cover enough of today’s plastic packaging in waste stream:
While California's successful Bottle and Can Recycling Law diverts nearly
100,000 tons of plastic bottles from landfills every year, policymakers for some
time have been keenly aware of the fact that the program covers less than half of
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all bottles sold in California. Currently, over 200,000 tons of plastic bottles are
land filled every year because they are not under California's Bottle and Can
Recycling Law. (CAW, n.d., p. 1)
The bill was offered up at the very end of a drawn-out legislative session that was
bogged down by enormous budget issues. In a very short time, the bill went through
many committee amendments, including some that were later denied to have been
adopted. At various stages of the bill’s life, it sought to address plastic bags, possibly
through a deposit system, and sought to add various types of plastic containers including
liquid soap, shampoo, food products, and cleansers. The bill language was extremely
complicated, and deemed to be “too much - too late” by legislative leaders. The bill was
parked in the rules committee in the last days of the legislative session and allowed to
die.
At the time of this writing, CAW has worked with a state senator to introduce a
new version of the expansion in SB 55. The bill sets out to expand the redemption system
to nonbeverage containers as did SB 1625 from last year, but one new twist appears to be
the strong participation of the Ocean Protection Commission mentioned earlier in this
paper. Such support takes the advocacy for CRV expansion to a much more broad and
diverse constituency.
The interesting aspect of SB 55 is that it recognizes a national trend; more
products are shifting to PET packaging. A long list of products that were once found in
other plastic types are now found in bottles that, correctly or not, carry the number 1 PET
logo on the bottom. In recent years, two new packages have entered the market, and are
rapidly gaining ground. PET clamshells containing prepared food items, fruits, and
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vegetables are now commonplace at grocery and big box stores. Also fairly new to the
market is a package called thermo-form. These contain items in large, clear
custom-shaped envelopes that can be hung on racks or lined up on shelves, and are rather
famous for being challenging to open.
When legislators begin hearing about the needs and benefits of expanding the
current bottle bill, they will get inundated with information about problems with plastic in
the waste stream. It might even be possible that one or two legislators could ask about
what happens to those bottles that are actually collected through the redemption system.
“Biodegradable” Plastic
Wouldn’t it be great if plastic could be made to break down, dissolve, and go
away? Researchers, chemists, and investors are working feverishly to accomplish such a
goal, and some go so far as to say that they have indeed accomplished such a
breakthrough.
While an entirely new kind of non-petroleum-based plastic is entering the
marketplace, figuring out exactly where it fits, how it performs, and how it interacts with
other plastics is just beginning. And, while that fascinating dialogue takes place, once
again, the bigger question of expectations around the recycling of plastic beverage
containers is raised.
A company called NatureWorks LLC has developed a product that it calls Ingeo,
which it describes as a bio-resin, manufactured from plant sugars. The scientific term for
such a product is polylactide biopolymer, which is also known as PLA. The product is a
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result of a joint venture between Cargill and Teijin Limited of Japan, indicating a rather
serious undertaking. According to NatureWorks (2009), “This biopolymer currently uses
65% less fossil fuel resources to produce, and reduces greenhouse gas emissions by
80-90% compared to traditional petroleum-based polymers” (p. 1). The primary retail
product utilizing NatureWorks’ Ingeo is a bottled water company called Primo Water
(see Figure 23).
Figure 23. Primo Water bottling company. From Primo Water, 2008. Retrieved April 11,
2009, from http://www.primowater.com/single-serve_our-vision.php
Primo explains its vision:
Now, what if all of us did our part by using natural plastics like Primo bottles
made from Ingeo
tm
? It could save a million or a couple of hundred million gallons
of gas a year. That would feel pretty good! (Primo Water, 2008, p. 1)
Neither Primo nor NatureWorks claim that their product is actually
biodegradable; however, there seems to be a natural assumption that because the material
is plant based, it will break down and cause no harm to the environment. In a December
26, 2008, USA Today article entitled “Biodegradable Plastic Made From Plants, not Oil,
Is Emerging” (Barnett, 2008), some of the complications regarding PLA are touched
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upon, but the reality of the product is overshadowed by the headline. PLA is, in fact, not
“biodegradable.” The article even points this out in the tenth paragraph of the story where
it quotes Betty McLaughlin, executive director of the nonprofit Container Recycling
Institute:
The basic ingredient of corn-based plastics is polylactide, or PLA. Most PLA has
to go to a commercial composting plant to be decomposed, she says. Although
PLA can be recycled for use in other products, it can't be recycled along with
regular petroleum-based plastics. (Barnett, 2008, para. 10)
So, for the first nine paragraphs, the story gives readers the impression that there
is now technology sufficient to produce plastic containers that simply disappear like a
mud-puddle after a rainy day. PLA certainly deserves to be critically explored and
evaluated, and it may prove to be a practical solution to reducing oil dependence for
petroleum-based plastic manufacturing. However, there are a number of critical
unanswered questions about PLA, including the following: How can it be sorted from
other plastics to avoid contaminating the stream for reprocessing? What are the energy
costs to reprocess verses PET? What is the impact to product shelf life in a PLA container
verses PET? How does the predominantly corn-based polymer fit in the food versus fuel
debate?
In their 2008 session, the Washington legislature heard HB 2422, which sought to
ban the retail sale of water in petroleum-based bottles throughout the state. The bill
failed, but a movement began. In 2009, legislation is expected that will call for the
prohibition of any state agency from purchasing any beverages in petroleum-based
containers. Aside from the potential blow to the recycling community, this bill fails to
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recognize that one of the larger customers for such beverages is state governments
responding to disasters. In 2008, Washington experienced severe flooding that impacted
municipal water systems in dozens of towns across the state, leaving residents highly
dependent upon bottled water and other beverages. Wild fires, common to Washington,
are also frequent disasters that call for large amounts of bottled beverages. The legislation
is obviously designed to drive demand to PLA bottles and away from PET, but its
additional and likely unintended consequences don’t seem to have been considered.
Another emerging product is a bottle that its manufacturers claim is
“compostable,” meaning that if the container is put in a hot compost pile, that in a
reasonable amount of time, the container will dissolve into the surrounding compost.
Other industries are experimenting with similar packaging for nonliquid products, such as
the new Frito-Lay Sun Chips bag. However, the same questions apply to compostable
bottles as to those that suggest that they are biodegradable.
The following is an account from TreeHugger.com commenting on the advertised
benefits of a compostable bottle, but ignoring the potentially disastrous results, should
these bottles result in contamination of the PET scrap stock (see also Figure 24).
Biota spring water is packaged in a compostable bottle made from a corn-based
bioplastic, an alternative to petroleum-based plastics that are recyclable, but not
biodegradable and which can also leech chemicals into the liquid it holds. The
bottle will decompose entirely within 80 days, but only when exposed to constant
heat and humidity. Though the label is also biodegradeable, the cap is not. Biota
is looking into that. The water, which is sourced in Colorado, is currently being
sold in Colorado, California, and Nevada. Drink it if you can. (p. 1)
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Figure 24. Compostable bottle. Retrieved April 3, 2009, from treehugger.com/files/
biota.gif
The frustrating point for the plastics industry, the recycling industry, and beverage
manufacturers is that they have collectively worked very hard to create and refine a 100%
recyclable package that has a national network supporting the collection and reuse of
PET bottles. Now, policymakers could, with the best of intentions, force a competing
product to the market, which does not have such a network, will contaminate the PET
stream, and may not meet performance specifications for many products.
Foreign Market Dependency: Should California Clean Its Own Mess?
Currently, a large majority of California’s scrap PET is being shipped to Asia
(primarily China) for reprocessing. Asian reprocessing markets have experienced steady
growth in market dominance since the PET reprocessing industry began. Several factors
contribute to Asian reprocessing dominance. These include a strong demand for polyester
fiber in Asia, inexpensive labor and overhead, lax environmental regulations, and, most
important, low shipping costs from California ports.
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The significance of the Asian market plays out in a number of ways. To begin, the
ability of Asian reprocessors to buy so much scrap from California sources has
diminished short-term interest in establishing a reprocessing center in California. After
all, if scrap is moving and profits are being made, why rock the boat with proposals of
change? The steadily climbing market has also enabled Asian reprocessors to reinvest
and grow their capacity, leading to increased dominance, and increased reliance from
California scrap dealers. If these situations aren’t discouraging enough, the biggest
problem with foreign dependency is that market indicators, particularly in China, aren’t
as apparent to California scrap dealers as domestic indicators are. This means that when a
downturn occurs, California scrap dealers are usually caught unaware.
Scrap prices in late 2008 tumbled from a strong midyear performance to
devastatingly low prices to finish out the year. In July of 2008, PET scrap prices were
.30/lb, but by November, they were .08/lb. This was consistent with most other scrap
prices in the same time period, such as aluminum, which dropped from .97lb to .55/lb and
newsprint which went from $180 per to $10 per ton. The average drop in scrap metal
value over this period dropped 70% (Moore, 2008).
Aside from the obvious economic impact, the dramatic drop in scrap value caused
a slowdown in orders from Asia, resulting in backlogs of supply. At some point, the
backlog becomes more complicated because it means more than lost sales and lower
revenue—it becomes inventory that requires storage space and the costs associated with
storage, such as rent and insurance. In a December 8, 2008, New York Times interview,
one recycling industry executive explained how the backlog is impacting his business:
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Many large recyclers now say they are accumulating tons of material, either
because they have contracts with big cities to continue to take the scrap or
because they are banking on a price rebound in the next six months to a year.
“We’re warehousing it and warehousing it and warehousing it,” said
Johnny Gold, senior vice president at the Newark Group, a company that has 13
recycling plants across the country. Mr. Gold said the industry had seen
downturns before but not like this. “We never saw this coming.” (Richtel &
Galbraith, 2008, p. 1)
At least one California reprocessor has been put in the ironic position of
contemplating buying California scrap back from oversees processors. Ed Byrne manages
Peninsula Packaging in California's central Valley, making clamshell packages for berries
and lettuce. Peninsula uses about 70% recycled PET, but is having a difficult time
sourcing the clean flake necessary for production. In a January 6, 2009, NPR radio
interview, Byrne explains the complications that his company faces: “We're buying some
from China and we have some coming in from South America, and we're still using a lot
more virgin resin than we'd like to because we can't get enough flake” (n.p.)
In the same interview, Alex Helou with the Los Angeles Bureau of Sanitation,
explains how the dependency on foreign markets has made California reprocessing less
desirable:
When the oil market was at all-time high, it was cheaper for us to take a ton of
recyclables from the Port of Los Angeles, ship it all the way to China, verses to
take one ton of recyclables from the Port of Los Angeles and ship it to Riverside.
We need to find markets in California, in the United States, where a lot of these
products could be recycled locally and put money back into the local economy.
(Marketplace Morning Report, 2009, n.p.)
The fact that California ships its used plastic beverage containers to other
countries for reprocessing is not common knowledge, even among California legislators
and policymakers. When similar issues have come up with other materials, reaction has
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not been supportive of the practice. An example is e-waste. Naturally, used and worn-out
electronics pose a more complicated threat to landfills than plastic bottles because of the
various toxic substances like cadmium and mercury that can easily leak out of the
electronic components. And, the reprocessing of e-waste can pose a much greater threat
to the health of those actually doing the labor to reprocess the components. Still, the very
idea that our society depends on foreign labor to clean up after it is an affront to some.
One organization that seeks to strictly regulate the export of trash is the Basil
Action Network, or BAN.
BAN is named for the Basel Convention, a multilateral environmental agreement,
which in 1994 passed a landmark decision to reverse this deadly trend and ban the
export of hazardous waste for any reason from rich to poorer countries. The Basel
Ban Amendment is a clear unabashed trade barrier erected for the environment,
and for human rights, supported by developing countries in recognition of the
present disparate economic playing fields that, if exploited, will shift pollution
problems to those least able to deal with them, rather than solve them at their
source.
There is an ugly underbelly of economic globalization that few wish to
talk about. Under the guise of simply utilizing the “competitive advantage” of
cheap labour markets in poorer areas of the world, a disproportionate burden of
toxic waste, dangerous products and polluting technologies are currently being
exported from rich industrialized countries to poorer developing countries. In
effect, rather than being helped to leap-frog over dirty development cycles
directly toward clean production methods, developing countries are instead being
asked to perpetuate some of the world's most toxic industries and products and are
even asked to become the global dumping ground for much of the world's toxic
wastes. (Basel Action Network, 2008, p. 1)
The current Basel Convention agreements are focused on toxic waste exports,
which mean that the substances must be explosive, flammable, toxic, or corrosive. Used
PET does not fall into any of these categories. This does not mean, however, that PET
won’t come under focus in the future. Currently, EPA regulations for waste exports focus
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on CRT computer screens. According to the U.S. Environmental Protection Agency
(EPA, 2008b), “Regulations took effect in January 2007 requiring exporters to notify the
EPA prior to shipping broken or unbroken CRTs to another country for recycling and
receive written consent from the receiving country before shipments can be made” (p. 1)
To date, one fine has been levied for export violations. In July of 2008, the EPA
fined a single company for failing to notify them before shipping used CRTs. “The U.S.
Environmental Protection Agency has filed a $32,500 complaint against Jet Ocean
Technologies of Chino, Calif. for failing to notify the EPA of a cathode ray tube export
shipment, in violation of federal hazardous waste laws” (EPA, 2008a, p. 1).
Despite the EPA’s diligence with the Jet Ocean Technologies case, some have
suggested that the EPA regulations are insufficient. The U.S. General Accounting Office
(GAO) finds the EPA’s efforts insufficient, as indicated by the following
U.S. hazardous waste regulations have not deterred exports of potentially
hazardous used electronics, primarily for the following reasons:
• Existing EPA regulations focus only on CRTs. Other exported used electronics
flow virtually unrestricted—even to countries where they can be
mismanaged—in large part because relevant U.S. hazardous waste regulations
assess only how products will react in unlined U.S. landfills.
• Companies easily circumvent the CRT rule. GAO posed as foreign buyers of
broken CRTs in Hong Kong, India, Pakistan, and other countries, and 43 U.S.
companies expressed willingness to export these items. Some of the
companies, including ones that publicly tout their exemplary environmental
practices, were willing to export CRTs in apparent violation of the CRT rule.
GAO provided EPA with the names of these companies at EPA’s request.
• EPA’s enforcement is lacking. Since the CRT rule took effect in January 2007,
Hong Kong officials intercepted and returned to U.S. ports 26 containers of
illegally exported CRTs. EPA has since penalized one violator, and then only
long after the shipment had been identified by GAO. EPA officials
acknowledged compliance problems with its CRT rule but said that given the
rule’s relative newness, their focus was on educating the regulated community.
This reasoning appears misplaced, however, given GAO’s observation of
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exporters willing to engage in apparent violations of the CRT rule, including
some who are aware of the rule, Finally, EPA has done little to ascertain the
extent of noncompliance, and EPA officials said they have neither plans nor a
timetable to develop an enforcement program. (GAO, 2008, p. 2)
With pressure mounting from organizations, such as BAN, coupled with positions, such
as that taken by the GAO, the likelihood for increased regulation of waste seems to be
high.
Regulation at the other end of the issue has grown more supportive of the concept
of exporting used plastic from the U.S. to China. Until March of 2008, the question of
whether it was legal to import used plastic into China was met with vague answers. At
times, the Chinese government either ignored or turned a blind eye to the used plastic
trade. At other times, the government enforced rules that they believed prohibited such
trade. In 2008, the rules regulating used plastic imports were clarified. According to the
Editorial Staff of Recyclingbizz.com,
The Chinese government has clarified that a plastic waste import ban will be
restricted to used agricultural film and to plastic bags, films and net collected
from households or municipal waste. As a result, European and US waste plastic
traders can heave a sigh of relief, according to Surendra Borad, Managing
Director of Belgium-based Gemini Corporation NV and Chairman of the Bureau
of International Recycling’s Plastics Committee. (“China Clarifies Plastic Waste
Import Ban,” 2008, p. 1)
For the time being, these clarifications are good for California scrap dealers. How
subject that they may be to other pressures remains to be seen, including concern that the
policies could be adjusted if and when China’s dominance in the polyester business
shifts.
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Summary
Aside from the direct question of whether California is doing enough with its
$826,500,000 redemption program with regard to plastic beverage containers, there are a
growing number of additional questions regarding plastics in California. Most of these
questions are being raised in some way through public policy, either at the municipal or
state level. The problem is that consensus is nearly impossible, and most proposed
answers contain little practicality. The few proposed solutions that seem attractive in
California have attributes that make them unattractive in other places around the country.
These emerging issues have the potential to drive even more interest in the topic of
plastics. The lack of understanding about the differences and recyclability of plastics
make it especially challenging to craft good public policy that makes sense for both the
public and industry. Creating a PET reprocessing plant in California covers just about
every aspect of good environmental practices, good business practices, and good
outcomes.
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CHAPTER SEVEN
THE NECESSARY INGREDIENTS
Combining the resources to build a polyethylene terephthalate (PET) reprocessing
plant in California will not be easy. Aside from the long list of everyday problems facing
any manufacturing business in California, a reprocessing plant will need to overcome
several industry-specific challenges. The first is the capital investment required to
complete the project. The second is a location that is conducive to the manufacturing
process, has low utility costs, and can handle heavy truck traffic. The third is a steady and
reliable supply of postconsumer PET bottles. The last, and perhaps the most critical, is a
market for the reprocessed PET.
Scrap PET is a global commodity. The margins in scrap PET are small, and the
competitive market can be volatile. The California scrap PET market is driven at one end
by hundreds of small and dozens of larger scrap dealers who acquire their stock of
postconsumer bottles from redemption centers, recycling centers, waste-hauling facilities,
and miscellaneous venues. The other end of the market is largely dominated by Asian
buyers who can be unpredictable. Quality varies from various scrap dealers, but is critical
to determining value. Buyers are loyal to scrap dealers that have a proven track record of
providing quality scrap. The opportunity for profit is slim, and depends on moving large
volumes from one end of the spectrum to the other. A successful reprocessing plant
would need to create a niche in that spectrum that secures supply without driving up costs
through increased demand.
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Capital
Two serious attempts have been made to build a food grade, bottle-to-bottle
capable reprocessing plant in California. The first is PET, LLC by Floyd Flexon, and the
second is Allan Company by Stephen Young (C. Lavigne, personal communication, April
6, 2009). Both entities have expertise in the field and have done a great deal of
preparatory work including engineering, negotiations with equipment suppliers, and
initial discussions with permitting agencies. Flexon’s project is modeled after a similar
reprocessing plant that he built in France. That plant has been in successful operation for
over 3 years. Young’s project is an expansion of an existing scrap business that has been
thriving for over 20 years and is considered one of California’s most successful.
In the case of Flexon’s proposal, the plant would need to be built from scratch.
This means that in addition to the $20–30 million in specialized equipment; he would
also need to invest in brick and mortar, as well as supply start-up funding to bridge the
gap between the start up during construction and the first revenue. The advantage to
Flexon’s plan is that the plant layout would be tailor made to its function, thus making it
as efficient as possible. The total price tag for this package is in excess of $50 million.
Young, who would locate his plant on existing Allan Company facilities and utilize assets
already in place, estimates his project costs to be around half of the Flexon project.
In both cases, the would-be proprietors have solid business plans that indicate a
reasonable profit potential with a few common but critical caveats. The first is the cost of
money. Flexon has had several deals almost completed with venture capital companies,
but each has crumbled at the end, largely due to the unconventional nature of the
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business. The long delay between funding the project and the beginning of the revenue
stream, combined with the risk that profits could be meager, takes some of the appeal out
of the concept. Both Flexon and Young have attempted to reach buying agreements with
large end users, which would provide surety to the business and attract capital
investment. However, due to the volatility of the commodity, combined with the fact that
recycled PET prices are always competing against virgin plastic prices, large end users
are reluctant to commit to anything other than market pricing. Should the market
experience a deep pricing slide due to falling oil costs, or should demand shift as a result
of large-scale adjustments in the Asian market, either Flexon or Young could find
themselves upside down in their pricing.
Figures 25, 26, and 27 are a market analysis done by Allan Company to establish
the viability of a reprocessing plant at their facility in Pomona, California. The analysis is
based on recent historical data to create a model for understanding the expected cost of
doing business and the difference between virgin and reprocessed PET.
The Allan Company Price Analysis chart indicates a relatively stabile cost
averaging between 18 and 19 cents. One key point from this chart is the trend where
scrap price tends to lag somewhat behind virgin pricing on upswings, but follows quickly
on the downturn. The most important comparison in this graph is that between the
processed SSP (Solid State Pellet) column and the Historical Virgin Resin column on the
far right. These are the costs that drive the decision about getting into the reprocessing
business for beverage manufacturers. Without any other factors, beverage manufacturers
would only be interested in using reprocessed PET if it was substantially cheaper than
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virgin. The estimated costs in this graph include operating and depreciation expenses,
plus debt service (see Figure 25).
Figure 25. Allan Company Price Analysis chart. From C. Lavigne, Allan Company
Executive, personal communication, April 6, 2009.
Figure 26, entitled Bailed Pet Bottles illustrates actual bale prices from Allan
Company since 2001. Bale prices are determined by the market which is largely
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dominated by Chinese buyers. When Chinese market demand is strong, prices, such as
those found in the first three quarters of 2008, prevail, but a weak market can bring prices
such as those found in the same time period just 4 years earlier.
Figure 26. Baled PET bottles. From C. Lavigne, Allan Company Executive, personal
communication, April 6, 2009.
Figure 27, the Material Price Adjustment graph, illustrates extra costs involved
with handling colored PET. New technologies in optical scan equipment make sorting
colors more efficient, and reusing color for new colored bottles can be easier than reusing
clear. The challenge for beverage manufacturers is maintaining the consistent color that
identifies their specific product to the consumer. Because fewer products are distributed
in colored bottles, demand is lower than that for clear.
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Figure 27. Material price adjustment graph. From C. Lavigne, Allan Company Executive,
personal communication, April 6, 2009.
Costs and risks are always on the minds of manufacturers considering using
reprocessed PET. The California Department of Conservation (DOC) has a grant program
funded from the Unredeemed Fund, which is designed to assist and enhance the recycling
of beverage containers. Both the Flexon and the Young projects qualified for significant
grants from the Department of Conservation. Flexon won a $5 million grant in 2003, and
Young won a $2.4 million grant in 2006. These grants add to the attractiveness of the
projects by reducing costs. Unfortunately for both, the time required to pull together the
remaining funding was too long, and both grants were lost to deadlines.
It is to the DOC’s credit that the grants were available in the first place, and while
it would have been helpful for the grants to be made available for a longer time, there are
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understandable equity issues with other grant applicants. Should either project suddenly
become highly viable, nothing would be more appropriate for DOC grant funds than
assisting in making a bottle-to-bottle plant a reality. Figure 28, from the California
Department of Conservation, illustrates the current recipients located around the state.
Location
Young’s Allan Company is already located on a property that has a lot going for it
in terms of a strong location for a PET reprocessing facility. The property is on an old
paper mill in Pomona, and has much of the required structure already in place. In addition
to the building, the facility also has a connection to the City of Los Angeles brine line, an
active rail spur, and is adjacent to a natural gas cogenerating plant that would be ideal for
supplying electricity and possibly steam. The facility is located in an industrial area that
already has a high tolerance and capacity for truck traffic. Loading bays are in place and
thousands of tons of paper stock are already moving through the property on a regular
basis. Allan Company also has a Conditional Use Permit in place. It is possible that no
other Southern California location would have enough of these types of assets to be a
practical reprocessing site (C. Lavigne, personal communication, April 6, 2009).
Flexon’s plan is to build a facility from scratch in an industrial park in Modesto,
California. Modesto owns its own power utilities and offers very reasonable rates. In
addition, the plant would be located in an industrial area that is an enterprise zone,
offering tax incentives for equipment purchases and operating finances. The advantage of
building from scratch is that the layout does not need to be adapted, resulting in
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Figure 28. 2008-2009 DOC grant awards distribution. From Department of Conservation,
Division of Recycling, 2009. Retrieved April 11, 2009, from
http://www.consrv.ca.gov/dor/grants/Documents/GrantMap.pdf
117
maximum efficiency. Further, Flexon’s project is located very near those of bottle
manufacturers, resulting in reduced transportation costs.
The process that Flexon would utilize requires a 120-foot-tall cooling tower. He
has cleared that requirement with the City of Modesto, and believes that he would not
have a problem with permits for the tower. The City of Pomona, on the other hand, has
signaled that it would not be enthusiastic about seeing such a tower at Young’s facility.
This would likely force Young into choosing a different reprocessing system. The system
that probably would most fit his operation would be one that has yet to be granted a
Letter of Non-Objection from the FDA. This means that in addition to all of the other
facets that Young would be managing, he may also need to assist in meeting
requirements for food grade plastic as established by the FDA (C. Lavigne, personal
communication, April 6, 2009).
Both projects expect a start to finish construction time of 1 to 2 years, depending
on the availability of equipment. It is likely that both projects would be built in stages,
probably allowing the wash and grind lines to be in service as soon as possible to create
cash flow and establish operational support as early as possible.
Establishing a reprocessing facility in the Western U.S., but outside of California
has some attractive aspects. Cheaper land, labor, and utility costs could reduce the
start-up and operating costs. Further, both Oregon and Nevada have aggressive economic
development programs that could work with firms to offer tax incentives to locate in
those states. Oregon, on the state’s webpage, highlights the following incentives to attract
new industry:
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• Skilled workers with above-average educational attainment
• Among the top states in patents per capita
• Global access to U.S. markets via a modern multimodal transportation system
• Second lowest effective business state and local tax rate in the country
• One of the lowest workers' compensation rates in the nation
• Certified industrial lands program with an inventory of project-ready industrial
sites. (Oregon Economic and Community Development Department. (n.d., p.
1)
Table 3 shows the incentives and finance offered by Oregon.
Nevada lists a similar approach on its webpage.
The economic development incentive programs offered at the state level include:
• Sales and Use Tax Abatement
• Sales and Use Tax Deferral Program
• Property Tax Abatement
• Modified Business Tax Abatement
• Train Employees Now (TEN)
• Property Tax Abatement for Recycling/Retail Wheeling
• Renewable Energy Abatements (NCED, n.d., p. 1)
On the same website, Nevada also expounds on a number of additional
advantages that it believes should serve to distinguish its state from others:
• No Corporate Income Tax
• No Personal Income Tax
• No Franchise Tax on Income
• No Inheritance or Gift Tax
• No Unitary Tax
• No Estate Tax*
• Competitive Sales and Property Tax Rates
• Minimal Employer Payroll Tax - 0.63% of gross wages with deductions for
employer paid health insurance (NCED, n.d., p. 1)
Arizona, while not as aggressive with direct economic assistance still offers the
following services from its Business Attraction Team on its website:
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Table 3
Incentives and Finance
Tax incentives Finance solutions
Standard enterprise zone exemptions
Designed to encourage business investment in
specific areas of the state primarily with
property tax relief. more information
Long-term rural enterprise zone incentives
Enhanced enterprise zone program with up to 15
years of tax abatements. more information
E-commerce enterprise zones
A special enterprise zone designation with income
tax credits too. more information
Oregon Investment Advantage
A new income tax exemption program that helps
businesses start or locate in most Oregon
counties with a 10-year income tax holiday.
more information
Strategic Investment Program (SIP)
Exempts a major portion of large capital
investments (more than $25 or $100 million)
from property taxes anywhere in Oregon. more
information
Construction-in-progress
Exempts new commercial facilities from property
taxes for a period of time anywhere in Oregon.
more information
Food processor exemption
Processors of raw or fresh fruits, vegetables,
legumes, nuts, seafood or eggs receive new
machinery and equipment exemption from
property taxes for five years. more information
Rural Renewable Energy Development Zones
An enterprise zone-type exemption from property
taxes on wind farms, biofuel production and
other eligible projects in a designated county.
more information
Business Energy Tax Credit (BETC)
Investments in energy conservation, recycling,
renewable resources and less-polluting
transportation fuels. more information
Brownfields Redevelopment Fund
Direct loan and grant program to conduct
environmental actions on brownfields. more
information
Oregon Business Development Fund (OBDF)
Loan fund works with banks to secure necessary
funds. more information
Oregon Business Retention Program
Designed to help private sector companies.
Program provides multi-industry expertise in
finance, marketing, operations, turnarounds,
restructurings, feasibility studies, etc. more
information
Oregon Capital Access Program (CAP)
Program helps lenders make more commercial
loans to small businesses. more information
Oregon Credit Enhancement Fund (CEF)
Loan insurance tool that lenders can use to help
businesses needing extra security to obtain
financing. more information
Entrepreneurial Development Loan Fund (EDLF)
Initial, direct loan to help companies get started in
Oregon. more information
Industrial Development Revenue Bonds/Express
Bonds
Designed to help Oregon manufacturers grow.
These are tax-exempt bonds, issued by the state
of Oregon. They provide long-term financing for
land, buildings and equipment. more
information
Local Revolving Loan Funds
Funds available for small business financing.
more information
Note. Adapted from Oregon Economic and Community Development Department. (n.d.).
From Business in Oregon. Retrieved April 11, 2009, from http://www.oregon4biz.com
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Table 3: Continued
Tax incentives Finance solutions
Biofuels Raw Materials Credit
Producers or collectors of biomass receive credit
based on quantities used for biofuel in Oregon.
more information
Research tax credits
Corporate tax credit for qualified research and
basic research conducted in Oregon. more
information and Tax Form for this credit (PDF)
Dependent care tax credit
Employers who provide dependent care assistance
to their employees may claim one of two
credits—the Information and Referral Services
Credit or the Employer-paid Dependent Care
Credit. more information (PDF)
Federal/State worker-based tax credits
Three incentive programs for business. more
information
All tax credits for corporations
Other programs
Governor's Strategic Training Fund
Fund supports the retention and growth of living-
wage jobs, a skilled workforce and competitive
businesses in Oregon. It is a flexible, responsive
and time-sensitive resource for training Oregon's
private-sector workforce. The emphasis is to
upgrade skills of the workforce in order to
increase productivity, keep Oregon businesses
viable and competitive, and offer new skills and
opportunities to Oregon's workers. more
information
Matching Grant Programs
Small Business Innovation Research and Small
Business Technology Transfer Research are two
federal grant programs tailored to small
business. More information on Oregon's match.
US Small Business Administration
504 Loan Program and the US Small Business
Administration 7(a) Loan Guarantee Program
more information
Business Start-up Information
see small business
Film production
The Oregon Production Investment Fund rebates
20% of Oregon-based production expenses and
10% of wages paid for work in Oregon. The
Greenlight Labor Rebate can offer qualifying
productions an additional cash payment of up to
16.2% of Oregon payroll for productions that
spend more than $1 million. more information
The Business Attraction Team provides:
• Confidential and thorough site selection assistance- including existing
buildings, build-to-suit opportunities, and buildings almost ready for market
that sometimes are not yet listed in the databases
• Official information on State Incentive Programs
• Customized research, including detailed comparative analysis of tax, real
estate, utility, and transportation costs
• Planning, coordination, and transportation for community and site visits,
including arranging meetings with local officials, key economic development
professionals, workforce and educational leaders
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• In-depth information about Arizona’s business climate
• Workforce Assistance including employment data, wage information, and
programs that will help with hiring and training needs
• Access to regulatory authorities and clarification of governmental regulations
• Coordination of regional and community partner information (Arizona
Department of Commerce, 2009, p. 1)
California offers few economic development services or incentives. Its website,
offers the following program for business seeking location or expansion assistance from
the state:
Figure 29. CALED and CCCEWD conference advertisement. (2009). Retrieved April 11,
2009, from CALED Web site: http://www.caled.org/economicdevelopment/node
The California Economic Development program focuses on workforce training,
but mentions nothing about tax incentives or assistance with bureaucracies. Locating a
plant just across the U.S./Mexico border also offers cost advantages. However,
reprocessing California scrap outside of the state involves costlier and more complicated
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transportation and, in the case of Mexico, the reliance on foreign markets for the actual
reprocessing would not change. One bottle-to-bottle reprocessing plant has recently come
on line in Mexico and is operated by PETCO. Its source of material is plastic bottles hand
picked out of landfills by scavengers known as “pepenadores.” They are currently
supplying food grade RPET to major beverage manufacturers, and say that the economics
are working. Another, near Toluca, Mexico, has been on line for nearly 3 years, operated
by the Alpla Company, and has been successfully supplying major beverage
manufacturers. Because they are so far from the California market, it is unlikely that
either will use California scrap.
The Players
California public policy is complicated by a number of factors, not the least of
which is balancing the needs, wants, and influence of the many stakeholders that are in
any way impacted by policy decisions. Any change to the status quo typically opens the
door for deals that could go far beyond the original intent of the change. The more
powerful the stakeholder, the less likely it is that any changes will inflict harm. Power
comes from a variety of sources, but the most common include: being a major influence
in campaigns; including providing significant funding, endorsements, and helpful
resources; having a large, organized constituency; being a media darling; having strong
influence over key legislators, such as appropriate committee chairs; having large
amounts of money to lay down in case of a fight and/or being in a position to convince
the governor that a veto is wise.
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Should policy changes be attempted that would impact the California plastic
beverage container situation, most if not all of the following groups would play a role:
California Department of Conservation
The California DOC is the state agency charged with oversight and
implementation of the California Beverage Container Recycling and Litter Reduction Act
also known as AB 2020. As a division of California’s Resources Agency, “The
Department of Conservation provides services and information that promote
environmental health, economic vitality, informed land-use decisions and sound
management of our state's natural resources” (DOC, 2007, p. 1). In addition to the
Beverage Container Recycling program, the department also oversees the following:
Land Resources Protection, Mine Reclamation, The California Geological Survey, Oil,
Gas, and Geothermal and the State Mining and Geology Board.
Beverage Industry
Beverage industry is a catch-all phrase, often used to represent all of the various
beverage companies manufacturing and/or distributing beverages. The phrase seems to
imply an omnipotent group of like-minded capitalists banded together through common
goals. A huge variety of drinks come under the bottled beverage industry umbrella,
including hard liquor, wine, beer, soft drinks, energy drinks, water, coffee, tea, sports
drinks, juices, dairy and a large number of alternative drinks. Missing from the
implication of unity is the extreme competition that exists between the types and brands
of beverages. Much of the rivalry is obvious, especially between brands. However, few
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realize the challenge between wine and beer manufacturers when it comes to the issue of
colored glass used for wine versus clear glass used for beer. Sorting glass containers from
the waste stream without excessive breakage is difficult, but sorting broken glass for
colors is an expensive and tedious process. Similar, challenges exist in the sorting of the
various types of plastic beverage containers. Some beverages, such as fruit juices, are UV
sensitive, or need to be filled in a very hot, sterile environment. The plastic bottles for
these types of beverages are different than those used for water or carbonated soft drinks,
and the different types of plastic are not compatible in the recycling process.
Inner-industry tensions can sometimes flair when the users of one type of container seek
special treatment of their material, or when outside interest attempt to single out a
specific container type for additional regulation. Additional tension comes from the
competition between large national and multinational firms and smaller regional firms.
California/Nevada Soft Drink Association
Made up of representatives from Coke, Pepsi, and 7up, this group utilizes the
lobbying and management of Bob Achermann and additional lobbying from Ralph
Simoni. This association plays an active, hands-on roll in all legislation impacting the
beverage industry, makes campaign contributions and networks efficiently among other
groups and associations with similar interests. The association maintains relationships
with policymakers beyond the lobbyists by utilizing members who interact with their
representatives within their own districts.
Californians Against Waste
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This nongovernmental organization was one of the leading proponents of
AB 2020, as well as other landmark pieces of waste legislation such as AB 939 (landfill
diversion) and SB 20 (e-waste) as well as key issues such as cell phone recycling, plastic
bag regulation, and battery disposal. Most recently, CAW led the effort to update AB
2020 by expanding covered containers beyond just beverage containers. CAW has
become the leading voice in Sacramento for bottle bill expansion. Their mission
statement:
Californians Against Waste is dedicated to conserving resources, preventing
pollution and protecting California’s environment through the development,
promotion and implementation of waste reduction and recycling policies and
programs. (CAW, n.d., p. 1)
PRCC
In addition to the deposit that California consumers pay when purchasing their
beverages, manufacturers also pay a fee into the redemption system called a “processing
fee.” This fee is based on a percentage of the cost to subsidize the recycling process. The
subsidy makes up the difference between market values and the “cost to recycle.” The fee
has run as high as three cents, and as low as a fraction of a cent per container. Annual
processing fees for PET have generated as much as $6.5 million for the state in recent
years. Naturally, the higher the “cost to recycle,” the higher the subsidy costs. The
biggest factor in the cost to recycle is scrap value. When scrap values are high, costs are
lower. With this in mind, in the early 1990s the soft drink industry established a
not-for-profit organization called the Plastics Recycling Corporation of California
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(PRCC), with the sole mission of insuring that the highest prices in the market would be
available to California recyclers. While some of its practices have changes with the times.
The PRCC continues to serve its role, and is a major influence in the postconsumer
plastic market in California (see Figure 30).
Proprietary and Confidential
Plastic
Recycling
Corp. of
California
PRCC’s Goals PRCC’s Goals
Keep the cost of doing business in California, under the CRV system, as low
as possible for California bottlers and their bottle suppliers.
State Department of
Conservation interaction
Legislative advocacy
Public Policy Activity
Knowledge of and intervention
in the marketplace through
purchase and sales of PET scrap
Reduce Risk of Scrap Market
Interruption
Promote operational efficiency Reduce Recycling System Costs
Improve the quality of PET bales Increase Scrap Value
Figure 30. PRCC’s goals. Retrieved April 11, 2009, from http://www.prcc.biz
For the past several years, PRCC has served primarily as a broker, connecting
purchasers with sellers, always at (or very near) market value. This service is most
valuable to small recyclers who might otherwise end up selling below market value
because they do not have the ability to track prices on a regular basis. In addition to
insuring strong financial trading, PRCC also serves as a quality control checkpoint.
PRCC staff work with recyclers to meet the high standards that generate high prices. This
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means that the bales are of standard specification for size and weight, and that they are
made up of well-sorted, correct type plastic.
PRCC works almost exclusively in PET, but does, from time to time, facilitate
sales in other types of plastics when possible. It also serves as the bank, often carrying
purchase price until payments can be made and/or checks clear. This role was not the
original intention, but without the ability to float the transactions, many California
recyclers would not be able to run at capacity without interruption.
The PRCC is a membership organization, made up of representatives from the
major soft drink companies, some bottled water companies, and most of the bottle
manufacturers who do business in California.
American Beverage Association
This Washington DC-based association is the national version of the California
association. It brings tremendous resources to the table, including credible data, history,
and expertise.
As the national voice for the non-alcoholic refreshment beverage industry, the
American Beverage Association staff of legislative, scientific, technical,
regulatory, legal and communications experts effectively represent members'
interests. (American Beverage Association, 2009, p. 1)
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International Bottled Water Association
The International Bottled Water Association (IBWA, 2006) states the following:
IBWA plays an active role at all levels of state and federal government assisting
in the development of stringent regulations for bottled water to ensure the greatest
safety possible and high quality of bottled water products. IBWA has supported
the U.S. Food and Drug Administration and state regulators/legislators in the
development of strict regulations that will help guarantee bottled water's quality.
(p. 1)
Representing most of the major bottled water brands as well as a sizable market
share of the bottled water business, this association finds itself in the very center of
debates about PET containers.
Grocer Manufacturers Association
This is a national group made up of most of the premium brand manufacturers
found in grocery stores. Its West Coast offices are located in Sacramento. The most
active members are government affairs personnel from each member company, so its
cumulative networking ability is quite strong. Some of the member companies have
political donation budgets, and they are all large employers. According to its website,
GMA has a first-class communications and media relations department that works
closely with the Association's issue and policy experts to deliver the food,
beverage and consumer products industry's messages to policymakers, the media
and consumers. From food safety and supply chain efficiency to nutrition and
reverse logistics, from rapid response to proactive public relations, GMA works
with broadcast and print media to amplify the industry's position on key issues.
(GMA, 2009, p. 1)
California Retailers Association
The California Retailers Association (2004) website states:
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The California Retailers Association (CRA) was founded and incorporated in
1933 to meet the needs of a growing company of retailers marketing a variety of
goods in the State of California. Sixty years later, CRA remains the only trade
organization which represents a broad base of retail companies, including
supermarkets, chain drug stores and general merchandise retailers. CRA member
companies operate over 9,000 stores with sales in California in excess of $100
billion annually. CRA's mission: To provide effective representation of its diverse
membership base through legislative and administrative advocacy. (p. 1)
Automatic Vendors Council
According to the California Automatic Vendors Council,
CAVC works to promote the common Interest and general welfare of the
automatic merchandising industry In California to improve the industry's service
to the public, to cooperate with government officials in advancing the public
interest, and to improve business conditions within the industry in the state.
California Integrated Waste Board
According to the California Integrated Waste Board,
The Board promotes a Zero Waste California in partnership with local
government, industry, and the public. This means managing the estimated 92
million tons of waste generated each year by reducing waste whenever possible,
promoting the management of all materials to their highest and best use,
regulating the handling, processing and disposal of solid waste, and protecting
public health and safety and the environment. (p. 1)
NAPCOR
The National Association for PET Container Resources (NAPCOR), is the trade
association for the PET plastic industry in the United States and Canada. NAPCOR was
founded in 1987. According to NAPCOR (2008),
NAPCOR's Mission:
• To promote the introduction and use of PET packaging.
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• To identify and overcome hurdles to the successful introduction and use of
PET packaging throughout its lifecycle.
• To articulate and communicate the attributes of the PET container as an
environmentally sustainable package.
NAPCOR's Vision Statement:
To be the credible voice and champion of the PET packaging industry; to
facilitate solutions to the introduction and use of PET packaging; and to provide
education on the benefits of PET packaging. (p. 1)
The Association of Postconsumer Plastic Recyclers
These are the professionals who actually do the converting from waste to useful
products. They describe themselves as follows:
At the Association of Postconsumer Plastic Recyclers, we represent companies
who acquire, reprocess and sell the byproduct of more than 90% of the
post-consumer plastic processing capacity in the United States, Canada and
Mexico. Our membership includes numerous recycling companies, consumer
product companies, equipment manufacturers and organizations committed to
plastics recycling. We strongly advocate the recycling of all post-consumer plastic
bottles. (Association of Postconsumer Plastic Recyclers, 2009, p. 1)
The beverage industry, along with just about everyone else involved with plastic
recycling, views APR as the highest authority in determining how to best apply the
science of plastic recycling.
The Container Recycling Institute
CRI (2003-2006) on its About Us webpage states,
CRI plays a vital role in educating policy makers, government officials and the
general public regarding the social and environmental impacts of the production
and disposal of no-deposit, no-return beverage containers and the need for
producers to take responsibility for their wasteful packaging. (para. 2)
The following explains their determination:
“Why single out beverage containers?”
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There are good reasons to single out beverage containers from other packaging
waste. Unlike most packaging,
They are very often consumed away from home for “immediate consumption”
They often cost more than the product they deliver
They consume huge amounts of energy in the manufacturing process, and
Unlike mayonnaise and pickle jars, the contents are consumed in a matter of
minutes, because they are primarily single serve containers (Franklin, 2002,
p. 2)
California Beer and Wine Wholesalers
These groups are well-funded and well-connected representatives of their
industries. Aside from the many common recycling complications that they share with
soft drink manufacturers, the beer and soft drink industries also face a long list of
regulations regarding manufacturing and marketing alcoholic beverages.
California Conservation Corps
While the CCC does do wonderful things for the California environment, it
doesn’t exactly play a big role in recycling bottles and cans. It does, however, receive a
great deal of funding through the CRV program, making it a stakeholder in any potential
changes to the program. California Conservation Corps Director David Muraki describes
the organization:
The CCC stands ready to serve the citizens of California through the activities of
our most valuable resource, our young people. Our corpsmembers fight fires
throughout the state, protect levees from the threat of flooding and restore habitat
making it easier for salmon swimming upstream to spawn. You’ll also find
corpsmembers in Yosemite building trails of granite and restoring fragile
meadows. (CCC, 2003, para. 1)
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Waste Management and BFI
These two waste hauling giants have adopted a proactive role in waste diversion
throughout California, including large scale recycling programs. Any change to the CRV
would concern them, as well as all other waste haulers throughout the state. Waste
Management describes its role:
We have taken a leadership role in promoting the recycling and reuse of
materials that would otherwise end up in landfills. Waste Management, combined
with its wholly owned subsidiary WM Recycle America, is North America’s
largest recycler. We process 5.5 million tons of commodities each year, saving
approximately 41 million trees through paper and cardboard recycling alone.
(para. 9)
BFI is a smaller, but still important hauler. They see their role in this way:
Our mission is to provide the highest quality waste collection, recycling,
transportation, disposal and related services to both public and private customers
worldwide. We will carry out our mission efficiently, safely and in an
environmentally responsible manner with respect for the role of government in
protecting the public interest. (BFI, n.d., para. 1)
Municipalities
Most counties, cities, and special districts throughout the state are impacted in one
way or another by the California redemption system. Impacts include requirements for
redemption centers, funding for recycling and waste diversion programs, and/or curbside
programs.
Other Activists’ Organizations
Several organizations could find an appropriate reason for becoming involved in
the discussion about policy changes to the California redemption system. These
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organizations include (but are not limited to) the Sierra Club, As You Sow, The Climate
Group, Keep America Beautiful, and the National Recycling Coalition.
Supply
California’s premium quality scrap is a valuable commodity. Establishing a
reliable supply stream of scrap PET is critical to the success of a reprocessing plant.
Down time due to lack of supply would be extremely expensive. One of the conditions
facing both Flexon and Young is the requirement that bales be stored inside. Since
neither wants to build-in large and expensive storage facilities, their sites limit the stock
that one could have on hand. This means that either reprocessing center would need to
insure that their supply would flow on a regular basis. Fortunately, both projects include a
comfortably certain supply source. In the case of the Flexon plan, the PRCC has
established a contractual supply agreement guaranteeing enough PET to keep the plant
fully operational. For Young’s plant, the situation is even more fortuitous. Allan
Company operates several buy-back centers around Southern and Central California, and
contracts with several more. This means that their supply is already built in. Further,
while PRCC’s bales are sourced from a variety of haulers and recyclers throughout the
state, and are of sufficient quality, the Allan Company system claims to be in a better
position to control the quality of its own stock (S. A. Young, personal communication,
March 4, 2009).
Should a new firm wish to enter the reprocessing business, the challenge of
locking in supply shouldn’t be too difficult. At some point, the PRCC may be in a
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position to guarantee at least a portion of the needed supply. Further, the possibility that
more states might establish a bottle bill could enhance supply. At the time of this writing,
four or five different state legislatures are seriously considering adopting bottle bills,
New York has very recently expanded, and Oregon is attempting to expand its
redemption system to cover more container types. Even though each expansion proposal
appears to be more revenue driven than environmentally inspired, they could impact the
supply available for reprocessing. If a couple of them succeed in adopting a redemption
system, the supply of high quality postconsumer PET on the market would grow. With
more competition, California scrap prices could be driven down, making product from a
California reprocessing plant more cost competitive.
Market
The market is the most confounding aspect of the business plan for either Young
or Flexon. As Chip Lavigne, manager of the Allan Company states; “We can’t afford to
build a Field of Dreams. We need to have the business deals in place before start”
(C. Lavigne, personal communication, March 4, 2009). His concerns are legitimate, but
may not be entirely practical. The Allan Company model is a very safe one, calling for
essentially a guaranteed profit before beginning construction. Their ideal model is to have
an anchor partner or two that are users of RPET. It’s hard to fault the concept. The
reprocessing equipment that is essentially custom built for the site would depreciate
dramatically as soon as it is installed, creating exposure for both the financial investment,
and the enormous time investment, should the project fail.
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Failure would be defined as being uncompetitive with virgin PET prices.
Occasional pricing spikes might be something that could be managed, but once
packaging companies, including bottlers, obtain the minimum amount of RPET that they
need, the greatest determination of where they will source the remainder of their PET
supply is price. When virgin and RPET pricing gets very close, demand is reduced for the
RPET. This means that even if a plant were built in California and came on line
producing high-quality food grade RPET, unless the price were competitive, it wouldn’t
find buyers.
Under pressure from the Wal-Mart effect, public policy trends and commitments
from major soft drink manufacturers to use minimum recycled content bottles, it seems
likely that demand for RPET will increase, making a reprocessing plant venture in
California a safer bet. However, with so many variables currently influencing the market,
including volatile scrap prices, fluctuating demand for scrap, swings in oil prices, and the
unpredictability of the Asian market, finding reliable customers for RPET that can absorb
price variations will be almost impossible.
Summary
Building a reprocessing plant in California will require bringing together four
critical elements; $20–50 million in capital, a site that will support the needs of the plant
while offering reasonable utility and operating costs, a reliable supply of postconsumer
PET bottles sufficient to maintain regular production schedules and customers for the
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reprocessed plastic. It could also require cooperation among a variety of stakeholders,
some of which will have competing interests.
Location is probably the easiest of the challenges to meet. Should a legitimate
proposal to build a reprocessing plant advance to the stage where contractual agreements
are needed to lock in supply, it seems highly likely that commitments for supply could be
made without too much fuss. This leaves construction and start up funds, and customers
for the end product. In the current environment, one could drive the other, but it will
require a leap of faith to get started.
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CHAPTER EIGHT
WHAT NEEDS TO HAPPEN?
Understanding the complexities of creating a bottle-to-bottle reprocessing system
in California is like trying to determine what came first; the chicken or the egg. As
logical as it would seem to build a plant in the golden state, such a project cannot get off
the ground unless circumstances change. A catalyst is needed to break the circular
question of whether a plant can be built on speculation, or whether supply contracts could
be signed before actual production costs could be demonstrated. Will investors get in
without the contracts, and will potential purchasers commit without the investment
having been already made?
Like so many innovation challenges, finances play a pivotal role. If money were
easy to find for a reprocessing plant, it is highly likely that one or two would be in full
operation right now. A mechanism for change can come about through several scenarios:
(a) some sort of mandate that would require industry to utilize more reprocessed PET,
thus forcing “investment”; (b) capital for construction and equipment through investment
speculation; (c) purchase agreements from manufacturers; or (d) incentives to make
establishing investment capital and supply agreements more attractive.
Mandates and Regulations
The rigid plastic container business (non-food plastic packaging) has faced
minimum recycled content legislation in California for several years. The general feeling
among legislators interested in the issue has been that without mandates requiring a
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minimum amount, the industry would never get around to utilizing a respectable level of
recycled content. The containers that are subject to this approach are not covered by the
California Redemption Value (CRV) system, and are mostly made of plastics other than
PET. At the time that AB 2020 was passed, the general intent of the legislature was that
bottles covered by the redemption system would be exempt from additional regulation.
This understanding, however, is fast becoming ancient history. Of the few policy makers
from that era that remain in Sacramento today, several are nearing retirement or are
moving on to other vocations. This leaves open the question about whether the legislature
might consider including beverage containers in proposed legislation mandating
minimum recycled content requirements for packaging in California.
Mandates are not attractive to the beverage industry because they tend to disrupt
markets. PET is a global commodity, and manipulating its consumption through
mandates in one segment of the market could potentially harm other segments. As an
example, if the California legislature put a minimum recycled content bill in place
requiring a standard of at least 25% recycled PET per container, the following could
likely happen: manufacturers would shift most of their RPET away from other markets
and focus it on California production. This could result in bottles that are currently
manufactured with RPET in the eastern part of the country being shifted into more, if not
all, virgin PET. Bottles manufactured throughout the West would be designed to meet the
content requirements, because it is nearly impossible to manufacture a California specific
bottle. Prices for reprocessed content would be impacted by tighter supply and higher
demand, making voluntary use of RPET in other markets less attractive, particularly to
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smaller and very low-priced manufactures. Such a mandate could even drive small brands
out of the California market all together because those brands wouldn’t have the
economies of scale and buying power to leverage competitive prices. Worst of all is that
California scrap prices might raise to the level that reprocessing in the state would be
economically unviable. As counter-intuitive as this seems, the only way reprocessing in
California makes financial sense, is to keep California scrap competitively priced. Extra
costs to doing business in California, such as higher rents, labor costs, utilities, liabilities,
taxes, fees, etc., are simply too great be offset by the lower costs associated with the
cleanliness of its scrap alone.
Another form of mandate or restriction could come about through limiting what
could be shipped offshore. Restrictions on shipping used plastic, like the restrictions
placed on electronics in the BASEL treaty could result in unintended economic
consequences similar to recycled content mandates. The only way that such restrictions
could be implemented, however, would be through federal legislation. Having a state
restriction in place would only result in California product going through another state to
be exported. Restrictions could result in dramatic reductions in value of the prime
California scrap, causing harm to scrap dealers throughout the state, which would cause
the cost to recycle to increase, triggering higher reprocessing fees for bottlers.
A common view among legislators who have never personally participated in
hands-on commerce or manufacturing is that a mandate or restriction that results in a few
extra cents’ cost to the consumer shouldn’t be much of a burden. Beverage manufacturers
are regularly asked by policymakers why they are so very resistant to fees that are only a
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penny or a nickel (or a dime) per container. What isn’t understood in the question is the
fact that the beverage business, for the most part, is driven by volume rather than margin.
This means that if an extra nickel per container could generate tens or hundreds of
millions of dollars for a mandated program, then those tens or hundreds of millions of
dollars are cutting into volume. An extra $1.20 per 24-pack will impact consumer buying
decisions. When volume is down, so is the ability to spend extra money for the handling
of the postconsumer containers. For example, a mandate that would require a minimum
percentage of recycled content in beverage containers would probably kill any interest in
achieving a recycled content level that exceeded the mandate. The beverage industry,
competing internally on fractions of pennies, trying to deliver value to share holders, and
struggling with increasing costs in raw materials, energy, labor and transportation, would
be highly resistant to mandates that add to an already burdensome business environment.
Few consumers realize that soft drinks sold in California already have four
“up-charges” built into the cost: the processing fee, the deposit, sales tax, and the sales
tax on the deposit. A single $1.00 soda ends up costing the California consumer at least
$1.15 (depending on the level of the local sales tax). Additional mandated costs would
raise equity, justification, and value issues.
A different form of mandate could come from Asian governments in the form of
tougher enforcement of existing import restrictions and/or further regulations that would
limit the supply that Asian reprocessors depend upon. Accurately predicting a long view
of the Asian market has proven to be nearly impossible. A couple of firms do provide
independent market analysis, but they are reluctant to suggest that their insights are deep
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enough to predict what may happen more than a few months out. The Asian reprocessing
industry is understood to be currently in good favor with the government because of the
employment base that it supports. However, interruptions to exports can quickly impact
prices and disrupt flow, ultimately creating uncertainty and instability for California scrap
dealers. At the end of 2008, after several months of strong trading at high prices, the
Asian market tumbled, bringing the California scrap business to a near halt. Prices
dropped dramatically and scrap dealers were forced to store thousands of tons of unsold
scrap plastic. In April of 2009, a rogue shipper was caught smuggling drugs in a shipment
of scrap commodities and, for several days, the market was put on hold while Asian
authorities sorted out whether imports would continue.
Even if the Asian market itself were to remain entirely stable, the one thing that
makes that market so viable for California recyclers is the cheap transportation. Cargo
ships hauling goods to the U.S. from Asia rarely have full loads returning (data). Hauling
plastic bales to Asian reprocessors is often the cheapest route to market for California
reprocessors. Should the dynamics of that situation change though, the California market
could see a downturn. Several large U.S.-based reprocessors (mostly in the carpet and
fiber industries) have been unable to compete with the Asian market and have closed
their operations. If the Asian market experienced a long-term complication either from
regulation or logistics, California recyclers could find it very difficult to find buyers for
its prime scrap. As an illustration, according to the 1997 NAPCOR National PET Report,
of the total 1,396 mmlbs of PET collected for reprocessing nationwide that year, only 741
mmlbs were reprocessed domestically (NAPCOR, 2007).
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Relying on California-generated regulations or mandates as a change catalyst is
impractical because of the unintended consequences. Despite their best intentions, the
California legislature would be ill equipped to understand and effectively participate in
the scrap plastic market. However, anticipating restrictions and mandates from Asian
regulators would be wise. Tariffs, import restrictions, import bans, and disruptions in
shipping systems are just a few of the ways that conditions could quickly change for the
worst. While the California scrap system is highly dependant on a healthy market, it is
also highly susceptible to the problems that regulations could create.
Capital and Investment
The cheapest and perhaps most appropriate source of capital financing could
come directly from the California Department of Conservation (DOC) unredeemed fund,
as a loan, at the state’s cost of money interest rate. The funds that accumulate in the
unredeemed account are the nickel and dime deposits that were never refunded to
consumers. The state has borrowed from the fund on several occasions, including over
$300 million in 2003, and $99.4 million in 2009. The state is obligated to repay those
funds, at its cost of money interest rate, which is usually less than 2%. Using this
approach, the concept that bottle bill proponents are so proud of: “Let those consumers
who chose not to recycle finance the recycling system,” comes into play very well. One
of the nice aspects of such a plan would be that the financing wouldn’t need to come in a
single lump. Since a plant would take at least a year to bring on line, payments for certain
pieces of equipment could be made in stages.
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A logical question about state-provided financing would be if the venture capital
industry isn’t prepared to finance the project, why should the state take the risk? The
answer, while somewhat subjective, is that there is no other entity that could better afford
to do so, nor is there a more appropriate one. Currently, the DOC has an annual $20
million grant program designed to support recycling programs throughout the state. The
grant program is respected for choosing worthy projects that provide good value. The
point, however, is that providing $20 million annually for give-away grants has no
negative impact on the department’s ability to do its job. Apparently, neither does lending
the state general fund hundreds of millions of dollars. The fund has turned into a regular
back-up source of cash for the state general fund. Money borrowed from the unredeemed
fund is required to be repaid by the general fund, but the California Redemption program
was never intended to be a financial cushion for California’s budget mismanagement. It
was intended to insure that as many bottles and cans as possible would be recycled.
Compared to the many other expenses hitting the fund, financing a reprocessing plant
looks like a minor bargain.
When this concept was broached with Governor Schwarzenegger’s
administration, it was determined that enabling legislation would be required to facilitate
such a transaction. The Governor’s Director of Finance at that time was Tom Campbell.
He researched the question, and suggested that the best way to proceed would be to create
a stand-alone bill enabling the DOC to finance a project. The problem with such a bill is
that it would quickly become what capitol cynics call “a Christmas Tree.” This means
that many other organizations seeking special deals with the DOC would pile on with
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additional funding requests, regulatory relief, or contractual considerations. It may not be
possible to get all the stakeholders in the redemption system to agree to finance a
reprocessing center without significant bartering of political favors.
An “out-of-the-box” incentive and creative alternative to financing from the DOC
unredeemed fund might be some sort of guaranteed pricing scheme, whereby the fund
agrees to bridge the gap between market price and real production price (should the
reprocessing plant’s prices be upside-down) for a period of time until the plant could
equalize with the market. In essence, the unredeemed fund would absorb the risk, making
investment more attractive. If the plant operated as expected, it is entirely possible that
there would be nothing to cover, and that no expenditures would be made out of the
unredeemed fund. Whether such an exposure would be acceptable to the state is difficult
to predict, but it might be more advantageous in the long run than some of the grants that
also bear risk. Like the idea of providing construction capital through the unredeemed
fund, this concept would probably require enabling legislation which would once again
open the door for the “Christmas tree” problem.
Further creative incentives could come in the form of tax incentives. Some sort of
tax off-set for manufacturers using California reprocessed PET could help to reduce the
potential downside risk. This, combined with California Department of Conservation
Market Development Fund grant money could make the important difference that would
get a plant up and running.
One of the most challenging aspects about getting support for a reprocessing plant
from the State of California is that there are no champions for the cause. Most officials
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respond positively to the concept, but no one from the legislature or the administration
has jumped at the opportunity to take a leadership role. The list of reasons is long,
including the complicated nature of the issue and the fact that it isn’t exactly headline
material. However, the biggest reason is that there is no effort to bring anyone into a
leadership role. There are probably a half-dozen legislators that would see this issue fit
well into their own environmental policy, and would welcome the opportunity to play a
leadership role.
A different approach to a funding source would be from a major beverage
company. Coca Cola (2007) has already pursued a similar route with its Spartanburg,
South Carolina plant. Should it, or one of the other major companies provide funding for
a venture like the one proposed by either Flexon or Young, it’s possible that the operation
could be branded, and supply could be secured for that company. This creates several
obvious benefits; PR a potential price hedge for RPET, and savings on transporting the
reprocessed PET by using it for California bottles.
The PR benefit is applicable on a couple of different levels. First is the goodwill
generated among the public and consumers, the second is in competitive marketability,
and the third is in the form of protection against regulation and mandates. If industry
were utilizing a closed-loop system, it’s hard to imagine how a well intended
policymaker could justify further regulation.
It wasn’t long ago when such an investment would probably have been criticized
by Wall Street as venturing beyond core competency. Until recently, green marketing had
little value for consumer product manufacturers. However, marketing strategies have
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been transformed in the last 2 years for all sorts of products ranging from household
cleaners and appliances to automobiles. Today, securing RPET supplies, while advancing
the green side of the business, should be seen as advantageous. Even environmentalists
concerned with corporate attempts at “green-washing” would have to acknowledge that
the very best reuse of a beverage container would be to process it in a closed-loop system
and turn it back into a bottle.
It isn’t difficult to imagine how a recycling message could effectively work with
product messaging in the soft drink business, but marketing experts aren’t quite so
optimistic. Advertising specialists like to avoid mixed messaging, and seem to shun
concepts that convey any sort of guilt. So, combining the good times feel that soft drink
companies thrive on with the notion that recycling is or should be going on, may present
less than optimal messaging. A few bottled water companies (i.e., Nature Works, Biota,
and Arrowhead) have attempted to weave environmental messages about light-weighting
and recyclability into their advertising, but without their internal metrics, it is impossible
to gauge whether the green messaging has made a difference.
Below is an advertisement for one of the leading bottled waters. It isn’t clear who
the intended audience is, but it is entirely possible that one of the targets is policymaking
bodies interested in whether restrictions should be placed on bottled water. This could
include colleges, universities, cities, counties, and, even in some instances, state
legislatures (see Figure 31).
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Figure 31. Recyclable bottle. From Arrowhead Water. Retrieved April 28, 2009, from
http://www.arrowheadwater.com/DoingOutPart/EcoShapeBottle.aspx.
Aside from investing in a reprocessing plant with cash, beverage companies could
provide a tremendous boost to get a project off the ground through signing a supply
agreement, which is essentially a contract to buy the product once a plant is operational.
Once again, however, financial risk is the determining factor. The sort of purchasing
agreement that a reprocessor would need might bind the beverage company to purchases,
whether they at market value or higher. This, of course, is beyond the level of
commitment that the beverage companies wish to make because unfavorable costs lead to
competitive pricing issues at the retail level.
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Ultimately, if true bottle to bottle recycling is to take place in California, the
perceived gap between the reprocessor and the beverage companies needs to be
narrowed. The reality is that two industry experts have independently developed detailed
business plans, based on decades of firsthand experience, and both forecast profitability
while being competitive in the market. They both believe that once a plant is up and
running, there will be no gap. However, they both agree that without some sort of deal
sweetener or other intervention, it may be many years before a closed loop,
bottle-to-bottle reprocessing plant is built in California.
Conclusion
California’s stock of postconsumer PET bottles is among the best quality in the
world. The redemption system keeps them clean, and the high ratio of clear bottles makes
them ideal for an efficient bottle to bottle, closed loop reprocessing system. Instead, they
are mostly bailed up and shipped to Asia or the East Coast of the U.S. for reuse as carpet,
textile fiber, or plastic sheeting.
The California redemption system costs more than $800 million annually. It’s a
great system for what it does, but consumers and policymakers could very well conclude
that shipping bottles out of state is either missing opportunity or shirking responsibility.
Further, a growing level of interest is being focused on plastic packaging. Plastic bags,
ridged plastic containers, plastic bottles containing Bisphenol A, plastic bottle caps, and
bottled water are all the subject of current, serious legislation in Sacramento. Ambitious
politicians are throwing around reckless claims about plastic without being held
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accountable to the facts. From its impact on marine environments to retailers and
policymakers calling for greater levels of recycled content, plastic is on the minds of
people who make things happen. Green marketing is becoming one of the leading forms
of consumer messaging, and shoppers appear to be more open to regulations such as
plastic bag bans. Plastic probably won’t be the next Exxon Valdese, but its popularity in
the public arena certainly isn’t thriving.
There is risk for plastic beverage containers in California. It may not be entirely
rational to suggest that one of the most recyclable containers on the market be penalized
or regulated beyond the current redemption system, but there is a great deal of ceremony
to be wrung out of portraying PET containers as big contributors to climate change and
environmental degradation. The media is kind to unsubstantiated claims, and the tired old
cry of corporations exploiting the environment for profit still grabs at heartstrings. At the
same time, industry does have an opportunity to step up and do something that is both a
good environmental measure and a good business move. To torture a few clichés, a
perfect storm against plastic could be forming, and the best way for industry to prevent it
would be to find the intersection where environmental benefits meet business benefits.
A PET reprocessing plant located in California could not only reduce the amount
of virgin plastic needed to make new bottles, it could also reduce an over reliance on
Asian markets for California recyclers. A well-run California plant should be able to
produce food grade reprocessed PET at competitive prices. Further, the beverage industry
could capitalize on the fact that they are truly recycling in a market that likely has the
highest appreciation for recycling. Making a reprocessing plant a reality in California
150
would be a bold move for the beverage industry. If it were done right, it should satisfy the
environmental community and policymakers for a long time.
The answer to the chicken and egg problem is commitment. Venture capitalists
will dance around the idea, but when a shinier bobble pops up in another opportunity,
they tend to lose interest. They’ll analyze the business plan and declare it sound, as they
have done so many times already. But they will decide that it’s a double at best, and they
like home runs. Table 4 shows the costs and benefits that would result from a California
PET reprocessing facility.
Table 4
Costs and Benefits of a California PET Reprocessing Facility
Costs Benefits
Capital investment Highest and best use of California scrap
Land Improved return on the investment for the
CRV system
Facility Eliminate the need to ship some scrap out of
state
Equipment Trim shipping costs
Energy (as ongoing overhead) Test bed/model for similar facilities in other
regions
Water (as ongoing overhead) Protection against Asian market fluctuations
Risks Jobs
Cost of end product could be too
expensive
PR and customer loyalty
Create expectations from policymakers
that may not be practical
Potential shield against content regulation
Would use of capital be more effective
elsewhere, such as increasing collection?
Potential for establishing simpler
collection/transportation methods
151
There is a clear public good in a bottle to bottle program. The state, which stands
to benefit from a recycling plant because it keeps commerce, jobs—and its own
recycling—in California, needs to be part of the answer. It has a fund that not only can
assist with financing, but it could be argued, should assist with financing. If Flexon,
Young, or some other entity is able to pull together the ingredients of a deal, the DOC
should be there to assist with the grant program. It’s unfortunate that both Flexon and
Young were unable to use the first round of grant awards, but both will make a strong
case that they have learned a lot, and much has changed since then. The state is getting a
nice income from the redemption system, insinuating that it is “recycling.” The time is
fast approaching when they may be able to put their money where their insinuations are.
Nobody is challenging the DOC’s commitment to recycling at this juncture, but they will
if the grant process doesn’t allow another chance at this critical effort.
The biggest share of commitment, however, will need to come from the beverage
industry. Beverage manufacturers are the face of this issue. Because technology and
industry are still playing catch-up when it comes to PET recycling, it isn’t necessarily
anybody’s fault that the current system is much less efficient than it could be. However, it
won’t be long before a critical look at the system will reveal huge missed opportunities.
When that happens, the focus will fall on the beverage industry for relying on a rag-tag
system dependant on less-than-stable foreign reprocessors. Missed opportunities could
manifest themselves in a variety of ways, including pricing that spins out of control due
to yet another calamity in the Asian market, or criticism suggesting exploitation of
foreign labor in the handling and sorting of California’s used bottles.
152
It may not be entirely fair to blame the beverage industry for these problems, but
given the tendency by media and policymakers to follow the path of least resistance while
going after the biggest players (all the better if they are big corporations), it is clear that
the beverage companies have the most to lose. They also have a great deal to gain. Coca
Cola has already found redeeming consequences in getting into the reprocessing business,
but locating it in Spartanburg, South Carolina, doesn’t address most of the issues
bubbling to the surface in California.
The financial risk that beverage companies may assess while evaluating whether
they should invest in a California bottle-to-bottle reprocessing plant should certainly
include the risk of not doing so. Making a commitment to recycling PET containers in the
highest form possible, not only demonstrates the most sincere desire to truly do what is
best, but also alleviates the potential for so many irritable and expensive confrontations
on a public policy basis. The risk is complicated, but the potential benefits are compound;
both for the supply of RPET and for sound, thoughtful business policy. If California’s
prime scrap PET is ever going to be put to its highest and best use, it will need to be
through a forward-thinking cooperative agreement, of which the cornerstone is a
commitment from a beverage manufacturer that boldly stands behind the deal, provides
the necessary ingredients, and reaps the many rewards of demonstrating faith and best
practices in achieving a closed loop recycling system.
153
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APPENDIX
May 14, 2009
Personal Statement
When I joined PepsiCo in the winter of 2000, a welcome but unexpected boom was
taking place in the soft drink business. Bottled water was becoming an extremely
popular consumer product. Carbonated Soft Drinks, and a few tea beverages in PET
bottles already had a presence in the market, but bottled water was driving huge increases
in the use of PET. These increases were happening faster than the recycling system could
keep up.
At that time, I always considered myself “environmentally sympathetic” which seemed to
mean that if it was possible to do the right thing – within reason- one should do so. Part
of my job is to participate in the Plastics Recycling Corporation of California. As
detailed in this report, the PRCC seeks to maintain the strongest possible market for post-
consumer PET by connecting sellers with buyers. In that capacity, I became aware of a
troubling, and growing gap between current practices of bailing and shipping scrap verses
the potential of re-processing it in California. Around the same time, the question about
the environmental impact of the growing volume of plastic started to enter mainstream
public dialogue.
A year or two later, Floyd Flexon, who also serves on the PRCC board, told of a brand-
new plant that he had just finished building in France which utilizes new technology that
is not only environmentally beneficial, but profitable as well. Here was a concept that
insured the highest and best use of California’s prime scrap, and should be attractive to
the beverage industry. I was hooked on the idea, and shared the concept with anyone
who would listen. Everyone within my own company seemed to think it was a great idea,
as did members of the California Legislature, the Governor’s office and the Governor’s
administration. The problem, though, was that few were in a specific position to help
bring the concept to reality. The PRCC took up the cause, did an admirable job of
assembling a business plan, and was awarded a $5 million grant from the California
Department of Conservation. My own company supplied a letter of intent to buy product
at market value. However, neither of these actions was sufficient. The grant wasn’t quite
enough to make the remaining $25+ million easy to get, and the letter wasn’t enough of a
commitment to impress investors.
As I promoted the concept within my own company, I found that this was a broad
horizontal idea that crossed lots of vertical decision making categories. Nobody objected,
166
but neither did anyone see it as a strong contributor to their own vertical set of
challenges. The “green movement” had yet to take hold, and our internal thought process
was yet to feel the heat from external discussion about environmental concerns. This was
a long-term effort being pitched to people with a short-term interest. In retrospect, I
should have done more to get that message through to the right people.
Just as the concept seemed to be dying, the green buzz began to grow louder, the PET
market took a few hits to its stability, and internal thought processes in the beverage
industry began to respond. Unfortunately, the economy also took a dive just as these
other factors were coming into play. Still, whether the beverage industry, my company or
someone smarter than everyone else takes up the cause to build a re-processing plant in
California, the fact remains that the current system is not efficient because it is not
operating at its highest and best potential.
This paper is a focused study of one specific concept. It falls far outside regular
discussions of business, economics, environmentalism, conservation and even recycling.
Yet, it impacts - and is impacted - by each of those schools of thought. To that end, this
project serves as not only a guide to PET re-processing, but also as a study in how good
things do or don’t happen.
I believe that California PET reprocessing will take place at some point in the future
because it truly is better from both an environmental and economic stand point to turn
California’s bottles back into bottles. My personal passion for advocating a reprocessing
plant in California has not diminished, and my interest in promoting common sense
environmental efforts has grown. However, I have come to realize that it’s a huge
challenge to sell round pegs to square-holed people. Those holes seem to be trending
more round. The round pegs are becoming more attractive, and I hope that this document
will be helpful to anyone who seeks to take advantage.
Greg Haskin
Doctoral Candidate
University of Southern California
and
Director, Government Affairs
PepsiCo
Abstract (if available)
Abstract
This project examines the process by which PET beverage containers from California are “recycled”, and explores how that process might be improved upon to achieve the highest and best use of recycled bottles. California scrap bottles are among the highest quality available, and are ideal to be turned back into bottles via a closed loop, or “bottle to bottle” reprocessing system. To explore the benefits of such a system, and to understand the obstacles preventing such a system from being implemented, this project focuses on the current process of shipping most of California’s scrap bottles out of state (usually oversees) and the steps required to shift to a closed loop system. The role of various actors and agencies involved is explained, including environmental activists, The California Department of Conservation, the recycling, plastics and beverage industries and other groups that would potentially play a role. Included is a brief history of beverage container development and recycling, back ground on California legislative efforts to support recycling and a look at emerging trends in recycling. The goal of this project is to provide anyone who would pursue establishing closed loop PET recycling in California with a comprehensive understanding of the steps that would need to be taken in order to successfully do so.
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Asset Metadata
Creator
Haskin, Greg
(author)
Core Title
Bottle to bottle: a guide to achieving closed loop recycling for California's PET beverage containers
School
School of Policy, Planning, and Development
Degree
Doctor of Policy, Planning and Development
Degree Program
Policy, Planning, and Development
Degree Conferral Date
2009-12
Publication Date
10/05/2009
Defense Date
05/14/2009
Publisher
University of Southern California
(original),
University of Southern California. Libraries
(digital)
Tag
AB 2020,bottle bill,closed loop recycling,downcycling,OAI-PMH Harvest,PET bottles,plastic beverage containers,plastic bottles,Recycling,reprocessing
Place Name
California
(states),
USA
(countries)
Language
English
Contributor
Electronically uploaded by the author
(provenance)
Advisor
Mazmanian, Danial (
committee chair
), Bradbury-Huang, Hillary (
committee member
), Moore, Patty (
committee member
), Richardson, Harry W. (
committee member
)
Creator Email
ghaskin@usc.edu,greg.haskin@pepsi.com
Permanent Link (DOI)
https://doi.org/10.25549/usctheses-m2645
Unique identifier
UC1493184
Identifier
etd-Haskin-3289 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-258471 (legacy record id),usctheses-m2645 (legacy record id)
Legacy Identifier
etd-Haskin-3289.pdf
Dmrecord
258471
Document Type
Dissertation
Rights
Haskin, Greg
Type
texts
Source
University of Southern California
(contributing entity),
University of Southern California Dissertations and Theses
(collection)
Repository Name
Libraries, University of Southern California
Repository Location
Los Angeles, California
Repository Email
cisadmin@lib.usc.edu
Tags
AB 2020
bottle bill
closed loop recycling
downcycling
PET bottles
plastic beverage containers
plastic bottles
reprocessing