PI Circular – Thirteenth Edition

Welcome back to PI Circular! In this edition, we will reflect on the progress made and challenges we encountered on our journey to a more circular economy for plastics in 2024.

1. EPR Advancement

2024 will be remembered as the year Extended Producer Responsibility (EPR) legislation for packaging gained traction in the U.S. Five states have passed EPR legislation for packaging: Maine, Oregon, California, Colorado, and Minnesota. In addition to these five states, ten states are in various stages of exploring EPR programs for packaging. Circular Action Alliance (CAA) has emerged as the producer responsibility organization (PRO) in several of the EPR states. The PRO is led by major brands such as Coca-Cola, Keurig Dr Pepper, General Mills, and Unilever. CAA aims to harmonize producer requirements despite inconsistent state obligations.

Brands marketing products in these states should register as a producer with CAA immediately if they have not done so already. In 2025, producers will be required to meet their initial reporting obligations. According to CAA, producers in Oregon must report data covering the 2024 calendar year on March 31, 2025. Producers will begin reporting August 31, 2025, in California and Colorado, submitting data covering Q1-Q2 of 2025. Producers must report the material type and weight of the covered materials identified by law. Fee obligations will begin in Oregon on July 1, 2025.

2. PET Recycling Rate Increase

NAPCOR recently revealed some much-needed good news for plastic recycling with their 2023 PET Recycling Report. The U.S. PET bottle collection rate increased to 33% in 2023 from 29% in 2022. This is the highest U.S. recycling rate since 1996 after the rate stagnated at or below 30% for 15 years. The amount of PET thermoforms recycled rose by 26% to 168 million pounds, an increase year-over-year of 34 million pounds.

The packaging industry must maintain this momentum to meet PCR targets and ensure compliance with EPR regulations. A good indicator that this trend will continue can be seen in the amount of PET PCR used in bottles and thermoforms. The average amount of PCR in bottles increased to 13.2% in 2023, nearly double the amount since 2017. The average amount of PCR used in PET thermoforms increased dramatically to 16.9% in 2023, up from 10.8% the previous year. Using PCR in packaging fuels efforts and investments to capture additional volumes.

3. PCR Market Challenges

Headwinds remained for the post-consumer recycled (PCR) material market in 2024 despite the upswing in usage noted above. Brands have commonly identified an undersupply of PCR as a reason why most 2025 PCR targets will be missed. This supply and demand gap would put upward pressure on PCR pricing in a vacuum, but the market is complex. Multiple industries compete for PCR supply. Although PCR uptake in packaging is up, demand in non-packaging applications like fiber has stagnated due to global conditions. Historically low virgin material prices due to global oversupply have put downward pressure on PCR pricing, given that certain markets toggle between recycled and virgin materials depending on pricing dynamics. Another headwind for domestic PCR producers is an uptick in imported recycled materials to fill the supply gap.

Looking forward to 2025, PCR mandates in states like New Jersey and California will further increase demand for PCR materials in packaging. The supply and demand gap will unlikely ease unless domestic recycling rates increase. It could worsen if demand for recycled materials in non-packaging industries increases. Consumer packaging brands can brace themselves for volatility and still meet their PCR targets by diversifying sources and exploring long-term supply agreements. Third-party PCR certification and source origination disclosures will be critical to combat the risks inherent in imported materials.

4. Advanced Recycling is Here

In 2024, several advanced recyclers successfully mass-commercialized their technologies. Advanced recycling processes break down plastic waste into fundamental building blocks, enabling the production of virgin-quality plastics. PureCycle, for instance, utilizes a purification process to recycle polypropylene items. The company achieved a significant milestone by delivering its first commercial shipment at the end of 2023. Progress accelerated in 2024, with PureCycle announcing in September that it had processed one million pounds of material within a single week.

Eastman made strides on its first commercial depolymerization facility in Kingsport, TN. In March, the company announced that production at the facility had commenced. The company will use a methanolysis process to break down polyesters into their monomer building blocks. The building blocks will be reassembled to make virgin-quality polymers for various end markets.

5. Design for Recycling Innovation

Driven by voluntary commitments and pending EPR compliance requirements, brands have made strides in increasing the amount of recyclable packaging in their portfolio. In response to this demand, packaging manufacturers have accelerated design for recycling innovation. Examples include the development of colorants detectable by near-infrared sortation equipment and barrier packaging that is compatible with existing recycling streams.

A notable development announced in 2024 is the evolution of the How2Recycle labeling system to connect more effectively with consumers. How2Recycle is a standardized labeling system that provides clear recycling instructions for packaging to help consumers properly recycle materials. The new system will offer the potential to use a dynamic QR code featuring The Recycling Partnership’s Recycle Check tool. The code gives consumers a clear, location-specific answer on whether a package is recyclable in their communities.

Have a Nice Day

Thank you for reading! If you have found this information insightful, you will enjoy reading our 2025 Thermoform Circularity report. The report will be published in early 2025, so be on the lookout!