Attendees at this week’s Plastics Recycling Conference delved into detailed discussions on the future of investments for secondary sortation, the importance of PCR market stability, collaborations in film recycling and more. Here’s a snapshot of key discussions from the event in National Harbor, Maryland.
The role of secondary sortation
Balancing supply and demand for recycled plastic as the price of virgin materials has dropped in recent months was a major topic of conversation.
Analysts with IHS Markit said they predict a global oversupply of resins will be common in the postconsumer resin market over the next few years. That's due in part to growing polypropylene capacity in China, which is now exporting the material, and projects like Bayport Polymers in Texas and Shell's ethylene cracker plant in Monaca, Pennsylvania, which are slated to add capacity in the U.S. this year.
“If you’re going to be in recycling the next few years, you better have a customer who’s paying for it,” said Joel Morales, vice president of polyolefins Americas at IHS Markit.
A panel of companies with secondary sortation facilities zeroed in on how investments could help boost supply and attract customers. Technology improvements have enhanced secondary sorters’ ability to capitalize on difficult-to-recycle waste streams, Chris Wirth, vice president of marketing and industry at AMP Robotics, said on the panel.
AMP announced the pilot of two secondary sortation facilities in 2022. The company’s primary business is its artificial intelligence and robotics technologies, which Wirth says are adept at identifying materials that could be ideal revenue streams for secondary processors, such as PET clamshells. “I think we’re definitely at an inflection point,” Wirth said.
Meanwhile, some processors and recycling experts said more commitment from customers through long-term contracts is needed in order to make the investment in high-quality sortation technology pencil out.
Steve Alexander, president and CEO of the Association of Plastic Recyclers, said brands need to adopt a more circular philosophy when it comes to their products. (The conference is produced by Resource Recycling, which is owned by APR.) Alexander said over the past decade, some have focused on new “gee-whiz” packaging materials at the expense of using materials that are proven to be recyclable — even as they continue to demand a consistent, cheap supply of postconsumer recycled content to meet internal sustainability goals or external regulations.
Alexander said that addressing that imbalance by shifting to longer-term contracts rather than spot market pricing would improve the supply chain for recycled materials overall.
"A buyer of recycled resin, one month they may want to buy a bale of polypropylene. They expect [processors] to have that line and that process in place, and so they make that investment. The next month, virgin plummets, and they say ‘I don't want that, I want virgin,’" Alexander said. "Who the hell is going to make an investment they don't know they're going to sell every month?"
Newer secondary sortation facility operators also need to think more critically about the types of materials they want to manage in order to protect themselves in the face of unpredictable market conditions, said Greg Janson, president of Granite Peak Plastics.
“The high market is not a business plan. We have to, for these facilities to be successful, align with the value chain. Start with the end product in mind and design your system around that,” he said.
Shifting recycled content markets through legislation and chemical recycling
New laws will also continue to play a role in shaping market demand, speakers said. Pete Keller, vice president of recycling and sustainability for Republic Services, said extended producer responsibility and minimum recycled content laws — particularly in California — are a major “motivating factor” for spurring secondary processing investment.
Republic anticipates its first plastics recycling plant will open in Las Vegas by the end of the year. Another is scheduled to open in 2024 in the Midwest, with two other projects in the works. Las Vegas is a “natural fit” for the first facility partly due to strong demand in the region, Keller said. “Recycling is mature in the western U.S., and there are high population centers,” he said.
Mike Centers, president of Titus MRF Services, discussed how his company closed its secondary processing center in Los Angeles in late 2020 due to low commodity prices, rising rent and a decline in volume because of temporary COVID-related MRF closures. “The pandemic was our downfall,” he said, but conditions today are better for such facilities to operate.
Janson sees the rise of chemical recycling businesses as another “game changer” for secondary processors. He predicts that many chemical recycling facilities will see value in sourcing their material from nearby secondary processors or otherwise vertically integrating it into their supply chain. “The pieces are in place, depending on how chemical recycling actually develops and scales, to create this voracious demand.”
Wirth said future opportunities could include working with consumer packaged goods companies that currently use flexible packaging for products, especially as AI and sorting technology gets more efficient and such packaging makes up more and more of the material stream. Yet many processors are still waiting to see when the material could be profitable enough to justify the work needed to sort that material in earnest.
Breaking through on plastic film recycling
“I think I just want to start off by saying that film is really hard,” said Alan Schrob, director of mechanical recycling at NOVA Chemicals, who moderated a Tuesday panel on initiatives to increase collection and transformation of plastic films.
Flexibles represent a huge market — multiple times the weight of PET bottles generated every year, noted Eunomia Research & Consulting Director Sarah Edwards — yet it’s not as well understood. Estimates suggest less than 4% is being recovered.
“It's basically a market we can no longer ignore,” Edwards said. “We’ve been speaking for many, many years about how we manage rigid plastics, but this is a huge market that is growing and evolving and it's complex,” Edwards said.
Collaborations happening across the value chain provide some reason for optimism.
In Minnesota, a coalition known as MBOLD has brought together major brands like Target and Schwan’s, as well as other regional organizations and leaders, to establish the relationships and infrastructure needed for a circular economy for film in the Upper Midwest. Myplas, a postconsumer polypropylene recycler based in South Africa, is set to open a facility in Minnesota this year (its first U.S. operation) following a $9.2 million equity investment through MBOLD, as well as support from the state government, Closed Loop Partners and others.
JoAnne Berkenkamp, managing director of MBOLD, described the importance of focusing on regional opportunities that can scale and securing supply and demand for recycled plastic film.
“There's so many reasons why 95% of the flexible film in the United States is not getting recycled. This is a systems issue,” Berkenkamp said. “As big as our companies are, alone they couldn't do this.”
Another investor in Myplas is Charter Next Generation, which produces plastics, including PCR films. CNG has also recently partnered with Revolution, which recycles film and creates new products, on PCR in food-grade flexible packaging. One of Revolution’s collection initiatives is through an app in which farmers can notify Revolution that they have plastic film in need of pickup. Revolution has its own truck fleet that reclaims that material.
Ultimately, Edwards said that policy (including EPR) will be an important catalyst to speed up coordinated investment with flexible film designed for recyclability, and having recycling targets specific to flexible plastics. However, capture rates are expected to still be a challenge.
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