{"id":2433,"date":"2023-09-05T08:00:38","date_gmt":"2023-09-05T12:00:38","guid":{"rendered":"https:\/\/blog.markkirkwood.com\/?p=2433"},"modified":"2023-10-21T09:22:59","modified_gmt":"2023-10-21T13:22:59","slug":"boosting-supply-of-recycled-materials-for-packaging","status":"publish","type":"post","link":"https:\/\/blog.markkirkwood.com\/?p=2433","title":{"rendered":"Recycled materials (supply)"},"content":{"rendered":"

Boosting supply of recycled materials for packaging<\/h2>\n

High long-term demand for recycled content in packaging could lead to shortages of recycled packaging materials. We explore three ways to boost rPET availability in the US market.<\/p>\n

Brand owners are continuing\u00a0<\/strong>to introduce new packaging formats and establish innovative ways to boost product recyclability and levels of recycled content to meet their sustainable-packaging commitments, address consumer concerns, and adapt to rapidly rising regulatory pressure.1<\/sup><\/a><\/span>\u00a0However, these companies face the very real risk that they cannot achieve their goals because of an anticipated shortage of recycled materials2<\/sup><\/a><\/span>: collection levels of high-quality recycled material look set to remain almost flat, creating supply challenges for brand owners and packaging companies. If brands with public recycled-content commitments follow through on their plans, the US demand for recycled polyethylene terephthalate (rPET) in 2030 would outpace supply by about three times. Consequently, as the supply-and-demand imbalance widens, the price premium between rPET and virgin PET has the potential to rise significantly over the next decade. The challenge for the industry moving forward will be to unlock additional rPET supply. To address this issue, we suggest three potential approaches, centered on boosting supply, ensuring access, and designing for circularity, that could also be applicable to other packaging substrates.<\/p>\n

Accelerating demand for recycled materials<\/h2>\n

Packaging is a ubiquitous part of our daily lives. It minimizes food waste and adds convenience at low cost, but it also imposes a heavy environmental burden, given the United States\u2019 low recycling rates.3<\/sup><\/a><\/span>\u00a0This has not gone unnoticed. In recent years, consumers globally have become increasingly concerned about packaging waste and leakage into environment, and governments have begun responding to public sentiment with robust action along accelerated timelines.4<\/sup><\/a><\/span>\u00a0In parallel, brand owners and the packaging industry have made bold commitments to improve the sustainability of their packaging portfolios through boosting recyclability and levels of recycled content.5<\/sup><\/a><\/span><\/p>\n

This has increased demand for recycled materials\u2014often at a green price premium, given the scarcity of supply. Here, we explore the rPET value chain to understand the underlying causes of an anticipated supply-and-demand imbalance. We put forward several approaches to mitigate this issue\u2014approaches that we believe can also be applied to other packaging substrates (such as glass, metal, paper, and flexibles) that are facing similar market pressures.<\/p>\n

The supply-driven gap in the rPET market<\/h2>\n

A diverse set of end-use applications currently relies on the PET waste stream\u2014textiles, plastic films, strapping, and food and beverage bottles, among others\u2014with PET bottles as the primary feedstock for rPET. Yet today, only about 27 percent of PET bottles and some 18 percent of all recyclable PET plastic waste are collected, with the remainder going to landfills (Exhibit 1). Over the past few years, there has been no step-change increase in PET collection or sorting. As a consequence, rPET supply has only grown at approximately 1 percent per annum over the 2012\u201322 period in North America.6<\/sup><\/a><\/span>\u00a0While there have been some new entrants in the reclamation and reprocessing section of the value chain, there have been no significant corresponding reductions in process losses. This means that approximately 4.6 billion pounds of PET end up in landfills every year.7<\/sup><\/a><\/span>\u00a0Collecting this unrecycled plastic represents a significant untapped opportunity to close the loop on food-grade PET.<\/p>\n

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Exhibit 1<\/div>\n
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Importantly, rapidly growing demand, combined with stagnant supply, is expected to result in a significant future supply-and-demand imbalance for rPET (Exhibit 2):<\/p>\n