Editor’s note: Learn more about procurement trends and many other topics at the 2025 Plastics Recycling Conference on March 24-26 in National Harbor, Maryland.
PCR procurement has changed over the years, though exactly how is difficult to put into words due to the nuances involved in getting post-consumer material into new products, said Crystal Bayliss, director of strategy and engagement at the U.S. Plastics Pact.
“But it’s really the nuances that are driving changes in the buying behavior,” she said. Bayliss will present “Reimagining PCR Procurement: Building Industry Capacity and Exploring Alternative Strategies” at the 2025 Plastics Recycling Conference, March 24-26 in National Harbor, Maryland.
At packaging giant Berry Global, dominant players in PCR supply are beginning to emerge along with consistent quality, said Doug Hano, vice president of sustainable resin purchasing. After years of buying PCR, “we’ve got enough history to compare and contrast quality levels, we can do more of a bidding sort of process, so that we can swap out one (supplier) for another,” he said.
As a result, recycled resin is becoming more commodity-like, especially in A-grade LDPE film and also, to some degree, for HDPE. However, “polypropylene is still all over the place” in terms of consistent color and quality, Hano said.
In the past, PCR was largely purchased on a spot basis and was closely tied to virgin resin pricing. Durable goods such as carpet fiber were the primary applications and didn’t require high-quality material, so RPET was used as a cost-saving measure.
But as focus shifted toward using PCR in packaging, quality requirements increased, which has helped drive an increase in longer term contracts to secure supply, Bayliss said. “We’re starting to see those shifts happen, not all the way there to justify the investment that’s needed to be able to get to where PCR content goals are, but we are definitely headed in that direction,” she said.
Moving forward, brands that need higher-quality grades of PCR will have to make longer term contracts and commitments, Bayliss added.
“I think that as brands understand that their packaging has to get recycled to prove responsible end markets for the emerging EPR legislation, they’re going to realize that they’ve got to incentivize the investment to collect and recycle their packaging, and the only way to do that is longer term contracts, with the types of contracting methods that incentivize investment,” Bayliss said.
Contracts are already common in the RPET market, Hano said. “Given the age of the RPET market, that tends to be a little bit more formulaic,” and resin pricing tends to be more formally based on bale prices. However, “since the olefins market is still kind of developing, and there’s a lot of newer players, I think pricing is more spot, less formal, because there are so many competitive dynamics,” he said.
Hano added that Berry buys most PCR except RPET on a spot basis, by submitting a bid and “letting people kind of fight for the volume that they’re interested in.”
Although spot pricing and “used-car sales haggling” style negotiations may suit suppliers for one commodity, Bayliss said, a small startup may offer a unique material that a buyer wants to lock down and help ensure the business remains viable.
Longer-term contracts can be tied to a pricing index, based on a cost-plus model, correlate to price movements for raw materials, feature price floors or ceilings, and so on, she said.
Regardless of the pricing mechanism, a contract helps ensure continuing and consistent demand, which also allows a supplier to continue to invest. “I think as folks understand the true need to make sure their packaging is recycled and that being tied to them bringing in the same quality of PCR, including the back-end packaging, you will see some of those contracting methods evolve to meet those needs,” she said.
Hano agreed, saying Berry’s customers “desperately” want pricing to be indexed, “but PCR markets haven’t been booming like virgin, and there’s not reliable enough indices yet. So that’s the next big, kind of structural thing that I think folks hope for.”
Berry started indexing some raw materials, but vendors would move pricing to remain competitive, Hano said. “If they thought they had the upper hand, price would go up; if I could introduce another player, prices would go down. But they’re stabilizing enough and there’s enough industry-wide capacity that I hope they’re becoming a little bit more commodity-like.”
Although Bayliss expects PCR procurement eventually will be indexed like other commodity markets, the recycling industry presents unique challenges. Traditional polymer markets tend to have only one or two supply chain links, whereas PCR has several – MRFs, traders or brokers, reclaimers, secondary sorters, converters and brand owners – who each may have their own pricing mechanisms.
“So it’s not necessarily just a straight pass-through, because they need to factor in any additional costs they’re having on different equipment or material handling or whatever the case may be,” Bayliss said.
Common complaints include reclaimers who say they don’t have enough demand for their products, and brand owners who say they can’t get the recycled resin they need because the prices are too high. “And that, to me, makes no sense,” she said. “How are the sellers saying they don’t have any markets and the end users are saying they can’t get it?”
“I think we’re seeing a true disconnect in the supply and the demand for the types of PCR, and that only gets solved by investment to be able to produce more of the higher quality grades, which is what the brand owners are needing,” Bayliss said. “It’s not as efficient as I would have expected in this type of market, and we need to really look at these different contracting methods to make sure that we’re marrying up supply and demand on the correct grade of PCR.”
In addition, consolidation has made the market a lot less fragmented and has helped improve the quality of the material as well to have bigger companies providing resources, Bayliss said.
Hano added that one worry is that as “goody two-shoes and early adopters” the company will end up paying higher prices until the rest of the producers get on board.
As for what’s ahead for PCR markets, Bayliss said she sees online trading platforms gaining steam, and helping to connect more buyers and sellers as well as adding transparency into contract discussions and pricing. “So that’s widening the number of people that can participate in the marketplace.”
Alternative sourcing networks provide additional volumes
While the lion’s share of PCR moves through larger channels such as MRFs, smaller, incremental volumes have emerged through less traditional sources.
In Michigan, stakeholders for the many local marinas approached Emmet County, asking for suggestions on what to do with their plastic boat shrink wrap. Research revealed that PE film processor Petoskey Plastics was headquartered in the area, said Lindsey Walker, who leads recycling outreach and market development for Emmet County. The company’s products include shrink wrap for the state’s automotive industry.
So in 2008 the county launched a pilot boat-wrap recovery program, Walker said. (The Council of the Great Lakes Region also launched its Boat Wrap Collection Program in 2023.)
“There was a perfect marriage of local companies working together to build this economy of scale, of marina plastic wrap recycling,” said Walker.
Before long, the county added pallet wrap to its recovery efforts, and later HDPE film bags, which required an alternative outlet since Petoskey Plastics didn’t accept those grades, Walker said.
“We made sure we had multiple end markets if we could, to leverage those so that we were in a good position,” Walker said. Unlike PET and HDPE containers, plastic film has limited end uses. “You can go export, or you can go waste to energy, which we don’t like to do,” she said. “We’d rather not do chemical recycling when we can mechanically recycle.”
Similarly, farmers in Wisconsin were seeking a solution for their used agricultural plastics, such as silage wrap, said Melissa Kono, an associate professor with the University of Wisconsin and community development educator for Clark and Trempealeau counties in that state. In this role, she coordinates agricultural plastics recycling throughout the state, working with both public and private partners.
Kono found a Wisconsin company that would place dumpsters on farms producing large volumes of plastics, and capture bags for farms that generate smaller volumes. One challenge is making the economics work – potential end markets are often too far from rural Wisconsin to justify trucking expenses, she said.
Kono said she only hosts a collection event if she knows an outlet exists, though this has meant having to exclude certain plastics at times. “I couldn’t take everything that farmers needed to get rid of, just because if I didn’t have a place for it to go, I didn’t want to risk collecting it and not being able to go somewhere with it,” she said.
“And that’s the thing I struggle with, is if I’m going to have collection events all over, how do I get the plastic baled?” she said, because “that takes connections and infrastructure and equipment.”
Collection events can be challenging as well, and as a result are held infrequently. The most logical time to hold them is in the winter, when farmers aren’t busy outside and are eager to get non-farm tasks completed, she said. But the state’s cold and snowy weather can impede participation. Kono is preparing to distribute bags for farmers to collect their film, then to deliver when the weather improves.
