[greenyes] Shortage of R-PET

["Peter Anderson" <anderson@no.address>]

PLASTICS NEWS - May 2, 2005
Recycled PET shortage serious, growing
By Joe Truini

AKRON, OHIO (April 27, 4:30 p.m. EDT) -- Recyclers and recycling advocates 
could be missing a golden opportunity to improve sagging plastic bottle 
recycling rates significantly.
Since humans began roaming the earth, demand often has dictated supply. 
Basically, if someone wants something, there is someone else willing to 
provide it - for a price.
But demand for recycled PET containers from carpet makers, beverage 
companies, strapping manufacturers and overseas buyers is outpacing supply.
Recovered PET prices have reached an average of about 25 cents per pound, 
but that premium still hasn't been enough to increase container recovery.
"We're playing musical chairs right now in the PET recycling industry, with 
10 players and seven chairs," said Phil Cavin, national procurement director 
for carpet maker Mohawk Industries Inc. "Everyone right now is just 
scrambling to get material, and prices are through the roof."
Mohawk, based in Calhoun, Ga., is one of the nation's largest PET recyclers. 
The company uses recovered material in its carpeting and is a major supplier 
of recycled PET resin.

Dropping fast
Despite the strong market and increased demand, the 2003 recovery rate for 
plastic soda, water and other PET bottles fell for the eighth consecutive 
year since 1995. That year, the United States recovered 39.7 percent. But 
that rate sunk to 19.6 percent in 2003, according to the National 
Association for PET Container Resources in Charlotte, N.C.
"There's plenty of bottles to go around, but they're just not being 
collected," Cavin said. "It's terrible right now. Nobody sees any relief in 
sight."
In 2003, U.S. recyclers produced 667 million pounds of clean flake from 
recovered post-consumer PET bottles, exporting 255 million pounds of that, 
according to NAPCOR.
That same year, U.S. manufacturers consumed 552 million pounds of recovered 
PET. Fiber product manufacturers, which include carpet makers, led the pack, 
using 296 million pounds. Food and beverage bottle manufacturers consumed 
106 million pounds, and the strapping industry 77 million pounds. Sheet and 
film producers, nonfood bottle makers and engineered resin producers used 32 
million, 24 million and 10 million pounds, respectively. Some 7 million 
pounds were consumed by other sources.
It is not a new issue, said Mike Shedler, NAPCOR vice president of 
technology.
"We've had a demand imbalance for quite some time," he said. "There have 
been meetings and committees and studies and everything else that people 
have talked about over the years in terms of how we can address supply 
issues. Not a whole lot, though, has happened."

Stuck in the middle
Many people agree that container-deposit laws, or bottle bills, are 
effective in recovering PET bottles, but stakeholders are split on their 
support, said Pat Franklin, executive director of the Container Recycling 
Institute in Arlington, Va. Beverage manufacturers, the grocery industry and 
retailers oppose bottle bills.
Recyclers are stuck in the middle, Franklin said. Major beverage companies 
are their customers, whether buying processed material from recyclers or 
selling them recovered bottles, she said.
"It's like they've got a gag order," Franklin said.
Recycling advocates praise the effectiveness of bottle bills. The 10 states 
that have had deposit laws running for some time - Hawaii, the most recent 
state to pass deposit legislation, just started its program this year - 
collect about three of every four bottles consumed, she said. Recovery rates 
can reach higher than 80 percent in those states.
"You're looking at single-digit recycling rates in nonbottle-bill states," 
she said.

No consensus
And over the past six to nine months, virgin PET price increases have 
created even more demand for alternative raw materials, including recovered 
PET, said Shedler of NAPCOR.
"There's no question we need more supply out there," he said. "The issue is 
that no one can agree on just how to do it."
And the incredibly high demand for strapping, which is used to secure a 
range of products such as baled materials, could add to the need for more 
PET, Shedler said. Strapping manufacturers are adding capacity to fill 
orders, as most of them are sold out of product.
"We could essentially double the demand for strapping in the next 12 
 months," he said. "That would put the strapping segment, in terms of 
[recovered PET] content, very close to where the carpet industry is today."

You just might get what you wish for
In 2000, recycling advocacy groups led by the GrassRoots Recycling Network 
started pressuring Coca-Cola Co. and PepsiCo Inc. to use more recycled PET.
That year, Coke officials agreed to start using 10 percent recycled content 
in billions of the company's bottles.
In 2002, PepsiCo officials outlined a goal to use 10 percent recycled 
content in their firm's containers.
But those environmental community victories are putting recyclers and 
processors on the spot to come up with enough material for everybody.
Coke and Pepsi together are consuming in the neighborhood of an additional 
200 million pounds of recovered PET bottles or so per year, according to 
recycling industry estimates.
The additional demand has led to shortages of 100 million to 200 million 
pounds per year, according to Cavin.
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_________________________
Peter Anderson, President
RECYCLEWORLDS CONSULTING
4513 Vernon Blvd. Suite 15
Madison, WI 53705-4964
Ph: (608) 231-1100
Fax: (608) 233-0011
Cell: (608) 698-1314
eMail: anderson@no.address
web: www.recycleworlds.net

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