Plastics Recycling Update

California market development payments prioritize PET bottles

PET flake with PET bottle.

The new system creates a hierarchy within the PET payments to pay more for certain types of manufacturing and processing. | Korn9/Shutterstock

A long-running post-consumer plastic market development program in California has been modified to further incentivize PET container recycling.

The Plastic Market Development Payment Program uses government funding to make payments to reclaimers and plastic product manufacturers that use recycled content, with the goal of spurring market development in the state. The program only covers plastic containers that are part of the state’s California Refund Value (CRV) deposit system.

In-state reclaimers who process deposit containers, and in-state manufacturers who purchase the resulting flake, pellet or other output from those processed containers, can be reimbursed at a rate that’s set each program year, up to $150 per ton of material handled.

The market development payment program was created in 2006 and is regularly renewed by state lawmakers. A frequent priority for plastics recycling stakeholders in the state, it was most recently renewed through Senate Bill 1013, passed in 2022, and is set to run until at least July 2025.

Lawmakers budgeted $10 million for market development payments during the current program year. Overall, they’ve allocated $47 million for the program to be used through June 30, 2027.

New in 2024, the program has been modified to use a three-tier payment structure, whereas previous years paid one rate for PET and one rate for HDPE. The new system creates a hierarchy within the PET payments to pay more for certain types of manufacturing and processing.

“The payment restructuring will incentivize participants who produce PET #1 or use PET #1 for new beverage containers,” CalRecycle stated in a public notice of the change.

The new structure pays $75 per ton to reclaimers processing A-grade bales of deposit PET containers, $50 per ton for any other grade of PET container bales and $25 for “other” deposit container bales. It pays $150 per ton to manufacturers producing RPET bottles that exceed state-mandated recycled content requirements (currently 15% post-consumer resin), $75 per ton to producers of RPET bottles with less recycled content and $50 to producers of all other RPET products (all RPET must be sourced from eligible CRV deposit material).

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