Bringing the market together – Recycling of resources

This article appeared in the August 2022 issue of Resource Recycling. Sign up today to access all print content.

F.o For more than 30 years, the Plastic Recycling Corporation of California (PRCC) has demonstrated that a voluntary producer responsibility organization can successfully manage the recycling of a specific product at the state level.

PRCC works to keep recycling rates of PET beverage bottles high, while keeping the costs of the recycling system low. Through the purchase and sale of PET beverage bottles, PRCC provides stability to the market.

Adaptable and resilient, PRCC successfully manages California’s huge PET recycling market with minimal disruption. For example, the organization has kept California’s recycled PET moving through unforeseen and challenging events such as China’s National Sword Policy, COVID closures, logistics disruptions, weak markets, public policy adjustments, and ever-changing PET package design.

As the broader recycling industry works to adapt to political changes in U.S. jurisdictions, officials can learn a lot from the evolution of the PRCC and how it has worked to organize and align various links in the California plastic recycling chain.

How it started

PRCC was formed in 1987 as a direct result of legislation: the California Beverage Container Recycling and Litter Reduction Act (AB2020), which established a bill for bottles in the state.

The law meant that beverage manufacturers who sold or distributed in California had to pay a deposit and a processing fee. The processing fee was calculated as the difference between the waste value of the containers and the cost to recycle them. This has led competing beverage bottle manufacturers to make the unique decision to work collaboratively to establish an effective statewide recycling program to increase the recycling rate of their packaging.

Thus was formed the PRCC, developed as a non-profit voluntary membership organization for producer responsibility which immediately started purchasing PET bottles. PRCC has also implemented innovative promotional and marketing strategies to increase redemption rates and public awareness of PET recycling.

At the beginning of the PRCC, there were no recovery facilities in California, there were limited markets for post-consumer PET bales, and most of the PET collected in California was exported to China via Hong Kong. PRCC staff have visited China on many occasions and have been informed of China’s intention to end its reliance on Western imports of PET bales and to develop its own recycling infrastructure. It was with this foreknowledge that the PRCC prepared for market changes and actively developed California’s PET recovery infrastructure.

There are now six remediation facilities in California, more than enough to process all the PET bottles collected in the state. This was achieved by providing supply contracts to various facilities. These bankable contracts have helped PET recoverers by ensuring a constant supply of raw material. PRCC also offers reliability and stability in payments, even assisting with credit at times, and PRCC supports California’s remediation facilities by actively working to keep PET bales in the state. PET retention policy in the state is now more important than ever due to California’s recently enacted recycled content requirement. Currently, over 90% of the PRCC volume remains in the United States and most of it in California.

What Makes It Work

A key element of the PRCC’s work has been clarity on pricing and market information.

The transparency of the PRCC bidding system makes PET bale prices in the state accessible to redemption centers and processors, ensuring economic openness. An open bidding is held every two weeks, with California suppliers providing PRCC with a list of their PET packaged cargoes by type and PRCC auctioning the unallocated portion of the cargoes for purchase by buyers pre-qualified.

PRCC then assigns the material to the highest bidder. The bid sets the value for the material assigned to contracted buyers. This provides the industry with a true market price that is openly shared with recyclers to ensure they get the best value for their material.

Additionally, as a Californian organization with relationships along the entire PET recycling value chain, PRCC is well positioned to collect data and undertake research of great value for PRCC members, redemption centers, sidewalk operators, PET recovery managers, policy makers and other stakeholders.

For example, in 2019, the PRCC conducted a unique PET leak study, finding that 12% of clear PET is lost during recovery and that much of this is due to non-compliant PET bottles such as opaque bottles, components metal and non-recyclable barrier bottles. (See the June 2020 issue of Resource Recycling for more information on this project.)

These data informed the PRCC’s legislative efforts to discourage non-recyclable and difficult-to-recycle PET.

Finally, PRCC regularly collaborates with all stakeholders to provide feedback from processors and regenerators directly to PRCC members – bottle and beverage manufacturers – on recyclability and design issues. These problems include colored bottles, full-wrap labels, barriers, and metal closures. This collaboration advances the dialogue and encourages the manufacturing industry to improve the recyclability of their PET bottles.

Quality of materials in focus

The quality of California’s PET bales is nationally recognized and is directly related to the work and advocacy of the PRCC in the state.

To promote quality, we have an active field agent who trains and provides technical assistance to MRFs, processors and redemption centers. The PRCC agent visits the facilities and offers sorting and packing assistance, which allows PRCC to move the material of each facility to the market which can make the best use of it.

Each remediation plant has different quality requirements. The PRCC agent organizes visits between suppliers and buyers so that each party knows the expected quality and standards. However, our work is not done there; California retrievers still deal with a wide range of contaminants in their bales, and PRCC personnel continually strive to maintain and enforce PRCC’s bale specifications.

The quality of California bales is complex, as there are several methods of collection: repurchase, delivery, and various types of pavement, all of which affect the quality of the material. The PRCC’s research, including the selection of regular bales, leads directly to the PRCC to implement additional specifications for the bales. When PRCC started, there was only one specification for PET bales in California, but we now have four specifications for bales: Grade A (buy back), Grade B (curb side), Grade B with thermoforms (curb side) and thermoformed bales only.

PRCC encourages the separation of thermoformed products from the bales of PET bottles. There are two reasons for this: to improve the quality of the bales of PET bottles and to create bales of thermoforming only. By grading the bales, the supplier is rewarded for better quality with a higher price and the hauler gets a higher yield. The variety of bale specifications help PRCC staff ensure that retrievers pay a price commensurate with yield and purchase the optimal material for their system, whether it is repurchase material to turn bottles into bottles or separate thermoforms from PET bottles with the aim of developing thermoforming-thermoformed recycling.

Based on feedback from California PET retrievers, PRCC has developed a quality app so retrievers can immediately provide bale quality feedback to help PRCC maintain bale standards. By improving the quality of PET bales, cleaner material leads to higher waste prices, which in turn improves the collection economy across the state. Although the price of recycled PET bottles is strong today, scrap prices have sometimes been so low that margins have been tightened and operations have struggled, compounding the problem of encouraging the opening of new redemption centers. PRCC’s cultivation of the quality of PET waste helps ensure continued interest and a variety of buyers for the material.

Maintain a solid presence

It is the direct knowledge of the market, through the purchase and sale of PET bales, that allows PRCC to anticipate market disruptions and to work to avoid disruptions. PRCC is able to respond quickly to problems such as port delays and facility closures because it has developed a variety of buyers, which means there is always a way to move material to different markets.

The longevity and credibility of the PRCC have enabled the development of established relationships, which in turn improve the stability, efficiency and consistency of the California PET recycling industry. They have enabled the PRCC to achieve a strong market position and support the growth of the recovery industry in the state. With knowledge of the PET recycling markets, bale quality and the entire PET value chain, PRCC is able to quickly address the problems and challenges that challenge the PET recycling industry, including the contamination, collection and policies. The PRCC argues that the PET recycling industry promotes greater efficiency, cleaner material and higher collection rates.

The PRCC continues to operate with the same objectives it had in the beginning, working along the entire value chain with a system-wide approach. This results in efficient and effective recycling of PET bottles which supports the entire PET recycling industry. The PRCC is regarded in the state and beyond as an industry expert on PET recycling and a keeper of the market, working to improve the quality and accessibility of PET bales in circulation and as an unparalleled source of data on recycling of PET. PET in California and beyond.

Sally Houghton is the executive director of the Plastic Recycling Corporation of California and can be contacted at [email protected]

This article appeared in the August 2022 issue of Resource Recycling. Sign up today to access all print content.

Leave a Reply

%d bloggers like this: