BILL ANALYSIS Ó AB 2530 Page 1 Date of Hearing: April 11, 2016 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair AB 2530 (Gordon) - As Introduced February 19, 2016 SUBJECT: Recycling: beverage containers SUMMARY: Requires that manufacturers of plastic beverage containers sold in the state label the containers with the percentage of postconsumer recycled content. EXISTING LAW: 1)Pursuant to the California Beverage Container Recycling and Litter Reduction Act (Bottle Bill): a) Requires beverage containers sold in this state to have a California refund value (CRV) of 5 cents for containers that hold fewer than 24 ounces and 10 cents for containers that hold 24 ounces or more and requires a distributor to pay a redemption payment to the Department of Resources Recycling and Recovery (CalRecycle). Continuously appropriates these funds to CalRecycle for the payment of refund values and processing fees. b) Requires that each new glass container manufactured in the state contain a minimum of 35% postfilled (recycled food container cullet) glass. Requires every glass food, drink, or beverage container manufacturer in the state to AB 2530 Page 2 report the amount of tons of new glass and the tons of postfilled glass used in the manufacturing of those containers to CalRecycle every month. c) Authorizes CalRecycle to conduct audits or investigations to determine compliance with the Bottle Bill and related regulations. 2)Pursuant to the Integrated Waste Management Act (IWMA): a) Requires that local governments divert at least 50% of solid waste from landfill disposal and establishes a statewide goal that 75% of solid waste be diverted from landfill disposal by 2020. b) Requires that 50% of newsprint paper sold in the state contain a minimum of 40% postconsumer recycled content. c) Requires that rigid plastic packaging containers sold in the state contain a minimum of 25% postconsumer recycled material and have a recycling rate of at least 45%. d) Requires that manufacturers of plastic trash bags that are at or above 0.70 mils thick to annually certify that they comply with one of the following: i) That the bags sold in California contain a minimum of 10% recycled content; or, ii) That all plastic products sold by the manufacturer in California contain a minimum of 30% recycled content. e) Requires that fiberglass sold in the state contain a minimum of 30% postconsumer recycled content. f) Requires that expanded polystyrene loosefill packaging AB 2530 Page 3 (i.e., packing peanuts) sold in the state contain a minimum of 60% recycled content. g) Prohibits a manufacturer or supplier from selling a plastic food or beverage container that is advertised with a specific recycling content amount unless the manufacturer or supplier is able to provide certification of that claim in a format that is easy to understand and scientifically accurate. Requires a manufacturer or supplier to provide information and documentation verifying the recycling content of a plastic food or beverage container within 90 days of a request for such information made by a member of the public or a state agency. THIS BILL: 1)Beginning January 1, 2018, requires a manufacturer of a plastic beverage container sold in the state to clearly indicate the average percentage of postconsumer recycled content in the beverage container, as specified. 2)For purposes of determining and labeling the amount of postconsumer recycled content, requires the manufacturer to utilize one or both of the following approaches: a) The average amount of postconsumer recycled content in all beverage containers sold by the manufacturer in the state during the previous year; or, b) The average amount of postconsumer recycled content in a specified type of beverage container. AB 2530 Page 4 3)Requires a manufacturer to demonstrate compliance with the bill's requirements to CalRecycle on an annual basis. 4)Prohibits CalRecycle from reducing the processing fee requirements for a manufacturer of a plastic beverage container unless the manufacturer complies with the requirements of the bill. FISCAL EFFECT: Unknown COMMENTS: 1)Food and beverage packaging. Historically, glass, steel, aluminum, and paper have been recycled for use in food packaging. The risk of postconsumer contamination has not been a major concern with glass and metals, because they are generally impervious to contaminants and are adequately cleaned at the temperatures used in their recycling. In addition, pulp from reclaimed fiber in paper and paperboard may be used for food-contact articles provided it meets federal standards (Title 21 of the Code of Federal Regulations, Section 176.260). Manufacturers of plastic food packaging that contains recycled plastic are responsible for ensuring that the recycled material is of suitable purity for its intended use and will meet all existing specifications for the virgin material. The federal Food and Drug Association (FDA) states that safety concerns with the use of recycled plastic materials in food packaging include: 1) that contaminants from the postconsumer material may appear in the final food-contact product made from the recycled material; 2) that recycled postconsumer material not regulated for food-contact use may be AB 2530 Page 5 incorporated into food-contact packaging; and, 3) that components in the recycled plastic may not comply with the regulations for food-contact use. To address these concerns, FDA considers each proposed use of recycled plastic on a case-by-case basis and issues informal advice as to whether the recycling process is expected to produce plastic suitable for food packaging. FDA then issues a "non-objection" letter to the manufacturer for the packaging. Generally, manufacturers use postfilled plastic, which refers to recycled materials that contained food or beverages prior to recycling, to meet FDA standards. 2)Polyethylene terephthalate (PET). PET is the most common plastic used in food and beverage packaging, including bottled water and soda. According to CalRecycle data, 43% of Bottle Bill containers are PET, making it the most common beverage container packaging material in California. Several plastic food and drink manufacturers located in California have received non-objection letters from the FDA and comply with the state's existing recycled content requirements for rigid plastic packaging containers. Several beverage manufacturers also include postfilled content in their packaging. For example, Arrowhead and Nestle bottled water both report a 50% recycled content rate; Pepsi reports 10% recycled content; and, Naked Juice reports that their bottles are made from 100% recycled content. 3)Plastic recycling in California. California has around 10 reclaimers accepting plastic for washing and producing recycled flake or pellets and 30 manufacturers that use recycled plastic to manufacture new products. While there has been significant growth in the use of recycled plastic in California, the vast majority of recycled plastic is sent overseas. In 2014, Californians returned approximately 17.7 billion (one million tons) beverage containers covered by the Bottle Bill. AB 2530 Page 6 Plastic containers accounted for 220,000 tons. Approximately half of these were processed and recycled in California. 4)Author's statement: In the decades since the Bottle Bill was enacted, Californians have embraced recycling beverage containers and roughly 82% are returned for recycling. Given the public's embrace of beverage container recycling, consumers should be able to easily determine whether the beverages they purchase are made out of recycled plastic - to know whether the beverage container material they have recycled is going back into new beverage containers. 5)Suggested amendments: a) The requirements for determining postconsumer recycled content are unclear and not consistent. The committee may wish to amend the bill to clarify these provisions and specify that the recycling content claims comply with the Federal Trade Commission Guides for the Use of Environmental Marketing Claims. b) This bill requires that independent, accredited laboratories certify a manufacturer's beverage containers comply with the requirements of this bill; however, the bill requires labeling based on the average content, not by each container. The committee may wish amend the bill to allow manufacturers to acquire an independent, third-party certification for the average percentage of postconsumer recycled content and strike out the reference to laboratories. AB 2530 Page 7 6)Previous legislation: AB 1447 (Alejo) would have established minimum recycled content standards for PET food and beverage packing and expanded the recycled content requirement for glass food and beverage containers to containers manufactured out of state. This bill was held in the Assembly Appropriations Committee. SB 732 (Pan) would have required every manufacturer of a beverage sold in any plastic container to demonstrate to CalRecycle that each type of a plastic beverage container sold in this state contains, on average, not less than 10% postfilled material on and after January 1, 2017. This bill would have also prohibited CalRecycle from reducing the processing fee requirements for any beverage manufacturer for any beverage sold in the state unless the manufacturer demonstrates to CalRecycle that the container is manufactured at a facility that meets or exceeds a specified percentage of recycled content, regardless of whether the container is manufactured in this state. This bill was held in Senate Environmental Quality Committee. REGISTERED SUPPORT / OPPOSITION: Support As You Sow AB 2530 Page 8 Californians Against Waste CarbonLITE Industries Clean Water Action/Clean Water Fund Marin Sanitary Service Napa Recycling & Waste Services RePET, Inc. Sierra Club California Sonoma County Waste Management Authority StopWaste UPSTREAM Verdeco Recycling, Inc. West Coast Chapter of the Institute of Scrap Recycling Industries Zanker Recycling AB 2530 Page 9 Opposition None on file Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916) 319-2092