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This report covers the supply and demand of recycled plastics, specifically with regards to those used to produce packaging materials. Packaging products with recycled content may contain materials collected from office/curbside recycling programs (post-consumer), materials generated after the manufacture of a product but before it reaches the end-user (post-industrial/pre-consumer), and virgin resin materials. Within this report, the total volume of post-consumer recycled plastic going into packaging is analyzed. In addition, information is provided on recycled content levels, which are defined as the total percentage of recovered material in a product.
For the purposes of this study, recycled resin price and value is considered at the pellet level, even though many recycled plastics are sold to end users in flake form.
Trends in Recycled Content Sources (PCR vs. PIR)
Plastic for recycling comes from two primary sources – consumer and industrial:
Post-consumer recycled (PCR) plastics – the plastics covered in this study – are defined as plastic products that having served their end use, are reclaimed and reprocessed into base resins. Recycling of finished plastic products by commercial and industrial consumers is included here.
Post-industrial recycling (PIR) includes the re-use and recycling of plastic scrap and trimmings from manufacturing processes and merchant market sales of these products. These products are excluded from the current study.
While PIR plastic has advantages as compared to PCR plastics, such as lack of contamination and relative purity of the waste stream, a large portion of PIR is captive, reducing the amount of recycled plastic available to the wider market. Additionally, as manufacturers increase their demand for recycled plastic to meet sustainability goals, PIR plastic production is unlikely to increase a sufficient amount to meet these stringent targets.
Plastic Resin Industry Trends
Plastic resin demand in the US is forecast to increase 1.4% per year to 98.6 billion pounds in 2025, an acceleration over the pace seen during the 2015-2020 period, when overall gains were restrained in part by the impact of the COVID-19 pandemic in 2020. Going forward, plastic resin demand growth will be fueled by:
increases in the construction market, in particular nonbuilding construction, which is increasingly utilizing plastics in applications such as pipe
a recovery in manufacturing activity following the losses in 2020 arising from the COVID-19 pandemic
the rising use of plastic in manufactured goods, particularly in motor vehicles, where producers continue to look for ways to reduce weight and increase fuel efficiency
healthy growth in packaging and consumer applications, driven by the low cost and source reduction advantages of plastics compared to competing materials
Thermoplastic resins will continue to account for about 85% of the market. Thermoplastic resins will account for by far the majority of gains due to the processing and design advantages they have over thermoset resins, which are limited by market maturity.
Factors Impacting Virgin vs. Plastic Pricing
Pricing is a crucial competitive factor for manufacturers of plastic film and containers due to the competitive nature of the industry and the fact that many items that are produced are high-volume, commodity products such as beverage bottles. Many variables can influence a plastic product’s price, including:
raw material and labor costs
transportation and filling expenses
level of demand
customization and design expenses
competition from other materials
In general, resin accounts for roughly half of the average plastic bottle’s cost, while other raw materials account for 10%, labor costs for 20%, and the remaining 20% is a combination of other expenses.
Additionally, plastic has to compete with glass, metal, paper, and other materials used for packaging. Virgin plastic resins are generally much less expensive than other materials due to technological and manufacturing innovations, economies of scale, and downgauging of resins.
Sources for scrap and waste plastics covered in this report include:
food and beverage bottles
rigid plastics and foam (including food containers)
carpeting (including rugs) and fiber
flexible packaging (including retail bags, trash bags, and film from other packaging products)
Excluded from the scope of this report are:
waste primarily made of nylon
post-industrial recycled content
bioplastics and engineering plastics
Plastic resins covered in this report include:
polyethylene terephthalate (PET)
high-density polyethylene (HDPE)
low-density polyethylene (LDPE) (including LLDPE)
Packaging applications for recycled plastic resin evaluated in the study include:
bottles, both those used for food and beverage as well as non-food applications (including hair care products, detergents and other cleaning products, motor oil)
rigid plastic packaging products other than bottles, including:
expanded polystyrene packaging
plastic caps and closures
tubs, cups, and bowl
flexible packaging (including retail bags, trash bags, and film from other packaging products – food wrap films, food and beverage pouches, plastic film lidding, plastic food bags, vacuum seal packaging, etc.)
Historical data are provided for 2010, 2015, and 2020, with forecasts for 2025 and 2030. The term “demand” refers to “apparent consumption” and is defined as production (also referred to variously as “shipments”, “output”, or “supply”) from a country’s domestic manufacturing facilities plus imports, minus exports. “Demand” is used interchangeably with the terms “market”, “sales”, and “consumption”. Data are presented in millions of pounds and millions of US dollars.
Post-consumer recycled goods are those that have left the manufacturing facility and have been used, even if their final destination is another manufacturing facility. This is in contrast to post-industrial recycled materials, which are directly generated during the manufacturing process. For example, plastic trimmed from rigid packaging on the manufacturing line that is then recycled would be classified as post-industrial recycled content, while the stretch film used to secure the palletized goods that is removed at the beverage manufacturer’s facility would be classified as post-consumer waste. Packaging made from post-industrial recycled waste is excluded from this study.
US demand for post-consumer recycled plastic in packaging applications is forecast to rise 9.1% per year to 2.8 billion pounds in 2025. Despite this rapid rate of expansion, the use of recycled plastic in packaging could be much higher if it were not constrained by supply. Demand for recycled content in packaging is higher than ever, with growth driven by:
an increasing emphasis on sustainability among packaging and consumer goods manufacturers, a large number of which have made public pledges to greatly increase the amount of recycled plastics in their packaging
consumer concern regarding packaging and its impact on the environment
packing producer concerns over potential bans of their products, such as the bans on plastic retail bags and single-use foodservice products
renewed efforts by the private sector to encourage recycling, in order to meet their ambitious sustainability goals
Growth Depends on Changes to Waste Collection & Processing & on Consumer Education
In order to produce enough recycled plastic to meet new ambitious recycled content targets, a number of changes to collection and processing need to be made. To increase the amount of waste collected, consumer education is needed to improve understanding of:
the detrimental effects of including unrecyclable waste in the recycling waste stream
proper recycling of plastic waste, including which plastics are recyclable
More importantly, systems need to be improved to make municipal waste pick-up easier and more convenient for consumers, particularly at multifamily residences such as apartments and condominiums, which often have not access to on-site collection.
Additionally, plastic waste processing technologies need to be improved to increase the amount of collected plastic that can be converted into flake that can be reused in new packaging. Technology advancements are needed for items that are already commonly recycled – such as bottles and other rigid packaging – but more importantly for products that are not already widely recycled – including flexible packaging, hard-to-recycle plastics, and non-packaging plastic waste. Producers of a wide variety of manufactured goods target discarded plastic bottles as a source of recycled content, but there are not enough plastic bottles produced to meet all recycled content demand.
PET to Remain Most Widely Used & Fastest Growing Recycled Resin
By 2025, PET is expected to account for 55% of recycled resin used in packaging applications. Demand for PET is expected to grow at an above average pace, with double-digit gains boosted by rising use of recycled content in food and beverage bottles, which much meet stricter standards to be food safe. Rising demand for recycled polyethylene, in contrast, will come from use of recycled content in non-food contact applications, which are easy targets for increasing recycled content in packaging because they do not require food-safe certified resins. In particular, rising demand for recycled LDPE in retail and trash bags will be driven by manufacturer efforts to prevent further implementation of retail bag bans by improving the sustainability of these products in other ways.