Gabriel Thoumi, Head of Plastics Programme at Planet Tracker
California has leapt ahead of the EU in plastic bottling recycling policy by introducing the most stringent recycling requirements globally. It's a critical step towards a circular economy. How could this forward-thinking regulation impact on other countries around the world?
Plastic remains one of the world’s most utilised packing materials and the plastic bottle market is still seeing rapid growth – valued at USD 160 billion in 2019 and expected to reach USD 240 billion by 2025. Indeed, in the wake of COVID-19, single-use plastic has drastically increased.
At the same time, environmental concerns are becoming increasingly important in the agendas of governments across the globe, with the pandemic increasing climate change awareness and the need to find a sustainable path to recovery. As such, an innovation race has begun with key players investing in recycling and introducing governmental policies to encourage more sustainable production and safer consumption of plastic.
In light of this, in September 2020, California adopted the world’s toughest plastic bottle recycling legislature, exceeding even the European Union’s standards. Now a global leader in recycled plastic content, California requires plastic beverage containers to use a set amount of recycled plastic (PET or R-PET) going forward – starting with 15% recycled content in 2022 and increasing to 25% and 50% in 2025 and 2030 respectively.
Signed by California Governor Gavin Newsom with support from the Association of Plastic Recyclers, the new bill – AB 793 – marks a critical step towards, reducing dependence on oil and virgin plastic and creating a closed loop system that minimizes resource inputs and eliminates waste, known as a “circular economy”. Following California’s example, will other countries rise to challenge and set their own progressive requirements?
New stringent standards
With over 12 billion plastic bottles sold each year in California, the plastic beverage container industry will have to adapt deliberately and decisively to meet these new requirements – increasing its recycled content by 10% in 2021. Although approximately 70% of the bottles are currently recycled (often into other types of plastic packaging), more than 3 billion end up in landfills or as litter, according to state statistics. The new law applies to 97% of the bottles sold in-state that use PET and will bring industry-wide change.
Under AB 793, beverage container companies will be penalized 20 cents for each pound of PET they are short of the target. These penalties will contribute to the expansion of state recycling infrastructure via California’s Recycling Enhancement Penalty Account – a strong motivator to ensure compliance with the stringent standards.
This new policy isn’t the first of its kind for California: the state has been acting on a number of plastic-related environmental concerns over recent years. In 2014, the city of San Francisco introduced an ordinance banning the sale of plastic water bottles on city-owned property – leading San Francisco International Airport to halt its 4 million yearly plastic water bottle sales.
Such policies are having an effect beyond their immediate scope: they are both encouraging entire industries to rethink their practices, and acting as a driving force for other states and countries to massively expand their recycling systems, reduce their dependance on plastic, and move further towards circular economy principles.
Scope of impact
Facing the most ambitious and aggressive plastic content law in the world, what shape are Californian beverage container companies in to meet the requirements?
The mandate builds on the 2016 Plastics Recycled Content Reporting Assembly Bill 2530, which requires annual reporting of R-PET use in beverage containers sold in the state to state agency CalRecycle.
While the 2019 data, reported in 2020, is incomplete due to the COVID-19 crisis, out of 71 beverage manufacturers who did report in Q1 2020 for the calendar year 2019, only 11 companies reported any use of R-PET, according to Planet Tracker’s review of the data.
What’s more, 33 companies reported zero use of R-PET in 2019 - see Table 1.
Table 1: Companies Self-Reporting Zero R-PET Usage in 2019 in California
Although overall state-wide trends are difficult to ascertain, it is clear that the beverage industry must quickly adapt and invest in their processes to meet these new requirements.
That said, the review did identify companies with significant and already-established plastic-related commitments, such as Niagara Bottling, Nestle, PepsiCo, Whole Foods, Danone and Coca-Cola which reported R-PET rates at 53%, 36%, 24%, 20%, 20% and 19% respectively. Such commitments represent critical steps forwards for the entire plastic production supply chain to meet its plastic reduction commitments and create a more sustainable option.
A global push forward
As seen with the new AB 793 regulation, markets globally have been increasingly introducing regulatory measures as the environmental risks of plastic have grown – with China, the European Union, and the US as the most proactive players.
China has put in place legislation to ban certain categories of single-use plastic, increasing in quantity and intensity until 2025, with the purpose of reducing consumption. The categories of plastic being targeted include plastic bags, tableware, e-commerce packaging, and single-use hospitality items.
Over 300 local laws and ordinances similar to California’s plastic bottle policy – albeit less extreme – have been adopted by 22 US states and Washington D.C. But although the US has a diverse set of municipal and state-wide policies, there are currently none at a federal level.
That said, there are five main pieces of legislation submitted to the Supreme Court that address single-use plastic and its environmental risks – they are similar in scope and scale to policies enacted in the EU and could be a momentous step in the right direction for the US.
Often the global leader in environmental policy, the EU has numerous laws in place. For example, in December 2017, EU member states and the European Parliament agreed on new plastic waste rules, including recycling 55% of all plastic packaging waste by 2030 and improving extended producer responsibility mechanisms. Other policies include targets to reduce littering, and a plastic waste levy beginning in January 2021 that will charge each nation country a fee on non-recycled plastic packaging waste.
Looking ahead
California’s introduction of the world’s toughest plastic bottle recycling legislature has placed it on the map as a global leader. This has the potential to act as a strong motivator for other policymakers to implement measures that mitigate the environmental risk of plastic. Policymakers should put regulatory pressure on the industry to introduce sustainable practices, to hold companies and investors responsible and learn from stakeholders on how to improve the industry.
With plastic waste expected to double from 150 million currently to 300 million metric tonnes by 2040, there is an immediate need for governments to actively encourage and work with plastic production companies to ensure that they are aligned with sustainability targets and on track to meaningfully support a circular economy.
Finally, the new Biden U.S. administration, coupled with the recently announced US Plastics Pact coalition, might result in expanding the U.S. bottle-to-bottle market that currently in California finds R-PET nearly at USD 300 per tonne above virgin PET. Bloomberg New Energy Finance also forecasts that the Biden administration will be supportive of the Break Free from Plastics Pollution Act that drew 90 co-sponsors in Congress. According to Bloomberg, the act would improve the enabling policy conditions to dramatically increase U.S. plastics recycling rates.