Editor’s note: This is the first of a two-part series exploring how industry players can take action to help ensure the longevity of RPET markets.
- Temporary geopolitical factors must not overshadow systemic flaws
- Packagers can provide swift, wide-ranging support
- Flawed market structure stymies long-term contracts
While soaring energy and fuel prices may benefit domestic RPET in the short term, the industry must refocus on supporting the long-term health of remaining capacity, stakeholders said during recent discussions.
So far, the US has lost about 25% of its PET reclaiming capacity, said Adam Gendell, director of material systems at The Recycling Partnership (TRP), during the March 27 webinar “From Crisis to Correction: How Industry Can Stabilize PET Recycling.”
In the past 18 months, such companies as Evergreen Recycling, Alpek, Phoenix Technologies and rPlanet Earth have closed some or all capacity, citing abundant cheap virgin resin imports and subdued demand.
Volatility in energy markets can strain recycler margins at the same time it is assumed to be helping them.
Chris Wirth, The Recycling Partnership
The closures have sent PET bale prices tumbling to near zero or lower as bales flood the market. At the same time, virgin resin prices are climbing to reflect higher crude oil values. Upstream oil pricing affects virgin PET pricing both in the intermediate chemicals used – paraxylene and purified terephthalic acid (PX, PTA) – and in the fuel costs incurred for deep-sea freight for imported volumes.
Although a dark cloud hovers over RPET, at least one bright spot remains on the horizon for bale markets. Republic Services is building its third Polymer Center, in Allentown, Pennsylvania, which like the Las Vegas and Indianapolis sites will produce RPET flake.
Construction on the facility is still on track to be completed by the end of 2026, with equipment commissioning and commercial ramp-up expected in early 2027, Pete Keller, vice president of recycling and sustainability at the nation’s second-largest hauler, told Plastics Recycling Update.
Republic supplies RPET to Circularix, which has a plant in Hatfield, Pennsylvania, not far from the recently shuttered Alpek plant in Reading.
In addition, Mexican Coca-Cola bottler Arca Continental will invest $1 billion this year in US and South American operations.
Domestic RPET has been unable to compete with virgin resin for at least the past two years. But the rising costs stemming from the war in Iran have led to industry speculation that domestic buyers may opt for US RPET for economic reasons and to reduce risk from deep-sea cargoes, which are more vulnerable to market volatility during their multi-week journey from Asia.
However, “even if geopolitical dynamics create brief advantages for RPET, those moments are unpredictable and insufficient to stabilize the system,” Chris Wirth, chief market innovation officer at TRP, told Plastics Recycling Update. “It’s also important to recognize that oil price spikes often create new burdens for recyclers rather than clear benefits.”
He added that “recycling is fundamentally a logistics‑intensive business: collecting, hauling, sorting, and moving material all depend on affordable, reliable transportation,” and those costs often offset any advantage gained by rises in virgin PET pricing.
“In practice, volatility in energy markets can strain recycler margins at the same time it is assumed to be helping them, underscoring why macroeconomic shocks are a poor substitute for stable demand, long‑term contracts and system‑level investment,” he said.
We should not have to rely on a war in the Middle East to solve this situation.
Kate Bailey, Association of Plastic Recyclers
During the TRP webinar, Kate Bailey, chief policy officer at the Association of Plastic Recyclers (APR), said, “We should not have to rely on a war in the Middle East to solve this situation.”
APR owns Resource Recycling, Inc., publisher of Plastics Recycling Update.
Wirth said, “The heightened attention on this issue is hugely important in this moment, but we need that disbelief to wear off quickly – it’s been established that the landscape is indeed in crisis, and now the conversation must pivot quickly towards solutions.”
While any solutions come too late for plants that have already shut down and laid off staff, stakeholders from across the RPET value chain offered concrete solutions for both the short and long term.
Packagers can quickly provide needed support
The quickest and most obvious solution is for packaging companies to focus on buying domestic recycled PET, panelists said during the webinar.
Wirth agreed: While everyone has a role to play, from local governments to MRFs to reclaimers, “packaging producers hold the most leverage and are uniquely positioned to send clear, durable demand signals to the market.”
Speaking with Plastics Recycling Update, Wirth noted that “maintaining volume commitments is one of the fastest ways to stabilize recycler operations.”
He provided several ways buyers can help support PET recycling in the near term:
- Honoring existing contracts with domestic suppliers. And during periods of market stress, avoiding retrading or reallocating committed volumes.
- Increasing scrutiny of RPET origin. Ask where material is sourced, whether it is domestic or imported, and how region‑of‑origin is tracked and disclosed.
- Temporarily prioritizing domestic RPET in procurement decisions. This helps preserve US operating capacity and skilled labor at US facilities.
- Engaging directly with suppliers. This can clarify near‑term risks, inventory dynamics and operational pressures more effectively than relying solely on generalized market signals.
Market structure flawed, long-term contracts elusive
Recycled plastics markets are yet to achieve widespread adoption of long-term supply contracts. Those that do exist tend to last only a few years rather than the 10-15 year commitments seen in virgin plastics markets.
“Multi-year agreements are easy, but buyers don’t want to lock themselves in necessarily to fixed pricing, floors, ceilings,” structures that would help stabilize the markets, Keller said during the TRP webinar.
He added that current pricing and contract models – for example, linking pellet pricing to bale pricing – fail to consider the “air space between a bale and a pellet,” such as differences in converter technologies and end markets. For example, one converter supplies PET strapping, while another feeds into the carbonated beverage market, he said.
“I don’t know how to say it more plainly than they just haven’t figured out how to value it,” Keller said.
For buyers, the lack of long-term contracts may be a conscientious choice for the time being. Doug Hano is director of circularity and decarbonization at major packager Amcor, which buys RPET pellet, along with polyolefins bales.
“A lot of our customers are so used to being indexed,” he said during a session on long-term PCR contracts during the 2026 Plastics Recycling Conference in San Diego. “We have great resources for price movements in virgin that have been developed over decades, and while there are [contract] products that exist in the PCR space, so much is happening right now with new participants in the commodities space, including some exiting.”
He added that beyond supply and demand fundamentals, comparing one supplier’s recycled plastic to another’s is not straightforward, making it hard to stick to a contractually obligated price. “Indexing [for PCR] is a lot more complicated today than it is on the virgin side,” he said.
Even so, Hano recognizes the value of long-term contracts versus the informal arrangements more common in the recycled plastics space. “There’s situations that can arise that test those relationships,” he said. “If you don’t have the contract to fall back on, you might find yourself in a difficult situation.”
He added, “We’ve been able to get away with a lot of informal contracts, but I’ve seen situations in the past where it would be better to have those finalized.”
During the same panel, Marija Massey, strategic sourcing manager of circular feedstocks at Eastman, said that while informal supply relationships have some advantages, more formal arrangements hold value for the longevity of the entire value chain. “Sometimes you win and lose, but long-term you get that protection.”
For Nestlé’s bottling operations, the lack of predictability in emerging RPET markets along with anticipation of EPR-driven PCR requirements has encouraged its pursuit of long-term supply contracts. “We’re making sure we have those partnerships, especially with the regulations we’re about to face,” said Nicole Flaherty, senior manager of sustainable sourcing and recycling at Nestlé USA, during the PRC panel.
“We take our commitments very seriously and to not be able to hit those would be very detrimental for us,” she added.
In addition to supply security, long-term contracts give recyclers the required certainty to secure financing and justify capital investments in equipment and technology regardless of commodity price volatility, said TRP’s Wirth.
Amcor’s Hano noted in San Diego, “It would be a positive reinforcement for everybody if we can get demand up. We can make bigger commitments, our suppliers can make bigger commitments, and we can get more investment into the system.”
Wirth noted, “We’ve seen voluntary corporate commitments rise and fall, and we don’t see mandated commitments requiring enough volume to facilitate the need for long-term contracts – especially when volatile commodity swings are compared against an ever-present alternative of paying a noncompliance fine.
“Long-term contracts in recycling will only follow more robust long-term strategies from producers, so we look to the broadening landscape of policy and business drivers as the needed precursors to make headway on these solutions,” he said.
In part two, industry stakeholders will explore ways to stabilize RPET for the long haul.
