Ontario Plastics Market Development Strategy

STEWARDSHIP ONTARIO
With funding support from
Environment and Plastics Industry Council
Ontario Plastics
Market Development
Strategy
Final Report | September 2007

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Ontario Plastics Market Development Strategy
Stewardship Ontario
Table of Contents
Table of Contents
List of Tables
List of Figures

EXECUTIVE SUMMARY
Section 1 PROJECT OVERVIEW
1.1
Why a Plastics Market Development Strategy ........................................ 1-1
1.2 Scope........................................................................................................ 1-1
1.3 Methodology ............................................................................................ 1-2
1.4
Plastic Recycling and Recovery Elsewhere ............................................. 1-2
Section 2 RECOVERY SCENARIOS FOR EVALUATION
Section 3 FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
3.1
Recovery and Cost Estimates................................................................... 3-1
3.2
Selection Criteria for Recommended Scenarios ...................................... 3-2
3.3 Recommended
Approach......................................................................... 3-3
Section 4 IMPLEMENTATION APPROACH
4.1 Implementation
Approach ....................................................................... 4-1
4.2 Projected
Recovery
Impacts .................................................................... 4-2
4.3 Tactics
Costs ............................................................................................ 4-2
Section 5 MARKET DEVELOPMENT
5.1
Principles for Marketing Materials .......................................................... 5-1
5.2
Market Capacity to Absorb Additional Plastics....................................... 5-1
5.2.1 PET .............................................................................................. 5-1
5.2.2 HDPE ........................................................................................... 5-3
5.2.3 Tubs and Lids............................................................................... 5-3
5.2.4 Other Rigid Plastic Packaging ..................................................... 5-4
5.2.5 Bags and Film .............................................................................. 5-5
5.2.6 Polystyrene................................................................................... 5-6
5.3 Alternative
Markets ................................................................................. 5-7
5.3.1 Offshore
Export ........................................................................... 5-7
5.3.2 Feedstock Recovery and Fuel Uses ............................................. 5-7
5.4
Market Barriers and Market Development Strategies ............................. 5-8
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Table of Contents
Section 6 IMPLEMENTATION CONSIDERATIONS
6.1 Key
Challenges ........................................................................................ 6-1
6.1.1 Institutional .................................................................................. 6-1
6.1.2 Infrastructure................................................................................ 6-1
6.1.3 Public Education and Promotion ................................................. 6-2
6.1.4 Market
Development ................................................................... 6-2
6.1.5 Technology .................................................................................. 6-3
6.2 Next
Steps................................................................................................ 6-3
Appendix A PLASTICS PACKAGING RECYCLING IN OTHER
JURISDICTIONS
Appendix B SCENARIOS DESCRIPTIONS
Appendix C RECOVERY AND COST PROJECTIONS AND
ASSUMPTIONS
Appendix D EPIC MARKET DEVELOPMENT COMMENTS
Appendix E IMPLEMENTATION CONSIDERATIONS AND
IMPLICATIONS

List of Tables

Table ES-1 Scenario-Specific Recovery and Cost Estimates ...................................ES-1
Table ES-2 Market Barriers ......................................................................................ES-3
Table ES-3 Market Development Strategies Cost and Implementation
Schedule ...................................................................................................ES-3
Table 3-1 Scenario-Specific Recovery and Cost Estimates........................................ 3-1
Table 5-1 Market Barriers........................................................................................... 5-9
Table 5-2 Market Development Strategies Cost and Implementation
Schedule ................................................................................................... 5-10

List of Figures

Figure 3-1 Historical and Potential Future Blue Box Plastics Generation and
Recycling.................................................................................................... 3-5

This report has been prepared for the use of the client for the specific purposes identified in the
report. The conclusions, observations and recommendations contained herein attributed to
R. W. Beck, Inc. (R. W. Beck) constitute the opinions of R. W. Beck. To the extent that
statements, information and opinions provided by the client or others have been used in the
preparation of this report, R. W. Beck has relied upon the same to be accurate, and for which no
assurances are intended and no representations or warranties are made. R. W. Beck makes no
certification and gives no assurances except as explicitly set forth in this report.

Copyright 2007, R. W. Beck, Inc.


All rights reserved.

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EXECUTIVE SUMMARY
Executive Summary
The primary objective of this Plastics Market Development project was to identify
opportunities and market development strategies and costs to improve the recycling
rates for Ontario residential Blue Box plastics, both in the short and long term. The
information in this report will be considered by the board of Stewardship Ontario to
formulate a Blue Box plastics market development strategy and its associated costs.
R. W. Beck evaluated three scenarios for increasing Blue Box plastics recycling, and
the market development implications of each. These three scenarios are presented in
order from most aggressive to least aggressive in Table ES-1, in comparison to 2006
as a baseline year. The first scenario focuses on collecting all rigid plastic packaging,
plus aggressive expanded collection of polyethylene (PE) film plastics and polystyrene
(PS). The second scenario focuses on collecting all rigid plastic packaging, with a
more moderate effort to expand collection of film plastics and polystyrene. The third
scenario focuses on deepening capture to maximize effectiveness of existing
programs, including expanding the collection of tubs and lids.
Table ES-1
Scenario-Specific Recovery and Cost Estimates
Scenario Maximum
Maximum
Scenario
Ongoing Net
Additional
Projected
Initiation Cost
Annual
Tonnes
Recycling
($ millions)
Incremental
Recycled
Rate
Costs
($ millions)
All Rigid Plastic Packaging
29,500 1
37% $3.3 $13-21
(aggressive film/PS)

All Rigid Plastic Packaging
22,100 34% $3.4 $7-12
(moderate film/PS)
All Bottles and Tubs
16,800 32% $3.5-4.0 2 $3-6
(moderate film/PS)
2006 Blue Box Baseline
52,222 total
22% n/a n/a
tonnes
1. Plus an additional 11,200 tonnes recovered and sent to fuel use.
2. Includes $1.0 million for multi-residential recycling strategy implementation, which would benefit all materials (not just plastics), the cost of
which should not be borne solely by plastics stewards. The high end of the range assumes an all plastic bottles and tubs television mass
media campaign is added onto the Recycling Works television advertising campaign; this could only occur if a future decision is made to
continue the Recycling Works advertising campaign and to authorize the proposed supplemental all plastic bottles and tubs campaign. The
lower end of the range assumes lower cost mass media buys through province-wide newspaper or other media (a lower level of tonnes
recycled would also be expected through the use of less costly and less effective media).
Several assumptions are reflected in the figures found in Table ES-1, the most
important of which is that all programs across the province are assumed to implement
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EXECUTIVE SUMMARY
a set of implementation strategies under each scenario that apply to them. Blue Box
program decision makers may elect to not implement certain strategies for cost or
other reasons. Therefore, the figures in the table should be considered to be the upper
limit that each scenario can attain and actual cost and effectiveness will be less than is
shown in the table.
Cost estimates for scenario initiation shown in Table ES-1 are initial “one time” costs
associated with setting up and promoting new programs. Ongoing net annual
incremental costs are recurring annual operational costs associated with the additional
recovery. Costs associated with addressing market obstacles – either special
processing adjustments that markets would require from materials recovery facilities
(MRFs) or downstream market challenges – are in addition to the costs shown in
Table ES-1 and are discussed later in this Executive Summary.
If a goal of Ontario Blue Box programs is to maximize recycling through the use of
North American markets and to minimize the use of alternative markets such as
offshore export and feedstock recovery for fuel use, there are market barriers facing
the All Rigid Plastic Packaging scenarios. Specifically, there are no domestic markets
that can cost-effectively sort the mixed plastics that would be collected and it is not
cost-effective for materials recovery facilities to do so. Market development efforts
would need to address these challenges and build recycling capacity before such a
scenario could be implemented.
Alternatively, the All Bottles and Tubs scenario can be immediately implemented with
the existing Ontario and North American market structure, although there are market
barriers that need to be addressed to ensure sufficient markets exist and enhance the
revenues that are received by programs. Therefore, of the three scenarios in Table ES-
1, it is recommended that Stewardship Ontario implement the All Bottles and Tubs
scenario over the short term (2007-2009), while concurrently undertaking market
development activities that potentially could allow the implementation of one of the
All Rigid Plastics Packaging scenarios (or some modification thereof) in future years.
Table ES-2 lists market barriers to increased recycling of plastics in Ontario. Except
for the barrier next to the Other Rigid Plastic Packaging material type, which applies
only to the All Rigid Plastic Packaging scenarios, the market barriers listed apply to all
scenarios and to Blue Box programs in operation today.
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EXECUTIVE SUMMARY
Table ES-2
Market Barriers
Material Type
Market Barriers
PET
- Sorting and recycling of an increasing quantity of dark coloured PET bottles
and PET thermoformed flat or hinged containers (known as “clamshells”)
HDPE Bottles
- Competition from export markets that accept low quality material
Tubs and Lids
- Competition from export markets that accept low quality material
- Approaching maximum capacity to consume this material in Canada and
limited redundancy in the marketplace given the limited number of markets
Film
- Generation of suitable quality from curbside programs
Polystyrene
- Implementing a cost-effective collection and transportation system to
recover, process and market polystyrene
Other Rigid Plastic Packaging
- No domestic markets
All Materials
- Need and cost to identify and separate each plastic material type from the
others
- Loss of materials to residue and other MRF product streams
Table ES-3 lists market development strategies and costs that are specific to
addressing market development needs. These costs are in addition to the specific
scenario-related costs shown in Table ES-1.
Table ES-3
Market Development Strategies Cost and Implementation Schedule
Market Development Strategy Estimated
Cost
Best Practices Research

1. Identify best practices as well as cost and performance expectations for collecting $150,000 -
film and polystyrene foam plastics via depots and retail take back
250,000
2. Identify best practices for the densification of polystyrene foam to overcome
$50,000 -
technical and cost barriers
75,000
3. Test ability of optical and other sorting technology to sort different types of rigids,
$50,000 -
such as thermoformed materials, and determine optimal sorting approach
75,000
4. Characterize MRF residue and marketed material streams for the purpose of
$50,000-
reducing loss of material
150,000
5. Provide training and technical assistance to support use of best practices in MRFs
$150,000
6. Invest in MRF automation and optimization
1
R&D/Technology

7. Research technologies and investigate the feasibility of developing “next generation”
$1,000,000
plastics recycling facility for other rigid plastic packaging materials
-1,500,000
8. Determine optimal means of reducing loss of plastics to other MRF product streams
$75,000-
and residue 2
150,000
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EXECUTIVE SUMMARY
Market Development Strategy Estimated
Cost
Alternative Markets

9. Develop increased domestic end user demand for materials that currently have
$225,000
limited domestic outlets
10. Investigate export markets to determine suitable outlets that meet defined standards
$150,000 -
of practice and facilitate market agreements with approved buyers
250,000
Totals $1,900,000-
2,825,000
1 This cost of this strategy is already reflected in the scenario ongoing Blue Box program cost increases found elsewhere in this report and so is
omitted from this table so as to not duplicate costs.
2 This strategy will also benefit the quality of other streams such as paper.
The issue of which market development strategies and activities should be pursued
when, by whom, and at what cost was actively discussed by the Steering Committee
for this project and with selected industry and municipal recycling experts with no
clear consensus. For that reason, if the Stewardship Ontario Board decides that
collecting all rigid plastic packaging should be a future goal of Ontario Blue Box
programs, it is recommended that Stewardship Ontario convene additional meetings to
identify the market development approach, appropriate assumptions, level of
spending, and focus areas for technology development.
While this project was underway, a separate multi-stakeholder group was formulating
a plan to reduce plastic retail bag generation and investigate recycling options. It is
recommended that Stewardship Ontario confer with the multi-stakeholder group to
work toward achieving consensus on film plastics recycling and market development
strategies to be implemented
The information in this report will help Stewardship Ontario formulate a Blue Box
plastics market development strategy and can be used to develop a detailed
implementation plan for moving the Province towards maximizing the recovery and
recycling of Blue Box plastics. The extent to which Stewardship Ontario is successful
will depend on the level of cooperation and commitment from stewards,
municipalities, and other stakeholders and the success of future market development
efforts.
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Section 1
PROJECT OVERVIEW
1.1 Why a Plastics Market Development Strategy
The Blue Box Program Plan (approved by the Ontario Minister of the Environment in
December 2003) recommended as part of its separately-funded Market Development
Program, material-specific market development strategies where market conditions for
recovered Blue Box materials warrant specific action. In 2004-2006 the primary
emphasis was on mixed broken glass, with a funding commitment of $2.5 million
levied against obligated stewards that package in “Blue Box glass.” Market
development attention for plastics has been limited to date, with an initial $100,000
provided in 2005 through levies of obligated stewards that package in Blue Box
plastics. A portion of the levy was used to fund this Plastics Market Development
Strategy research and report.
The primary objective of this initial Plastics Market Development project was to
identify opportunities and market development strategies and costs to improve the
short, mid, and long term recycling rates for residential Blue Box plastics. The short
term focus is on deepening the capture of materials already targeted by Ontario Blue
Box programs. The long term focus recommended in this report is on implementing
market development strategies to enable the eventual collection, processing and
marketing of all rigid plastic packaging for mechanical recycling. This report provides
information and recommendations for consideration by the Stewardship Ontario Board
in determining what market development activities should be pursued, and the funding
that would be needed from stewards that package in Blue Box plastics.
The purposes of Stewardship Ontario’s market development activities are to:
Ensure there are sufficient markets for recovered Blue Box materials – both
today and in the future; and
Enhance the revenue received for materials to lower the overall net Blue Box
system cost to both stewards and municipalities.
1.2 Scope
The scope of this project was limited to those plastics designated in the Ontario Waste
Diversion Act as Blue Box Waste. By definition, these are plastic packaging materials
that are generated in residences (and therefore exclude the same packages if generated
outside the home). Blue Box Plastics include:
PET bottles and jars;
PET other packaging (e.g., thermoformed berry containers and egg cartons);
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Section 1
HDPE bottles and jars;
PVC bottles and jars;
Other plastic bottles and jars;
Polystyrene packaging (both foamed and rigid);
Wide mouth tubs and lids;
Large pails and lids;
Polyethylene packaging bags and film (including retail carryout sacks);
Plastic laminate packaging; and
Other rigid plastic packaging.
It should be noted that of the above categories of plastics, only PET beverage bottles
are mandated for collection in Blue Box programs. As a result, the decision whether
or not to collect other types of plastics is a local decision.
1.3 Methodology
This project was conducted from June-September 2007 by R. W. Beck, Inc. The
project was managed by Stewardship Ontario, with a steering committee comprised of
staff from Stewardship Ontario and staff from the Environment and Plastics Industry
Council (EPIC), which also provided financial support for this project. The project
methodology included reviewing applicable E&E fund projects, reviewing 2006 WDO
data call recycling rate information for plastics collected through Ontario Blue Box
programs, drafting and evaluating three recovery scenarios, estimating the cost and
recovery impacts of the scenarios, preparing an implementation strategy, evaluating
existing market capacity to absorb the material to be recovered, and preparing market
development recommendations.
The project steering committee provided review and direction to R. W. Beck. Key
sections of the report were also reviewed for technical feasibility by an external peer
review group, consisting of plastics industry, recycling consulting, and municipal
recycling program representatives.
1.4 Plastic Recycling and Recovery Elsewhere
Ontario leads other jurisdictions around the world in the level of plastics packaging
recycling that occurs in the Province. In Europe, at best only one or possibly two
countries report higher levels of recycling (higher reported diversion rates include
diversion of plastics to fuel uses and feedstock recovery). No U.S. state reports better
plastic recycling rates than are being achieved in Ontario. Appendix A contains
information to support this conclusion. This plastics packaging market development
strategy will help to ensure that plastics recycling in Ontario remains world class.

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