Major PET recyclers exit APR over recycled content laws

Posted on October 11th, 2019 by plasticycle

STEVE TOLOKEN Plastics News Staff 10/4/19

Verdeco Recycling Inc. and CarbonLite Industries LLC wrote in a Sept. 25 letter that APR should speak more forcefully.

Two prominent PET recycling companies are leaving the Association of Plastic Recyclers, arguing that the sector’s main trade group is not providing strong enough support on issues like recycled content legislation.

Verdeco Recycling Inc. and CarbonLite Industries LLC — who lobbied heavily for a tough recycled content law that passed the California Legislature in September — wrote in a Sept. 25 letter that APR should speak more forcefully.

“APR has not embraced fundamental changes in our industry and its position on minimum mandatory recycled content legislation is a prime example of why we have decided to leave the organization,” CarbonLite Chairman Leon Farahnik and Verdeco President and CEO Alex Delnik wrote in their resignation letter.

The two companies, who are prominent players in recycling PET back into food and beverage containers, argue that the commitments of brands like Coca-Cola Co. to use more recycled plastic and public pressure will shift the political environment for the industry.

And they noted in the letter that they produce half the recycled PET used in beverage containers in the United States.

APR President and CEO Steve Alexander said the association was “disappointed” in the companies leaving, and he said APR does advocate for recycled content, including for the new California law that Delnik and Farahnik also pushed for.

“APR was the first plastics-related organization to support minimum recycled content mandates, and we have continued to advocate for recycled content throughout the years,” Alexander said. “For example, in California’s most recent legislative session, we supported AB-792 — the [Assemblymember Philip] Ting bill — on minimum content from its introduction to enrollment.

“We continue to advocate on behalf of our industry and our members in urging the governor [Gavin Newsom] to sign this legislation,” Alexander said.

But both Los Angeles-based CarbonLite and South Gate, Calif.-based Verdeco said APR did not act forcefully enough.

Both companies and a few others in the industry formed a coalition and hired their own lobbyist, independent of APR, to push legislation in California.

They succeeded this year after falling short the last several years, with the Legislature in September passing what’s been called the world’s strongest plastic bottle recycled content law.

It requires all containers in the bottle bill, including PET, to have recycled content, starting at 10 percent in 2021, hitting 25 percent in 2025 and topping out at 50 percent in 2030.

But the Verdeco-CarbonLite coalition had wanted a stronger version of that law, requiring 75 percent recycled content by 2030.

APR did not support that version. It sent a so-called “support if amended” letter June 26 to California lawmakers supporting the concept of recycled content but saying the particulars of the 75 percent version were impractical.

APR’s position was similar to that taken by the American Beverage Association, the International Bottled Water Association and Plastic Recycling Corp. of California, a group of bottle makers.

They warned of major supply shortages and market havoc if beverage makers tried to go above 25 percent after 2025. APR said it would require significant investments in the state’s infrastructure to collect enough recycled plastic.

APR ultimately supported the version that passed, at 50 percent, as did the Verdeco-CarbonLite group.

The version that became law also added significant “off ramp” waivers for companies to avoid penalties in order to win support from the American Beverage Association.

Delnik, however, said those provisions removed some of the teeth from the law.

Delnik said APR should not have attached those conditions to its support of such legislation, calling it a “nonsupport letter of support” and saying recycling companies would benefit from the strongest legislation.

Verdeco and CarbonLite argue that the public pressure around plastics and ambitious commitments for recycled content plastic packaging from food and beverage companies creates opportunity for APR to pursue stronger policies.

“APR is at best an observer (occasionally a reluctant supporter) of these changes and we can’t recall any effort by APR to initiate a serious discussion within the organization on how APR should lead the industry during these transformational times,” the two companies wrote.

Regarding the recycled content legislation, they wrote: “Our repeated attempts over the last few years to engage APR leadership in serious conversations on the subject (in light of our legislative efforts in California) have been completely and utterly ignored.”Bottle bills

While they did not raise it in their letter, Delnik also said they want to see APR more strongly advocate for container deposits to boost collection of PET.

The U.S. PET bottle recycling rate is about 30 percent, which is about half the European collection rate of 58 percent.

Those rates vary widely between individual U.S. states and European countries. Jurisdictions with container deposits typically have much higher bottle recycling rates.

“APR really is not clear what they’re trying to accomplish beyond generalities,” Delnik said. “Did they advocate for bottle bills across the country in every state?”

Farahnik believes the recycled content commitments by beverage companies will lessen the soft drink industry’s traditional opposition to bottle bills, as they scramble to get enough material.

“The Cokes of the world, the Pepsis, are now more amicable to … a system across the country for some kind of collection, and not fighting the deposit systems, the bottle bills,” Farahnik said. “They demand all this recycled material and it’s not going to happen unless collection systems go up.”

APR officials, however, have expressed skepticism about a national bottle bill. Alexander declined to comment on Farahnik and Delnik’s specific deposit comments. In the past, APR officials have said the organization supports expanding current bottle bills in the 10 states that have them but doesn’t see a realistic path for a national push.

“Although a national bottle bill would be great, it’s just simply not a realistic option,” said Kara Pochiro, APR vice president of communications and public affairs. “Recycling is a state-by-state issue. It’s very, very difficult to push any kind of nationwide legislation that would effect recycling.”

Speaking at a recycling conference in March, Pochiro said APR supported alternative federal legislation to get more investment in recycling as part of a national infrastructure bill. But even that is a “hard push,” she said.

“We support the expansion of current bottle bills, and we understand how great they can be and they lead to a much higher collection rate, but we have to be realistic, too,” Pochiro said.

Farahnik believes the recycling sector’s dependence on beverage makers as its customers makes it difficult for the group to take firm policy positions that could help recyclers.

“They want to walk this tightrope so nobody gets upset,” Farahnik said. “When you don’t want anyone to get upset, you’re nonfunctional.”

CarbonLite, Verdeco and similar recycling companies would benefit economically from more bottle collection, particularly the higher-quality material streams that come from deposit systems.

CarbonLite, which is based in Los Angeles, said in May it was moving ahead with an $80 million investment in what will be its third factory, near Reading, Pa.

It sees more demand from customers like Nestle Waters North America and PepsiCo and suggested it was looking for a fourth U.S. facility.

The company says it’s the world’s largest producer of food-grade recycled PET.

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