BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: AB 2530 ----------------------------------------------------------------- |Author: |Gordon | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |6/15/2016 |Hearing |6/29/2016 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Rebecca Newhouse | | | | ----------------------------------------------------------------- SUBJECT: Recycling: beverage containers. ANALYSIS: Existing law: 1) Under the California Beverage Container Recycling and Litter Reduction Act (Bottle Bill): a) Requires beverage containers, as defined, sold in-state to have a California redemption 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 distributors to pay a redemption payment to the Department of Resources Recycling and Recovery (CalRecycle) for every beverage container sold in the state. These funds are continuously appropriated to CalRecycle for the payment of refund values and processing fees. b) Requires every glass manufacturer in the state to use at least 35% of postfilled glass in the manufacturing of their glass food, drink or beverage containers, as specified. 2)Pursuant to the Integrated Waste Management Act: a) 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%. AB 2530 (Gordon) Page 2 of ? b) 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. c) Requires that expanded polystyrene loosefill packaging (i.e., packing peanuts) sold in the state contain a minimum of 60% recycled content. d) 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. e) 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) Requires a manufacturer of a plastic beverage container, beginning in March 1, 2018, to report the amount of virgin plastic and postconsumer recycled content in plastic used in their beverage containers subject to CRV sold in the state the previous calendar year. AB 2530 (Gordon) Page 3 of ? 2) Requires manufacturers submit the above information to CalRecycle under penalty of perjury. 3) Specifies that the requirements above do not apply to a refillable plastic beverage container. Background 1) Statutes requiring recycled content. California has several programs and statutes that require minimum levels of recycled content or "postconsumer" material in various products or purchases. Postconsumer material is generally defined as products that were bought, used, and recycled by consumers. For example, a plastic bottle that has been purchased, recycled, and used to make another product would be considered postconsumer material. a) Rigid plastic packaging container law. California's Rigid Plastic Packaging Container (RPPC) law was enacted in 1991 as part of an effort to reduce the amount of plastic waste disposed in California landfills and to increase the use of recycled postconsumer plastic. The law mandates that rigid plastic packaging containers sold in the state contain a minimum of 25% postconsumer recycled material. Some products are exempt from compliance, including food, drugs, baby formula, and other materials. b) Glass beverage container recycled content. California state law requires in-state glass manufacturers to use a minimum of 35% postfilled glass (glass that had previously been filled with a beverage or food) in the manufacturing of their glass food drink, or beverage containers, measured in the aggregate on an annual basis, and a minimum of 25% postfilled glass if the manufacturers use at least half mixed-color cullet. Glass manufacturers are required to report each month to CalRecycle on the total tons of new glass food, drink and beverage containers made in California and the tons of California postfilled glass used in the manufacturing of those new containers. There is no similar statewide requirement for plastic AB 2530 (Gordon) Page 4 of ? beverage containers. c) State Agency Buy Recycled Campaign. Current state law establishes the State Agency Buy Recycled Campaign (SABRC), which requires state agencies and the Legislature to purchase recycled-content products and track those purchases. The SABRC requires minimum postconsumer material content for 11 specified product categories, including a minimum level of 10% postconsumer material for plastic products. All state agencies are mandated to require all businesses to certify in writing the percentage of postconsumer material in the products, materials, goods, or supplies offered or sold to the state. 2)Plastic recycling in California. California has around 10 reclaimers accepting plastic for washing and producing recycled flake or pellets and over 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. Plastic containers accounted for 220,000 tons. Roughly half of these plastic containers are at least partially processed in California. 1)Barriers to using postconsumer plastic. a) Economics. According to the report "One major driver of California's recycling efforts is the broader market for recyclable materials. In order for recycling to be economically viable, the cost of processing and using the recycled material must be less than that of virgin material. One complication is that prices for materials can fluctuate wildly, leading to dramatic variations in the monetary reward for recycling." AB 2530 (Gordon) Page 5 of ? The report further states, "The prices of individual commodities are based on a range of factors, including global supply, demand, strength of the U.S. dollar, inventories, consumer consumption, material quality and cleanliness, and the availability of facilities to process recycled materials. In addition to the inherent volatility of market prices for secondary materials, small changes in prices can have strong impacts on the profitability of secondary materials compared to virgin material. For example, falling oil prices and other factors have reduced the price of virgin plastic and made recycling plastics less economically feasible by reducing the scrap value of post-consumer recyclable plastic." b) Contamination. 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. 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 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 proposed uses of AB 2530 (Gordon) Page 6 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. Several plastic food and drink manufacturers located in California have received non-objection letters from the FDA. Depending on the beverage manufacturer and product line, there is a range of recycled content used in plastic beverage containers. For example, Coca Cola uses on average 6% recycled content for their PET packaging, Pepsi Co reports they are at 10% for beverage containers, Arrowhead and Nestle bottled water both report a 50% recycled content rate, and Naked Juice reports that their bottles are made from 100% recycled content. Comments 1) Purpose of Bill. According to the author, "Thirty years ago, the Legislature passed and the Governor signed the California Beverage Container Recycling and Litter Reduction Act, better known as the Bottle Bill. This Act established California's systems for the recycling of beverage containers. 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 recycling, consumers should be able to determine whether beverage companies are using recycled plastic in the beverages they purchase." 2) No postconsumer recycled content requirement. As noted in the background, several other programs in California, including the Rigid Plastic Packaging Container program, require minimum levels of postconsumer recycled material. This bill does not have a mandate for postconsumer recycled content in beverage containers, but does require manufacturers who sell beverages in plastic containers in California, and that are subject to CVR, to report annually to CalRecycle on the level AB 2530 (Gordon) Page 7 of ? of postconsumer recycled material used for those plastic beverages. Related/Prior Legislation AB 1447 (Alejo) would have established minimum recycled content standards for polyethylene terephthalate (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 California contains no less than 10% postfilled material, and would have prohibited CalRecycle from reducing the processing fees for beverage manufacturers unless their beverage containers meet the required recycled content. This bill was held in Senate Environmental Quality Committee. SOURCE: Californians Against Waste SUPPORT: As You Sow CarbonLITE Industries Central Contra Costa Solid Waste Authority Clean Water Action EcoPET Plastics, Inc. Global PET Los Angeles Alliance for a New Economy Marin County Hazardous and Solid Waste Management Joint Power Authority Marin Sanitary Service Napa Recycling &Waste Services Natural Resources Defense Council Northern California Recycling Association RePET Sierra Club California Sonoma County Waste Management Agency StopWaste AB 2530 (Gordon) Page 8 of ? Tri-CED Community Recycling UPSTREAM Verdeco Recycling, Inc. West Coast Chapter of the Institute of Scrap Recycling Industries Zanker Recycling OPPOSITION: American Beverage Association American Chemistry Council California Bottled Water Association California Chamber of Commerce California League of Food Processors California Manufacturers and Technology Association California Nevada Beverage Association California Retailers Association Grocery Manufacturers Association International Bottled Water Association Plastic Recycling Corporation of California SPI - The Plastics Industry Trade Association ARGUMENTS IN SUPPORT: Proponents say that AB 2530 creates a voluntary market incentive for beverage producers to increase their use of recycled content. They note that while Californians have done a great job collecting beverage containers for recycling, the in-state plastic recycling market is facing considerable challenges, including the drastic drop in oil prices, which has lowered demand and price for California-generated recycled materials, and that this has many manufacturers reconsidering their commitments to using recycled content. They further state that AB 2530 will encourage the development of a closed-loop recycling system that supports a robust in-state recycling industry that not only creates jobs but also provides a valuable raw material for the state's manufacturers. AB 2530 (Gordon) Page 9 of ? ARGUMENTS IN OPPOSITION: Opponents argue that AB 2530 would impose new, costly and unnecessary bureaucratic duties on the beverage industry that ignore the realities of today's regional beverage manufacturing and distribution marketplace. Specifically, they note that large beverage manufacturers have hundreds of specific product packages that would need an annual in-depth supply chain analysis to generate an accurate percentage of recycled content, and that there is no test to determine recycled content other than to audit the extensive supply chain of both the source of beverages and beverage packaging. They state that the report would have to be revised each year to ensure accuracy and that it is unrealistic to assume such reports will provide meaningful information to the public or CalRecyle. -- END --