Hey Procurement Pros and Sustainability Champions! How are you navigating the complexities of plastics recycling? It is a tale of two cities.
If your organizations are aiming for sustainability initiatives, implementing a plastics recycling strategy is a crucial step. However, it’s essential to understand the complexities involved, especially in terms of pricing and availability of Post-Consumer Resin (PCR) versus virgin resin.
PCR versus Virgin Resin:
1. Cost Dynamics of PCR vs. Virgin Resin: One of the key considerations is the cost. Generally, PCR can be more expensive than virgin resin due to the additional processes it undergoes – collection, sorting, cleaning, and remanufacturing. These steps add to the cost, making PCR less competitive price wise. On the flip side, using PCR aligns with sustainability goals and can enhance brand image, potentially leading to long-term gains.
Figure 1 from Plastics News (12/18/23 report) below shows the historical price trends between PCR and Virgin resin for High Density Polyethylene. Managing these price fluctuations in the context of sustainability initiatives is a critical component of how Procurement advises their business partners in their organizations.
2. Availability and Quality Issues: Another challenge is the limited availability of high-quality PCR. This scarcity often stems from challenges faced by Material Recovery Facilities (MRFs), such as contamination in the recycling stream and technological limitations in sorting and processing. The variable quality of PCR can also be a deterrent, as it might not always meet the stringent standards required for certain applications. More on MRFs later.
The suitability of PCR for certain applications depends on both the quality of the recycled material and the specific requirements of the end product. Here are some applications where the use of PCR can be challenging due to stringent requirements:
- Food and Beverage Packaging: Safety and hygiene standards for food and beverage packaging are extremely high. PCR must be thoroughly cleaned and processed to be food-grade, ensuring no contaminants that could leach into the product. This process can be complex and costly, and not all recycled plastics meet these standards.
- Medical and Pharmaceutical Products: Similar to food packaging, medical and pharmaceutical products require materials of the highest purity and safety standards. The risk of contamination and the need for consistent, high-quality material often make virgin resins more suitable for these applications.
- High-Performance and Engineering Plastics: Applications that require materials with specific strength, durability, heat resistance, or other performance characteristics might find PCR inadequate. Recycled plastics can sometimes have compromised properties due to the degradation of polymer chains during the recycling process.
- Clear or Transparent Products: Achieving a high level of clarity in recycled plastics can be challenging. PCR often has a level of discoloration or cloudiness, making it less suitable for applications where aesthetic considerations, like clear or consistent coloring, are important. This is especially true in beauty and personal care, where I worked for many years.
In these cases, advancements in recycling technologies, improved sorting and cleaning processes, and the development of hybrid materials (combining virgin and recycled resin) are ongoing efforts to expand the use of PCR in more stringent applications. However, as of now, certain high-standard applications still rely heavily on virgin plastics.
3. Market Considerations: The market for recycled plastics is influenced by various factors, including oil prices (as virgin resin is petroleum-based), regulatory changes, and consumer demand for sustainable products. These factors can cause fluctuations in both the cost and availability of PCR and virgin resin, making long-term planning challenging.
4. Strategic Implications: As procurement professionals, the decision to incorporate PCR into our supply chains isn’t just a cost-benefit analysis. It’s also about aligning with corporate sustainability goals and responding to increasing consumer demand for environmentally responsible products. However, the limited supply of PCR can make this switch challenging. We must weigh the benefits of contributing to a circular economy against the practicalities of cost and supply chain stability.
Many challenges exist due to the availability of PCR. These challenges are often due to the availability of MRFs or Material Recovery Facilities. Here’s a closer look.
Material Recovery Facilities (MRFs)
MRFs play a crucial role in the recycling process by sorting and preparing recyclable materials for their next life. However, they face several challenges:
1. Contamination: One of the biggest challenges MRFs face is contamination in the recycling stream. Items that are not recyclable, or recyclable items that are dirty or mixed with non-recyclables, can contaminate entire batches of materials. This reduces the quality of recyclables, making them harder to sell or process.
2. Technological Limitations: MRFs often rely on a mix of manual sorting and machinery. Technological limitations can hinder the efficiency and effectiveness of the sorting process. For example, certain plastics may be difficult to sort due to their size, shape, or type, leading to lower recycling rates for these materials.
3. Market Fluctuations: The demand for recycled materials can fluctuate based on various market factors. When demand is low, MRFs may struggle to find buyers for their sorted materials, impacting their profitability and sustainability.
4. Costs and Funding: Operating an MRF is expensive. The costs associated with sorting, labor, equipment maintenance, and upgrades can be high. Additionally, MRFs often rely on municipal contracts and market prices for recycled materials, which can be unpredictable.
5. Changing Waste Stream: The composition of the waste stream is constantly changing with new packaging materials and products. MRFs must adapt to these changes, which may require additional investments in technology and training.
6. Public Misunderstanding: A lack of public knowledge about what can and cannot be recycled contributes to contamination. MRFs and municipalities often spend resources on education and outreach to improve the quality of the recycling stream.
Public knowledge and awareness is one of the biggest challenges in recycling. Incentives and educational programs promoting recycling are needed to drive better compliance.
7. Regulatory Challenges: MRFs must navigate a complex web of local, state, and federal regulations, which can vary widely and change frequently. Compliance with these regulations can be a significant challenge.
MRFs operate under a patchwork of local and state regulations that can vary greatly in terms of recycling standards, accepted materials, and processing requirements. This diversity creates a complex operational environment where MRFs in different regions must adhere to distinct sets of rules, even within the same country.
Establishing a more uniform set of federal regulations could alleviate many of these challenges. Uniformity would:
- Simplify compliance requirements, reducing operational complexities and costs for MRFs.
- Enhance scalability and encourage investment in advanced recycling technologies, as MRFs would have clearer expectations and standards to meet.
- Improve market efficiency, creating a more predictable demand for recycled materials.
- Provide clearer guidelines for consumers and businesses, potentially reducing contamination rates and improving the overall effectiveness of recycling programs.
8. Safety Concerns: Sorting recyclable materials, especially in facilities that rely heavily on manual labor, can pose safety risks. Workers are exposed to potential hazards such as sharp objects, heavy machinery, and hazardous waste.
While the journey towards effective plastics recycling is fraught with challenges, from cost considerations and quality concerns to technological and regulatory complexities, it remains a crucial endeavor for procurement professionals. The dynamic landscape of PCR and virgin resin, alongside the pivotal role of MRFs, underscores the need for innovative solutions and sustained commitment to sustainability. As we continue to navigate these waters, it’s imperative that we not only adapt to the evolving demands of the market but also proactively shape them through strategic decisions and collaborative efforts. The future of plastics recycling holds both challenges and opportunities – a narrative that we must all be a part of. Stay tuned as we explore more on this topic, uncovering the potential breakthroughs and strategies that could revolutionize the way we approach plastics recycling and sustainability in the procurement sector.
How is your organization balancing PCR versus vergin resin? Tell me in the comments. 👇
____________
If you want to discuss supply chain planning and procurement excellence, let’s chat. I want to know your thoughts.
Schedule a discovery call with me here.