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By 2022, all plastic bottles made of polyethylene terephthalate (PET) through the California recycling system must contain at least 15% post-consumer resin (PCR). According to Congressional Bill 793 signed by the following persons, California was the first state governor Gavin Newsom to enforce the PCR directive in September 2020. By 2025, this percentage will increase to 25%, and by 2030 it will increase to 50%.

But less than a month before the implementation of this new requirement, data shows that only 7 of the 69 beverage manufacturers in California have reached the first recycled content threshold.

According to a report issued by the state's Department of Resource Recycling and Recycling (CalRecycle) in early September, these companies are:

Nearly half of the listed companies either reported using 0% PCR or did not fully report the data-this violated the California Beverage Container Recycling and Waste Reduction Act of 2018.

Compared to 2019, the PCR content of companies reporting their usage has dropped by at least 20% year-on-year, including those with some of the most ambitious sustainability goals, such as Coca-Cola North America, Niagara Bottling, Pepsi and Nestlé Water .

According to AB 793, with certain exceptions, manufacturers that fail to meet the minimum requirements are subject to a fine of 20 cents per pound of PCR.

However, some participants believe that manufacturers that fail to meet PCR targets will simply pay extra, especially if the current price of virgin PET is lower than the recycling price.

"I believe that fines will continue to increase and people will continue to pay, at least until the requirement reaches 50%," California recyclers said.

Although California’s recycling content law is the first in the country, other states are already following suit. Washington State enacted its own PCR Act in May 2021, which will take effect in 2023.

In addition to government requirements, hundreds of large consumer brands in the value chain have also made their own voluntary PCR commitments-the most common is to include 25% or 30% of recycled content by 2025.

"We don't have a minimum content issue, we have a collection issue," said Darrel Collier, executive director of the National Association of PET Container Resources (NAPCOR).

According to the latest NAPCOR report released in early November, the end-use consumption of R-PET in the United States and Canada increased by 10% in 2020. However, the same report showed that in the United States alone, the collection of PET bottles dropped by 2.3%, bringing the U.S. recycling rate to 26.6% in 2020.

R-PET is currently a limited resource, and the price is completely inelastic, because the availability of raw materials is directly related to the recycling rate, which varies from municipality to municipality, and is affected by local budget cuts and different recycling rules.

Although the recent increase in demand has created a valuable end market for recycled materials, the entire recycling supply chain-from recyclers to brand owners-is now facing a huge gap between demand and what the current U.S. infrastructure can supply gap.

"It used to be just about which material is cheaper, but it's not anymore," said West Coast recyclers. "The question now is either how do I comply with the regulations or make my products as green as possible so that consumers can buy them."

According to a 2021 study by the American Institute of Packaging and Environment, in order to meet the company's announced PET brand promise, the recycling capacity in the United States needs to be increased by at least 50% over the current capacity.

"When you set minimum content requirements without some kind of corresponding collection improvement process, you are bound to fail," Collier said.

In addition to packaging, R-PET has other end uses, such as polyester fiber used in the manufacture of clothing and textiles. For example, brands such as Patagonia and Nike have launched product lines made from recycled water bottles.

Generally, these types of consumer products have higher profit margins than bottles or food packaging, which allows manufacturers of such products to pay more for R-PET than bottle manufacturers.

Brand owners often choose to use water bottles in their "sustainable" product lines, rather than using lesser-known types of plastic or existing clothing products, partly as a marketing strategy, but also because they are used to recycle post-consumer textiles The scalability of technology is limited.

Polyester fabrics are rarely recycled. Fashion brands often use plastic bottles to interrupt the closed-loop system despite their circular economy intentions. Otherwise, these plastic bottles could have become more recyclable products, such as other plastic bottles.

By examining the R-PET demand in specific end markets, NAPCOR's 2020 report shows that the food/beverage and non-food/beverage bottle categories have increased by 32% in total, surpassing fiber for the first time, becoming the largest post-consumer PET bottle user.

Nevertheless, with increasing PCR requirements for bottlers, textile companies are unlikely to reduce their own PCR consumption to allow beverage and packaging manufacturers to meet their government regulations.

"The market will ultimately determine how they are divided between applications," Collier said. "Similarly, our job is to increase the amount of collection so that everyone has more balance to choose from, rather than a quantitative system."

As people's awareness of the ever-widening gap between supply and demand continues to increase, many industry associations have initiated initiatives to solve some potential and systemic problems.

One such strategy is the U.S. Plastics Convention’s 2025 roadmap, led by the Recycling Partnership and the World Wildlife Fund, as part of the Ellen MacArthur Foundation’s global initiative. The roadmap was launched in June and is a national collaborative effort of more than 100 private and public stakeholders (often disconnected from each other), such as brand owners, research entities, governments, recyclers, and manufacturers.

This 36-page document outlines four ultimate goals:

"We have put forward some very ambitious goals in our roadmap around PET," Collier said. "Frankly, we think this is achievable because we have experience all over the world to prove it, but we still have a long way to go in the United States."

The roadmap is not just an extensive statement checklist, it also provides step-by-step guidance on how to achieve each goal through actions such as better packaging design, educational activities, and policy development. Specific time frames and responsible parties (such as leadership, co-leadership, and support roles) are assigned to each goal.

However, to achieve any of these four ultimate goals, the roadmap itself indicates that a large amount of smart infrastructure investment is required.

Specifically, in order to meet PCR requirements, recycling facilities need to be equipped with appropriate sorting and washing technologies to produce high-quality R-PET flakes, which can then be processed into food-grade pellets. To use this post-consumer resin in food and beverage packaging, both mechanical and chemical recycling technologies must receive a letter of no objection from the FDA. This technology can be very expensive and usually has limited availability.

Robert Stier, senior director of quantitative analysis of petrochemical products at Platts Analytics, said: “We need economic incentives to convert more roadside bales into food-grade quality materials.” “Without this investment, prices will continue to rise because people want to The same limited number and bid against each other."

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