Factories and Recycling and Manufacturers and Energy & Environment and Environment and Products and Manufacturing & Technology

State's chilly recycling climate means higher costs for container makers

May 19, 2012
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Indiana’s makers of glass, plastic and aluminum beverage containers say a shortage of recycled materials is raising their manufacturing costs and could discourage others from locating here.

“Recycling can drive our economy in ways people hadn’t thought about previously,” Stephen Segebarth, a senior vice president at glass maker Verallia’s Muncie operations said this month at the Indiana Recycling Coalition’s annual meeting in Indianapolis.

Factories operated by Verallia, Anchor Glass and Owens-Illinois employ more than 1,600 people in Indiana. Their need for discarded glass, known as cullet, far exceeds all 700 million glass containers used in the state annually, Segebarth said.

“There is a robust market for returned glass. We are hungry for all the cullet we can get.”

The thirst for returned containers is also strong for Alcoa, whose four Indiana factories employ about 3,000. Aluminum cans collected from recycling arrive by rail car and are melted to reduce the amount of raw ingredients needed to make aluminum.

Yet aluminum cans equivalent to about 1,000 airliners are driven into landfills in Indiana every year, said Beth Schmitt, director of recycling programs for Alcoa Global packaging.

“It’s $35 million worth of metal” wasted in Indiana alone, Schmitt said. “It’s metal that there’s a strong market for.”

Recovery rates might be worse for plastic bottles, mainly polyethylene terephthalate, or PET, of which only about 30 percent is recovered in the United States, said Michael Washburn, director of global sustainability for Nestle Waters, which has a plant in Greenwood.

Such numbers can be significant because the availability of recyclable feedstock can drive decisions on where to build plants. Late this year, Perpetual Recycling Solutions plans to open a $30 million, 55-employee plant in Richmond. It will transform discarded containers into food-grade plastic flake, which will be sold to container makers.

Just how many plants in Indiana rely on a supply of discarded material harvested during recycling is unclear. The Environmental Protection Agency’s Region 5 office in Chicago has begun a study of Indiana and five other Midwestern states, with input from groups such as the IRC.

The study to date has found at least 30 manufacturers in Indiana using recycled feedstock and employing more than 6,400 people. The study should be released this summer, said Susan Mooney, chief of EPA Region 5 municipal and industrial materials section.

Over a ton of natural resources is saved for every ton of glass recycled, said Verallia’s Segebarth. He said energy usage falls 2 percent to 3 percent for every 10 percent of recycled glass used in manufacturing, with reductions in nitrogen, sulfur, particulates and greenhouse gases.

Glass can be perpetually recycled. Segebarth tells college students that the beer bottle they drink from today may have been made from bottles their parents swigged when they were in college.

Verallia said one challenge has been finding cullet that hasn’t been commingled with other recyclables. The company has created joint ventures to clean and sort and has been working with bars and restaurants to acquire used glass.

About 65 percent of glass cullet comes from the 10 states with so-called bottle bills: California, Connecticut, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, Oregon and Vermont. They have glass recovery rates of 64 percent versus states without bottle return requirements, such as Indiana, which tend to average about 12 percent, according to the Container Recycling Institute.

The institute said recovery rates for aluminum in bottle-bill states is 76 percent compared with 35 percent in non-bottle-bill states; PET plastic bottle recoveries are 44 percent and 14 percent, respectively.

Bottle bills vary in complexity. One of the simplest is Iowa’s. A beverage distributor charges 5 cents on each container delivered to a retailer, who passes that cost on to the consumer. The consumer gets the money back upon returning a bottle.

Indiana’s last flirtation with a bottle bill was in 2009, with a proposed 10-cent rate. The bill did not get a committee hearing.

Beverage industry representatives at the IRC annual meeting said they were dismayed by endless years of debate in Indiana about container return policy while countless millions of dollars in valuable feedstock is buried in landfills.

Some manufacturers favor a bottle bill. Others, like Nestle Waters, advocate an “extended producer responsibility” approach in which container producers, not municipalities, take responsibility for collection and recycling.

The IRC has not yet come out in favor of a particular approach, but is encouraged by policy discussion taking place within the industry, said Carrie Hamilton, IRC’s executive director. •
 

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