Why Consider EPR for Packaging? An Industry Perspective
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1 Why Consider EPR for Packaging? An Industry Perspective Resa A Dimino Director of Public Policy SERDC Summit October 4, 2012
2 Summary Ø Introduc)on to NAPCOR Ø The Problem Ø How can we solve the problem? Ø Why hasn t government solved the problem? Budget & Resource Constraints Structural Constraints Ø What is the path forward? Why consider EPR for Packaging? 2
3 Introduction to NAPCOR? Ø NAPCOR is the trade associa)on for the PET packaging industry in the United States and Canada Ø 50 members encompass all parts of the PET value chain from resin produc)on to end of life/recycling Ø NAPCOR s priori)es are to: Promote the introduc)on and use of PET packaging Facilitate PET Recycling Communicate the apributes of the PET container as an environmentally sustainable package 3
4 NAPCOR Membership 2012 PET Container Manufacturers Amcor Rigid Plastics Nestle Waters of N. America Plastipak Packaging, Inc. Yoshino America Corporation PET Resin Manufacturers DAK Americas LLC Eastman Chemical Company Indorama Ventures USA Inc Selenis Canada PET Sheet / Thermoformers PET Industry Suppliers Dart Container Corp. Earthbound Farm Fabri-Kal Genpak LLC Global PET Nu-B, Inc. Par-Pak, Ltd. Peninsula Packaging Company Placon Corp. Plastic Ingenuity, Inc Sabert Corporation Solo Cup Corp. Sonoco Plastics Avery Dennison BP Buhler CarbonLite Industries Clear Path Recycling ColorMatrix Custom Polymers PET Erema North America Evergreen Plastics Husky Injection Molding KHS USA Krones MHT USA Marglen Industries Meckler Associates Mohawk Industries Peninsula Plastics Recycling Phoenix Technologies Plastrec Polyquest, Inc. Pure Tech Plastics Reterra Sidel Signode Sorema Plastic Recycling Starlinger and Co. TOMRA No. America UltrePet LLC Uniform Color Company 4
5 NAPCOR & EPR Ø NAPCOR has NO POSITION on EPR for Packaging and Printed Products Does not support or oppose EPR for Packaging and Printed Products Ø NAPCOR will con)nue to engage in EPR discussion and dialogues to ensure that programs and policies result in an increase in rpet supply and that financing mechanisms treat PET packaging fairly and equitably 5
6 The Problem: A Macro View Ø Recycling rates are stagnant 6
7 The Problem: PET Industry Perspective Demand Exceeds Supply Number of Plants in the US Reclama6on Capacity (Billion Lbs) Clean Flake from US PET BoBles Collected* (MMLbs) (es)mated) *Includes boples currently exported 7
8 The Problem: PET Industry Perspective Ø Industry efforts to date have not moved the needle More than $2 billion invested in PET recycling capacity Industry has invested or leveraged hundreds of millions in pilot and demonstra)on projects to increase collec)on NAPCOR alone has spent or leveraged $100 million 8
9 The Problem: The US is Lagging in PET Bottle Recycling PET BoBle Recycling Rate US 29% Canada ~60% Europe 51% 9
10 The Problem: PET Recycling Rates In Context PET Beverage BoBle Recovery Rate (Gross) Bales of RPET BoBles Recovered (in Billion Lbs) Collec6on Gap/Add l Bales Needed (in Billion Lbs) 2012 (projected) % % %
11 How can we solve the problem? Ø Collect recyclables everywhere Residen)al curbside/drop off Mul)- Family Away from home Commercial (restaurants, gas sta)ons) Ø Process recyclables efficiently Ø Increase par)cipa)on Incen)ves (e.g., Pay As You Throw, RecycleBank) Outreach/Educa)on 11
12 Why hasn t government solved the problem? It boils down to the three Ms Ø Money Lack of resources; unsustainable sources Ø Mo)va)on Not self- iden)fied as key link in a supply chain No impera)ve to improve performance Ø Market Disconnects Inability to affect volume/composi)on of stream or markets, i.e., no ability to control costs 12
13 Why hasn t government solved the problem? Budget & Resource Constraints Ø Government Budge)ng Process Constraints Annual budge)ng; condi)ons vary each year Long- term planning, strategic investment and consistent implementa)on challenging Inelas)c re: commodity pricing Responsive to local condi)ons and needs, not to commodity market/ industry needs 13
14 Why hasn t government solved the problem? Budget & Resource Constraints Ø Government Budget Pressures No New Taxes & Fees Unfunded Mandates Americans with Disabili)es Act, Clean Water Act, Medicaid, mandatory recycling requirements and other laws that put costs on local gov ts with no funding mechanism Compe))on with cri)cal services (schools, libraries, police, fire, etc) 14
15 Why hasn t government solved the problem? Budget & Resource Constraints Ø Examples of state recycling budget pressures NYS allocates $6 to $10 million/year for recycling grants; current wait list is 5 years NC local grant funding requests are double available state resources Ø Federal Government funding = ~0 15
16 Why hasn t government solved the problem? Structural Constraints Ø Public works/solid waste directors see recycling as a service (adjunct to waste collec)on) No incen)ves to maximize recycling No sense of opera)ons as key part of an economic supply chain Ø Plans, skills and exper)se vary by community 16
17 Why hasn t government solved the problem? Structural Constraints Ø Responsible party (local gov t) has no ability to influence volume or composi)on of materials affect materials markets Ø Responsible party (local gov t) is limited by: lack of service or regulatory oversight in mul)- family, commercial, away- from- home senngs resources to expand services or promote programs ability to regulate ac)vi)es of non- municipal service providers Poli)cal will to implement policy or funding mechanisms 17
18 Why hasn t government solved the problem? Structural Constraints If you were going to design a responsive commodity supply system, why would you rely on decision- makers who appear unmo)vated by prices, have compe)ng internal investments and are essen)ally unrewarded by the marketplace? And why would you set up a system in which the cost of produc)on in this case, collec)on of discarded materials is not remotely covered by system income, even in the best material value scenarios? Scott Mouw, NCDENR 18
19 What is the path forward? Ø Changing role for government Provide oversight & possibly services Ensure a level playing field Perform key outreach, educa)on func)ons Ø Greater private sector involvement in recycling supply chain Inject capital to improve overall system performance Foster efficiency, maximize quality and control costs Standardize level of effort and collec)on approaches Enable company and industry sustainability goals to be achieved 19
20 Why consider EPR for Packaging? Ø EPR has the poten)al to increase supply of recycled PET Bring resources into the system to improve collec)on, processing Ra)onalize recycling collec)on as a supply chain Broad applica)on of best prac)ces Consistent resources for educa)on, outreach and promo)on Ø Increasing availability of rpet will stabilize the market 20
21 NAPCOR & EPR Ø NAPCOR has NO POSITION on EPR for Packaging and Printed Products Does not support or oppose EPR for Packaging and Printed Products Ø NAPCOR will con)nue to engage in EPR discussion and dialogues to ensure that programs and policies result in an increase in rpet supply and that financing mechanisms treat PET packaging fairly and equitably 21
22 Reality Check Ø For plas)c packaging, there is NO sustainability without recycling! Ø There is no post consumer plas)c recycling without public policy! Ø There is no such thing, environmentally, as a polymer so good it can just be thrown out! 22
23 Thank you! Resa Dimino (518)
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