Coming full circle: finally, the business case for plastic film recycling is overwhelming. So why isn't it more prevalent?

Today, too few companies are aware that their plastic film scrap is not only an economic resource but a strategic one. The key to acceptance will be a shift in the mindset of executives to understand that this material is not garbage, not just a recyclable material, but a renewable resource that can play a significant role in achieving a company's economic, strategic and environmental goals.

THE PLASTIC FILM MARKET. Throughout the past 15 years, the plastic film and bag industry has grown at a significant rate producing billions of pounds of grocery and retail bags, stretch wrap and other film products.

Although recycling is not a new concept for paper, metal and plastic bottles, it has yet to be embraced for plastic film. In fact, the recovery rate for plastic film has reached only 5 percent, according to researched estimates.

Plastic film recycling has the potential to be the next recycling success story. Packaging and durable goods manufacturers, retailers and grocers, Fortune 500 companies, municipalities and other scrap generators are slowly starting to realize the benefits of recycling plastic film. But they aren't yet realizing the benefits of creating a "renewable resource."

There is clearly a difference between throwing away plastic film and selling it to a recycler, but using it to create a renewable resource, which creates a long-term sustainable environment, is less obvious.

With the development of new recycling and manufacturing technologies and innovations, post-consumer plastic film is becoming increasingly recyclable. Throwing it away is not only a tremendous cost to our environment--and to a company's bottom line--it is shortsighted. Selling these plastics to recyclers who can use them to produce long-lasting, durable products will allow scrap generators to reduce disposal costs, increase revenue and participate in environmental initiatives. When companies look beyond these traditional options and consider ways of transforming scrap material into renewable resources, they will find greater "value" than they ever imagined.

When plastic film is transformed from waste to a renewable resource in the form of recycled resin, it allows for the production of durable products, many of which are already used or sold by the film generators themselves. This process results in significant cost savings for manufacturers and consumers and creates a long-term sustainable market.

While legislators propose taxes and bans on plastic bags in an effort to discourage and reduce their use, the industry has developed market-driven solutions. Grocery and retail bags, stretch wrap and other film scrap can--and is--being recycled into different products for the automotive, household consumer goods, agriculture, packaging, building and construction and consumer products industries.

Historically, the plastic lumber industry created and drove the market for plastic film scrap. Because of the physical characteristics of plastic film, it is best used when re-applied in durable products, such as plastic lumber. Plastic lumber manufacturers started buying recovered plastic film and created an excellent, reliable and consistent market for the material. Today, the plastic lumber industry remains an excellent short-term and long-term market for plastic film scrap and one that is worthy of support.

However, in order to increase recycling rates, generators of plastic film found they could not rely on one industry that produces one product. The success of plastic film recycling in the long-term requires diverse markets and a variety of product applications.

Today, sourcing recovered plastic film is becoming a competitive market, with plastic lumber companies, exporters and other product manufacturers wing for plastic film scrap. Consequently, demand for recovered plastic film significantly outpaces supply.

DEMAND SITUATION. Why is the demand for plastic film growing at such a significant rate? The first factor driving demand, at least in the short-term, is the price of oil. Plastic is a petrochemical. Since the price of oil has risen dramatically throughout the past two years, so has the price of virgin resin. Product manufacturers have faced steep increases in raw material costs, and even though prices have dropped to more reasonable levels, they are still looking for ways to reduce raw material and manufacturing costs. Many manufacturers have sought international sources of resin to keep costs down and continue to do so.

The second factor driving demand this past year was the recent Gulf Coast hurricanes, particularly Hurricane Katrina. Oil refineries and related industries, including the processors that make virgin resin from unrefined oil, in the Gulf were affected. The resulting resin shortage created a crisis for many industries as they suddenly found themselves scrambling to find raw materials.

Long-term, the growing demand for recovered plastic film is driven by many factors. These include a growing supply of post-consumer recycled (PCR) resins, advances in recycling technologies that improve the quality of recycled-content resins, improvements in product manufacturing technologies that enable the blending of recycled-content resins with virgin resins, environmental concerns, proposed tax and ban legislation on plastic bags and a growing number of applications for the recovered material. Today, all of these factors point to an increasing demand for plastic film and recycled resins.

THE ELEMENTS OF SUCCESS. Although plastic film recycling is in its infancy, it has the potential to mature into a robust market if material can be successfully sourced, processed and reused.

Recovered plastic film primarily consists of stretch film and carrier bags. Stretch film is used in commercial applications to secure stacks of boxes or merchandise during shipments. When a shipment reaches its destination, stretch film is cut from the boxes and discarded. Carrier bags that are recovered today are sourced by retail storefront collection programs as well as by municipal curbside programs.

As the demand for recovered plastic film grows, the market needs to expand its supply, increasing the recovery rate beyond 5 percent. The supply of recovered plastic film will grow faster if and when more grocers, retailers, distribution centers, Fortune 500 companies and municipalities participate in recycling initiatives.

Plastic lumber companies pioneered the use of plastic film and are highly experienced in processing this scrap material. Now that converters are able to transform these films into new resins, more and more plastic product manufactures are learning how to use PCR resins made from film scrap. The challenge is providing these manufacturers with a consistent supply of the material. In order to do so, converters need to be consistent in respect to their processes.

Successful plastic film recycling requires the reuse of recycled content. PCR resins must meet the composition and quality demands of a diverse set of manufacturers. Typically, PCR resins sell at a slight discount compared to virgin resin. And with an environment of high virgin resin costs, savings can be significant. However, for this market to be sustainable, reduced pricing cannot be the sole benefit. Product manufacturers must consider the additional economic benefits as well as the strategic and environmental value. The plastic film recycling industry must do a better job of ensuring that the supply of PCR resins is available to all manufacturers that can use them. Some state laws currently require a certain level of PCR content in products sold within their borders, a trend that is likely to increase every year. These mandates are difficult, if not impossible, to comply with without a consistent stream of PCR available to these product manufacturers.

CLOSING THE LOOP. Today, generators of plastic film are beginning to recognize the value of expanding their recycling programs to include closed loop recycling. Rather than simply selling their scrap and considering "price per pound" as the only value, these companies are strategically selecting who they sell their scrap to so they can maximize the overall value (economic, strategic, environmental) of their recycling programs.

By taking their recycling programs full-circle, or by "closing the loop," scrap generators can sell products on their shelves, use products in their operations and display products at their facilities--all made from their own recovered plastic film, thus preserving natural resources. These products can include pallets, shopping carts, hand baskets, parking stops and other consumer products.

In addition to simply receiving applause for their "green" efforts, these generators and their employees, customers and shareholders will see tangible benefits. The most important benefit may be communicating the environmental message of future sustainable recycling possibilities.

HELPING OR HURTING? Why are legislators and environmentalists proposing taxes and bans on plastic bags? Because plastic bags affect the environment in a different way. An improperly disposed of plastic bag can fly through the air, litter streets, clog waterways, and can even harm wildlife.

We all know that plastic bags are here to stay. They're convenient, strong and inexpensive--a winning formula in our consumption-driven economy. So, how do we address the problem? We need to get back to the basics of "Reduce, Reuse and Recycle."

To reduce bag usage, manufactures must produce fewer but stronger bags. Consumers already reuse plastic bags because of their versatility. Consumers must be provided with recycling outlets to increase the recovery rate.

The curbside collection of plastic bags could have an enormous impact on plastic film recycling. In addition to environmental benefits, the recovered plastic film could be used to meet growing PCR demand and ultimately to make a variety of durable products in the auto, agriculture, construction and consumer industries.

Through the cooperative efforts of generators, recyclers, manufacturers, educators and legislators, closed-loop recycling and the creation of sustainable markets can be achieved. Plastic film recycling offers an enormous opportunity to transform an environmental challenge into an environmental and economic success.

The author is president of NextLife Recycling and can be contacted at [e-mail].