United States
Environmental Protection
Agency
EPA/530-SW-90-071A
Solid Waste and
Emergency Response
(OS-301)
December 1992
Policy, Planning
and Evaluation
(PM-221)
Markets for
Recovered Glass
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Contents
Page
I. Introduction
II. Market Overview
I. Factors Influencing the Gullet Markets
IV Government Intervention in Gullet Markets 27
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I. Introduction
Recycling is experiencing a rebirth as the era of abundant, inexpensive
landfills is corning to an end. In some parts of the country, landfill capacity is
becoming strained by shutdowns at existing operations and difficulties in siting
new operations. As a result, recycling, with its recognition of the intrinsic value
of many of the materials that are thrown away, is becoming an economic and
logistical necessity in many communities.
Yet the economics of recycling (as opposed to the economics of landfills)
currently makes recycling attractive for only a limited number of materials. Used
materials will be recycled only if they can be collected, processed, and reused at
the same or less cost than substitutes made from virgin materials can be
produced. Markets for recovered materials have developed over time to facilitate
the consolidation of material into quantities that are worth handling and that
allow for economies of scale in collection and processing.1
Because these existing markets are the key to continued and expanded
recycling opportunities, governments contemplating initiatives for promoting
recycling should consider the operation of these markets and how the markets
would react to policies designed to increase recycling in the United States.
Governments should understand the operations of the private sector in handling
these materials; otherwise, policies that appear to promote expanded recycling
opportunities may replace private ventures with government operations. In
addition, governments should understand the influences of policy decisions on the
scrap markets so that incentives designed to encourage reuse and recycling are
targeted appropriately.
This study describes the operation of the markets for cullet, or crushed
scrap glass. It concentrates on post-consumer cullet in the municipal solid
waste stream, although it provides limited information on other glass as well.
The study addresses the following issues:
• How the markets are structured
• What influences the supply of and demand for materials
• What projections can be made about the markets
• How government policies to increase recycling might affect these
markets
'Recovery refers to the supply to scrap material from, for example, households.
Material collected from curbside collection programs is therefore recovered
material, it is not considered recycled until the material has been processed and
returned to a similar or some other use.
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The market for glass cullet was chosen as the focus of this study because
glass is an important component of the municipal solid waste stream, accounting
for 7 percent of waste generation (by weight). The recycling discussion focuses on
container glass, since container glass cullet represents virtually 100 percent of all
glass recovered from the municipal waste stream.2
2u.s. Environmental Protection Agency. Characterization Of Municipal Solid
Waste in the United States: 1990 Update, June 1990, p. 15.
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II. Market Overview
Scrap glass exists in three forms. Manufacturing scrap is a mixture of transition
glass, off-specification glass generated as glass producers slowly change the ingredient
mix in their giant melting vats, and finished glass that breaks at the manufacturing
plant. Pre-consumer cullet is finished glass that breaks at a bottling or distribution
facility. Both of these types of scrap are reused within the glass plants. Finally, post-
consumer cullet consists of the glass bottles or other glass products discarded by
consumers after use.
Glass is 100 percent recyclable in that it can be melted repeatedly to produce the
same product, and the technology for recycling glass is relatively simple and well
established. The reuse of cullet is complicated, however, by the fact that different types
of glass are not always compatible for recycling. The glass produced by different
manufacturers differs in both form and chemical composition. Form variations are
familiar: glass comes flat, pressed and blown into shapes, or in more complicated
applications, such as fiberglass or fiber optics. Although glass can be remelted and
changed from one form into another with ease, a problem arises in separating the glass
from other materials in a product (e.g., separating the glass in a light bulb from other
non-glass components). Glass also differs in chemical composition. Although all glass
is composed of silica and sodium oxide (soda ash), the type and quantity of other
compounds added vary slightly in different types of glass. These differences frequently
cause problems in recycling glass, because producers of some types of glass have strict
specifications for the chemical makeup of any cullet they might use. However, as
discussed later, there is evidence that these requirements maybe more flexible than is
frequently perceived.
Glass in the Solid Waste Steam: The Source of Post-Consumer Cullet
The amount of glass discarded into the municipal solid waste stream (discarded
glass equals total glass generation minus material recovery) declined from 14.2 million
tons in 1980 to 11.0 million tons in 1988. Virtually all of this glass is post-consumer
glass. The total weight of discarded materials grew 15 percent during that period, and
so the percentage of discarded material represented by glass fell from 10.5 percent in
1980 to 7.1 percent in 1988.3The decline in the percentage of the waste stream
accounted for by glass may be explained by several factors. First, in recent years the
packaging industry has shifted away from the use of glass in packaging to the use of
aluminum and plastic, As glass containers represent a large component of all glass
3U.S. EPA, characterization of Municipal Solid Waste in the United States: 1990 Update,
June 1990, (USEPA 1990) pp. 12, 15.
3
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discards (89 percent by weight in 19884), this translates into a measurable decrease in
the total volume of glass discards. Second, an increased effort is being devoted to
recovering glass through state and local legislation (e.g., mandatory recycling laws or
deposit laws) and through alternative government or industry-run recovery
programs.
According to a recent EPA report, 1.5 million tons of glass, or 12 percent of total
glass waste generation, was recycled in 1988. Glass cullet from bottles and jars
represents virtually 100 percent of this recycled material. In 1988, 73 percent of the
recycled glass cullet was derived from beer and soft drink containers, while the
remaining 27 percent came from wine, liquor, food, and other glass containers5This
mix represents a change from the historical composition of cullet. In the past, beer and
soft drink containers accounted for virtually 100 percent of recycled container glass.6
Since 1985, however, the expansion of curbside and drop-off recovery programs has
encouraged the recovery of other types of glass containers, resulting in the present cullet
mix.
Container Glass
Most glass (89 percent) that is discarded is container glass. The glass container
industry is also the largest segment of the glass industry, shipping $4.5 billion dollars
worth of glass containers in 19897and employing about 43,2008 workers. In 1987, glass
containers represented 44 percent of the value of primary glass shipments in the United
States."Glass containers are used in a variety of product industries, including food and
beverages, medicine and health, toiletries and cosmetics, and chemicals.
Ibid., p. 15.
Tbid., p. 15.
6Ibid., p. 44.
7W.S. Department of Commerce, U.S. Industrial Outlook 1990.
8Predicasts, Inc., Predicasts'Basebook, 1989, p. 500.
"This figure is derived using the sum of the value of product shipments for SIC codes 321
and 322. Other glass products (e.g., SIC 3231, Products of Purchased Glass) are
manufactured using glass produced by industries with SIC codes 321 and 322. Source:
U.S. Department of Commerce, Bureau of the Census, 1987 Census of Manufactures,
Industry Series: Glass Products.
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The decline in the amount of container glass discarded (dropping from 13.2
million tons in 1980 to 9.9 million tons in 19881; is largely attributable to a decrease in
the shipment of new glass containers, from 46.7 billion units in 1980 to 40.5 billion units
in 1988."The decreased shipments reflect the industry's loss of market share to other
container types. (See Chapter III.) According to the Glass Packaging Institute, the
trend toward making lighter bottles also contributed to a decrease in the weight of glass
in the solid waste stream.
In 1989, however, product shipments of glass containers grew slightly for the first
time since 1986, to 40.9 billion units. Growth in 1989 shipments is attributed to various
factors, including the conversion from plastic soft drink bottles back to glass in a few
markets, increases in sales of beer and food containers, and deceleration in the
movement to plastic bottles for liquor products.
Throughout this same time period, the recycling of glass containers has
increased. In 1980, 5.7 percent of glass containers were recycled. By 1988, this rate had
increased to 13.3 percent of glass containers, representing an increase of 133 percent.
Materials recovery from the entire solid waste stream increased at a slower rate, from
9.7 percent in 1980 to 13.4 percent in 1988, or an increase of 38 percent.13
Some of the impetus for increased recovery of glass containers has come from
deposit laws or bottle bills. In 1970, no bottle bills existed; in 1988, nearly 44 million
Americans (18 percent of the U.S. population) lived in the nine states that required
deposits on glass beer and soft drink containers. Recycling programs initiated by states,
localities, or industry have also helped boost the recovery rate for glass containers.
Reliable data on the source of recovered glass containers are not available, however.
Recovery of glass in 1988 totaled 1.5 million tons (12 percent of total glass
generated); most of this was beer and soft drink containers (1.1 million tons). (See Table
II-l.) Growth in curbside and other recycling programs in the last several years has
also increased the quantities of other types of glass recycled. In 1988, other container
glass and non-container glass accounted for approximately 27 percent of the total glass
recycled, compared with less than 1 percent of all glass recycled in 1986.14
10U.S. EPA 1990, p. 46.
"U.S. Department of Commerce, U.S. Industrial Outlook 1985, 1990.
12I b i d .
"U.S. EPA, pp. 44-45.
"US. EPA, Characterization of Municipal Solid Waste in the United States, 1960 to 2000
(update 1988), March 30,1988, pp. 21,22.
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Table 11-1
Glass in Municipal Solid Waste 1988
Type of Glass
Glass Generated
Tons
Percentage
of MSW
Glass Disposed
Tons
Percentage
of
Generation
Glass Recovered
Tons
Percentage
of
Generation
Container Glass 11.3 6.3% 9.8 86% 1.5 14%
Beer and Soft Drink 5.4 3.0 4.3 80 1.1 20
Other (e.g., food) 5.9 3.3 5.5 93 0.4 7
Non-Container Glass :L2_ iLZ :L_2 iIL2 -sQ.1 <8
All Glass 12.5 7.0% 11.0 88% 1.5 12%
Note: Tonnage figures are in millions.
Source: EPA, 1990, pp.15, 42-48.
Non-Container Glass
Details on the composition of the non-container segment of glass in the solid
waste stream are extremely sketchy, as no quantitative data exist to describe it. Non-
container glass amounting to 1.2 million tons were discarded to the municipal solid
waste stream in 1988, although this figure is probably underestimated. "Presumably,
this figure includes disposal of broken windowpanes, windshields, glassware, and other
durable glass products thrown away by residential consumers. Because of the diversity
of non-container glass and the fact that no component of the total is very large,
"materials flow" methodology does not capture the recovery and disposal trends of this
glass very well.
It is estimated that little of the non-container glass in the municipal solid waste
stream is recovered. Non-container glass is recovered from commercial and industrial
waste streams, but no comprehensive data exist on non-container recycling.
15U.S. EPA, p. 15.
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One major industrial recycler estimates that about 500,000 tons of plate glass are
recovered each year. This glass comes not only from communities, but also from
industrial and commercial sources. In addition, in-house recycling occurs in all the
glass industries.
Final Consumers of Gullet: The Demand Side of the Market
Just as the glass container segment is the largest single component of the glass
industry, glass container manufacturers are by far the largest users of post-consumer
cullet. Although other glassmakers and users of purchased glass use cullet in their
production processes to some degree, no other market for cullet is as important
currently as the container market. The extent of cullet use in an industry depends on
transportation costs, technical requirements, and public relations considerations. Each
of these factors will be discussed in more detail in Chapter III.
Container manufacturers have a strong interest in buying uncontaminated post-
consumer cullet as a raw material for production. Although little information is
available on the cost savings from using cullet instead of virgin materials, we have cited
below savings in energy use and extended furnace life as two benefits. Also, given
increasing public and governmental pressure on the content of packaging, it is in the
industry's best interest to use as much recovered material as possible in its products.
Glass Containers
According to the Bureau of the Census, glass container manufacturers consumed
about 830,000 tons of cullet in 1982.16Recent informal estimates of cullet usage in the
container industry put cullet consumption above 1 million tons per year, but the
industry has no official estimate of cullet usage. Unfortunately, the Census statistics do
not distinguish between pre- and post-consumer cullet, but the container industry's
830,000 tons is the largest share of total cullet reported. If we include cullet use in
containers (830,000 tons), pressed and blown glass (96,000 tons), products of purchased
glass (207,000 tons), and flat glass (506,000 tons using 1977 data), total usage was roughly
1,600,000 tons. This includes pre-consumer cullet, transition glass routed back into the
batch, and post-consumer cullet.
Even though limited data makes it impossible to quantify, the container industry's
stake in glass recycling is substantial. To process cullet before remelting, container
manufacturers own and operate 27 beneficiation (cleaning and processing) units, which
service the industry's 82 manufacturing plants. The industry also supplements its
16U.S. Department of Commerce, Bureau of the Census, 1987 Census of Manufactures,
Industry Series: Glass Products. Data from the 1987 Census of Manufactures do not
contain revised estimates of cullet use, since a large fraction of the total had to be
estimated.
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cullet supply by purchasing furnace-ready cullet from independent dealers and
processors.
The major consideration in recovering cullet for use in the container industry is
contamination. Contaminants include containers of a different color (such as a green
bottle in a pile of clear glass cullet), metal caps and neckrings, and ceramics. It is
important for container manufacturers to remove these contaminants before the cullet
enters the production process. Since the container industry produces green, amber
(brown), and flint (clear) containers, color sorting at the point of collection is one way in
which producers minimize contamination. The technical specifications for each color
require cullet to be color-sorted if it is to be used in significant quantities, particularly in
the manufacture of flint containers.
According to glass container industry representatives, except as discussed below,
the container industry is willing to buy as much cullet as it can get if it is free from
contamination (e.g., ceramics) and color-sorted. Cullet has several advantages over
virgin materials in the container industry. Each 10 percent of the batch displaced by
cullet saves 1 to 5 percent of the energy used to make virgin glass. 17In addition, using
cullet may extend the life of the glass furnace due to the lower temperatures needed to
melt the cullet, and can give a marketing advantage to firms that use it for consumer
products. Furthermore, although greater effort has been put into recovering glass,
recovery rates are still low; as a result, the supply of flint and amber cullet is short.
Green cullet is the one color that is not in very short supply, say industry
representatives. In fact, serious gluts of green glass have occurred because of low
domestic green glass manufacturing capacity and a large volume of imported green
glass containers (e.g., beer and wine bottles).
There are some short-term technical limitations on cullet use. According to
container manufacturers we spoke to, most plants would require modifications to
operate using greater than 50 percent cullet, but the modifications are technically
possible. Although some plants are currently using cullet at or above the 50 percent
level, most of the container industry has a "batch percentage" in the 20 to 30 percent
range. Because the furnaces run continuously and must be set for a given mix of cullet
and other inputs, the plant operator must be sure there is sufficient cullet to maintain
the feed rate. Since cullet supply (i.e., recovery from households and others) has been
somewhat uncertain, it is prudent to plan conservatively for the batch percentage. With
more supply becoming available through curbside and other programs, batch
percentages will likely increase, especially at plants near major supplies (i.e., near
population centers with active recovery programs).
17Gordon Stewart, "Cullet and Glass Container Manufacture," Resource Recycling,
March/April 1986. According to Nancy A. Lang ("Hoisting the Glass," Beverage World,
June 1989), fuel makes up 15 percent of the cost of producing virgin glass. Thus glass
using 10 percent cullet has a 0.15 percent (15 percent of 1 percent savings) to 0,75 percent
(15 percent of 5 percent savings) cost advantage over virgin glass, not including the
difference in price between cullet and virgin materials.
8
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Gullet prices do not vary over time as much as other commodity prices. Gullet-
handling firms interviewed, as well as officials from state and local governments,
report that prices stay fairly steady. Several cullet sellers interviewed reported that
prices they received had "always been" in the $40 to $45 per ton range. Others quoted
higher or lower prices based on location or glass color, but individual marketers
typically do not experience wide fluctuations in the price they receive for cullet. We were
unable to identify data sources showing cullet prices over an extended period, however.
Cullet prices vary depending on the color of the glass and the region in which it is
sold. Because of the prevalence of clear glass containers in production, demand (and
price) for clear or flint cullet is generally stronger. Less green and brown glass are
manufactured domestically and imported colored glass provides additional supply
which weakens prices. Regional differences result primarily from transportation costs.
Table II-2 shows recent cullet prices, taken from the August 13, 1991, issue of
Recycling Times, for three color types in seven regions of the United States. These data
show that, while end users (glass manufacturers) are paying $0 to $15 per ton for green
glass cullet in the Northeast, the price for the same cullet in the South Central states is
$50 per ton. Smaller price differentials exist within some regions for different colors of
glass. For instance, in the Northeast, green cullet sells for $0 to $15 per ton to end users,
while clear cullet sells at $43 to $50 per ton. In the South, green cullet sells for $10 to $20
per ton versus $50 per ton for clear cullet. These price differences affect the price
municipalities and private collectors receive for their cullet, even though the price to
those municipalities and collectors does not fluctuate greatly over time. A nationwide
study published by the Glass Packaging Institute, in which 19 communities with
recycling programs were surveyed, reported cullet prices ranging from $25 to $66 per
ton.18 Further discussion of price variations is presented in Chapter III.
8Glass Packaging Institute, Comprehensive Curbside Recycling, 1988.
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Table 11-2
Cullet Prices Paid by Glass Manufacturers by Region and Color
(dollars per ton)
Cullet
color
Clear
Brown
Green
.Price
in the
Northeast
$43-5O
20-25
0-15
Mid-
Atlantic
$5O-55
45-55
1 0-20
South
$50
50
1 0-20
South
Central
$50
50
50
East
Central
$4O-55
22-25
0-15
West
Central West*
$50 $60
50 60
50 60
includes California scrap price which is subsidized by the glass packaging industry
state; the subsidy is a response to California's container recycling law, AB 2020
Source: Recycling Times, August 13
1991. Prices cover July
15 to August 2,
1991.
Consumption of Cullet by Non-Container Glass Producers
The use of cullet in the non-container class industries varies greatly. Some
industries, such as the fiberglass insulation industry, use a small amount of cullet in
their manufacturing processes. The glass bead industry uses a significant amount of
cullet according to the Glass Packaging Institute. Other industries, such as the
producers of many kinds of pressed and blown glassware, purchase no cullet and in fact
sell their own scrap. Producers of non-container glass more commonly use small
amounts of cullet which are mostly self-generated and rarely purchased. As
mentioned earlier, however, we could not find reliable data on cullet usage in these
industries.
In part, the reluctance in many glass industries (other than glass container
manufacturers) to use cullet stems from technical requirements. Container glass is not
suitable for some glass industries because of differences in chemical composition
between container glass and non-container glass. Differences in color may also cause
technical problems. Some of this reluctance may also result from a stigma attached to
recycled glass. Prior to 1970, most glass container manufacturers limited their use of
cullet either in the belief that recovered glass was not as reliable as other glass or in the
belief that consumers would not accept glass made partly from recovered materials. For
some firms, such as a fiberglass reinforcements company we interviewed, there is no
economic advantage to using cullet now, so they are not interested in doing so. However
real or imaginary the barriers to cullet use, the result has been low use of scrap in
industries other than the glass container industry.
The fiberglass insulation industry is one example of a non-container industry
that faces quality constraints on the amount of cullet they can use. While some
fiberglass insulation manufacturers use pre-consumer cullet from a variety of glass
manufacturing processes, post-consumer cullet is less feasible because of its
10
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inconsistent quality. The major requirement for using cullet in fiberglass insulation is
consistency; fiberglass manufacturing is more sensitive than container manufacturing
to contaminants and to differences in the composition of the glass. This sensitivity has
been the limiting factor in the use of post-consumer cullet. In addition, bottle cullet
does not contain boron, the key (and most expensive) ingredient in fiberglass. Thus, the
materials cost savings for using post-consumer cullet are less for fiberglass makers
than for container manufacturers. In addition, energy savings in this industry are not
as great as in container manufacturing — each 10 percent of the batch displaced by
cullet saves 1 to 3 percent of the energy used to make virgin insulation.19 By
comparison, container manufacturers realize an energy savings of 1 to 5 percent for
every 10 percent of cullet.
"Glasphalt" is another commonly cited potential use for cullet, although it is not
yet in widespread use. Several communities have tested this mixture of glass cullet and
asphalt, which is used to pave roads. These communities, in tests using from 20 to 40
percent cullet in the glasphalt, found several disadvantages to the mixture. Using
glasphalt actually increases the initial cost of paving by 25 to 40 percent.20In addition,
traction is not as good on glasphalt as on asphalt at speeds above 40 miles per hour, and
"rutting" may occur in the road when studded tires are driven over the glasphalt.
Finally, "stripping," the appearance of loose grains of glass on the road, occurs in the
first few weeks after paving. These problems are weighed against the advantage that
glasphalt dries faster and retains heat longer than asphalt.21 Glasphalt may also
provide a low-cost outlet for mixed-color cullet. Also, on residential streets, problems
with traction may not be as serious as on roads with higher speed limits. In any case,
more widespread use of glasphalt will probably be required to verify and generalize the
experience of the few communities that have tested the mixture.
19,1
EPA Insulation Guideline, Part 3," Waste Age, June 1989.
20Personal Communication, John Rugg, National Pavement Asphalt Association,
August 1990,
21Tom Watson, "When the Tire Hits the Glasphalt," Resource Recycling, July 1988.
11
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Figure II-1
The Post-Consumer Glass Recycling Path
Consumers
• Residential
• Commercial
• Industrial
Deposit
programs
Buy-back and
drop-off
centers
Curbside
programs
Independent
cullet
processors/
dealers
Materials
recovery
facilities
(MRFs)
Glass
container
industry
Major volumes
Moderate volumes
Low volumes
•• - Flat glass
Miscellaneous
pressed and
blown glass
Fiberglass
insulation
Fiberglass
reinforcements
Fiber optic
cable
i—H
Alternative uses
(e.g., glass in
asphalt, brick,
and block)
12
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The Post-Consumer Glass Recycling Path
Post-consumer cullet can follow any one of a number of paths from the original
glass consumer to the eventual end use. (See Figure II-l.) Several options exist for
collecting post-consumer glass. In addition, cullet may go through an intermediary for
processing before it is passed on down the recycling path. Finally, although most post-
consumer cullet is eventually consumed at glass container plants, a small portion of the
cullet may end up being used by other types of cullet consumers.
Collection
Glass containers are collected from consumers through three primary channels:
deposit programs, programs involving drop-off or buy-back centers, and curbside
pickup. No estimates of the quantity of cullet obtained from each of these sources exist.
Deposit programs, as mentioned above, operate in nine states with a total population of
44 million people (18 percent of the U.S. population). Under these programs, consumers
pay a minimum deposit of 5 cents (Michigan has a 10 cents deposit) on all beer and soft
drink containers, including glass bottles.22 Many of the deposit programs include wine
coolers, two include wine and liquor bottles, and one includes juice bottles. The beverage
industry also sponsors drop-off or buy-back centers in a number of states. Through
these programs, consumers can return or sell their containers back to major glass-
container manufacturers without having the glass pass through any intermediary.
Finally, source separation with curbside pickup is an emerging method of collecting
glass without imposing the inconvenience of transporting glass to a retailer or recycler.
In this case, municipalities or private haulers collect the glass and sell it either to a
container producer directly or to an intermediary.
22In California's deposit-type program (AB 2020), the redemption payment by
distributors is 2 cents per container, and 4 cents per container of 24 ounces or more. The
refund value is 5 cents for every two containers, and 5 cents per container of 24 ounces or
more.
13
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Reliable data on the amount of glass recycled by each method are not available,
but we believe that deposit programs probably provided the largest fraction of container
cullet in 1988.23 Although deposit programs primarily focus on beer and soft drink
container glass, the California program, drop-off centers, and curbside programs
accept all types of glass containers. While the data cited earlier indicate that most glass
recycled from municipal solid waste is from beverage containers, the growth of these
other glass recycling programs in the past several years suggests that a broader range
of glass containers is currently recycled. Data from California's Division of Recycling
indicate that for the last six months of 1988, 566 million glass beer and soft drink
containers were recycled (207 million of which were refillable bottles), as well as 138
million other glass containers, including juice and food containers.24 No national data
exist describing glass recycled through drop-off and curbside programs, however.
Intermediaries/Processing
Most cullet must be processed in some fashion before it can be remelted and made
into new glass. Cullet processing typically occurs in one of three types of facilities: a
beneficiation plant installed at a container manufacturing plant, an independent
intermediate processor, or a materials recovery facility (MRF). These three types of
processing share two major common features. First, all have systems to remove
contaminants and crush glass. Second, the three types of processors are regional in
scope, with each facility handling over 10,000 tons per year and serving more than one
container plant.25
Frequently, glass container plants can process the cullet themselves at one of the
27 beneficiation units in the United States. Most of these 27 beneficiation units have the
same basic design. The beneficiation unit can process 15 to 20 tons of color-sorted glass
per hour.26The system removes contaminants such as paper, plastic, or metal from
the glass, and crushes the glass. These units could run virtually around the clock,
given adequate cullet supplies. For comparative purposes, we calculated the processing
capacity of these 27 units. Given a unit running 24 hours per day 7 days a week for 45
23We can arrive at a rough estimate of glass returned through deposit programs using
previously cited information. The Department of Commerce reported 150 million gross
beer and soft drink containers shipped in 1988. If we assume that 18 percent of the
population living in deposit states buy 18 percent of those bottles, then 3.9 billion bottles
were sold in those states. Assuming a comparatively high return rate of 85 percent,
about 3.3 billion bottles could have come back in those states. At an average of two bottles
per pound, this works out to recovery of about 825,000 tons of glass, or slightly over one-
half of the U.S. EPA estimate for 1988.
24California Division of Recycling, Biannual Report on Redemption and Recycling
Rates: July 1, 1988 to December 31, 1988, pp. 5,8.
25Steve Apotheker, "Glass Processing: the Link Between Collection and Manufacture,"
Resource Recycling, July 1989, p. 38.
26Ibid., p. 41.
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weeks, these 27 plants could process over 4 million tons of cullet each year.27 It is
estimated that the total for glass recovery by all facilities was 1.2 million tons in 1988.
Since beneficiation units are running at or near capacity at many plants and glass is
also processed by other intermediaries as well, these data suggest either that this
estimate is too low or that glass recycling has increased substantially since 1988.
Alternatively, the cullet maybe processed by an intermediary that buys the glass
from the collector, processes it into furnace-ready cullet, and sells it to a glass
manufacturer. These intermediate glass processors, until recently, handled pre-
consumer scrap caused by breakage at manufacturing and distribution plants. Now
these processors are beginning to become involved in post-consumer scrap as well. An
average processing plant costs $300,000 to $500,000 to build and has a capacity of 10 to 25
tons per hour.28 Although the number of intermediate glass processors is unknown,
the largest such company, the Cleveland-based Bassichis Company, operates 17 plants.
We were unable to find reliable data on the total number or capacity of these
intermediate processors.
Materials recovery facilities (MRFs) operate in areas where a high volume of
post-consumer recycling makes it economical to separate types of recyclable (paper,
metals, glass, plastic) and to process recycled glass at the same facility. MRFs typically
separate glass from other recyclable through a combination of hand sorting, magnets
and/or density separation. Glass is then color-sorted by hand or by machine. The last
step resembles the processing done at a beneficiation plant. The cost and capacity of
these systems vary, with capital costs per ton of daily capacity ranging from $10,000 to
$75,000 per facility, and capacities anywhere between 8 and 300 tons per day. A recent
survey put the number of MRFs operating or planned at 99, with 47 currently accepting
recyclables.29
In addition, dealers perform the function of purchasing cullet from a number of
relatively small collectors and then selling a much larger amount of cullet to a glass
manufacturer. According to the glass container industry, one of the biggest problems in
increasing cullet use in the container industry is the difficulty of guaranteeing a steady
supply of cullet. Because glass producers can only change the proportion of ingredients
in their vats slowly, they may use less cullet in the production process to guarantee that
they will always be able to purchase enough cullet. Dealers can help guarantee a steady
supply by grouping small collectors together.
27Since glass furnaces typically operate around the clock, these units could also operate
constantly to provide raw material.
28Apotheker, p. 40.
29Jim Glenn, "Fast Pace for MRF Development," Biocycle, May 1990.
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Summary
The technology for recycling container glass is relatively simple and well
established. Mechanisms for recovering glass from the municipal solid waste stream
exist in many areas and include beverage container deposits, buy-back or drop-off
centers, and curbside collection programs. Deposit programs focus on beer and soft
drink containers, and, in some states, include wine coolers, wine, liquor, and/or juice
containers. Estimates prepared for EPA suggest that beer and soft drink containers
accounted for the majority of cullet recovered from municipal solid waste in 1988. Other
programs, which are expanding, focus on a broader range of glass containers.
Unfortunately, no comprehensive data exist to document the total quantity of post-
consumer cullet that is collected. Finally, the little information available indicates that
post-consumer non-container glass is rarely recycled because of the absence of
collection mechanisms and the technological difficulties in reusing non-container
glass and in separating other materials from the glass.
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III. Factors Influencing the Gullet Markets
We have divided our consideration of issues affecting the cullet market into
those that affect the supply of recovered cullet and those that affect demand for
recovered cullet. For each side of the market, we will present issues that shape
the supply of or demand for cullet, discuss trends in the industry that will
influence the markets in the future, and present conclusions, which include our
assessment of the ramifications of our findings for government policies.
Supply of Cullet
The supply side of a market reflects the costs of producing a given output.
For the cullet market, the supply function can be thought of as the relationship
between the price of cullet deliveries to glass manufacturers and the amount of
cullet that suppliers are willing to deliver for that price. In most markets,
suppliers are willing to provide some small quantity even at low prices. However,
suppliers generally respond to higher prices by increasing the quantity they
supply.
The major factor affecting the supply of cullet is the increasing attention
being paid to recovery by consumers; the federal, state, and local governments;
the media; and industry. Escalating landfilling costs will continue to lead to
greater efforts to provide convenient recovery opportunities for glass, increasing
the supply of cullet. Expanded recovery through curbside and drop-off programs
will also increase the supply of container cullet not tied to deposit laws. We expect
the quantity of cullet supplied to increase over the next few years.
Factors Influencing Supply
The major factors we have identified are summarized below. The text that
follows describes these issues in more detail.
• Nonprice motivations for supplying cullet are important, particularly
because the historical market price of cullet is low on a per bottle
basis.
• The influence of public attention to recycling, an expansion of
convenient recycling opportunities, and the prospect of higher
landfilling costs should increase the supply of cullet.
• Regional differences in the supply of cullet exist because recycling is
concentrated in certain regions, and because the cost of
transportation limits the effective range of cullet sales.
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Nonprice Motivations Affect Consumers'
Decisions to Recycle Containers
The existence of drop-off centers where consumers, in effect, donate their
containers by dropping them off without getting money back shows that the desire
to "do good" is an important motivation to recycle glass. The economic motivation
for consumers is weakened by the low price of cullet relative to the cost incurred
in supplying cullet and the low cost of alternatives to recycling (e.g., land
disposal). Currently, the scrap value of a typical glass beverage bottle is almost a
penny and a half (assuming $50 per ton and an average of two bottles per pound).
In areas that rely on drop-off or buy-back centers to collect used glass containers,
the low price paid does not provide a strong incentive to consumers to return their
containers. One study estimated that the return on a consumer's time spent in
preparing bottles for return was about 4 cents per minute, or $2.40 per hour.17
Consumers may be more influenced by the perception that donating used glass is
an inexpensive way to contribute to a charity, or that recycling glass is an easy
way to help the environment.
Monetary return does play some part in consumer willingness to recycle
glass. Our rough analysis of 1988 data described in Chapter II suggests that the
nine states with deposit laws were recycling more than half the total glass beer
and soft drink containers recycled in the United States, a significantly larger
share per state than contributed by non-deposit states. To achieve this response,
however, the deposit states have had to offer returns on bottles that are far above
the market scrap value of the bottle and we have not considered the cost associated
with deposit laws.
The experience with price and nonprice motivations to recycle has been
limited to a certain range of prices. In deposit states, a deposit of 5 to 10 cents
stimulates the quantity of glass containers recycled. Elsewhere, the return to
consumers is lower, despite the efforts of some large manufacturers of glass
containers to subsidize container returns. For instance, California's Glass
Recycling Corporation, formed by container manufacturers in the state,
subsidizes container returns in order to prop container prices above a state-
mandated minimum.
Finally, we have not considered the entire benefit to society of recycling.
Land disposal may be underpriced implying that recycling yields significant
benefits beyond those currently recognized.
17Darlene Snow and Ballina Edwards, Glass Recycling: Opportunities and
Constraints, August 1985.
18The scrap price subsidy has been paid to avoid a processing fee which could be
levied against all glass containers sold. The processing fee, established by AB
2020, is designed to ensure that recyclers earn enough to cover their costs plus a
reasonable profit.
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Deposit Programs May Focus
on Only a Limited Share of Containers
As cited in the previous chapter, the majority of all post-consumer recycled
glass in 1988 came from beer and soft drink containers. This is a result of the
deposit laws in nine states and other recycling programs. Deposit programs, in
most cases, establish deposits and provide return opportunities for soft drink and
beer bottles only, which represent about 58 percent of containers sold.19 Due to
the limited focus of these deposit programs, recycling rates for other container
glass and non-container glass have been relatively unaffected by deposit laws.
In other areas, any glass container can be dropped off at a center or put out
for curbside collection. Most buy-back and drop-off centers accept non-beverage
containers or even non-container glass. Given the growth of these non-deposit
programs, especially those providing curbside pickup, we would expect a shift
away from the dominance of beer and soft drink containers in the national
recycling statistics.
Glass Containers Face Competition
from Aluminum and Plastic
Since the introduction of plastic beverage containers in the late 1970s, the
glass share of the beverage container market, as well as the non-beverage
container market, has dropped consistently. Prior to that, glass was also losing
market share to aluminum cans. In the soft drink market, for example, glass
containers accounted for 80 percent of packaged soft drink sales in 1970. By 1980,
the glass share had fallen to 45 percent and in 1989 it was 22 percent.20arket
factors have favored growth for aluminum and plastic. Both materials are lighter
than glass and both are shatterproof. Aluminum cans have captured a large
share of the convenience market and the larger plastic containers have created a
substantial market for at-home consumption.
Competition from plastic and aluminum has translated into a decline in
the real value of glass container shipments every year from 1977 to 1987.21 The
number of containers shipped also declined between 1980 and 1988.22 However, in
19U.S. Department of Commerce, U.S. Industrial Outlook 1990, p. 11-1.
'"National Soft Drink Association, 1986 Statistical Profile and Beverage Industry
Annual Manual 1990/91, p. 72.
21Predicasts, Inc., Predicasts'Basebook, 1989, p. 501.
22U.S. Department of Commerce, U.S. Industrial Outlook 1989.
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1989, product shipments of glass containers grew slightly; this growth trend is
expected to continue in the 1990s.23
The competition from other materials has meant that fewer glass
containers are shipped and less glass is available for recovery and recycling:
estimated shipments of glass containers in 1989 were approximately 12 percent
below 1980 levels.24 The declining number of glass containers as well as increase
in recovery of glass means that less glass enters the municipal solid waste
stream. Because of limited data, it is difficult to identify the effect of this loss of
market share on the amount of glass recycled.
The Mix of Glass Recycling Programs Available Affects Gullet Supply
Even though more states and localities are instituting recycling programs
as a means of handling solid waste, effective and convenient glass recycling
opportunities do not yet exist in all areas. One barrier that has slowed the
establishment of glass recycling programs is the relatively low price of cullet.
Still, when the avoided costs of landfilling are taken into account, recycling may
be a less expensive method of handling glass (although the costs of both recycling
and landfilling vary among communities) .25 If more communities become
aware of the costs that can be avoided by recycling glass, the supply of cullet
should increase.
Another factor affecting recycling rates is the type of collection. In some
areas, the only recycling opportunities are provided by the beverage or container
industry; these programs almost always require consumers to travel to a
particular location (either a staffed center, an "igloo" disposal container, or a
"reverse vending machine") to return their glass containers.
The most convenient option is collection of glass at the household. Curbside
collection allows consumers to recycle glass with only the minimal effort of
separating the glass from other trash (and sometimes sorting the glass by color).
As a result, the supply of cullet is affected by the mix of curbside, drop-off, and
deposit programs throughout the country. As more localities adopt curbside
programs, the cullet supply should increase.
23U.S. Department of Commerce, U.S. Industrial Outlook 1990.
24U.S. Department of Commerce, U.S. Industrial Outlook 5-1990.
25Although costs vary widely, disposal of a glass beverage bottle has an average
cost of about 0.7 cents; this assumes two bottles per pound and the average tipping
fee of $27 per ton reported in Waste Age in March 1989. With scrap prices over 1
cent per container ($50 per ton), this provides a difference of more than $75 per ton
to offset the recycling costs. Recently promulgated federal regulations for
municipal landfills will likely increase the avoided cost of disposal.
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The Market for Gullet Is Regional
The variation in cullet price by region, discussed in Chapter II, shows that
the market for cullet is regional, rather than national. Lack of a high volume of
interregional scrap shipments allows cullet prices in different regions to differ
greatly. The existence of large price differences by color in some regions and not
in others also results from the regional nature of the market.
The transportation of cullet from the collection point to the glass plant is
paid for by the supplier, not the end user of the cullet. (However, some
manufacturers pay a $5-per-ton bonus for cullet shipped more than 50 miles,
and an additional $5-per-ton bonus for cullet shipped more than 300 miles.) This
means that the farther the cullet must be shipped, the less profitable it is for the
recycler (a community, an intermediary who buys from the community, or
individual consumers) to recycle glass. Furthermore, transportation is the
largest cost component in supplying cullet. Consequently, little movement of
cullet between regions occurs, allowing the price of cullet to differ greatly by
region.
According to several state and local government officials interviewed, a
significant amount of cullet crosses state boundaries. However, most interstate
movement appears to occur between neighboring states, such as Iowa and
Illinois, and may primarily reflect the color requirements of a certain plant. For
example, a local plant may produce only clear glass and all colored glass would
have to be shipped elsewhere, perhaps out-of-state. In the Northeast, cullet
seems to move farther: both Maine and Connecticut officials report glass collected
in those states moving as far as Pennsylvania. Even in the Northeast, however,
no state or local officials reported significant interregional movements of cullet.
In addition to the transportation cost, another factor inhibiting interregional
movement may be that cullet collectors and processors are much more likely to be
aware of the glass manufacturing plants in their own areas than in other regions
of the country.
Recycling of Non-Container Glass
Is Hampered by Handling Problems
Other glass products are much more difficult to recycle than containers,
either because they are durable products or because they are mixed with other
materials. For instance, light bulbs and other purchased glass products contain
large quantities of metal. Flat glass maybe heavy and awkward for consumers to
transport. Non-container glass does not account for a large share of municipal
solid waste (although its share of industrial and commercial waste is unclear).
The recycling of these products is hampered by physical constraints on collecting
and handling; these constraints suggest that recycling these materials would be
extremely expensive compared to the potential revenue.
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Demand for Gullet
For the cullet market, the demand function expresses the relationship
between a given price of cullet and the quantity that consumers of cullet will
purchase at that price. The cullet market is typical in that some consumers are
willing to buy some scrap at a relatively high price; however, if scrap suppliers
wish to increase sales, they must lower the price of cullet to increase the quantity
demanded.
The major factor determining demand growth over the next few years is
likely to be the projected modest growth in glass container shipments, although
there is still room for container companies to increase their percentage use of
cullet. Glass container producers may be more likely to use cullet as they become
convinced of the stability of cullet supply.
Alternative uses for cullet should show a small expansion as growing
supply pushes down cullet prices. But those industries considering alternative
uses may need some additional incentive to reconsider their current position on
the feasibility of using cullet.
Factors Affecting Demand
The major factors we have identified are summarized below. The text that
follows describes these issues in more detail.
• The container industry remains the major end user of post-
consumer cullet.
• The major concerns of glass container makers in using cullet are
contamination in the cullet and guaranteeing a reliable cullet
Supply.
• The container industry is motivated to use available cullet because of
benefits such as reduced energy use and because of concern over
public image.
• Slow growth in the container industry means that industry's
demand for cullet will grow, although modestly.
• Non-container glass industries face barriers to increasing cullet
use; the barriers may be based on technical issues or on the cost of
learning how to use cullet in their industries.
• An increasing supply of cullet should combine with sluggishly
increasing demand, resulting in modest increases in cullet
recycling.
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Container Gullet Dominates the Gullet Market
Because of the short-term use of glass containers, as well as the manner in
which recycling programs have been set up, container cullet has been collected
more successfully from residential and commercial consumers than has any
other type of cullet. And because it is easier for glass manufacturers to use cullet
originating from only their own industries — cullet that generally already
conforms to production requirements — most of the container cullet is purchased
by the container industry for use in new containers.
Because of their few numbers and their dominance of recycling, the
container companies effectively set cullet prices. The container companies are
buying cullet at approximately $50 per ton, and other users of residential and
commercial cullet must compete with the large container market for cullet. In
many cases, cullet is not worth these prices to other cullet users such as
fiberglass insulation or glasphalt manufacturers. Thus, although alternative
uses for cullet are growing because of the general increase in cullet supply,
alternative users still represent a very small portion of the post-consumer cullet
market compared to the container producers. However, in some cases, where
alternative users can purchase cullet in the area around their manufacturing
plants, suppliers find it more profitable to sell cheaply to the nearby alternative
user than to pay transportation costs to a higher-paying container plant farther
away.
Consistency of Supply Is Critical to Glass Manufacturers .
Glass making is a continuous, closely-monitored process. The ingredients
of glass — lime, soda ash, glass sand, and any cullet used in the process — are
fed continuously into vats that operate 24 hours a day. The materials are melted
in the vats, and the product is removed from the vats continuously. The mix of the
inputs can be changed only slowly, and the transition glass produced during the
changeover is unusable except as in-house cullet to be blended back into the
process.
Because of the nature of the process, the ratio of cullet to virgin materials
used can be changed only slowly during glassmaking. As a result, glass
container manufacturers find that a major problem is guaranteeing a consistent
supply of cullet. One strategy the container makers use to guarantee supply is to
deal, when possible, with large intermediaries who can provide a greater volume
of cullet with greater reliability than can small, individual communities or cullet
processors.
The technical requirements of glassmaking also mean that short-run
quantity demanded is probably not very sensitive to price. However, the major
glass container manufacturers have maximum prices that they will pay for
cullet, even in the short term, and there is no reason to believe that long-term
demand for cullet would not be responsive to price. The combination of concerns
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about a guaranteed supply, other nonprice influences on demand, and the
historically stable price of cullet makes it impossible to predict how a substantial
increase or decrease in cullet prices would affect the quantity demanded.
Container Companies Are Pushing to Increase Their Cullet Use
Like many other packaging manufacturers, glass container producers
have been working hard to increase the recycling rates for their product, in part
because recycling improves the industry's public image and also because
increased recycling rates (i.e., increased cullet supply) will depress the price of
cullet, thus decreasing production costs. In addition, because of the advantages
mentioned in Chapter II associated with using cullet to replace virgin
ingredients, the container industry has a long-term interest in seeing stable and
efficient markets for cullet develop. Considering the competition among
aluminum, glass, and plastic in the beverage container market, glass container
makers need to be aggressive in finding ways to keep costs down.
How Glass Fares in the Competition with Aluminum
and Plastic Will Influence Cullet Demand
Because cullet is an input to the glass container manufacturing process, a
change in the volume of glass container production should affect the demand for
cullet. (For example, if glass containers were to be replaced entirely by plastic
containers, demand for cullet would obviously decrease.) Industry observers
predict that the glass container industry will continue to see modest growth over
the next few years. The U.S. Department of Commerce, for instance, projects that
the volume of glass container shipments will rise approximately 1 percent during
the 1990-1994 period.26 This increase should slightly heighten the demand for
cullet.
Color Is Important in Assessing Cullet Demand
Because of the technical specifications for the manufacture of glass
containers, nearly all the cullet used in making glass of a particular color must
be cullet of that same color. The Glass Packaging Institute estimates that roughly
two-thirds of containers are made of flint glass, one-quarter are brown, and the
remaining 8 or 9 percent are green. Flint glass, for instance, can contain no
more than 5 percent amber cullet and no more than 1 percent green cullet. This
means that the three major cullet colors are sold separately and that their market
situations are not always the same.
For instance, in some areas with a heavy emphasis on recycling (areas like
the Northeast with recycling mandates, deposit laws, and high disposal costs),
the market is nearly saturated with green cullet because many imported beers are
6U.S. Department of Commerce, U.S. Industrial Outlook 1990.
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packaged in green glass. In these same areas, flint cullet is scarce and more
expensive, while amber occupies a middle position. (See Table II-2.) The green
glass marketing problems will be limited, however, by the relatively low share of
green glass containers (8 or 9 percent) and the low share of imported glass
containers — about 3 percent of all container types according to Department of
Commerce estimates. So although markets for green cullet maybe fragile, the
rest of the industry appears willing to handle more cullet.
Some Glass Industries Are Unwilling to Use Cullet
Another barrier to the expansion of alternative uses for cullet is an
unwillingness to use cullet on the part of manufacturers in some glass
industries. It is difficult to discern whether these industries — including many
types of pressed and blown glass, flat glass, and fiberglass reinforcements — face
technical barriers or whether the decision not to use cullet is an economic one.
The answer is probably both. For example, the technical specifications for cullet
for many of these glass industries are tighter (particularly for container cullet)
than those of the container industry. But a similar reluctance to use cullet once
prevailed in the container industry until the industry learned more about the
nature of cullet and how to use it. Although many industry representatives said
their companies could not use cullet, one company's technical expert indicated
that, if prices or regulations changed enough to make it worthwhile, his firm
would be compelled to find ways to use more cullet than it does today.
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IV. Government Intervention in Gullet Markets
Government programs at the state and local levels are responsible for
much of the glass recycling that occurs. Most of the post-consumer scrap is
recovered from curbside, drop-off, or deposit programs mandated by or operated
by governments. This chapter discusses the desirability of increased government
involvement in glass recycling, describes existing policies, and then considers
potential government involvement in the market with the objective of increasing
recycling. The list of potential initiatives is not indicative of intended government
actions or policies. Instead, it simply presents possible scenarios for
consideration should a determination be made that the marketplace is not
functioning properly and must be influenced to correct the problem.
Market-Based Incentives
In cases where significant environmental problems are caused by market
failures, EPA strongly supports the use of economic incentives (at the appropriate
jurisdictional level) to address the environmental problem rather than traditional
command-and-control regulatory approaches. With the glass recycling
markets, our conclusion to date is that incentive-based options are best applied at
the state and local level, where the solution can be tailored to the particular needs
of that jurisdiction.
Summary of Current Involvement
Government programs have affected the container sector of the glass
industry through the introduction of deposit legislation and other recycling
programs. Deposit laws were first enacted in the early 1970s and have focused
primarily on beer and soft drink containers. Several states require deposits on
other beverage containers, such as wine cooler, wine, liquor, and juice
containers, but no states have deposits on non-beverage containers. Some states
are considering advanced disposal fees on beverage and food containers.
The deposit programs increase the value of empty containers far above their
actual scrap value. (Scrap value averages slightly more than a penny for a glass
beer or soda bottle as described in Chapter III.) This higher value, combined with
publicity about the program and numerous redemption locations, encourages
returns. Under these programs, consumers return containers at retail outlets or
redemption centers and redeem their deposits..
Mandatory recycling collection programs, which have emerged only in the
last few years, are oriented less toward incentives and more toward command-
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and-control than are deposit programs. These programs mandate the local
development of recycling collection programs for many materials, often including
glass. The most prevalent approach taken thus far requires consumers to
separate glass from the waste stream at home, where it is subsequently collected
by the community. These programs expand the types of glass accepted to include
other container glass (e.g., food jars, liquor bottles, medicine bottles).
California's approach to container collection is different. The California
program creates a redemption value of 2.5 cents on glass beverage containers.
Consumers returning containers not only receive their 2.5 cents back but also
may receive as a bonus a share of the funds generated by unreturned containers.
The economic incentive makes the program similar to a deposit program, but the
return is through an independent network of recyclers established and subsidized
by the program. In addition, consumers may return any glass containers to these
recycling centers, even if the container does not have a redemption value.
These three programs have similar effects on the supply side of the cullet
market: they force more glass into the market than would otherwise be available.
Voluntary recycling programs also facilitate the return of glass containers by
making recycling opportunities more convenient. While precise estimates are not
available, these government programs (i.e., deposit programs, mandatory
recycling, and the California program) are responsible for a large majority of
cullet used in the container industry.
Another form of government involvement in the cullet market is less
obvious and almost certainly less significant. The federal tax code provides tax
benefits (e.g., depletion allowances) for raw materials used in the production of
glass and many other products. These benefits constitute a tax subsidy favoring
the use of raw materials over cullet, since depletion allowances for natural gas
and sand, for example, reduce the actual costs of those inputs. No analytical
evidence exists that fully describes the effect of the subsidy.
Effects of Possible Federal Actions to Increase Glass Recycling
supply options
Mandatory container recycling at a national level would likely depress the
price of cullet because the large increase in the supply of cullet following
enactment of such a program would almost certainly lead to excess supply in the
cullet markets. Furthermore, consumers would bear the cost of collecting and
sorting the glass. Economic incentives designed to stimulate supply include tax
credits on recycling equipment and operations, which also reduce the cost of
supplying cullet, and deposit programs, which increase the value of empty
containers and impose collection and handling costs on retailers and the beverage
industry. Of course, the cost of these programs will ultimately be borne by
taxpayers/consumers as well.
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Another way to decrease the cost of supplying cullet is to encourage the
establishment of larger, regional programs to collect and process material. Such
programs would allow operators to achieve scale economies and to provide a
higher-quality and more predictable supply for buyers. Programs in New
Hampshire and in Montgomery County, Pennsylvania, are cooperatively
marketing a range of recycled materials, including glass.
Finally, to increase the supply of recycled cullet, local government could
discourage disposal of glass by ensuring that disposal fees cover the full costs of
waste disposal and publicizing those costs. Awareness of full avoided disposal
costs would increase the economic viability of collecting and recycling glass and
other materials. Federal and state governments could also provide guidance to
communities about how to compute their full avoided disposal costs. Since many
communities are unaware of or underreport their disposal costs their customers,
this would heighten awareness of recycling as a cost-saving measure. EPA is
currently developing information to help communities assess and report the full
cost ("true-cost accounting") of solid waste management.
Data on which forms of collection are the most efficient and effective are
relatively scarce. The application of these incentives and programs would require
additional information about costs, consumer behavior, and the demand side of
the market.
Demand Options
Demand for scrap glass could be increased by offering incentives that make
cullet a less expensive input, intervening directly in input markets, or improving
the marketability of cullet. Incentives for cullet use include tax credits for cullet
processing equipment (beneficiation units) or a tax credit for the glass producer
based on the percentage or volume of cullet used in its batches. An alternative
approach is to increase the cost of virgin glass by eliminating applicable depletion
allowances or by assessing a tax on the production of glass with no recycled
content.
One possible approach would be to require a minimum content of cullet in
glass products. Unlike an incentive approach, this alternative does not take into
account the various cullet market conditions faced by different producers and
allows significantly less flexibility. Under this option, the government could
either require that all glass procured by its agencies and contractors include a
minimum recycled content or apply the requirement to all glass.
Another marketing option is to facilitate formation of regional marketing
groups combining cullet from individual collection programs. One of producers'
biggest risks in using cullet is that supplies will evaporate and they will not be
able to sustain production with a given level of cullet input. Agents representing
a large number of collection programs would have the ability to ensure a reliable
flow of adequate quantities of materials.
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Report Conclusions
Unfortunately, the data on glass recycling are inadequate to characterize
the scrap market completely. The glass industry does not publish information on
the uses of cullet, but available information indicates that the container industry
is the primary end user of post-consumer cullet.
Post-consumer cullet is supplied through several different channels,
including deposit-refund laws, curbside collection programs, drop-off centers,
and buy-back centers. No data on the quantities of cullet supplied through each
of these programs are systematically collected. It is estimated that approximately
73 percent of glass recycled in 1988 was beer and soft drink container glass. The
remaining 27 percent was other container glass and non-container glass. This
mix represents a change in the historical composition of cullet. Until recently,
beer and soft drink containers accounted for virtually 100 percent of recycled
glass. Growth in recycling programs, especially curbside programs, has
increased the quantity of other glass recycled, resulting in the present mix.
Continued growth in curbside and other recycling programs is likely given rising
landfill costs, landfill capacity constraints, and resistance to siting new disposal
facilities.
The increasing supply of post-consumer cullet is expected to coincide with
moderately increasing demand for cullet, with the container industry continuing
as the primary source of demand. The container industry is motivated to use
available cullet because of benefits such as decreased energy use and the favorable
public image it provides.
Markets for container cullet are regional, and are differentiated by color,
with the green glass market the most fragile. The price of green cullet is less
than that of amber or clear cullet because of the large quantity of green glass
imported (e.g., foreign beers) and the more limited domestic uses of green cullet.
Green glass accounts for a relatively small share of the total container market,
however, and, while some regional markets might experience gluts of green
cullet, green cullet markets are not saturated nationwide.
The overall outlook for glass recycling is healthy. Technical barriers to
cullet use in the major market (containers) are few and consumers appear
willing to return glass containers of all types given the opportunity. The rapid
increase in the supply of containers from curbside and drop-off programs should
offer reliable evidence to container manufacturers that supply will remain strong
and that increased investments in cullet processing and use are warranted. The
major concern that remains, however, is cullet quality. It is not enough that
consumers are given the opportunity to return their bottles and jars: Consumers
must be educated that color or ceramic contamination can render an entire
trailerload of cullet worthless.
Other outlets for container cullet exist, but have not been price-competitive
with container manufacturers in most cases. Of particular interest are lower-
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value markets for contaminated loads or green glass cullet which is currently in
excess supply in several parts of the country.
Other types of glass will continue to face substantial logistical problems
with post-consumer recycling because of the disparate sources of relatively small
quantities (e.g., window glass) and the difficulty of separating glass from other
multi-material products (e.g., light bulbs). Nevertheless, with rising waste
disposal costs and heightened consumer interest in recycling, even these sectors
may see stronger incentives to recover glass and return it to manufacturers.
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