Reflections on Recycling Report Chandler Slavin Sustainability Coordinator

Reflections on “Recycling Report©” Chandler Slavin Sustainability Coordinator Dordan Manufacturing Co. Inc.

Dordan Manufacturing Co. Inc. • Midwestern based, national manufacturer of custom designed thermoformed packaging solutions since 1962. • Family owned and operated. • Specializes in custom clamshells, blisters, trays and components for the consumer goods and electronics industries. © 2010 Dordan Manufacturing, Inc. 3

Today’s Presentation • Introduction: What is “recyclable” and why • Part 1: The economics of recycling packaging in America • Part 2: The state of blister/clamshell recycling in America – Supply and demand – Sortation – Contamination • Part 3: Progress being made in recycling thermoforms – – NAPCOR APR Retailers SPI © 2010 Dordan Manufacturing, Inc. 4

The Discovery Like many types of consumer packaging, thermoform containers are not recycled in 60% or more American communities; therefore, can’t be considered “recyclable” according to the FTC Green Guides. © 2010 Dordan Manufacturing, Inc. 5

Dordan CEO’s Inquiry: If we manufacture our thermoforms out of PC PET bottles, then

What types of packaging is recycled in America? © 2010 Dordan Manufacturing, Inc. 7

Municipal Solid Waste Generation, Recycling, and Disposal in the United States Detailed Tables and Figures for 2008 http: //www. epa. gov/osw/nonhaz/municipal/pubs/ms w 2008 data. pdf

“Recyclable” is… Only those types of package/material combinations that are collected post consumer, reprocessed and/or remanufactured in the “substantial majority of American communities” can be labeled “recycled and/or recyclable. ” © 2010 Dordan Manufacturing, Inc. 10

Why are certain types of packages recycled, while others are not? © 2010 Dordan

Part 1: The Economics of Recycling in America © 2010 Dordan Manufacturing, Inc. 12

Economics of Recycling Those material/packaging types that are “easy” to: – Collect post-consumer – Transport – Sort – Reprocess – and, Remanufacture _________________________ Enjoy the likelihood of being recycled because the cost of the resultant “recycled” material is competitive with the cost of virgin material/production. © 2010 Dordan Manufacturing, Inc. 13

Chicken and Egg • There is no supply if there is no demand; there is no demand if there is no supply. • A package/material type will not be collected for recycling if there is no buyer and/or end market for this recyclate; there will be no buyer end/market if there is not a consistent quantity and quality available for reprocessing. © 2010 Dordan Manufacturing, Inc. 14

“Material/packaging type? ” • For a package to be recycled, it has to be of a specific material type, like PET, AND a specific packaging type, like screw neck bottle. • It is only the correct combination of material and packaging type (i. e. PET screw neck bottles), which determines a packages’ ability to be recycled. © 2010 Dordan Manufacturing, Inc. 15

Our Economic Framework for Understanding Recycling IF the cost of post-consumer collection, transportation, sortation, reprocessing and remanufacturing < The cost of virgin material/production; ____________________ THEN it is likely that said material/packaging type is recycled or will be so in the future with proper investment. © 2010 Dordan Manufacturing, Inc. 17

What does all this mean for the state of recycling thermoform packaging, like clamshells

Part 2: The State of Blister/Clamshell Recycling in America © 2010 Dordan Manufacturing, Inc.

Section 1: Supply and Demand Considerations © 2010 Dordan Manufacturing, Inc. 20

Supply Considerations • There has to be enough of a specific material/packaging type generated in the MSW stream to economically justify the collection and recycling thereof; and, “enough” is defined by the requirements of the buyer/end market. • “Enough” is commonly referred to as “Critical Mass” in the industry. © 2010 Dordan Manufacturing, Inc. 21

Example: PET Bottles • According to NAPCOR, the total number of pounds of PET bottles and jars available in the U. S. for recycling in 2008 was 5. 366 billion. • This quantity achieves the critical mass necessary to economically justify the recycling of PET bottles in the context of material generation. © 2010 Dordan Manufacturing, Inc. 22

PET Bottle vs. Thermoform Generation While large quantities of PET bottles are manufactured each year, there are not as many clamshells of a single resin manufactured, which makes the collection of an adequate supply of this material/package type difficult; therefore, its recycling economically ambiguous in the context of material supply/generation. © 2010 Dordan Manufacturing, Inc. 23

Do thermoforms have Critical Mass? • According to the American Chemistry Council, there has to be about 400 million lbs. of a particular plastic generated for the recycling to be profitable (Plasticstoday. com). • Fortunately, 1. 4 billion lbs. of PET thermoforms were produced in North America in 2008 (Ibid). • As more thermoforms transfer from PVC to PET, more thermo-grade PET will be available for collection and reprocessing. © 2010 Dordan Manufacturing, Inc. 24

Demand Considerations • Demand for PC PET material in North America exceeds the supply 3: 1. • If PET thermoforms were integrated into the PET recovery stream, then more RPET would be available to meet the growing demand. © 2010 Dordan Manufacturing, Inc. 25

Section 2: Sortation Considerations © 2010 Dordan Manufacturing, Inc. 26

Sorting Technologies • There are two sortation systems employed at MRFs: – Visual/manual sortation : Workers on “The Line” pull the “recyclables” from those destined for landfill via visual cues inherent in the package, like screw top plastic bottle. – Automatic sortation: Deploy detection to analyze one or more properties of the plastic bottles passing through and automatically sorts these plastics into several categories, either by resin type, color, or both. © 2010 Dordan Manufacturing, Inc. 27

Visual Sortation? Bottles • Easy to visually identify on “The Line” at a MRF by their thin necks and screw tops. • Investment has been made in sorting bottles from those materials destined for landfill. Thermoforms • Heterogeneous in size, shape, and material. • Difficult to visually identify by material type as the move down “The Line” at a MRF. • Little investment has been made in sorting technologies/processes. © 2010 Dordan Manufacturing, Inc. 28

Sorting Technologies, the Economics of Recycling, and Supply and Demand • A materials’ ability to be competitive after the cost of recycling depends, in large part, on the sortation technologies employed by the MRF. • Many MRFs do not have automated sorting systems capable of sorting thermoforms by material type. • A MRF will not make an investment in automated systems until the supply and demand necessary to sustain the process of recycling itself is guaranteed. © 2010 Dordan Manufacturing, Inc. 29

Section 3: Specs and Baling Considerations © 2010 Dordan Manufacturing, Inc. 30

Specs are… • The documented qualifications a buyer/end market outlines to the supplier of PC material upon procurement. This depends on the end use of the recyclate: – If the buyer/end market is a bottler, the recyclate has to meet one set of specs; – if the recyclate is intended for thermoformed packaging, it has to conform to another; – and, if the recyclate is used in non-packaging applications like carpet, imitation timber, etc. , it has to demonstrate compliance with another set of specs. © 2010 Dordan Manufacturing, Inc. 31

Specs = Value of Recyclate • The more stringent the specs: – The higher value the recyclate due to its application to many end markets; – The lower the concentration of contaminates; – The more likely the end market attempts to “close the loop. ” © 2010 Dordan Manufacturing, Inc. 32

How do you bale thermoforms? Due to their differing densities, geometries, and often times materials, it is difficult to come up with a uniform bale for market, especially when no specs for thermoform bales exist. © 2010 Dordan Manufacturing, Inc. 33

In Summary… • We need to create specs for recycling thermoforms, including specs for baling, which rests entirely on the end-market/buyer. • However, no one will create specs for thermoformonly bales or PET thermoform & bottle bales if there is no buyer/end market; and, there will not be a buyer/end market if none of this material is available for resale. © 2010 Dordan Manufacturing, Inc. 34

Section 4: Contamination Considerations for Recycling Thermoforms © 2010 Dordan Manufacturing, Inc. 35

Approach to Recycling Thermoforms? • There are three popular approaches to recycling thermoforms: – Recycle PET thermoforms with PET bottles to remanufacture into RPET bottles and/or thermoforms. – Recycle all PET thermoforms together to remanufacture into RPET thermoforms. – Recycle all mixed-resin thermoforms together to remanufacture into various down-cycled applications, like imitation timber. © 2010 Dordan Manufacturing, Inc. 36

Isolate PET Bales for Highest PC Value • Bales of a single resin, like PET, enjoy more PC value than mixed resin bales, described as a low-grade plastic mix. • By recycling PET thermoforms with PET bottles OR recycling all PET thermoforms together, the resultant recycled material would enjoy a high PC value applicable to a variety of end markets. © 2010 Dordan Manufacturing, Inc. 37

Approach taken informs what is a “Contaminant” If either approach is taken (PET bottles+PET thermoforms OR PET thermoforms only), then contamination issues need to be addressed. © 2010 Dordan Manufacturing, Inc. 38

Known Contaminates to PET Recycling • • • Barrier Resins(EVOH) Closures Labels Safety seals Container residue i. e. chemicals or food Look-a-likes like PVC, CPET, PETG, etc. Modified PET resins Multi-layer PET containers Colored PET © 2010 Dordan Manufacturing, Inc. 39

In conclusion The recycling of thermoforms depends on the ability to collect, transport, sort, bale, reprocess and remanufacture into new material/products in an economically competitive way with virgin material/production. © 2010 Dordan Manufacturing, Inc. 40

Part 3: Progress in Recycling Thermoforms © 2010 Dordan Manufacturing, Inc. 41

NAPCOR • 2009: NAPCOR facilitated the shipment of almost one million pounds of PET thermoforms to various reclaimers and end markets to understand the technical barriers keeping them from being recycled. • NAPCOR and its partners discovered that adhesives used on food-grade thermoform packaging were too hard to remove during reprocessing, rendering the recyclate unmarketable; they found that berry containers from South America were turning the recyclate fluorescent; and, determined it was technically easier to recycling PET thermoforms with PET thermoforms than with PET bottles. © 2010 Dordan Manufacturing, Inc. 42

APR • March, 2011: APR issues bale specs for non-bottle rigids in hopes of increasing the amount of post consumer plastics collected for recycling and increase the amount of PC material available for domestic reprocessors. • July 2011: Introduced new testing protocol for adhesives and labels used on thermoform packaging in conjuncture with NAPCOR. © 2010 Dordan Manufacturing, Inc. 43

Retailers • June 2011: Canadian grocery chains require clamshells suppliers to switch to PET by January 2012 in hopes of simplifying the waste stream, increasing the amount of thermo-grade PET available for reprocessing, and decreasing the likelihood of look-alike contaminants like PVC. © 2010 Dordan Manufacturing, Inc. 44

SPI • July 2011: SPI in partnership with NAPCOR announces $100, 000 grant for model PET thermoform recycling program; request for proposal available to US recycling program operators. • The industry alliance is interested in establishing a model program for collection and reprocessing of PET thermoform containers. © 2010 Dordan Manufacturing, Inc. 45