2. Recycling Report: The truth about Clamshell and Blister Recycling in America Chandler Slavin Sustainability Coordinator Dordan Manufacturing Co. Inc.

3. 3 © 2010 Dordan Manufacturing, Inc. Dordan Manufacturing Co. Inc. Midwestern based, national manufacturer of custom designed thermoformed packaging solutions since 1962. Family owned and operated. Specializes in custom clamshells, blisters, trays and components for the consumer goods and electronics industries.

4. Thermoformed packaging Thin gauged, rigid plastic packaging; Applicable to consumer product packaging for its visibility, performance and cost; Examples include: Clamshells (pictured right) Blisters Trays Components Manufactured from PS, PP, PET, PVC, HDPE, etc. 4 © 2010 Dordan Manufacturing, Inc.

5. 5 Today’s Presentation Introduction: What is “recyclable” and why Part 1: The economics of recycling packaging in America Part 2: The state of blister/clamshell recycling in America Conclusion: What progress is being made in recycling thermoforms

6. Definitions MRF= Material Recovery Facility PC= Post Consumer Recyclate= the resulting material composition following the process of recycling i.e. RPET MSW= Municipal Solid Waste NAPCOR= The National Association for PET Container Resources APR= the Association of Postconsumer Plastic Recyclers 6 © 2010 Dordan Manufacturing, Inc.

7. 7 The Discovery Like many types of consumer packaging, thermoform containers are not recycled in 60% or more American communities; therefore, can’t be considered “recyclable” according to the FTC Green Guides.

8. 8 © 2010 Dordan Manufacturing, Inc. Dordan CEO’s Inquiry: If we manufacture our thermoforms out of PC PET bottles, then why can’t we recycle them with PET bottles?

9. 9 © 2010 Dordan Manufacturing, Inc. What types of packaging is recycled in America?

10. Municipal Solid Waste Generation, Recycling, and Disposal in the United States Detailed Tables and Figures for 2008 http://www.epa.gov/osw/nonhaz/municipal/pubs/ms w2008data.pdf

11. 11 © 2010 Dordan Manufacturing, Inc.

12. 12 © 2010 Dordan Manufacturing, Inc. What is“Recyclable” according to FTC Green Guides? [If the] “Substantial majority” of consumers/communities have access to recycling facilities — [Then the] marketer can make an unqualified recyclable claim.

13. 13 © 2010 Dordan Manufacturing, Inc. “Recyclable” is… Only those types of package/material combinations that are collected post consumer, reprocessed and/or remanufactured in the “substantial majority of American communities” can be labeled “recycled and/or recyclable.”

14. 14 © 2010 Dordan Manufacturing, Inc. Why are certain types of packages recycled, while others are not?

15. 15 © 2010 Dordan Manufacturing, Inc. Part 1: The Economics of Recycling in America

16. 16 © 2010 Dordan Manufacturing, Inc. Economics of Recycling Those material/packaging types that are “easy” to: – Collect post-consumer – Transport – Sort – Reprocess – and, Remanufacture _________________________________________________ Enjoy the likelihood of being recycled because the cost of the resultant “recycled” material is competitive with the cost of virgin material/product production.

17. 17 © 2010 Dordan Manufacturing, Inc. Example: PET bottles Because PET bottles are made from quality resin and are “easy” to recycle, the remanufactured resin enjoys a value that allows it to compete with virgin, facilitating the continued recycling of PET bottles.

18. 18 © 2010 Dordan Manufacturing, Inc. “Easy” to Recycle? By “easy” to recycle I mean investment has been made in the recovery infrastructure and the process of recycling itself is well established within the industry and waste management hierarchy.

19. 19 © 2010 Dordan Manufacturing, Inc. Chicken and Egg There is no supply if there is no demand; there is no demand if there is no supply. A package/material type will not be collected for recycling if there is no buyer and/or end market for this recyclate.

20. 20 © 2010 Dordan Manufacturing, Inc. Too expensive to recycle? IF the cost of recycling is too high, THEN the cost of the product/package for which said recyclate was intended would put the selling unit at a competitive disadvantage in the market.

21. 21 © 2010 Dordan Manufacturing, Inc. Example: EPS 98% air; 2 % resin. Its bulky and lightweight nature makes it economically unsustainable to recycle because the process of collecting and transporting the material to the MRF/reclaimer exceeds the cost of virgin EPS production.

22. 22 © 2010 Dordan Manufacturing, Inc. “Material/packaging type?” For a package to be recycled, it has to be of a specific material type, like PET, AND a specific packaging type, like screw neck bottle. It is only the correct combination of material and packaging type (i.e. PET screw neck bottles), which determines a packages’ ability to be recycled.

23. 23 © 2010 Dordan Manufacturing, Inc.

24. 24 © 2010 Dordan Manufacturing, Inc. Our Economic Framework for Understanding Recycling IF the cost of post-consumer collection, transportation, sortation, reprocessing and remanufacturing < The cost of virgin material/product production; _______________________________________ THEN it is likely that said material/packaging type is recycled or will be so in the future with proper investment.

25. 25 © 2010 Dordan Manufacturing, Inc. What does all this mean for the state of recycling thermoform packaging, like clamshells and blisters, in America?

26. 26 © 2010 Dordan Manufacturing, Inc. Part 2: The State of Blister/Clamshell Recycling in America

27. 27 © 2010 Dordan Manufacturing, Inc. Section 1: Supply and Demand Considerations for Recycling Thermoforms

28. 28 © 2010 Dordan Manufacturing, Inc. Supply Considerations There has to be enough of a specific material/packaging type generated in the MSW stream to economically justify the collection and recycling thereof; and, “enough” is defined by the requirements of the buyer/end market. “Enough” is commonly referred to as “Critical Mass” in the WM industry.

29. 29 © 2010 Dordan Manufacturing, Inc. Example: PET Bottles According to NAPCOR, the total number of pounds of PET bottles and jars available in the U.S. for recycling in 2008 was 5.366 billion. This quantity achieves the critical mass necessary to economically justify the recycling of PET bottles in the context of material generation.

30. PET Bottle vs. Thermoform Generation While large quantities of PET bottles are manufactured each year, there are not as many clamshells of a single resin manufactured, which makes the collection of an adequate supply of this material/package type difficult; therefore, its recycling economically ambiguous in the context of material supply/generation. 30 © 2010 Dordan Manufacturing, Inc.

31. 31 © 2010 Dordan Manufacturing, Inc. Do thermoforms have Critical Mass? According to the American Chemistry Council, there has to be about 400 million lbs of a particular plastic genrated for the recycling to be profitable (Plasticstoday.com). Fortunately, 1.4 billion lbs of PET thermoforms were produced in North America in 2008 (Ibid).

32. 32 © 2010 Dordan Manufacturing, Inc. Thermoforms do have Critical Mass Recycling of PET thermoforms can be an economically sustainable process, based on the amount generated and available for post consumer collection. Transition from PVC to PET will render more PC PET available for collecting and recycling.

33. 33 © 2010 Dordan Manufacturing, Inc. Demand Considerations Demand for PC PET material in North America exceeds the supply 3:1. If PET thermoforms were integrated into the PET recovery stream, then more RPET would be available to meet the growing demand.

34. 34 © 2010 Dordan Manufacturing, Inc. Section 2: Sortation Considerations for Recycling Thermoforms

35. 35 © 2010 Dordan Manufacturing, Inc. Sortation is… The process by which recyclable materials are sorted from those destined for landfill. The responsibility of the MRF, which is where materials that are collected via curb side or other systems are brought for recycling.

36. Sorting Technologies There are two sortation systems employed at MRFs: – Visual/manual sortation : Workers on “The Line” pull the “recyclables” from those destined for landfill via visual cues inherent in the package, like screw top plastic bottle. – Automatic sortation: Deploy detection to analyze one or more properties of the plastic bottles passing through and automatically sorts these plastics into several categories, either by resin type, color, or both. 36 © 2010 Dordan Manufacturing, Inc.

37. 37 © 2010 Dordan Manufacturing, Inc. Visual Sortation and Thermoforms? Bottles Easy to visually identify on “The Line” at a MRF by their thin necks and screw tops. Investment has been made in sorting bottles from those materials destined for landfill. Thermoforms Heterogeneous in size, shape, and material. Difficult to visually identify by material type as the move down “The Line” at a MRF. Little investment has been made in sorting technologies/processes.

38. 38 © 2010 Dordan Manufacturing, Inc. SPI ID Code Most plastic packaging is labeled with a SPI ID #, pictured below. Intended to represent the resin from which the package is made. The recent influx of new resins, bio-based resins, barrier-resins and others have made the SPI ID code confusing as means of separating plastic by material type for recycling.

39. 39 © 2010 Dordan Manufacturing, Inc. Example: SPI ID #1 Packages made from PET are labeled with the SPI ID #1 However, packages labeled with #1 may also be comprised of PETG, in which the –G lowers the melting point of the PET polymer, disrupting the established reprocessing of PET recyclate. Other examples include packages made from CPET and multi-layer PET; these have the potential to ruin the PET recyclate for remanufacturing.

40. 40 © 2010 Dordan Manufacturing, Inc. In Short… The more time-intensive the process is for the manual sorters to visually identify the recyclable materials from those destined for landfill, the higher the reprocessing costs; therefore, the more expensive the recyclate and the less competitive it will be with virgin material/product production.

41. 41 © 2010 Dordan Manufacturing, Inc. Automatic Sortation and Thermoforms? Many MRFs do not have automatic sortation systems because they are too expensive. If the investment has not been made, the MRFs’ ability to sort thermoforms by material type from those still with no end markets will be time-intensive, resulting in higher reprocessing costs.

42. 42 © 2010 Dordan Manufacturing, Inc. Sorting Technologies, the Economics of Recycling, and Supply and Demand A materials’ ability to be competitive after the cost of recycling depends, in large part, on the sortation technologies employed by the MRF. A MRF will not make an investment in automated systems until the supply and demand necessary to sustain the process of recycling itself is guaranteed.

43. 43 © 2010 Dordan Manufacturing, Inc. Section 3: Specs and Baling Considerations for Recycling Thermoforms

44. 44 © 2010 Dordan Manufacturing, Inc. Specs are… The documented qualifications a buyer/end market outlines to the supplier of PC material upon procurement. This depends on the end use of the recyclate: – If the buyer/end market is a bottler, the recyclate has to meet one set of specs; – if the recyclate is intended for thermoformed packaging, it has to conform to another; – and, if the recyclate is used in non-packaging applications like carpet, imitation timber, etc., it has to demonstrate compliance with another set of specs.

45. 45 © 2010 Dordan Manufacturing, Inc. Closed Loop vs. Down-cycling By remanufacturing bottles from bottles or thermoforms from thermoforms, the value of the PC material is not diminished after reprocessing. If down-cycled, in which bottles are recycled into polyester fiber applications, the recyclate is diminished in value because it does not have to confirm to as stringent specs.

46. 46 © 2010 Dordan Manufacturing, Inc. End-Use Categories for PET and Associated Market Value Packaging applications, like bottles; Sheet and film applications, including; thermoforming applications; Strapping; Fiber applications, like carpets, fabrics, and fiberfill; etc.

47. 47 © 2010 Dordan Manufacturing, Inc. Specs = Value of Recyclate The more stringent the specs: – The higher value the recyclate due to its application to many end markets; – The lower the concentration of contaminates; – The more likely the end market attempts to “close the loop.”

48. 48 © 2010 Dordan Manufacturing, Inc. Specs for Thermoform Bales Needed Specs for thermoform bales are needed if we want to recycle them. Without a buyer/end market and therefore specs, these material/packaging types will not be collected and sold for reprocessing/remanufacturing.

49. “Bales” are… How a material is collected and prepared for recycling at the MRF. 49 © 2010 Dordan Manufacturing, Inc.

50. How do you bale thermoforms? Due to their differing densities, geometries, and often times materials, it is difficult to come up with a uniform bale for market, especially when no specs for thermoform bales exist, yet. 50 © 2010 Dordan Manufacturing, Inc.

51. 51 © 2010 Dordan Manufacturing, Inc. In Summary… We need to create specs for recycling thermoforms, including specs for baling, which rests entirely on the end-market/buyer. However, no one will create specs for thermoform- only bales or PET thermoform & bottle bales if there is no buyer/end market; and, there will not be a buyer/end market if none of this material is available for resale.

52. 52 © 2010 Dordan Manufacturing, Inc. Part 4: Contamination Considerations for Recycling Thermoforms

53. 53 © 2010 Dordan Manufacturing, Inc. Approach to Recycling Thermoforms? There are three popular approaches to recycling thermoforms: – Recycle PET thermoforms with PET bottles to remanufacture into RPET bottles and/or thermoforms. – Recycle all PET thermoforms together to remanufacture into RPET thermoforms. – Recycle all mixed-resin thermoforms together to remanufacture into various down-cycled applications, like imitation timber.

54. 54 © 2010 Dordan Manufacturing, Inc. Isolate PET Bales for Highest PC Value Bales of a single resin, like PET, enjoy more PC value than mixed resin bales, described as a low-grade plastic mix. By recycling PET thermoforms with PET bottles OR recycling all PET thermoforms together, the resultant recycled material would enjoy a high PC value applicable to a variety of end markets.

55. 55 © 2010 Dordan Manufacturing, Inc. Approach taken informs what is a “Contaminant” If either approach is taken (PET bottles+PET thermoforms OR PET thermoforms only), then contamination issues need to be addressed. These considerations apply only if the end market for the recyclate is food-contact packaging, like bottles and thermoforms, or other packaging that requires outstanding clarity.

56. 56 © 2010 Dordan Manufacturing, Inc. Known Contaminates to PET Recycling Barrier Resins(EVOH) Closures Labels Safety seals Container residue i.e. chemicals or food Look-a-likes like PVC, CPET, PETG, etc. Modified PET resins Multi-layer PET containers Colored PET

57. 57 © 2010 Dordan Manufacturing, Inc. Where do we go from here?

58. The recycling of thermoforms depends on the ability to… Collect; Transport; Sort; Bale; Reprocess; and, Remanufacture Into new material/products in an economically competitive way with virgin material/product production. 58 © 2010 Dordan Manufacturing, Inc.

59. Luckily, we are not alone! 59 © 2010 Dordan Manufacturing, Inc.

60. Progress in Recycling Thermoforms In 2009, NAPCOR facilitated the shipment of almost one million pounds of PET thermoforms to various reclaimers and end markets to understand the technical barriers keeping them from being recycled. It was found that certain adhesives on thermoform labels compromised the color of the recyclate. It also implied that it is technically easier to recycle PET thermoforms with PET thermoforms then recycle PET thermoforms with PET bottles. 60 © 2010 Dordan Manufacturing, Inc.

61. NAPCOR concludes… “As a result of this work, it is anticipated that there will be various market options for this material in the near future…. NAPCOR is committed to working on this issue until PET thermoforms can be labeled “recyclable” in the truest sense of the word.” 61 © 2010 Dordan Manufacturing, Inc.

62. 62 © 2010 Dordan Manufacturing, Inc.