PET recycling rate drops but NAPCOR sees potential for turnaround

The U.S. PET bottle recycling rate dropped slightly in 2019, to 27.9 percent, continuing what's been a decade of the rate hovering near 30 percent and essentially stagnating.

But the head of the PET sector's main trade group points to signs of change that could bode well, like increasing support for bottle bills, more focus on recycled content and investment in new recycling capacity.

The National Association for PET Container Resources released its annual PET bottle recycling report on Dec. 1, calculating that the rate dropped from 28.9 percent in 2018 to 27.9 percent last year.

NAPCOR Executive Director Darrel Collier said there's a need to collect more material to meet increased demand, particularly in bottles. That's led NAPCOR to come out with a policy statement essentially supporting bottle bills.

The group adopted the policy in the summer calling for "well designed incentive systems" to increase the recycling rate but had not publicly announced the new position, he said.

It means the group, which represents the PET bottle making supply chain, now supports container deposit systems like Oregon's that have a strong role for industry in the operations, Collier said.

"The way I've described it is we have a policy statement that supports incentivized collection as a way to increase collection, which we see the most critical need in this industry today," he said. "It's hard to deny what we are talking about is something similar to what we have in a state like Oregon."

NAPCOR's report also presented for the first time a PET recycling rate for North America, using statistics from Canada and Mexico, and calculated a 35 percent rate for PET bottles in the three nations. It did not provide separate rates for Canada and Mexico.

In a news release, NAPCOR noted that the rate is above the 30 percent threshold for recycling and composting set by the Ellen MacArthur Foundation to demonstrate that a material can be recycled "in practice and at scale."

The report said 1.774 billion pounds of PET bottles were recycled in the U.S. last year and noted the strongest growth in demand is from bottle markets. It said demand for recycled PET to go back into bottles — both for food and beverage and for non-food uses — rose more than 40 percent from 2017 to 2019.

The largest end market for recycled PET remained fiber applications such as carpet and clothing, accounting for 41 percent of demand. Bottles were the second-biggest, at 35 percent, followed by film and sheet applications at 15 percent, Collier said.

NAPCOR said demand from the fiber market was steady in 2019, rising less than 1 percentage point, while the smaller end market for recycled PET in strapping was down approximately the same amount.

The thermoforming and sheet market actually saw a drop of 16 percent from 2017 to 2019, the group said.

Collier pointed to positive changes in the PET recycling market, even if the rate has been flat for the last decade.

"We've been plus or minus 2 percent, on either side of 30 percent, for the last 10 years we've done this," he said.

But he said the industry has seen a huge increase in domestic processing capacity in that time.

Close to 60 percent of PET bottles collected for recycling in the U.S. were exported at the high water point in 2008, but that's declined steadily to less than 8 percent in 2019, or about 139 million pounds, NAPCOR said.

It means the U.S. industry is processing about 1 billion pounds of additional recycled PET compared with a decade ago, he said.

"Quite frankly, the reclaimers have made a lot of investment," he said. "The markets seem to be there."

Bottle end markets grew from 403 million pounds of recycled PET in 2017 to 556 million pounds in 2019, and Collier pointed to increased commitments from consumer product makers to use more recycled materials as well as legislative mandates that will drive more demand in that fast-growing segment.

California earlier this year passed the world's strictest recycled content law for PET beverage bottles, requiring them to use 50 percent by 2030, and Collier noted other states like New Jersey are looking seriously at similar legislation.

Many of the consumer brand companies have voluntarily committed to using about 25 percent of recycled content in bottles in the next few years, but Collier said there's only enough material in the system currently to generally support 12-13 percent recycled content.

To get to 25 percent, he said NAPCOR estimates you need U.S. PET recycling rates of at least 50 percent, and likely higher, depending on demand in the fiber market, Collier said.

In talking about strategies to boost collection of PET bottles, Collier pointed to the 10 U.S. states with bottle bills that all have PET bottle recycling rates of at least 65 percent, and the eight Canadian provinces with deposits have a rate of 79 percent.

He said NAPCOR is not endorsing particular deposit systems but favors programs that give industry a strong operations role.

"We're not being specific and say we like this law or that law but we made principles that we have kind of learned from what we see as the best examples in the states as well as Canadian provinces," he said.

Collier said the traditional opposition to bottle bills from large consumer brand companies that are customers of the PET sector kept NAPCOR from endorsing bottle bills in the past.

But with signs that those consumer product companies are also changing their positions, NAPCOR changed its policy, even if it did so rather quietly.

"I think the reality is that many of the actual brand houses are getting to a point of endorsing it and in some parts of the world are endorsing it," he said.