REDcycle collapse: Why is it so hard to recycle a plastic bag?

Sascha: [00:00:02] From Equity Mates media. This is The Dive. I'm your host, Sascha Kelly. Environmentally conscious Australians were shocked last week when a major recycling programme supported by our two major supermarkets RedCycle, announced they were pausing operations. Australia's largest soft plastics recycling programme, RedCycle, has been suspended due to untenable pressure on its business model. For years, RedCycle has been Australia's only way to recycle household soft plastics. You know, that mixture of plastic shopping bags, food wrappers and other packaging that soft scrunch or plastic that just too often ends up in landfill on the side of roads or in our waterways. But Australians are not alone here. The world just does not have a good way to recycle soft plastics. So on today's episode of The Dive, we wanted to unpack the business behind recycling and why soft plastic proved so difficult. And then look at other countries around the world and how they tackle this problem. It's Monday, the 14th of November. And today I want to know, why is it so hard to recycle my plastic shopping bags? To do this, I'm joined by the co-founder of Equity Mates and someone who in a past life worked in waste and recycling. It's Alec Renehan. And Alec, welcome to The Dive. I know this is a pet subject of yours. 

Alec: [00:01:24] Thanks, Sascha. Good to be here. Yeah, this is one that I'm pretty close to and excited to talk about. 

Sascha: [00:01:29] You've got to declare an interest right at the top, which is when you were working at one of Australia's major supermarkets. You actually worked on the RedCycle Programme. That is the focus of today's story. 

Alec: [00:01:39] Yeah, that's right. And I think that was a key reason why I wanted to talk about this today. It's been a little bit disappointing to see some of the reporting from Australia's major news outlets on this. It's easy and I would maybe say lazy reporting to focus on RedCycle. Blame RedCycles founder Liz Cassel and just collect a few vox pops of people saying that they're angry or disappointed at RedCycle. If you've done the right thing and dropped a plastic bag in a RedCycle donation, been bad news over the past few months. Up to 5 million recyclable items a day have been sent straight to storage facilities. 

Sascha: [00:02:17] That's crazy to think about. 

Alec: [00:02:18] There are bigger structural issues at play here, and we may not have the rage that those media outlets have, but we wanted to try and do a better job of explaining what's actually happened here. 

Sascha: [00:02:29] Fighting words that I like and, you know, small but mighty. And we can definitely tell our perspective on this. So let's start with an understanding of how plastic is actually recycled, because that's integral to understanding the story. 

Alec: [00:02:43] So after you put your plastic bottles in your home recycling bin and it gets collected by the garbage truck, the plastic gets taken to a recycling centre where it's sorted into the different types of plastic pet plastic bottles over here, aged plastic milk bottles over there, the different types of plastic are separated and that is critical. Then the plastic is cleaned, shredded, melted down into pellets, and then remoulded into something new. When you have a clean stream of properly sorted plastic, you have flexibility. When you're recycling, you can melt the plastic down into clean pellets and then use those plastic pellets to make something new. But this is where plastic recycling gets difficult. If you can't separate all the different types of plastic, you're in trouble because each type of plastic has different melting points. 

Sascha: [00:03:34] Hold on. Hold on. How many different types of plastic are there exactly? 

Alec: [00:03:40] Well, there's six types. They say there's seven, but the seventh is just a catchall for every other type. So there's Patty, which is your standard plastic water bottle. There's HDP, which is a bit thicker than Patty, and you might say it is used for juice bottles, shampoo bottles, medicine. Sometimes there's PVC. When you hear that, you probably think of PVC pipes, but it's also used in toys, detergent, and bottles. There's ldpe. This is your classic single use shopping bag plastic. There's Pepe. A lot of your Tupperware might be made out of paper, but it's also in the water bottle that I'm drinking out of right now. There's P.S. polystyrene, which is your takeaway container. And then there's this seventh other category, which includes everything else polycarbonate plastic blends, multi-material packaging and the emerging type of plastics bioplastics. 

Sascha: [00:04:36] And this is why plastic recycling is so confusing, because which categories of those plastics can be recycled and which ones can't? 

Alec: [00:04:44] Now, this is the challenge because from a technical perspective, almost all plastic could be recycled. If you got a clean, uncontaminated stream in a large enough quantity, you could melt it down and recycle most types of plastic. The real question? He is wondering what could be recycled, i.e. what can we put in our home recycling bin and get it recycled by a commercial waste provider? And that really goes to two factors. The first one being quantity. The recycler needs a sufficient enough scale to be able to recycle and resell it. So we need to be using enough of it to warrant collecting it. And then the second one is the ability to sort recyclers that need an efficient and scalable way to separate the different types of plastic into their different types. 

Sascha: [00:05:32] And that second factor that you're talking about, the ability to sort is really why soft plastics are not accepted into home recycling bins. And where RedCycle comes into the picture. 

Alec: [00:05:43] Yeah, that's right. If you're on a sorting line at a recycling station, it's pretty easy to tell the difference between a milk bottle and a clear plastic water bottle. But if you are on a sorting line at a recycling station, could you quickly separate an LDP bread bag from an HDP, a Ziploc bag from a paper chip pocket, and simply they say cling wrap. 

Sascha: [00:06:04] It sounds like a taskmaster game or some kind of computer game in the works there. How quickly can you sort the challenges? 

Alec: [00:06:11] A lot of soft plastic packaging might be made from different plastics, but they all look really similar and that makes it really hard to properly separate and recycle. And that was the challenge that RedCycle really stepped into in 2011. At first it was literally Liz setting up a bin at a local Coles supermarket and driving a trailer to collect the plastics. Fast forward maybe five or six years and both of Australia's major supermarkets, Coles and Woolworths, had installed a RedCycle bin in all of their stores. And Liz was managing a national plastic recycling programme, collecting tens of thousands of tonnes of soft plastic every year. 

Sascha: [00:06:49] What an extraordinary growth story. And with that, this seems like a good place to take a break. And when we come back, I'd like to pick up the story and unpack how it all collapsed this year. 

Alec: [00:07:07] Well. A major recycling company has suspended its collection programme after soft plastics were secretly stored in warehouses. 

Sascha: [00:07:15] Welcome back to The Dive. Today we're talking about plastic recycling. Before the break, we got our heads around the difficulties of plastic recycling and how in Australia RedCycle sprung up to fill the need and ended up collecting tens of thousands of our plastic bags, food wrappers and other plastic packaging every year. But I am a little confused, Alec, and I'd love you to unpack this for me. You said commercial recyclers couldn't, or it was a massive challenge to sort and recycle this stuff. How would RedCycle doing this differently? 

Alec: [00:07:49] Yeah, so this is the challenge and I guess ultimately this is why the programme broke down. So you remember when we said if you have a clean stream of plastic, you can melt it down into pellets and then remake it into a new plastic product? Mm hmm. Well, if you have a stream of mixed plastic, it gets harder. And this is because all the different types of plastic have different temperatures that they melt up. 

Sascha: [00:08:11] I actually remember doing that as a science experiment in grade ten, and I think it was highly toxic. I'm not sure it was a great idea for 14 year olds to be melting plastic at school. 

Alec: [00:08:21] Don't don't try this at home. But that is the key difference when you're recycling a single type of plastic. You get nice pellets that you can recycle into new products. When you're recycling mixed plastic because of the different melting points. You get these pretty ugly plastic pellets that can't really be remade into a lot. And so RedCycle, we're partnering with manufacturing partners to turn that mix plastic into park benches, car park wheels, stops, decking, bollards. Think of really large, bulky, blocky items. Now, there are two challenges with this. Firstly, these recycled products were more expensive than similar products made with virgin plastic. The challenge with all plastic recycling is that virgin plastic is just so cheap. But the second challenge is even if you could find buyers willing to spend more to buy the recycled products, there are only so many park benches and car park wheel stops that you can actually sell. And so this is the biggest challenge with all recycling. It's only commercially viable if there's an end market for the recycled product. And over the years, RedCycle tried to find more and worked on some really innovative products. For example, a recycled plastic additive to road bass, literally mix plastic was going into roads and tests were finding them more durable. But it was always an uphill battle to find end markets that could handle the scale of mixed plastics that Australians were going through and then recycling. 

Sascha: [00:09:56] And to add an even bigger challenge to this mix. China's 2013 green fence policy and the 2017 National Sword Policy blew up the Australian recycling industry.

Alec: [00:10:08] It wasn't just Australia, it blew up the global recycling industry. And to be honest, looking back, it was probably fair enough from China.

Sascha: [00:10:16] Following a public awareness campaign, an outcry from Chinese citizens ignited in some cases by the documentary Plastic China. The country implemented a series of policies called Green Fence National Sorry and Blue Sky to stop your kerbside pickup from ending up in unmanageable quantities. 

Alec: [00:10:33] The world's biggest recyclers were exporting their contaminated and low grade recycling loads to China. And Chinese recyclers were just dealing with it, basically. There was such a demand for material in China because it was, and I guess still is the manufacturing capital of the world, that Chinese recyclers were just desperate to get their hands on as much material as possible. So North America, Europe, Australia, other parts of Asia, we were all sending most, if not all of our recyclables to China, no matter how mixed or how contaminated. Hmm. But with the green fence in 2013 and really with the national soared in 2017, everything changed. China stopped any low grade or contaminated recyclables entering the country to basically stop our waste ending up in Chinese waterways or landfills. To put some numbers on it. Before National soared in 2017, 95% of plastics collected in the European Union and 70% of plastics collected in the United States went to China. After national soared, China's plastic imports fell by 99%. 

Sascha: [00:11:46] Those are huge numbers, Alec.

Alec: [00:11:48] Yeah, it was a devastating change in the Australian recycling industry and you know, in America and Europe as well. It was big. Now returning to our story, RedCycle wasn't exporting plastics overseas. They were here at home making park benches and bollards. But with China's policy change in 2017, the big Australian waste companies all of a sudden couldn't send the mixed plastic, that low quality plastic overseas. So RedCycle and really all of Australia was just faced with so much more mixed and low grade plastic remaining on shore. 

Sascha: [00:12:23] Yeah. And then fast forward a couple more years and RedCycle was faced with the same challenge growing popularity of their bins in Coles and Woolworths supermarkets, meaning more plastics to recycle, but not a growing popularity for products made out of recycled RedCycle material. 

Alec: [00:12:42] Yeah, it's the killer of any recycling business. You can have the best technology, you can have the best sorting, you can have the best collections in the world. But if you don't have an end market to sell your recycled product to or a manufacturer that's willing to take it and make it into something, you're in trouble. 

Sascha: [00:12:59] Yeah. Just that image of parks filled with park benches is just such a great visual. 

Alec: [00:13:06] While I was at Coles we were buying park benches and putting them in all of our stores and then we bought a whole bunch to donate to schools and then we still had to buy more. So we started trying to find stores where we could put second benches in the front of stores. We realised that we needed to find something better and the road base was something better. It was really exciting, but unfortunately there was a fire at a facility earlier this year and it shut down that avenue just for now. Hopefully it will come back on, but it really forced RedCycle to stockpile more and more of this plastic. And there's only so much low grade mixed plastic that you can store in warehouses. Eventually you have to stop collecting, which it really brings us to today and really is what they've done. 

Sascha: [00:13:50] Okay. I like this is actually a pretty depressing story. I guess it's left me wondering, am I just not going to be able to recycle lots of plastic? Can you end with what comes next? Is there a silver lining to this story? 

Alec: [00:14:06] So I have some thoughts here.

Sascha: [00:14:08] Of course you do. And I am excited for them, but. It's to be expected. 

Alec: [00:14:13] So my view on the RedCycle programme after working on it for years, is that it was a really noble effort from Liz and the RedCycle team and they should be commended for trying to find a solution. But ultimately it created a moral hazard for the fast moving consumer goods industry. The big food companies and the supermarkets felt comfortable putting more soft plastic packaging into the world because they could say it was recyclable and they knew RedCycle was doing the hard work and ultimately bearing the costs and to come full circle. That's what I felt was really missing from the reporting from the major media outlets about this story. Hopefully what happens next is that the pressure is put on the big food companies to change, not just pay their dues to the Australian Packaging Covenant and slap a RedCycle logo on their packaging and call it a day. There really needs to be consideration of how packaging can be recycled at scale, how easily it can be sorted, melted down and remade, and what the end markets for those products are in Australia. And we need to be realistic on how much we can ask consumers to separate up and have a say. If we want to solve this problem, we need to look upstream to the manufacturers and to the producers rather than downstream at the recyclers. But Sascha, that's my little rant. That's my soapbox. What I actually think happens next is a waste of energy. Now, waste to energy is essentially where you send general waste, the stuff that would normally go to landfill, to a facility that essentially burns it to create energy. Europe has embraced waste to energy for years. In 2018, it amounted to about 2.4% of the European Union's total energy generation. Here's one of my favourite waste facts and yes, I do have favourite ways. Fox. Germany has such a high recycling rate that they don't create enough general waste to power their waste to energy plants. So Germany imports general waste from neighbouring countries. 

Sascha: [00:16:11] Wow, that's impressive. 

Alec: [00:16:12] And look, waste of energy is controversial. Recycling is a better use of the resource. You don't want to go to the trouble of creating plastics from, you know, oil or, you know, creating cardboard and then just burning and losing it. You would rather recycle and keep the resource. But if you can't recycle it, at least it avoids landfill when you convert it into energy. In Australia, waste to energy has traditionally been a bit on the nose from local councils and state government planning bodies. But in this past decade we've really seen attitudes shift. We've got Cleanaway looking at a waste to energy facility in New South Wales. Veolia is partnering with Macquarie to deliver Australia's first thermal waste to energy facility in WA and Veolia are looking at a second one in New South Wales. Raimondo is looking at doing one in Queensland. Look, I think, Sascha, this is likely what the future holds until we can sort out upstream how we actually package our food and our everything really. We're probably not going to get better at recycling it. The waste companies are probably going to find a perhaps less favourable but definitely more scalable solution in waste to energy. 

Sascha: [00:17:22] This is such a fascinating topic, Alec, and definitely I've got to say, as much as says bigger business stories at play here, it's definitely opened my eyes to how much soft plastic is in my life, and maybe I need to take a little bit more accountability for that in the as well in this process. 

Alec: [00:17:39] Well, Sascha, to end with some stats, in Australia we use about 70 billion pieces of soft crunchy plastics a year. We produce about 2.5 million tonnes of plastic waste each year, which equates to about 100 kilos per person. So you're definitely not alone in the amount of plastic waste that we create. 

Sascha: [00:17:57] That left me speechless. Alec, so I think that's a good place to finish off the episode for today. If you've enjoyed it, maybe that's the wrong word. If you've learnt some facts during this episode today, then tell a friend about it. Tell your friend who needs to be recycling more. It really is the best way for this podcast to grow. If you've just joined us for the first time, then welcome. Go check out our back catalogue. We've got heaps of episodes that we're really proud of. Remember, you can follow us on Instagram where the handle at The Dive business news, no, don't wear it and you handle. Now you can contact us by email The Dive at Equity Mates dot com and you can subscribe wherever you're listening right now so you never miss an episode. Thanks so much for joining me to talk about one of your pet topics for today, Alec. 

Alec: [00:18:43] Thanks, Sascha. 

Sascha: [00:18:44] And a final thank you to PETA, who reached out on the Equity Mates forum to suggest this topic today. Remember, if you'd like us to talk about something, you can reach out to us on any of the channels. The form Instagram Socials Get in touch until next time.