Recyclers, Already Facing Losses, Fear New Plastics

Susan Warren /The Wall Street Journal Europe 17nov99

Plastics recycling is in the dumps.

Just a few years ago, recycling was removing huge quantities of plastics from the trash in the U.S. Now, the economics of the industry are wobbly.

U.S. consumers, no longer worrying over landfills, are less interested in saving and sorting empty milk bottles and detergent jugs. Recyclers are losing money in a glutted resin market. And the same companies that couldn't slap environmental claims on their products fast enough five years ago now are set to unleash a flood of new types of plastic packages that will make recycling even more complicated and unattractive than it is already.

These packages, made from what some people in the industry call "gourmet" plastics, include composite materials and bright colors that cost recyclers more money to process and consumers more time and effort. Foremost among them is the plastic beer bottle, a long-awaited innovation that, if it becomes standard, could deal a severe blow to plastics recycling in its current form.

Philip Morris Cos.' Miller Brewing Co. is test marketing a plastic single-serving beer bottle in convenience stores in more than a dozen U.S. cities, including Los Angeles, Phoenix, Dallas and Miami. Anheuser-Busch Cos. brought its own short-lived test to a quick halt in April after it met with lukewarm consumer response. Still, a plastic bottle of one form or another is regarded as inevitable in the beer industry, given its advantages of being light, sturdy and resealable.

Plastic packaging is growing ever more popular. Since 1995, the use of PET, or polyethylene terephthalate plastic , in bottles such as those for soda has soared 54%, to 1,352 kilograms in 1998 from 878 kilograms in 1995, according to the National Association for PET Container Resources, a Charlotte, North Carolina, trade group. At the same time, plastics recycling is plummeting: In 1998, 20% of plastics escaped landfills and were recycled, down from 1994 when 34% of plastics were recycled, according to the group.

Unlike aluminum and paper, plastics come in many variations that in most cases must be meticulously sorted in order to produce recycled resin that can be sold. Cloudy white milk jugs, made from high-density polyethylene, or HDPE, are usually processed separately from bright-colored detergent and juice bottles , made from another kind of HDPE. Both must be kept separate from soda bottles , made from PET plastic . Even a smidgen of PVC -- the material used in the lining of some bottle caps -- can destroy a whole batch of PET bottle resin. Then there are all those other plastics -- yogurt cups, takeout containers, baby-wipe boxes -- that belong to categories all their own.

Many consumers have concluded the effort isn't worth it. Kristen Defibaugh, 13, says her Dallas-area middle school has a program for recycling aluminum cans but not for plastic soda bottles . "We just throw away the plastic ," she says.

A number of recycling companies also have decided that plastics recycling doesn't pay. Oversupplies of virgin resins and weak prices have made recycled resin less competitive. In the past two years, major plastics makers like DuPont Co., Phillips Petroleum Co. and Union Carbide Co. have quietly shuttered recycling operations. The recycling business "is the worst I've ever seen it," says Steve Babinchak, the founder of St. Jude Polymers Corp., a 22-year-old recycling business based in Frackville, Pennsylvania, named for the patron saint of lost causes.

The 500-gram PET soda bottle is the prime culprit behind the decline of plastics recycling. Because they are purchased and consumed on the go, these bottles rarely find their way into a recycling bin. Yet they accounted for an estimated 13 billion soft drink bottles in 1998, more than half the 24 billion plastic soft drink bottles sold in the U.S. that year, according to John Maddox, a Waverly, Georgia, packaging consultant.

The plastic beer bottle, also made of PET, could be even more of a threat. Although beer is now a tiny fraction of the PET-package market, industry experts believe if the plastic bottle were to become the beer industry standard, it could double the amount of PET packaging on the market.

The PET used to make beer bottles presents a whole set of recycling headaches. It has a special chemical coating, or "barrier," designed to keep out oxygen that would spoil the beer. The barrier, the amber color and other particulars of the caps and labels mean the PET beer bottles can't be commingled with the PET soda bottle for recycling. "One of our biggest fears is what we call `the stew,'" says Robin Cotchan, director of the Association of Postconsumer Plastic Recyclers, a Washington group.

The plastic beer bottle could be the last straw for Mr. Babinchak, who says his business hasn't made money for three years. At present, he sells recycled PET plastic for 32 to 40 cents (31 European cents to 39 cents) per 0.45 kilogram. Although the market has turned up a bit in recent weeks, his customers -- makers of carpet, clothing, plastic -strapping and nonfood packages -- can buy off-grade virgin resin for about 25 cents per 0.45 kilogram.

Sorting plastic amber beer bottles from soda bottles could cost recyclers an additional six cents to eight cents per 0.45 kilogram, according to Peter Anderson, a Madison, Wisconsin, recycling consultant. Aluminum caps also must be sorted out; metalized labels may contaminate the resin, he says.

Mr. Babinchak and other recyclers are nervously guessing how much the PET beer bottle will cost them. "Maybe we'll end up with 5% (of the new bottles ) in 100 pounds (45 kilograms). And that shouldn't hurt you," he figures. "But nobody knows yet when that one more bottle (will) totally destroy the whole truckload."

Miller Brewing says it is sensitive to recyclers' needs. Scott Bussen, a Miller Lite spokesman, says, "We understand the anxiety in the recycling community, but we have been going through the process behind the scenes working to make sure this is an environmentally responsible package."

Ralph Armstrong, director of new markets for Continental PET Technologies, a unit of Owens-Illinois Inc. and the maker of Miller Brewing's plastic bottle, says after the resin is processed, only scant traces of contaminant from the barrier coating will remain. "We know before you start in designing the beer package that it has to be recyclable," he says.

Tom Bavaria, technical manager at Envipco Plastics, the U.S. recycling division of Belgium's Envipco Holding NV, took part in a test of Miller's plastic bottle and gives it high marks for recyclability. But he says he is bracing for major headaches from other new colored and coated bottles hitting the market. "There are containers out there that really scare us quite a bit," Mr. Bavaria says.

Recyclers complain that if consumers would only demand more recycled content in the packages they buy, then manufacturers would use more and the market would improve. Indeed, Mr. Maddox, the Georgia consultant, says packagers emphasize eye-catching appearance and high performance because those are the things consumers want. "I'm sorry that it's messing up the recycling numbers," he says, "but who gives a damn?"

Certainly not many consumers these days. Darin Morse, 32, an information systems manager from suburban Dallas who does the family grocery shopping, says price is his top priority. "And then quality," he says. "I don't say `Oh, I guess I'll buy this because it's recyclable.'"

Says Kathy Buehner, a 51-year-old human resources manager, "It's what's inside the container, not the container, that I'm buying."

Some companies are trying. A few years ago, Quaker Oats Co.'s Gatorade division designed a bottle with recycling-friendly features: better-quality resin, minimum glue on the label, no base cup. But it used a cap with a PVC lining -- and just a few caps ruined the works. Mr. Babinchak remembers telling a Gatorade official: "Look, guys, you make such a beautiful bottle. A guy could fall in love with that bottle. But your caps are killing us." Quaker eventually switched caps.

Eastman Chemical Co., of Kingsport, Tennessee, says it is working on a new recycling technology that should be able to remove a wide range of contaminants from plastic resin, answering recyclers' complaints about the new bottles . Tom C. Parham, Eastman's manager of plastics recycling, says consumers "like what PET will do: better bottles , clarity, designs and shapes. And we can only expect more of that."