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Recycled plastics: supply-side highs - demand-side lows.

The supply-side plan for recycling plastics is reasonably strong and gaining strength; but the demand-side for reclaimed/recycled material is falling short of our expectations. It may be that until we're told that X amount of recycle must be used with Y amount of new material, we are not about to incur and pass on the increase in material costs for using recycle. The reason is that there are no substantial markets for handling the ever growing stockpiles of HDPE, LDPE, PP, PS, and PVC. And the added cost for using PET in food packaging makes it a costly pursuit.

The rationale for the soft market for HDPE, LDPE, PP, PS, and PVC appears to be twofold: The government has not responded in keeping with the supply-side of the program in providing guidelines (percentages of recycle to virgin materials or acceptable applications for recycle) for reuse of these materials (this we expected); and the price of after-market materials is greater than that of new materials. From a profit-and-loss standpoint, we may find ourselves in a bit of a financial quandary. Is recycle the kind of product that manufacturers will voluntarily purchase?

Without sufficient demand for recycled materials, we'll create a warehouse glut of these materials that may render them less than enticing to the people who collect and market them. And stockpiling supply-side product in lieu of cash flow cannot be taken lightly. The one exception, PET, is being used for numerous after-market products. And even though it costs more than new PET when used for food packaging, some companies are doing it: For example, Coca-Cola is using recycled PET in some of its one liter bottles. This may be a singular effort to comply with voluntary usage of recycled material in food packaging. But other recyclable materials are falling short in after-market bulk-material sales. What's the alternative? Well, perhaps it's time for "dates and rates. "

In brief, dates and rates, a proposed government program, refers to mandatory contents of recyclable materials by legislated dates. A voice in the packaging industry appears to be against the government's mandating such a program - it is felt, and perhaps justifiably so, that government should not legislate mandatory contents and dates to the industry. But if it doesn't, if something isn't done to further the use of recycle in tandem with new material, we may see the demand-side of this effort take a protracted decline.

Until the government establishes a schedule of dates and rates, there doesn't seem to be much that we can do to stimulate the flow of reclaimed material from warehouse to processor to manufacturer. We might not care for the government's delivering a mandate, but it may be the only way to enforce and stimulate the demand-side of plastics recycling.

Roger M. Ferris EDITOR
COPYRIGHT 1992 Society of Plastics Engineers, Inc.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Ferris, Roger M.
Publication:Plastics Engineering
Article Type:Editorial
Date:Feb 1, 1992
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