PET Bottle Recycling Update & Impacts Felt

from California Legislation

Presentation Outline

• State of the PET Bottle Recycling Industry

• Impacts From RPPCL and SB 332

• Issues and Concerns

PET Bottle Recycling Flow Chart

Deposit/Redemption Curbside, Drop-Off, Commercial

PRFs MRFs Third Party Handlers

Distributors Bottlers

IPCs IPC Cert. Processors

Reclaimers – Clean Flake

Converters – Intermediate Raw Materials

Fiber Film Sheet Compounds Specialty Pellet

End Product Manufacturers

Transparencies Woven Non-Woven

Filament

Thermo-formed Products

Furniture Automotive

Bottles Strapping

Import Bales

1995 1.95 Billion lbs

1996 2.2 Billion lbs

1997 2.55 Billion lbs

1998 3 Billion lbs

1999 3.25 Billion lbs

U.S. PET Bottles Available for Recycling

1995 775 mmlbs

1996 697 mmlbs

1997 691 mmlbs

1998 745 mmlbs

1999 771 mmlbs

U.S. Post Consumber PET BottlesGross Pounds Purchased

Post Consumer BottlesGross Weight Purchased (mmlbs)

Market Segments

1997

580

111

691

66

646

A. Purchased by U.S. Reclaimers

B. Purchased by Exporters

C. Total U.S. Material Recycled (A+B)

D. Post Consumer Bottles Imported

E. Total Bottles Used by U.S. Reclaimers to Producer RPET (A+D)

1996

549

148

697

87

636

1998

656

89

745

101

757

1995

605

170

775

46

651

1999

588

183

771

60

648

U.S. PET Reclamation CapacityMay 1, 2000

Operating Plants 15 848 mmlbs

Shuttered 3 60 mmlbs

Total 900 mmlbs

7 Vertically Integrated

Vertically Integrated Reclaimers(Gross Weight - mmlbs) *

1997 1998 1999

Number of Plants 4 7 7

Capacity (lbs in) 200 405 465

Lbs Consumed 150 260 350

Lbs Consumed in Product 100 197 288

Total U.S. Bottles Available 691 745 767

% Consumed 22% 35% 46%

* NAPCOR Estimates

RPET Clean Flake Production Summary

1995 1996 1997 1998 1999

RPET Produced from U.S. Bottles 469 438 486 513 457

RPET Produced from Imported Bottles 38 70 55 75 47

Total Post Consumer Production

Available for U.S. End Use Products (A + B) 507 508 541 588 504

RPET Clean Flake Equivalent Exported 153 134 92 75 154

Total U.S. RPET Produced from U.S. Bottles

+ Exported Clean Flake Equivalent (A + D) 622 572 578 588 611

RPET Product Categories

Fiber

Sheet & Film

Strapping

Engineered Resin

Food & Beverage Bottles

Non-Food Bottles

Other

Total U.S. Convertor RPET Consumption

Source: NAPCOR

RPET Used

(Millions of Pounds)

1996 1997 1998 1999

292 320 415 417

69 71 89 68

66 58 67 80

24 26 30 26

24 41 52 68

71 53 47 50

1 1 7 9

547 570 707 718

PET Price HistoryMixed Color Bales - High & Low Pricing

0

5

10

15

20

25

30

35

40

89

90

91

92

93

94

95

96

97

98

98

.5

Ju

n-9

8

Se

p-9

8

De

c-9

8

Ma

r-9

9

Ju

n-9

9

Se

p-9

9

De

c-9

9

Ma

r-0

0

LOW

HIGH

Impacts of California Laws on PET and The PET Bottle Recycling

Industries

Impacts of SB 332

• Neutered PRCC as a market mechanism– Closing of only California PET Reclaimer

– Created Open/fluid bale specifications

• Increased access for exporters

• Created an unlevel playing field for different packaging materials

Impacts of RPPCL

Not Much

Issues and Concerns

Issues and ConcernsSB 332

• Inconsistent message not all packaging materials being treated equally

Issues and ConcernsSB 332

• PET competivity disadvantaged vs other resins– One year processing fee reassessment vs

three year “freebie” for other resins

– Higher processing fee due to higher recycling rate

Recycling Infrastructure Concerns

• Evolving Bale Specification

• One Bale or Two?

• Certified Processor Capability

APR and NAPCOR Applauds the DOC Decision to Keep Separate

Resin Streams

Issues and Concerns - RPPCL

• Enforcement Inconsistent

• Doesn’t Achieve Intended Purposes

Questions

Comments

Discussion