[Senate Hearing 118-736]
[From the U.S. Government Publishing Office]
S. Hrg. 118-736
EXAMINING SOLUTIONS TO ADDRESS BEVERAGE
CONTAINER WASTE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON CHEMICAL SAFETY,
WASTE MANAGEMENT, ENVIRONMENTAL JUSTICE,
AND REGULATORY OVERSIGHT
OF THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 28, 2023
__________
Printed for the use of the Committee on Environment and Public Works
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
61-949 WASHINGTON : 2025
-----------------------------------------------------------------------------------
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
THOMAS R. CARPER, Delaware, Chairman
SHELLEY MOORE CAPITO, West Virginia, Ranking Member
BENJAMIN L. CARDIN, Maryland KEVIN CRAMER, North Dakota
BERNARD SANDERS, Vermont CYNTHIA M. LUMMIS, Wyoming
SHELDON WHITEHOUSE, Rhode Island MARKWAYNE MULLIN, Oklahoma
JEFF MERKLEY, Oregon PETE RICKETTS, Nebraska
EDWARD J. MARKEY, Massachusetts JOHN BOOZMAN, Arkansas
DEBBIE STABENOW, Michigan ROGER WICKER, Mississippi
MARK KELLY, Arizona DAN SULLIVAN, Alaska
ALEX PADILLA, California LINDSEY O. GRAHAM, South Carolina
JOHN FETTERMAN, Pennsylvania
Courtney Taylor, Democratic Staff Director
Adam Tomlinson, Republican Staff Director
----------
Subcommittee on Chemical Safety, Waste Management, Environmental
Justice, and Regulatory Oversight
JEFF MERKLEY, Oregon, Chairman
MARKWAYNE MULLIN, Oklahoma, Ranking Member
BERNARD SANDERS, Vermont JOHN BOOZMAN, Arkansas
SHELDON WHITEHOUSE, Rhode Island ROGER WICKER, Mississippi
EDWARD J. MARKEY, Massachusetts DAN SULLIVAN, Alaska
JOHN FETTERMAN, Pennsylvania SHELLEY MOORE CAPITO, West
THOMAS R. CARPER, Delaware (ex Virginia (ex officio)
officio)
C O N T E N T S
----------
Page
SEPTEMBER 28, 2023
OPENING STATEMENTS
Merkley, Hon. Jeff, U.S. Senator from the State of Oregon........ 1
Mullin, Hon. Markwayne, U.S. Senator from the State of Oklahoma.. 2
WITNESSES
Collins, Susan, President, Container Recycling Institute......... 3
Prepared statement........................................... 6
Bailey, Jules, President and CEO, Oregon Beverage Recycling
Cooperative.................................................... 24
Prepared statement........................................... 27
Steve, Alexander, President and CEO of the Association of Plastic
Recyclers (APR)................................................ 51
Prepared statement........................................... 53
ADDITIONAL MATERIAL
Letter to Senators Merkley and Mullin from:
American Beverage............................................ 85
The Aluminum Association..................................... 88
Can Manufacturers Institute.................................. 93
Letter to Senators Carper, Capito, Merkley and Mullin from the
PET Resin Association (PETRA).................................. 98
EXAMINING SOLUTIONS TO ADDRESS BEVERAGE CONTAINER WASTE
----------
THURSDAY, SEPTEMBER 28, 2023
U.S. Senate,
Committee on Environment and Public Works,
Subcommittee on Chemical Safety, Waste Management,
Environmental Justice, and Regulatory Oversight,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:59 a.m. in
room 406, Dirksen Senate Office Building, Hon. Jeff Merkley
(chairman of the subcommittee) presiding.
Present: Senators Merkley, Mullin, Carper, Whitehouse.
OPENING STATEMENT OF HON. JEFF MERKLEY,
U.S. SENATOR FROM THE STATE OF OREGON
Senator Merkley. Good morning. Welcome to today's hearing
here in the Chemical Safety, Waste Management, Environmental
Justice, and Regulatory Oversight subcommittee on establishing
a national deposit return system for beverage containers.
In my home State of Oregon, a man named Richard Chambers
went out for a walk on the beach one morning in 1968. He was
pretty disturbed seeing the beach littered with empty bottles.
So Mr. Chambers called up his State legislator, Paul Hanneman,
and brought him down to the beach to see the accumulated mess.
That moment was the beginning of what became Oregon's Bottle
Bill, the first statewide bottle recycling legislation in the
Country.
When the bill was up for debate in the legislature in 1971,
folks said that, it was pretty intensive opposition, but the
legislators decided to give it a try. Thank goodness they
succeeded. Thanks to that Bottle Bill in Oregon and the
modifications that have been made over the years, Oregon
regulatory has a bottle return between 80 and 90 percent. Most
recently, in 2022, it hit an 88.5 percent redemption.
Oregon is now one of 10 States, red and blue, with a
deposit return system that allows citizens to recycle used
containers. But 40 out of 50 states do not have deposit return
for beverage containers. Without a deposit return system, there
are much lower rates of recycling, much higher rates of litter.
Here are a few numbers. For plastic bottles, States without
deposit return have a recycling rate of 17 percent versus
States that do have a deposit return system at 57 percent, a 40
percent difference. For aluminum cans, the distinction is 41
percent difference, between 36 and 77 percent. For glass
bottles, 44 percent difference between 22 percent and 66
percent.
So a nationwide deposit return program could have a lot of
benefits. The Container Recycling Institute, represented here
today by Susan Collins, one of our witnesses, estimates that a
national container deposit return system could create 100,000
jobs.
Meanwhile, we spend a lot of money across the Country on
litter cleanup, $11.5 billion a year, most of it paid by
businesses. So there is a potential significant savings for
business and for government.
Recycling also reduces global warming gases. A national
deposit return system, if it had a rate of close to 90 percent,
it would save about 11.2 million tons of greenhouse gas
emissions, or to translate that, that is like taking 2.4
million cars off the road.
But to do all of this, we need a lot of partnership and
cooperation. We need to dive into the complexities of the
different chemicals that make up bottles, understand what the
different paths are. So there is a lot of work to be done to
envision a system that could work nationally. And I have
noticed a lot more interest as more States have had recycling
systems, as more attention is given to the challenge of
plastics. Certainly, there is more consideration that perhaps a
national system rather than 50 different systems might make a
lot of sense. That is what we are here to explore today.
I will now turn to our Ranking Member and introduce our
witnesses after his opening statement.
OPENING STATEMENT OF HON. SENATOR MARKWAYNE MULLIN, U.S.
SENATOR FROM THE STATE OF OKLAHOMA
Senator Mullin. Thank you, Mr. Chairman. Thank you to all
the witnesses for attending this hearing.
Just to let you know, I am unfortunately going to have to
make an opening statement and then I have to run to another
hearing. I am going to try to come back but I do not know how
that is going to work out, so I apologize. I do have questions
that I will submit for the record before I leave, though.
But anyway, thank you so much. I mean no disrespect by
having to leave. It is a little busy right now. This whole
thing about a shutdown or something, I do not know what that is
all about.
But I would like to start by once again thanking our
witnesses here, including Steve Alexander, from the Association
of Plastic Recycling. Thank you for taking the time. We
appreciate your being here with us today.
As we have seen in America as well as in other countries, a
one-size-fits-all Federal mandate is not always the best
economical solution for everyone, especially in smaller
businesses. Take Germany, for example, which everyone knows to
be the poster child, along with South Korea, for recycling
rates. In 2022, according to the German Brewers Association,
private brewers across Germany participated in a bottle-back
program, experiencing extreme shortage of beer bottles. Not
because of a lack of bottles, but because of the lack of
incentives for customers to return the empty bottles due to
multiple other factors.
What a lot of people do not consider is that a forced
refillable incentive can result in an unintended hassle and tax
on consumers, especially in rural and underserved communities.
Bottle bills also have a negative impact on local
municipalities, because plastic bottles are often the most
valuable commodity streams that municipalities' recyclers use
to fund their operations, resulting in a revenue loss and
effectiveness of local curbside recycling programs.
If we push for legislation that imposes a one-size-fits-all
approach, we will lose the opportunity to successfully increase
America's recycling rates and harm local municipalities and
rural States while doing it. One focus should be aimed at
addressing accessibility, awareness, ensuring reliable,
affordable availability of post-consumer material for the
recycling industry in a cost-effective manner.
With that, I yield back.
Senator Merkley. Thank you very much, Senator Mullin.
Can you please go make sure we do not have a shutdown?
Thank you.
[Laughter.]
Senator Merkley. We are fortunate to be joined by three
witnesses today who will share their expertise with many
benefits of these systems.
We are joined by Jules Bailey, Chief Executive Office and
President of the Oregon Beverage Recycling Cooperative, which
operates Oregon State's beverage container recycling system.
Joining us also is Susan Collins, President of the
Container Recycling Institute, which seeks to make North
America a global model for the collection and recycling of
packaging materials, and compiles a whole lot of statistics of
use to those trying to understand the various options and their
success in designing systems of re-use or recycle.
Also with us today is Steve Alexander, President and CEO of
the Association of Plastic Recyclers, a trade organization
whose members span the entire recycling process from design to
collection and recovery to remanufacturing.
Thank you for joining us all today. We will turn first to
Susan Collins.
STATEMENT OF SUSAN COLLINS, PRESIDENT,
CONTAINER RECYCLING INSTITUTE
Ms. Collins. Thank you, Chair Merkley.
The Container Recycling Institute (CRI) appreciates the
opportunity to provide comments on solutions to address
beverage container waste in the United States. CRI is a
nonprofit organization and leading authority on the economic
and environmental impacts of used beverage containers and other
consumer product packaging.
I will start with an overview. The inability to effectively
recycle beverage containers in most U.S. States is increasingly
contributing to our plastic pollution, marine debris and
climate crises. However, we know that one solution works,
deposit return systems or DRS, which enable consumers to return
empty bottles and cans to a redemption location and receive
back the deposit they paid upon purchase.
Decades of data show that these systems are the single most
effective solution to increase container recycling rates,
reduce associated litter and marine debris, lower energy use,
avoid greenhouse gas emissions, decrease waste collection and
landfilling costs, and provide more high-quality scrap
manufacturers need to make new products. A national deposit
return system (DRS) would maximize the recycling of beverage
containers, support economic growth, and create new domestic
manufacturing jobs.
Next, I will describe the multiple problems we are trying
to solve. Sales of packaged beverages continue to grow at a
rate that outpaces population growth, with the lion's share
coming from bottled water. In the last 25 years, plastic water
bottle sales have grown almost tenfold from 8 billion to 86
billion per year nationwide. Meanwhile, recycling rates have
remained stagnant, resulting in increasing amounts of beverage
container waste, now nearly 13 million tons per year.
Containers wasted rather than recycled must be replaced
with more virgin materials, which results in greater energy use
and carbon emissions. Littered containers also harm our marine
life and pollute our soil. As the Senator said, Keep America
Beautiful has estimated litter cleanup costs at more than $11
billion annually.
But the scrap value of beverage container materials wasted
each year would be worth more than $2 billion if we recycled
them instead. The tonnage of aluminum cans alone wasted in 2019
is enough to rebuild the entire 2021 U.S. fleet of commercial
aircraft 17 times over. The amount of energy required to
replace the number of beverage containers wasted annually is
enough to power 3 million households.
The good news is that there is a solution to these
problems, and that is a national DRS. Here is how this works.
When a retailer buys beverages from a distributor, a deposit is
paid to the distributor for each can or bottle purchased. The
consumer then pays the deposit to the retailer when buying the
beverage.
The deposit is refunded when the consumer returns the empty
beverage container with options that may include a retail store
or redemption center with or without reverse vending machines,
or bag drop. The retailer recoups the deposit from the
distributor plus an additional handling fee in most U.S.
States. This helps cover the cost of handling the containers.
DRS creates a privately funded collection infrastructure
for beverage containers and makes producers and consumers,
rather than taxpayers, responsible for their packaging and
waste. They also typically have very high redemption and
recycling rates, achieving an average of 82 percent worldwide.
Among other benefits, a national deposit return system
would achieve an 80 percent return rate for beverage
containers, given a 10 cent deposit, cut beverage container
litter in half as found by Keep American Beautiful in their
national litter study in 2020, create over 80,000 new direct
jobs, provide cleaner, high quality material without breakage
or contamination, which often occurs in curbside systems,
support domestic container material industries with more than 8
million tons of additional recyclables, save municipalities and
taxpayers money, because the cost for beverage container
recycling would be shifted to beverage distributors.
A national DRS program could also support the return of
refillables in the United States. And a national DRS would
eliminate greenhouse gas emissions equivalent to taking nearly
2 million cars off the road.
The adoption of beverage container DRS continues to grow at
a skyrocketing pace worldwide. In just the last 7 years, new
laws have been announced that will include nearly half a
billion people in DRS systems. Last, the popularity of DRS in
the United States was demonstrated in 2020 by a public attitude
survey conducted by the Keep American Beautiful group, in which
75 percent of those surveyed indicated support of deposit laws.
Thank you, and I look forward to answering any questions.
[The prepared statement of Ms. Collins follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Merkley. Thank you very much, Ms. Collins.
Now we will turn to Mr. Bailey.
STATEMENT OF JULES BAILEY, PRESIDENT AND CEO, OREGON BEVERAGE
RECYCLING COOPERATIVE
Mr. Bailey. Thank you, Senator. It is a pleasure to be with
you here this morning.
My name is Jules Bailey, and I am President and CEO of the
Oregon Beverage Recycling Cooperative. We are a cooperative
composed of Oregon beverage distributors and we are responsible
for all aspects of the Oregon program, from handling the
deposits and refunds to operating redemption centers to
trucking, processing, and even marketing the material.
Our vision is a world where no resource is wasted. Beverage
containers are not waste. The glass, plastic and metal
materials that compose the packaging and even the containers
themselves in the case of refillable bottles are resources that
can be used again and again.
You can see in this excerpt from our 2022 annual report, we
are pretty good at what we do. The bottom line is, we have a
better redemption rate than any other system, we operate at the
lowest cost per container in the United States and maybe the
world, and we offer some of the most convenient return options
of any program.
Last year, we turned over 2 billion glass, metal, and
plastic beverage containers into grade A, high quality
recyclable material, offsetting not only virgin material, but
also producing the kinds of materials that are put in the
global market by Russia and China. We also run the Nation's
only statewide refillable bottle program with nearly three
times more bottles in circulation than the system in Paris,
France.
We are not done yet. Next slide, please. We continue to
expand access in our flagship. The Green Bag Account program
now has over a million signups in the State with only 1.5
million households. We have more than 5,600 nonprofits signed
up in our State, which received nearly $6 million last year for
organizations ranging from wildland fire fighting to preschools
to homeless shelters and everything in between.
So how did it happen? Oregon, as the Senator mentioned, had
the first Bottle Bill in the Nation in 1971. The legislature
didn't have a road map. So instead, it set the refund value of
the container and assigned responsibilities. The legislature
asked the beverage distributors to figure out the rest, and
over time, they did.
The term ``extended producer responsibility,'' or EPR, has
recently come into fashion. Yet while no one in 1971 would have
understood that term, Oregon's Bottle Bill was really the first
EPR program. We are now implementing EPR for other kinds of
packaging, but that remains distinct and separate from the DRS.
The primary feature of Oregon's deposit return system is
that industry is responsible for all costs and all benefits of
the program with four fundamental principles. One, industry
pays for all aspects of the program and accepts no public
funding. Two, industry invests unclaimed refunds above the
target redemption rate into operating and improving the system.
Three, industry keeps the scrap material, allowing for full
material circularity. And four, no handling fee exists in
Oregon, which allows OBRC to be a central system operator at
scale.
We have evolved into this over 50 years, and Senator
Merkley, when he was still Speaker of the House Jeff Merkley,
shepherded a major set of reforms that expanded Oregon's Bottle
Bill and allowed industry to coordinate as a cooperative,
creating OBRC as we know it.
Ultimately, there are only two things that affect whether a
Bottle Bill is successful: convenience and incentive. A system
with high incentives will fail if there is no convenience, but
likewise, the most convenient system in the world will fail
without an incentive.
Curbside recycling is just such a system. And the highest-
performing curbside systems fail to get back more than around
40 percent of beverage material and often much less. And the
quality is usually lower. Even if the quality increases,
without an incentive it will not be enough volume to supply the
needs of the American recycling infrastructure, like the new
aluminum plants being built in the south.
So how do we do convenience? First, Oregon law created room
for innovation by allowing industry to work out the details in
the private market. In Oregon, government regulators act more
like referees than coaches or players on the field.
Second, OBRC created a strategy for customer segmentation,
allowing for return pathways that make sense for different
users. We have fast, high-volume return options for those who
want cash; for others, the Green Bag program means families can
just place glass, plastic, and metal containers in the same bag
and drop them off at a redemption center or store when they go
do their shopping. You can see that here in the next slide.
Most Oregonians use this method.
Still others are motivated to redeem containers for their
local charity, church, or school. Third, OBRC makes it easy for
you to use your money. We have an app that allows you to use
Venmo, PayPal, bank to bank transfer to move your money. You
can donate your balance to a nonprofit or connect it to a kid's
529 college savings plan, or even spend it for in-store credit
with a 20 percent bonus.
None of these innovations were mandated. Rather, the
flexible structure of Oregon's deposit return law allowed them
to happen.
But at the end of the day, the most important statistic is
our customers. Do they like it? People are voting with their
feet. There is a lot of info on this slide. But this is the
whole system summed up in one graph. You can see a dozen years
ago 90 percent of returns went directly back to large grocery
stores with only a billion containers redeemed and a lot more
unclaimed refunds compared to the number of containers
processed.
As the refund value changed from a nickel to a dime, we
expanded to cover nearly all beverage types and invested in
convenience and access. Now, nearly 80 percent of returns come
directly back to us and we are doing twice as much volume
directly through our network with a fraction of the unclaimed
refunds.
It is popular. Ninety-four percent of Oregonians are
familiar with our deposit return system; 97 percent of those
say it is good for Oregon. And in fact, when we look at the
crosstabs, our strongest supporters are consistently older,
rural, and Republican. We enjoy broad bipartisan support in the
legislature and we take that responsibility to steward that
goodwill very seriously.
So as you examine a national deposit return system, we
should look at the principles of the Oregon model. We have had
50 years to build the program, and not every State will look
the same. But the principles of government facilitation, of
regulation, empowerment of the private sector to do what it
does best in service of public goals, that should be at the
heart of a national system. It will not be one-size-fits-all,
and we will need to allow for successful statewide systems to
continue operating.
But the benefits of a national framework are large. Fewer
cross-border issues, more recyclable material at higher quality
to build American industry and jobs, and the opportunity to do
reusable packaging at scale.
So let's make sure that in America, no resource goes to
waste. Thank you.
[The prepared statement of Mr. Bailey follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Merkley. Thank you very much.
Now we will turn to Mr. Alexander.
STATEMENT OF STEVE ALEXANDER, PRESIDENT AND CEO, ASSOCIATION OF
PLASTIC RECYCLERS
Mr. Alexander. Thank you, Chairman Merkley, members of the
committee. My name is Steve Alexander, and I am the President
and Chief Executive of the Association of Plastic Recyclers.
The recyclers are excited to be here today. Thank you for
giving the recyclers the opportunity to address you.
APR is the voice of plastic recyclers. We are the boots on
the ground dedicated to making recycling work every day across
the United States. We work at every link of the chain, from the
initial design of packaging to the eventual manufacturing.
Our design guide for plastics recyclability and our testing
protocols are the gold standard and referenced across the
globe. They have been adopted by thousands of companies,
countries, and organizations, as the technical basis to ensure
that plastics packaging is designed to be recycled from the
very beginning.
Our member companies take your soda bottles, your milk
jugs, your yogurt containers, from every community recycling
program. We wash them, we grind them, we flake them, we make
pellets that we then sell to U.S. manufacturers who make them
into new plastic packaging and products. Last year, our members
completed this cycle countless times, recycling more than 5
billion pounds of post-consumer plastics. That is 5 billion
pounds of plastic that did not end up in the ocean or in a
landfill.
Plastics recycling particularly for consumer plastics
packaging works. But as we all know, it can work a lot better.
The problems facing our recycling infrastructure today,
however, are not just in plastics. We know that three out of
every five cardboard boxes and half of the aluminum cans are
thrown away by U.S. households every year.
But my focus with you today is on plastics recycling. I
would like to share some numbers, if you do not mind. I will
try to keep this as straightforward as I can.
Eighty percent of consumer packaging is comprised of three
resins: PET, which is soda bottle resin that we are talking
about here today; high density polyethylene, which are your
milk jugs, your laundry detergent; and polypropylene, which is
yogurt tubs, butter tubs, what have you. Eighty percent of
consumer packaging are in those three forms.
Right now, we recycle those three forms in the United
States at 19.8 percent. It is not very good. Interesting, our
members have the capacity today, September 28th, 2023, to take
that number to 42 percent tomorrow, if in fact we could get the
supply. Recyclers simply cannot recycle what is not made
available to recycle. So collection and supply is a huge
problem facing this industry, because we have the ability to
deal with it and to recycle it, even as we sit here today.
We know that recycling matters, not just to reduce waste
and protect our environment, but also as the economic engine
for U.S. manufacturing in building clean, resilient domestic
supply chains. Demand for our products, recycled content, is
soaring. U.S. companies have committed to buying three times
more soda bottle resin by 2025 than is currently available in
the domestic market. As a result, our members are already
importing plastics from other countries to meet that demand.
Collecting more recycled plastics is good for U.S.
consumers, U.S. manufacturing, and clearly benefits our
environment. We need to collect more plastics from consumers,
but the responsibility cannot and must not fall on consumers
alone. We need robust public policies at the State and Federal
level to grow and sustain recycling. Plastics recycling is a
very complex, interconnected system. There is no silver bullet
fix. Instead, we need a comprehensive suite of tools at every
link in the chain, and our focus right now is on three main
suggestions for you.
First, plastics must be designed to be recyclable. If they
are not designed to be recyclable, it does not matter if we
collect it, we sort it, we process it, it is going to
contaminate the stream. It includes manufacturing adherence to
design standards and implementation of very clear, consistent
labeling, so we do not confuse consumers in terms of what to
put in the bin.
Second, recycling must be convenient and accessible. We
need more bins at every household and business in the State.
Frankly, we need to make recycling as simple as throwing away a
container.
We have 9,000 recycling programs in this Country. Most of
them take something different. We do a great job at confusing
the consumer.
Third, new plastics packaging must be made out of recycled
plastic through U.S. manufacturing. APR was the first
organization to call for mandatory recycled content standards
nearly 20 years ago, in 2006. We still need State and Federal
policies to drive minimum recycled content standards.
Americans across the board support recycling. So long as
people depend on plastics, we need a robust recycling supply
chain to minimize that waste and to strengthen sustainability.
Recycling is the sustainability solution for plastics
packaging.
Thank you for taking the time to listen to the recyclers. I
look forward to answering any of your questions.
[The prepared statement of Mr. Alexander follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Merkley. Thank you very much to each of you for
bringing your diverse set of skills and experiences to bear
here.
I want to start with you, Mr. Alexander, in kind of
understanding this plastics piece better. You mentioned that
there are three types of plastic that are common in food
containers: PET (polyethylene terephthalate), high-density
polyethylene (HDPE), and polypropylene.
Mr. Alesander. Yes, sir.
Senator Merkley. Basically corresponding to water bottles,
milk jugs and yogurt cups, crudely?
Mr. Alexander. Yes.
Senator Merkley. Did you say that 80 percent of the
containers fall into one of those three categories?
Mr. Alexander. Of consumer packaging, right, 80 percent of
the rigid consumer packaging, not film and flexibles, the rigid
consumer packaging falls into one of those three categories,
yes, sir.
Senator Merkley. Is there an effective recycling path? You
mentioned the wash, grind, flake, pellet path. Does that same
path work for all three of these plastics?
Mr. Alexander. Yes, it does.
Senator Merkley. Can they be mixed together, or do you have
to keep separate each of those streams?
Mr. Alexander. Senator, they do not like each other.
[Laughter.]
Mr. Alexander. Sorry, I do not mean to be flip. Basically
each stream has to be homogeneous. Soda bottle resin, and
again, it is called polyethylene terephthalate, that is one.
High density polyethylene, low density polyethylene,
polypropylene, there can be a little bit of mix depending on
the application. You might have 5 percent mix, 10 percent mix,
but again, it depends on the application.
But by and large, you need a very clean, pristine,
homogeneous stream. That is why plastics need to be sorted
appropriately.
Senator Merkley. So you mentioned how confused people are
about what can be recycled, what can go in the bin. I
experience this every single week, staring at the triangles,
wondering if these triangles are accepted and so forth. So we
need a simpler system.
Can you explain just briefly, ordinary folks like me just
kind of go, why these three different types of plastic for
these three different types of products? Does it have to do
with the chemical interactions with different types of yogurt
versus water versus soda? Why aren't they all made from the
same type, which would make it simpler in terms of commingling
the streams?
Mr. Alexander. It really has to do on the application, and
the chemical composition of each of the individual resins. One,
it is really to protect the material, the contents of the
container. For instance, you see a lot of milk jugs have a
natural color to them. That is to protect it from light and
from spoiling and things like that. Also in terms of the way
that, you can not put, for instance, yogurt in the same
container as a single-use water bottle. The material will spoil
much more quickly. It is about preservation of the material.
It is interesting, it would be much simpler if we could do
that. And it would be much less expensive for the packaging
companies and the recyclers to be able to do that. But
unfortunately, the protection of the product lends itself to a
particular type of protective package delivery system.
Senator Merkley. That is very helpful. Thank you. More or
less, it is equally simple to wash, grind, flake, and pellet
each three. When you produce those pellets from these different
plastics, there is a market for those. I think you are
referring to how, if more was recycled, there would be a ready
market for an expanded flow of plastics.
Mr. Alexander. Absolutely.
Senator Merkley. Okay. You mentioned that one of the things
that could drive this is recycled content standards. What do we
have currently? Are there voluntary suggestions? Do any States
have a standard, or is there any national standard?
Mr. Alexander. There are not any national standards, either
from design or recycled content mandates nationally. There is
some efforts, the State of California has a recycled content
mandate for beverage containers that is due to go into effect
in 2025. It gets progressively more, from 25 percent to 35
percent to 50 percent. There is discussion in the State of
Oregon and the State of Washington right now about developing
recycled content mandates along with recycling rate mandates.
We are working very closely with them.
The issue there is we need to make sure you have the supply
available in order to meet those contents. For instance, in
California, we did a study for them 3 years ago on the 25
percent recycling content rate. We told them we have enough
material in our stream to get them to 25 percent. But anything
beyond that, we need to collect more material. So right now,
there is enough in the process to get us to 25 percent.
Senator Merkley. Okay. Thank you very much.
I am going to turn to the Chair of the committee, Senator
Carper. So glad you could join us. Welcome.
Senator Carper. This is great. Now I can talk out of both
sides of my mouth. How is that? That is what they let chairmen
do around here.
On a serious note, welcome. Ms. Collins, you looks just
like your pictures of the Senator from Maine, who is one of our
revered colleagues. Have you ever met Senator Susan Collins?
Ms. Collins. I have been in her office.
Senator Carper. Did you meet her?
Ms. Collins. No, I didn't get a chance to meet her. I met
with her staff.
Senator Carper. When you went into her office, did you tell
her staff that you were the real Susan Collins?
Ms. Collins. I told them I was the other Susan Collins.
[Laughter.]
Senator Carper. Well, you have a good name. That is a good
name around here.
We have a couple of other hearings going on, we have a
bunch of new IRS nominees to help run the IRS and provide
better customer service, that is going on in the Finance
Committee, so I will be bouncing back and forth between here
and there.
Mr. Bailey, it is nice to see you, Mr. Alexander, nice to
see you as well. Mr. Chairman, thank you so much for pulling
this together for what I think is a really important hearing.
I am 76 years old, I started recycling when I was a
lieutenant JG in the Navy. My squadron was located in Moffett
Field, California, not far from Palo Alto and Menlo Park. I
learned that when I was just joining my squadron that there was
a place you could recycle not far from the base. I started
going there when I was just a young pup and I have never
stopped. I have recycled entire vehicles, motor vehicles, like
our Ford Exploder, also known as a Ford Explorer. Recycled
dehumidifiers. I like to run outside, and when I see
recyclables along the trail, I stop and I pick them up and take
them with me. I run by other peoples' houses, and if they have
the recycling bin out, I just put it in the recycling bin.
This morning, I was on the Amtrak train coming down from
Delaware, I go back and forth most days. I was in the caf car
getting a cup of coffee. A guy came in and he had a plastic
bottle, and he was going to put it into the trash. Before he
could do that, I intercepted him, I took the bottle and said,
``On Amtrak, we recycle.'' About two feet away was the
recycling bin.
So I believe in leadership by example. I know Senator
Merkley and I share this passion. I am certain that you do as
well.
I like to say, when I talk to people about climate change,
the need to save this planet, I say, it is not just a noble
thing to do, actually in terms of jobs and job creation it is
the smart thing to do. With respect to recycling, not only does
it give the opportunity to strike a blow against the climate
crisis, but it also gives us the opportunity to create a whole
lot of jobs for a whole lot of people in places throughout our
Country.
With that having been said, good morning, Sheldon. We are
following each other from committee to committee. We do that
fairly regularly.
Would you expand on the role of a national deposit return
system and the role it could play in reducing emissions and
fighting the climate crisis, please?
Ms. Collins. Thank you for that question. We talked about
the greenhouse gas savings and the equivalent to taking 1.8
million cars off the road.
Senator Carper. Over what period of time?
Ms. Colins. Over each year, each year the containers would
be recycled and that is the number of cars operating in that
year that it would be equivalent to.
Most people do not realize how our common materials are
created. There is no need for us to, we just use plastic
bottles and aluminum cans and glass bottles. But a tremendous
amount of material has to be mined to create those materials.
It has to go through several industrial processes and then be
transported, sometimes great distances, across the world. Our
aluminum can come from many different countries as close as
Jamaica, as far as Russia.
So all of those industrial processes, all of that
transportation becomes part of the embodied energy of something
like an aluminum can or glass bottle.
When we recycle, we skip the first several steps of
production. We skip all of that industrial mining and
transportation and just take what has already been produced,
melt it down and produce it again. That is why we save so much
in greenhouse gases. Most people do not realize that there is a
very big front-end burden of greenhouse gases on the
manufacturing of our materials.
Senator Carper. That was a great explanation.
Mr. Alexander, we also heard from you, maybe just before I
arrived, that the mechanical recycling of plastic materials as
opposed to the use of new resins created through a chemical
recycling process is better for our planet. Will you please
share with us how your industry could help curb emissions and
reduce energy consumption?
Mr. Alexander. Thank you, Senator. Recycling plastic is one
of the most important things we can do to reduce greenhouse gas
emissions. The energy consumption in order to use recycled
plastics to remanufacture is anywhere between 75 and 80 percent
of the energy, as Susan was talking about, to manufacture
virgin materials.
Second, reusing recycled plastic to remanufacture reduces
the carbon footprint by more than 70 percent. It is interesting
that there have been studies that have shown that in this world
of climate change, one of the most effective things that can be
done by a consumer to physically participate in reducing their
own carbon footprint is to recycle their plastic. So the more
material that we recycle, obviously if you think about it, we
are replacing more virgin material in the marketplace, which
means we are reducing greenhouse gas emissions from that
initial manufacturing process that Susan just talked about as
well.
So when we talk about, we need more supply so that we can
recycle more of this material, so that we can replace more of
the virgin material that is going into the marketplace, that by
itself is a great reducer of greenhouse gas emission and carbon
footprint implications.
Senator Carper. Thank you for that response.
Is your industry currently recycling plastic material at
its full capacity, or would increased resources and
infrastructure allow you and your industry to recycle more
plastic? The second half of my question would be, would the
improved ability to mechanically recycle more plastic lead to
additional climate benefits? Two-part question.
Mr. Alexander. To the second part, to refer to my first
answer, absolutely. The more you recycle, the more we are going
to be reducing our climate impact and our greenhouse gas
emissions. I indicated earlier in my statement, Senator, that
right now, the three primary resin components of consumer
packaging, which make up 80 percent of consumer packaging, we
recycle those three components at a 19.8 percent. But we have
the capacity today to make that 42 percent.
We need more supply. It is as simple as that. So the more
supply we can get, the more we can recycle, the more virgin
resin we can eliminate in the marketplace. And then of course,
that has the effect of reducing greenhouse gas emissions and
our carbon footprint.
Senator Carper. Thanks. Thanks, Mr. Chairman.
Will there be a second round of questioning?
Senator Merkley. Absolutely. And a third and fourth. Maybe.
[Laughter.]
Senator Carper. I will not be around for the fourth.
Senator Merkley. Senator Whitehouse.
Senator Whitehouse. Thank you, Chairman, and thank you
particularly for your persistent interest and concern about the
plastics issue.
On plastics recycling, I try to be a good citizen. I have
the recycling bins under the kitchen table. And I try to be
diligent about making sure that I rinse out the bottles and put
them in the bin at the right time of the week. I come down to
the outside bin and dump them in the outside bin and then roll
the outside bin down to the street where then the recycling
truck comes to pick it all up.
I am also working with Senator Sullivan on our plastics
legislation, and we are looking at, now it will be Save Our
Seas 3.0. As part of that inquiry, I am looking more into
plastics recycling. What I am learning is that it really is not
happening, that the stuff that I actually take and put in my
blue bin, the amount of the stuff that actually gets put in the
blue bin, setting aside the stuff that gets thrown away,
discarded improperly, etc., from the blue bin, the amount that
actually gets recycled is in single digits. Most of it is not
recycled at all.
More and more, it makes that blue bin in my kitchen look to
me like a prop that is a prop in an essentially fraudulent
scheme to make American consumers think that they can buy all
the plastic that they want for as long as they want, because
there is a legitimate recycling end to it, making them feel
better about it, and keep buying the bottles, keep buying the
packaging, keep throwing it in the bins, keep thinking that it
is going to be recycled. And it is not. It is a fake, more than
90 percent of the time. And consumers are the suckers in all of
that, and taxpayers are the suckers in all of that, because the
recycling programs that propagate this mythology of plastics
recycling are paid for by taxpayers.
So I have gone from feeling good about putting my plastics
away, as I have done my research, into thinking that I have
basically been co-opted into a big fat scam that makes people
believe there is recycling when there really is not. If you
look at the other end, on the plastics industry side, and you
look at what the plastics industry is doing to bring recycling
into its products, the number that I recall is that for single-
use plastics, the component of plastic input that is recycled
is less than 2 percent. They are not even trying. You could
probably get 2 percent by accident.
So there is really no effort. When I ask why is there
really no effort, they say, well, because it is actually more
expensive for us to go and find and test and have a proper
supply chain for recycled plastic than it is for us just to get
the new nurdles and spread more and more and more plastic into
our ecosystem. It is cheaper to not use recycled plastic. So
guess what? They do not use recycled plastic.
When I tried to fix that buy putting a little charge on
virgin plastic destined for single-use plastic products, so
that it would equilibrate, so that there would be equivalency
in the cost to the industry of recycled plastic and new
plastic, I got virtually berserk industry opposition. Pages in
newspapers with pictures of child seats and bicycle helmets
saying that Congress wanted to tax your child seat and your
bicycle helmet. Last I heard, child seats are not single use.
Last I heard, bicycle helmets are not single use.
So we have this system in which the public is being fooled,
the industry is not being helpful at providing any significant
recycling support, and when you try to equilibrate the economic
imperatives that they follow, they fight you on it.
So that is where I think we are on recycling. I have
essentially burned through all my time, but I offer any of the
three of you the opportunity to respond in a response for the
record. If you think I have said something that is outlandish
or wrong or I have my facts not right, then feel free to let me
know.
But what I am left with is that I feel like I have been the
sucker in a con job and that a lot of taxpayers are paying a
lot of money to prop up a completely phony or almost completely
phony recycling apparatus that reaches into kitchens and
garages all around the Country and has as its primary purpose
misleading people about where their plastic ends up and
therefore encourages them to--guess what?--buy more plastic.
With that, I yield.
Senator Merkley. Senator, I think it would be useful in
this dialog, when we have the time to do so, we have certainly
the wish-cycling, which is a term used for putting your things
in those buckets that is never going to be recycled. But in the
bottle recycling, it may be a little bit of a different picture
than the non-bottle world. We have experts on the bottle world.
Would it be useful to have them share their insights?
I am yielding the committee's time to you.
Senator Whitehouse. Anybody who wishes to comment?
Mr. Bailey. I might jump in. Senator, as I talk to people,
my friends and neighbors, a lot of them share a similar
frustration to what you are expressing. There is a perception
that they are unsure what is happening to the material that is
going into the blue bin on the side of their house that they
are pulling out to the curb. They want to recycle; they want to
do the right thing. But they just do not know.
Senator Merkley, to an earlier point that you made, it is
very confusing when we try to talk to busy people about
recycling and tell them, you have to separate this and do that,
and you have to figure this out or clean this or pull this off
the top. It is hard. Frankly, with two young kids at home, I
feel the pain. I am busy just trying to get dinner on the
table.
But that is where deposit return systems provide a really
clear economic incentive. It says, hey, this has a value
associated with it. This is easily recyclable. And if you
return it, you get your value back. And it is segregated from
the other things. So you do not have your water bottle mixed up
with your detergent bottle, even if they are the same type of
plastic, all blended together, mixed in together with whatever
people also throw in the blue bin, which is often recyclable or
not, depending on the wish-cycling that you brought up.
The good news is that I can guarantee you, Senator, that
when a beverage container is regained through a deposit return
system, and it is not just ours, I would say this is true for
any of the deposit return systems across the Country, it is
recycled. It is recycled and it is recycled to its highest and
best use.
In Oregon, we get back nearly 90 percent of all bottles and
cans sold in the State, and 100 percent of those bottles that
are plastic go to a wash and flake facility in St. Helen's,
Oregon, in rural Oregon.
Senator Whitehouse. So by putting a reward on return, you
are able to essentially flip the numbers from 90 percent of the
plastic not being recycled and just ending up in a dump
someplace in the U.S. or in some foreign country or ultimately
in a river, and in the ocean, to where 90 percent of it
actually get claimed and used?
Mr. Bailey. That is correct, Senator. Yes.
Senator Whitehouse. Well, that is a very helpful signal
about the importance of what we would call bottle bills. I can
relate to you that every time I see a bottle bill turn up, the
plastics and drinks industry goes berserk trying to make sure
that it does not pass into law. So bravo getting it passed into
law. I assume you had the same experience with opposition from
industry.
I will close out by saying, you can actually do this at the
more corporate level as well. I was in Oslo at the Our Oceans
conference when Unilever made what I thought was a very
impressive commitment, which is about to go live, if I remember
the timing. For every kilo of plastic that Unilever put out
into the world as packaging or whatever, whatever came through
them and out into the world, they would go find a kilo of
plastic waste and take it back out of the world, and assure its
proper disposal or recycling.
Which did something significant, and that is again,
economics driving all of this, now they have to buy that stuff.
So suddenly, there is a market particularly to go to poor
countries where this stuff is piled up, you see these horrible
photos of countries where is shin-deep along the beach, and 50
years out into the water, just a mass of floating plastic
waste. Now, Unilever has an incentive to pay somebody to go out
and get that stuff and bring it back to them and have a solid,
we are actually cleaning up the waste supply chain, to prove
out their promise. I think that can make a very big difference.
I think at the end of the day it is enormously about
economic incentives. It is almost unfair to corporations to
expect them to behave in a manner that is inconsistent with
their economic interests. So it really is incumbent on us to
make sure that their economic interests align with the public
interest. Otherwise, it is always going to be an uphill
struggle and the ones who want to cheat the most will have the
best economic advantage against the ones who try to be good
citizens.
Thanks again for holding the hearing.
Senator Merkley. Thank you, Senator. Thank you for your
work on plastics. It is so important.
Ms. Collins, let's turn to one point that Senator
Whitehouse raised. When the materials are flaked and turned
into pellets, so they are washed, they are ground, they are
flaked and they are turned into pellets, is that material
cheaper to the industry than virgin material for making new
plastic bottles?
Ms. Collins. Thank you for the question. It totally depends
on what is happening in the marketplace and what the price of
oil is. Virgin prices go up and down dramatically. So sometimes
virgin material is cheaper, sometimes recycled content is
cheaper. I will add that the recycled content laws in the
different States, especially I will speak to the one in
California, attempts to impose an economic incentive to use
recycled content by placing a 20 cent per pound penalty on
material that is used that is virgin material instead.
So it is an economic mechanism to try to even out the price
differential. Sometimes, recycled content is cheaper for
plastic and sometimes it is more expensive.
Senator Merkley. Thank you. Mr. Alexander, this is your
world. How do we make sure that the economics work for the
recycled plastic that you are noting to be greatly expanded if
we had more of it?
Mr. Alexander. Thank you, Mr. Chairman. If you do not mind,
I would also like to address some of the comments that Senator
Whitehouse made.
I think one of the things we find in this industry, not to
get too technical, this industry tends to operate on a month to
month short-term purchasing basis. One of the things we have
been pushing very aggressively in our market is for recyclers
to be able to obtain long-term contracts with converters and
consumer brand companies to use the material in their
packaging.
Because in point of fact, right now we are played against
the virgin market on a month to month basis, if recycled resin,
the additionality of recycling the material is somehow
consistent with virgin material, then we can sell it. On
others, when virgin prices plummet, then they get out of the
market and they go to the cheaper product.
So a lot of it is a procurement issue that we are working.
That is why with long-term contracts and with mandated content
requirements, if the companies have to use content, then they
know that they are going to have to use it, so then we can have
a stable economic environment, we know we are going to have a
market, we can price it accordingly for the longer term which
then allows us to pay the supplier, the MRFs, a better price in
order to make their bales of material more pristine, which
reduces our operating cost, which reduces the cost of the
product.
Senator Merkley. So recycled content standards and long-
term contracts are critical.
Mr. Alexander. They are critical.
Senator Merkley. Thank you.
I am not going to ask you to respond to all of Senator
Whitehouse's broader vision, because of the limited time, but
we will have time at the end to come back to it.
I wanted to turn, starting to amplify a little bit on the
details.
Senator Carper. Mr. Chairman, could I ask a favor? I have
limited time to get back to the Finance Committee. If you do
not mind.
Senator Merkley. Absolutely, Mr. Chairman. Please.
Senator Carper. Thanks so much.
Ms. Collins, a question, if I could, for you. In your
testimony you mentioned that the deposit return systems in the
U.S. currently create over 20,000 jobs, is that right?
Ms. Collins. Yes.
Senator Carper. And your organization estimates a national
bottle bill could create an additional 80,000 jobs to 100,000
jobs. That is kind of a win-win situation where I come from.
Could you share with us a little more information on how
deposit return systems increase employment rates and contribute
to economic growth? What are some specific jobs associated with
deposit return systems?
Ms. Collins. Absolutely, thank you for that question.
We conducted a study about 10 years ago where we looked
very deeply at the entire process of recycling and looked
industry by industry and got factors for the jobs per thousand
tons of materials moved.
The No. 1 reason that container deposit laws create more
jobs is because there is more material in the recycling system.
It is because instead of operating at something like 20 or 30
percent recycling rates, they are actually bringing back more
material, and that material has to be handled by people doing
the recycling process.
When I say the recycling process, it starts all the way
from the beginning where the materials are collected and then
they are transported to places like glass beneficiation
facilities where the glass is cleaned up so it can be used by
manufacturers, or to plastic reclaimers where they are taking
that material and turning it into plastic pellets that can then
be made into bottles again.
All of those places are jobs and some of them are highly
valued, highly paid manufacturing jobs. And they are domestic.
They all stay here in the United States.
Those are the numbers we found. It would be an additional
80,000 jobs and those are the types of jobs that they are.
Senator Carper. Good. Thanks for that response.
Mr. Alexander, before I run, one last question for you. In
EPA's draft strategy to address plastic pollution, you may have
noticed that the agency affirmed that it does not consider
activities that convert non-hazardous solid waste such as
plastics into fuels to be recycling activities. That is the way
they call it.
Do you agree with the statement that any process that takes
plastic materials and converts it into a fuel source using
incineration, pyrolysis, chemical reactions or otherwise,
should not be considered recycling?
Mr. Alexander. That is correct. If it is not going back
into plastics, we do not consider it recycling.
Senator Carper. Would you please explain the main
difference between mechanical recycling and the process often
referred to as advanced or chemical recycling, including energy
use, emissions, or scalability?
Mr. Alexender. Essentially, when Susan pointed out earlier,
the initial process for manufacturing the material but also the
initial process for segregating and recycling the material,
mechanical recycling, chemical recycling, the initial process
is similar. You have to collect the material, you have to sort
it, and then you have to begin to process it.
In many ways, it has to be mechanically processed for a
while and then make it available, if in fact there is a
chemical process for it.
Mechanical processes are exactly what we talked about. You
are physically, mechanically grinding, flaking, pelletizing.
The chemical process, the best I understand it, and I am not a
chemist, is that you then take that material and through some
combination of heat and pressure break it down to the original
monomer. So you are actually breaking the material down.
That is technology that has obviously been discussed. There
may be an opportunity for that because we need new technologies
in order to address a lot of the plastic products that are out
there.
But what we know how to do and what we are doing today is a
proven recycling activity, which is mechanical recycling.
Frankly, if we had more supply, we had more content
requirements and we had more convenience, we can improve and
reduce greenhouse gases more by just reinforcing and
prioritizing what we are already doing today.
Senator Carper. Thank you for those responses.
Mr. Chairman, before I run out of the room, I just received
from my staff, I said, what percentage of our paper are we
currently recycling in America? And the number, I think it was
pretty high, it is about 68 percent. I think this is an EPA
number.
With respect to aluminum, about 35 percent. Not as high as
paper, but that is an EPA number. Is that right? That is from
EPA.
We are told in 2018 EPA estimated that paper recycling ,
the aluminum rate was that, while for plastic, what is it, 9
percent? Yes, 9 percent. I like to say, Mr. Chairman, find out
what works, do more of that. Find out what works, do more of
that.
Obviously, we are doing, in the paper part, plenty of
supply, if you will, for that in terms of recycling. We can do
better. We have to do better than we are doing. Hopefully, part
of that solution, part of the answer will come from this
hearing and your leadership. Thank you all very, very much.
Senator Merkley. Thank you very much, Chairman Carper. I
think that 9 percent rate may have dropped this last couple of
years, if any of our experts have a sense of that. I thought it
had dropped down closer to 6 percent in the last year.
Mr. Alexander. Mr. Chairman, may I address that?
Senator Merkley. Sure. Briefly, though, please.
Mr. Alexander. That is always a challenge.
The reality is that number, we hear it all the time,
relative to consumer plastics packaging, that number is wrong.
That takes in all plastics that are manufactured. Primarily
what we are addressing here is consumer packaging. More than 50
percent of the plastic that is manufactured is not meant for
consumer curbside recycling programs. You are talking medical
waste, automobile parts, fiber, electronics.
You take away that half, and what we are doing is we are
focusing on consumer recycling on the other essentially 50
percent. As I indicated to you earlier, 8 of every 10 of those
packages in that 50 percent category of consumer packaging, we
are doing that at 20 percent today. And we can get it to 42
percent.
So when you talk about that 8 percent number, frankly, it
drives us recyclers batty.
The other thing I would like to say is we know, this is
what we do very day, something goes in your bin, it gets
recycled at a 70 percent rate. I do not know where that
narrative comes from that if it goes in your bin, it is not
recycled. We know. We have been doing studies. We have been
doing this for 35 years. It goes in your bin; 70 percent is
going to get recycled.
Senator Merkley. Thank you for that clarification.
I want to turn to some of the details of the Oregon
program, since it is one of, in our estimation, the most
successful in the Country. It has gone through a number of
changes.
Mr. Bailey, 20 years ago, people returned their bottles to
the grocery store. Grocery stores didn't really love that very
much. Now, Oregon has changed its system. Can you explain that
transition?
Mr. Bailey. Absolutely, Senator. What has happened over
time, and it was the graph that I showed earlier, is people
have voted with their feet. They prefer an option that is more
convenient. The trick is to have multiple return pathways.
Under the reforms that were shepherded in the mid-2000's, we
started opening redemption centers that are high capacity
redemption centers.
People that want to get back their cash and return a lot of
containers all at once, which there are a number of people that
do that, they like going to those redemption centers better
than going to a grocery store, because they can return their
containers faster. We have high-volume, high-capacity machines.
They get their cash more quickly. It is a better return
experience overall.
We have also created what is called the Green Bag program,
which is really convenient for families. Senator Whitehouse
mentioned the bin he has under a sink. In my family, we have
garbage, we have recycling, and then we have redemption and
compost is up on the top there. Redemption is easy; we just put
our Green Bag in there, we throw in all our containers mixed,
we do not have to separate glass from plastic.
Then when we go to any of the drop sites, sometimes they
are at a grocery store, sometimes they are at a redemption
center. We just drop the bag and walk away. OBRC picks it up,
processes it, credits to your account, and makes it super
simple.
What we have seen is that that is the most popular option
Oregonians want. The demand for that is astronomical.
Senator Merkley. I am going to pause you there and explain
for folks who are watching that under this Green Bag system,
and you had a picture of it up on the screen, I do not know if
we can put up the person who was returning their green and a
blue bag, which I will get to in a moment.
In our family, we have the Green Bag out in the garage. We
throw everything that has a redemption into it, large bottles,
small bottles, soda, and so forth. Then it has a quick response
code that you put on the package. You go to the redemption
center, you throw it through the door, and then it gets
transported to a processing center where the bags are opened,
the bottles are scattered across a tray, the computer takes a
picture of them, immediately recognizes what is all recyclable,
and credits your account.
It is pretty much science fiction. I encourage people to
visit and see it.
But you also in that picture had a Blue Bag being returned.
What is the difference between a Green Bag and a Blue Bag?
Mr. Bailey. A Blue Bag indicates that that is a bag that
will be automatically credited to a certified nonprofit. So if
you put your containers in a Blue Bag, we have verified that is
a 501(c)(3). For example, my kids' school has Blue Bags. When
we go pick the kids up, they say, have you got your Blue Bag
yet? They hand us one. Then when we go home, we put the
containers into the Blue Bag. Then when we drop that off, the
money automatically goes to that nonprofit.
We have 5,600 nonprofits in the State of Oregon registered
for Blue Bags.
Senator Merkley. Habitat for Humanity, food banks, school
clubs, Boy Scouts, Girl Scouts, you name it, 5,600 of them are
saying, hey, you are involved in the swim club, put our QR
codes on a Blue Bag and it will be a fundraiser. That provides
an additional large incentive for recycling.
Mr. Bailey. That is right, Senator, and I think the really
important point here you are driving at is there are so many
things that pull people into the program that care about
redeeming containers. They may not care about the environment.
The 10 cents might not mean a lot to them. Maybe they have
other things going on. But you know what? If their local
Sportsmen's Club or their kid's school puts a Blue Bag in their
hand and says, will you put some containers in there, and drop
it off for us? Yes, they are going to do that.
That is one of the reasons the redemption rate is so high
in Oregon.
Senator Merkley. I really want to emphasize, in your
testimony you talked about convenience and incentive. So the
Bule Bag is another whole set of incentives that encourage
recycling. It is convenient because you just throw the bag
through the door, and it all happens automatically.
I wanted to turn to the incentive rate. In Oregon it is 10
cents. If we go back to the initial program in Oregon, it was 5
cents. Five cents today, we used to say it would be more than
25 cents, but now I am sure it would be higher. It was like,
oh, yes, I noticed as I was in Boy Scouts at the time and we
would go up and cleanup the river, along the Columbia River,
the beach, and suddenly all the bottles disappeared overnight.
All the glass bottles that would be shattered and broken
disappeared overnight.
What would that 5 cents be today?
Mr. Bailey. It feels like every year we have to do the
calculation again. I think we are over 30 cents or 33 cents
now.
But the change, when we went from a nickel to a dime in
2017 was remarkable. Oregon's system was struggling. Thanks to
the reforms that were shepherded through the legislature, we
went from a nickel to a dime in 2017 and literally overnight we
went from essentially an annualized rate of about 64 percent,
but it had really dropped down to about 58 percent by the time
it changed, all the way up to 84 percent overnight and then
continued to climb to 90 percent.
So it has made a dramatic difference.
Senator Merkley. Ms. Collins, some States have on certain
types of bottles a 15 cent redemption. Are there insights that
come from setting a 5 versus a 10 versus a 15? What is the
magical point at which people stop and pick up bottles that
someone else has left on the street?
Ms. Collins. Absolutely. We have studied this both in the
United States and around the world. Here in the United States,
there are three levels of deposit. There are States that are
all at 5 cents, there are States that are all at 10 cents, then
there are a few States that have some containers at a higher
level and some containers at 5 cents.
Those different deposits, when you compile all the
information together, it stacks up exactly how you would think
it would. Five cents is an incentive, 10 cents is a stronger
incentive. The 5 cent programs have lower redemption rates than
the 10 cent programs. We see that it goes all the way up to 25
euro cents in Germany, which has one of the highest redemption
rates in the world, between 95 and 100 percent.
Senator Merkley. Since we do not have a national system, if
you have a State that has a 15 cent return, do you find people
basically transporting bottles across State lines? Does that
undermine the system or is that just an additional beneficial
collection process?
Ms. Collins. It depends on your point of view. There are
containers that move across the border. They are generally in
the range that is less than 5 percent of the total system. So
they are sort of offsetting the folks who are not in the given
State that are returning their containers. There is 10 to 15
percent of those, even in the best systems. Then there are some
leakage from another State into your State.
So it is not a make or break situation, but it does occur.
Senator Merkley. Are the containers in States that are far
from a deposit State, are they labeled returnable in those
other States, or are they not labeled that way?
Ms. Collins. There are some containers that are labeled
differently. In the northeast, where it did get to be enough of
a problem, some of the beverage manufacturers changed their
labeling to make it very clear whether that container was a
deposit State container or a non-deposit State container. So
when it did reach a certain threshold of a problem, there was a
way to address it.
But in the vast majority of cases, the containers are
labeled identically, so you wouldn't know from State to State.
Senator Merkley. Mr. Bailey, let's go to some of the other
economics here. How much taxpayer money goes into driving the
recycling system in Oregon?
Mr. Bailey. None, Senator. We do not take any public money.
Senator Merkley. All the Republicans who are present here,
and the Democrats who are present like that answer.
Mr. Bailey. It is paid for by the beverage industry,
Senator. One other point I might just make very briefly on the
point of the nickel to the dime change. When we went from a
nickel to a dime, while I will not comment on any particular
beverage seller, I can tell you in the aggregate, per capita
sales did not change in Oregon.
Senator Merkley. So we do not see a disincentive to
purchase because of that?
Mr. Bailey. We have not seen that in the data, Senator.
Senator Merkley. Okay, so we have talked a little bit about
the different types of plastics that are in beverage bottles.
Under the Oregon system, the return deposit, I am assuming
there are several different types of plastic that are coming in
through these Green Bags, Blue Bags, yellow bins, so on and so
forth. How do you sort them out to keep these waste streams
separate the way Mr. Alexander was explaining, that each one
has to have a separate, if you will, wash, grind, flake, and
pellet process?
Mr. Bailey. Yes, Senator. I will try to make this brief,
because there is sort of an interesting longer answer here. I
will see if I can condense.
Most beverage packaging is in PET. There is some HDPE in
our system. There is some polypropylene and a few other things.
The vast majority is in PET. Although the caps on PET are
polypropylene. We urge people to leave the caps on. We recycle
those as well. Please leave the cap on your container when you
return it.
As long as it is all beverage containers, it is actually
pretty easy to separate out the different material types. It
goes baled in bulk to our sister facility, ORPET, in St.
Helen's. There are different weights to the plastic, so if you
run it into water, the PET will sink and the other material
will float. You can skim it off. It is not very difficult to do
it.
If you had to do it at scale and there were a ton of
different plastic types mixed in together, it would definitely
get much more difficult to do that, and you could risk other
contamination.
As an example, and one of the reasons that having an
industry-run program has been very powerful, is we had a
beverage manufacturer, I will not say who, who came into our
market wanting to sell a container that was made of a plastic
type that, to use a technical term, would have screwed up the
recycling of all the rest of the plastic that we had.
We went to them and we said, well, we can not stop you from
selling this in the State of Oregon. But we are going to have
to pull that out by hand and separate it out, and that is going
to be very expensive in the system. So our fee to you to do
that, to sell that in Oregon, is going to be astronomical. Do
you want to sell this in the State or not?
And they said, actually, you know what, never mind. We will
not sell that package in the State of Oregon, because it is not
really recyclable.
Senator Merkley. So the materials or the bottles that have
the deposit are mostly PET? Do you call it PET or P-E-T?
Mr. Bailey. It depends. It's potato, potato.
Senator Merkley. And high density polyethylene. So what are
the percents on that? Is it like 80 percent PET?
Mr. Bailey. It is higher than that.
Senator Merkley. Those are the main two?
Mr. Bailey. Yes. It is primarily PET and HDPE. We do have
some polypropylene packaging in there, but it is de minimis.
Senator Merkley. How do you get that out? The high density
sinks, the PET floats, that is easy.
Mr. Bailey. Polypropylene floats as well, and we also have
sorters in our wash and flake facility that use optical
sorting. It is actually really cool, speaking of magic. I know
how the AI works for our Green Bags; it is not magic to me
anymore. But the sorters are still magic to me. They can see
opacity within the different flake types, and they can shoot
them off with these little air jets at really high speed and
get those things sorted.
Senator Merkley. All right. So it goes down a conveyer belt
and gets knocked off?
Mr. Bailey. Exactly.
Senator Merkley. So it is not a problem, is my point in
this.
Mr. Bailey. Not within the beverage container world. You
wouldn't want, again, to repeat, you wouldn't want non-food
grade with food grade mixed together, because then you have two
polymer types that are same and it would be hard to distinguish
in that sink-float, or in the polymer sorting or opacity
sorting. It would look the same. But there is a big difference
in the chemical composition between something that is food
grade and not.
Senator Merkley. So these pellets of these different types,
going back to the economics of how we drive this, is it sold
then, do you sell these pellets?
Mr. Bailey. Yes. We co-own the wash and flake facility. We
then sell the flake. Some of that goes into pellets through
another company. We do not market the pellets directly. But we
do have flake. To echo Mr. Alexander's point, we have a problem
with demand. Having that pull-through of need for recycled
content, of long-term contracts, that would go a long way
toward making these kinds of facilities much more viable. But
then they would of course need to be at scale to be supplied
with as much material as they can handle.
Senator Merkley. So the key, as Mr. Alexander noted, a key
piece is a recycled content standard or requirement? Is that
what you need to drive the demand?
Mr. Bailey. We do not have a specific position on recycled
content standards. But what we have seen is that recycled
content standards have been a major motivator. To Senator
Whitehouse's earlier comment about industry, it is one of the
reasons we have seen industry come around to support these
kinds of programs, because they need clean supply to then meet
those standards.
Senator Merkley. Okay. What do you do if you can not market
it? Or do you just lower our price in order to get it out of
the warehouse?
Mr. Bailey. Supply and demand. Prices are low, yes. If
anybody wants to buy it, they can call me.
[Laughter.]
Senator Merkley. Very good. Ms. Collins, as we look across
the landscape, I think most of the plastics we are talking
about are made with fossil gas, and fracking has made fossil
gas a lot cheaper. Are we in a situation where that has made it
difficult to sell from the different systems around the
Country, difficult to get rid of the recycled material?
Ms. Collins. Again, there is a difference between food
grade material and non-food grade material. So historically,
the materials, specifically plastics, specifically PET plastic
through bottle bills, has always experienced a stronger
position in the marketplace. It is very high quality, food
grade material.
So when there have been times historically where it was
hard to sell material, it was easier to sell the bottle bill
material. It was the curbside, lower grade material that had to
wait longer to find a home.
Senator Merkley. We used to ship a lot of bulk plastic
waste to China. That ended. China said no, we are not taking
this anymore. Do we ship anything out of the Country now, or
does it all stay here? I know this is broader than consumer
plastics or food plastics.
Mr. Bailey. Senator, I will let the others speak more
broadly. I will just say, for the systems we run, no material
is shipped out. Most of the material is recycled within the
State. Certainly when you include the aluminum, it is all
recycled domestically.
Mr. Alexander. Senator, exported material has been going
down since 2005. Most of the markets have escalated for the
demand, and then obviously with the China sort in 2017 and
2018, the infrastructure has essentially absorbed most of that
material. As I indicated in my testimony, we are importing
material to try and meet the demand for recycled content, both
food and non-food grade applications.
Senator Merkley. Mr. Alexander, is it a challenge to make
sure that the imported material is actually what you think it
is?
Mr. Alexander. The challenge arises as to whether or not,
and we have certificates of origin. First of all, food grade
material, to sell food grade material in this Country, you have
to through an FDA letter of non-objection (LNO). So you have to
have an LNO to sell that material. It is a very elaborate,
exhaustive, demanding process. If a company has that, as Susan
indicated, and Jules said, they are the gold standard. They are
the highest priced in the marketplace.
Beyond that, the other applications that can be utilized as
barrier labels fill our other products with PET in it, what we
are concerned about is basically from consumer applications. We
have certificates of origin that we use so our members pretty
much know that the material is coming from a consumer
application, regardless of where it comes from.
We do have some problem with some countries in terms of
authenticity of certification. You might be able to guess who
some of those are. But by and large, where we get our material
from, we pretty much are confident that we know it is coming
from a consumer application.
Senator Merkley. My colleague mentioned one concern about
establishing a deposit program. He mentioned that plastic has
value in the trash stream or the waste stream, and that that is
currently sold and it is a source of funding. And as a deposit
system, basically undermining the economics of the waste
stream. Ms. Collins, can you address that?
Ms. Collins. Sure. What is important in answering a
question like that is to make sure that you are looking at the
whole issue, and not just a very narrow piece of it. The whole
issue is the entire process of what a municipality or taxpayers
pay for in terms of recycling.
At the narrow point of just having a recycling facility
that is selling that material, the PET plastic is valuable to
them, the aluminum is valuable to them, and the glass
oftentimes has a negative value because of the way that it has
been broken and contaminated through the curbside recycling
system.
But when you go more broadly and ask a different question,
which is, what is this municipality experiencing in terms of
their total recycling cost, when container deposit systems are
established, they save money. They do not have to pay for the
landfilling of most of the material that is being landfilled
and not recycled at all. They do not have to pay for the
collection and processing. They have lower litter collection
costs, because these container deposit programs solve so many
different problems for them.
This has been confirmed in literally more than two dozen
studies around the world.
Senator Merkley. Over the last 10 years, how many
additional States have adopted a deposit program?
Ms. Collins. The last container deposit program entirely
that was established in the United States was in the State of
Hawaii in 2005. But there have been probably maybe 10 different
updates to container deposit laws, updates and expansions, in
the States that do have them in the U.S.
Senator Merkley. Washington State is considering a program.
Are other States on the verge of potentially establishing a
deposit program?
Ms. Collins. Consistently since 2019, we have seen nine or
ten States every year seriously consider these laws through
having hearings in their legislatures.
Senator Merkley. I am going to wrap up with this question
to you all, which is just a bit of a story. Back when I was an
intern here in 1976, that is a long time ago, Senator Hatfield
presented a national bottle bill proposal on the floor of the
Senate. I went over to sit in on his speech.
When he was done, and he lost the vote, both Senator
Packwood and Senator Hatfield proposed a study at the same
time. Only Senator Hatfield had arranged to be called on, to
the chagrin of Senator Packwood from Oregon. We had a softball
game that night. I can tell you, there was a lot of tension
between the two Oregon teams over that.
But the point here is that there has a been a conversation
now for over half a century over whether a national structure
makes sense. My colleague and co-chair, Ranking Member Senator
Mullin pointed out, different States may have different models
that make sense. Different cultures are established, different
consumer preferences.
Is there a pathway for a national framework that would have
some guidelines but also leave some flexibility to the States
that could accomplish the goal that I heard from all of you of
greatly expanding recycling with its various values of job
creation, waste reduction, greenhouse gas reduction, and so
forth? Do you have a vision of how we might create a national
framework that makes sense? Do any of you want to weigh in on
that?
Mr. Bailey. I will jump in on that really quickly, Senator.
I am sure there are other comments here. Other than the fact
that Oregon just joined the Big Ten, there is not a whole lot
of similarity between Oregon and Iowa, right? At least you
wouldn't think so on the surface. Similarly, my wife's family
is from Massachusetts, and sometimes I think they speak a
foreign language. I call it like I see it.
I think there are a lot of differences in various States.
But what we have seen is that deposit return programs have
worked in a lot of these different kinds of places around the
Country. I would actually take Ranking Member Mullin's point
around one-size-fits-all. I wouldn't think that a one-size-
fits-all program would work in the United States.
But to set a north star, to set a standard that says, here
is what successful programs look like, and then to allow for
State-based innovation and private sector innovation, I think
has a lot of power and a lot of opportunity to eliminate some
of the cross-border issues that we talked about, to generate
more supply, to overcome some of the barriers that can crop up
at the local level.
That is, I think, an appropriate place for Federal policy
to examine how we have a system that is flexible and can meet
the needs of different constituencies.
Ms. Collins. I could just add that that is exactly how it
has played out in Canada, with all of their provinces, in
Australia, with their different states, and in the European
Union through the European Union Directive.
Senator Merkley. And by play out, you mean that some
countries in Europe had a program, but then it expanded in a
broader vision. Did they use a few basic standards and then
each country in Europe is flexible within that? Same question
about Canada and any additional insights from those two
structures.
Ms. Collins. Yes. They have all evolved in different ways.
I will use the European Union as an example. They had many
countries that already had a deposit system in place ahead of
time. Then they passed a single-use plastics directive, which
mandated a 90 percent return rate for plastic bottles. They
have until 2030 or 2029 to do that.
One by one, the different countries that do not already
have a system have been implementing new systems. So we
anticipate that they will all come online by 2030. But they
have done it in their own individual way in each country.
Senator Merkley. Again, State that basic requirements that
drove that.
Ms. Collins. The most important one is just that they want
a 90 percent collection rate for plastic bottles. That alone,
that one sentence----
Senator Merkley. Plastic beverage bottles?
Ms. Collins. Yes, thank you.
Senator Merkley. And Mr. Alexander, at one time, the
bottling world was deeply opposed to deposit systems. That was
certainly true when Oregon originated this. I have started to
hear little bits of feelings like, oh, maybe we are interested
in a nationwide system with some parameters as interest grows
about the amount of plastic waste that goes into landfills or
ends up in rivers, ends up in the ocean and so forth.
Do you see kind of a shifting attitude and a possibility of
creating a national framework?
Mr. Alexander. Absolutely. We have experienced the same
thing, particularly from the beverage industry who are now
working very closely with us. They need supply. I think that as
Jules pointed out, in terms of his testimony, that is a
phenomenal program, and the incentives they have. We have
learned a lot over the last 35 years in this endeavor.
But it also points out that each State is its own
marketplace. Vic Horton in Maine needs something different than
Jules needs in Oregon or Amaya might need in Texas.
But I think a national framework is certainly something we
need to supply. It is as simple as that.
Senator Merkley. I picture things like the Green Bag, the
Blue Bag, as the kind of details that States might pursue on
their own, flexibility. But if we are thinking about basic
provisions that would drive a national system, what do you see
as what those basic provisions would be? Would it be setting a
minimum return deposit and saying this should apply to all of a
certain class of beverage bottles? Or how would you, if you
were at the whiteboard saying, hey, this would work, how would
you design that?
Mr. Alexander. One of the things we would make sure is it
is not just soda bottles, but it is also water bottles. We have
worked to expand existing deposit legislation over the years to
include water bottles, because they have exploded over the
years.
I think that is really what we would focus on, is making
sure you can bring in one class. Unfortunately, with the
diversity of resin, you want to make sure you are getting one
class, a homogeneous class of material through that. So you do
not have the contamination levels and things like that, and you
begin to create the highest value in the secondary market of
the material.
What we would think it should be focused on is one class of
container, be it a PET container or something along those
lines.
Senator Merkley. You are suggesting, rather than having,
the deposit system in Oregon covers basically, based on what is
in the bottle, but it does not say it has to be just PET or
HDPE. Are you saying it would be better to focus just on, say,
PET bottles?
Mr. Alexander. It is the most iconic package out there, and
it is the easiest for the consumer to understand. That would
drive, we think, the greatest consumer participation.
Senator Merkley. So if we were to say each State needs to
have a recycling system for beverages that focuses on PET
containers, and at a certain minimum deposit rate, those States
could then expand on that, they could expand on the Oregon
model, deciding how do you return them, do you return them to a
recycling center, do you return them to the store, do they
raise the rates higher to do that, do they include other types
of plastic once they have the system set up, with more
flexibility. But if we were to start with a basic national
system, you would be recommending a minimum deposit rate and
just PET bottles?
Mr. Alexander. Well, again, I really would have to think
about that, to be honest. I am hesitant to say, again, that
Maine would be able to handle that, given the rural nature
versus what Jules is able to do in the area of, let's say the
metropolitan area of Portland in Oregon.
It sounds like a great idea. To be honest with you, I think
some basic framework is important. Whether or not something as
specific as that, frankly, I would have to take a look at it,
to be honest.
Senator Merkley. Mr. Alexander, I will just ask if you will
continue to use your expertise in the plastics world to help us
figure out what the basics of a national framework would be.
That would be very helpful.
Mr. Alexander. We appreciate the opportunity and we will
take advantage of that. Thank you very much, sir.
Senator Merkley. Thank you. Mr. Bailey?
Mr. Bailey. Senator, if I might just color one little bit
of testimony here, from the perspective of somebody who
operates this every day for customers that come in the door. It
is really challenging to tell a customer that one bottle,
because it is one material and another bottle that looks the
same but might be a slightly different material, one is
redeemable and one is not. That is really confusing to people.
The most disappointed customer is the customer who leaves with
bottles that they brought in to redeem.
So I think making sure that we also have a system that is
easily understandable for Americans, for customers that come
in, and that really covers a broad range of all of the glass,
plastic, and metal bottles that are out there as broadly as
possible is not only good for supply and for the environment,
but it is better for customers.
Senator Merkley. So, make it as little confusing as
possible, clear labeling, clear definitions. I will ask, or
challenge you to do the same thing, which is to lay out the
basics of a national architecture might look like that leaves a
lot of flexibility to individual States, so that we can start
wrestling with and have that conversation with our national
producers, and see if there is a pathway. Would you do your
whiteboard exercise and get it back to us?
Mr. Bailey. Yes, Senator. Just very briefly, I think you
assign the refund value, I do not know that you even need to
mandate the deposit, but you assign the refund value, you
assign the responsible parties, and you assign a target. Then
from there, you let it play out. That I think is really the
most basic system that you can have.
Senator Merkley. Write that up and provide it to us. Thank
you.
Ms. Collins, same exercise. Can you go through that with
your insights?
Ms. Collins. I have it written down.
Senator Merkley. Okay, great.
I want to thank you all very much for participating in the
conversation. I think how we handle our containers is a
significant part of the issue of waste and environmental
improvement and energy savings. It is a win on many levels, job
creation, as you have all pointed out.
So I look forward to your insights as we work to try to
create a conversation here half a century after Senator
Hatfield worked at that same conversation. I know that there
are a number of my colleagues across the aisle who really have
started to see the impact of plastics, especially those ocean
States, and would like to ponder if there is a framework that
could make sense, that is good policy and perhaps good
politics.
In closing, thank you all for appearing today and sharing
your perspectives.
Some housekeeping, I ask unanimous consent to submit for
the record a variety of articles and materials that include
letters from stakeholders and other materials that relate to
today's hearing. Hearing no objection, so ordered.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Merkley. Additionally, Senators will be allowed to
submit written questions for the record through the close of
business on Thursday, October 12th. We will compile those
questions, send them out to our witnesses. We will ask for you
to get replies back by October 26th.
With that, the hearing is adjourned.
[Whereupon, at 11:38 a.m., the hearing was adjourned.]
[all]