California Leapfrogs EU with First State-Wide Recycled Plastic Bottle Mandate in the U.S.

Circularity, Fixed Income

California has just leapt ahead of the EU in the plastic bottling recycling innovation race with some of the most stringent recycling requirements globally.[i]

With support from the Association of Plastic Recyclers, California Governor Gavin Newsom signed into law on September 28, 2020, rules mandating increasing amounts of recycled content for plastic beverage containers impacting the 12 billion plastic bottles sold each year in California, 70% of which are recycled. The law applies to 97% of the bottles sold in-state that use PET.

Going forward, the law requires companies to use 15%, 25% and 50% recycled-PET (post-consumer resin – or R-PET) in their bottles by 2022, 2025 and 2030 respectively.[ii]

Under law AB 793, if beverage companies miss the mandate, they are penalized 20 cents per pound of R-PET they are short with those monies earmarked to expand state recycling infrastructure efforts via California’s Recycling Enhancement Penalty Account.[iii]

Companies must already report their use of R-PET in beverage containers sold in the state under the Plastic Recycled Content Reporting Assembly Bill 2530, signed by Governor Brown in 2016. The law mandates annual reporting to the state agency California Department of Resources Recycling and Recovery (CalRecycle).

When reviewing 2019 disclosures,[iv] most companies use zero R-PET. Because companies report in % of bottles, tonnes, pounds or other units, overall state-wide trends are difficult to ascertain.

While reporting in 2020 for calendar year 2019 was incomplete due to Covid-19 according to CalRecycle, of the 71 beverage manufacturers who reported in Q1 2020 for calendar year 2019,  only 11 companies reported any use of R-PET while 33 companies reported zero use of R-PET in 2019 (see Table 1). Many companies did not report any data at all so trends are inconclusive.[v]

Table 1: Companies Self-Reporting Zero R-PET Usage in 2019 in California.[vi]

Table Companies Reporting Zero
On the other hand, companies with significant plastics’ commitments such as Niagara Bottling, Nestle, PepsiCo, Whole Foods, Danone and Coca-Cola reported R-PET rates at 53%, 36%, 24%, 20%, 20% and 19% respectively.

In line with these efforts, CalRecycle is also providing loans to support and enable industry transition for companies who need to upgrade equipment to improve their R-PET processing efficiency.[vii]

Finally, the law also requires, starting in 2024, PET recyclers operating in California to report the amount of R-PET flakes, sheets, pellets, etc. they sold the previous year which was “food-grade” and approved by the FDA.

Altogether, by signing AB 793, California has just increased the demand for R-PET by forcing companies’ to purchase more R-PET which enables them to meet their own plastics recycling commitments.

[i] Arthur, Beverage Daily (28 September 2020). California makes recycled content in plastic bottles mandatory with ‘world’s strongest recycled content standards’.

[ii] Paben, Plastics Recycling Update (2 September 2020). California mandates recycled material in beverage bottles.

[iii] Goldsberry, Plastics Today (28 September 2020). California Governor Signs Nation’s First Mandatory Recycled-Content Bill.

[iv] California Department of Resources Recycling and Recovery. Plastic Recycled Content Reporting AB 2530: 2019 beverage manufacturers who submitted a report. Access 29 September 2020.

[v] Staub, Plastics Recycling Update (22 April 2020). How much recycled plastic do California bottlers use?

[vi] California Department of Resources Recycling and Recovery. Plastic Recycled Content Reporting AB 2530: 2019 beverage manufacturers who submitted a report. Access 29 September 2020.

[vii] Paben, Plastics Recycling Update (22 September 2020). California to help PET reclaimer expand capacity.

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