Traceability intersects with profitability, compliance

Enabling product traceability is vital to provide PCR accountability and can even help streamline recycling processes, according to several panelists during a session at the recent Plastics Recycling Conference.

Put simply, traceability is a system used to track a product or process, and available methods include RFID, geolocation or blockchain technology. Few if any requirements currently exist for providing a chain of custody for recycled materials. 

However, the increasing pace of state-level legislation for extended producer responsibility programs for packaging are proof that change is on the horizon, said panelist Ed Dominion, president and founder of Texas-based reclaimer D6. 

“At the end of the day, we are going to have to prove that these materials are coming from what are known as REMs, responsible end markets,” Dominion said. 

“Traceability needs to work for large and small companies across the board, anywhere in the world,” said panelist Bill Robberson, cofounder and chief technology officer of California-based Kamilo. “It needs to be low-cost, it needs to be simple to deploy.” 

In recent years the recycling industry has faced a constant battle against public misperceptions, Robberson added. 

“The reality is that all these unsubstantiated claims, whether they’re intentional or not, undermine the public trust,” he said. “It really behooves us to actually start telling our story with real data.” 

In such an environment, it’s also important for businesses to provide an outside look at their systems, to ensure that processes are happening the way they should, he said. A third-party vendor can verify the data and provide the tools, while a company manages the extent of its own data visibility and maintains a product dashboard. 

“We’ve all seen companies self-certifying and greenwashing, and saying things that they’re doing, but we don’t really know,” Robberson said. “If you want to look at your Scope 3 emissions, there’s no better way than to track that supply chain. Then it’s easy to pull that data out, in whatever way you want to use it.” 

Delivering a return on investment

Despite the many benefits of providing supply chain visibility, a persistently low-margin environment can make investing in traceability systems a hard pill to swallow, the panelists said. But they agreed such systems can provide tangible returns aside from a third-party audit chain.  

“Traceability can add profitability as well as increased resilience to your supply chains,” said Stan Chen, CEO at RecycleGo.

Dominion concurred, saying that the RFID tags D6 uses cost about 5 cents per bale. “I think we’ve all got enough margin to make that work,” he said, adding that the initial investment and nominal continuing costs are well worth the level of confidence and auditability they provide to customers.

In addition, providing robust supply chain visibility supports lifecycle analyses, adding weight to companies’ circularity claims especially as eco-modulation fees become more prevalent, Dominion said. Chen noted that traceability can help ensure access to better quality feedstock by showing what additives, such as flame retardants, exist in the recycled material. 

Role of regulatory requirements and environment

Although the U.S. is unlikely to see federal-level regulations, the pace of state-level EPR programs is accelerating. “The states are really going to set the tone for this,” Dominion said. 

Chen noted that traceability fits in neatly with fast-approaching regulatory compliance and reporting requirements. “Whatever business process you have in terms of producing a product, you have externalities, whether it is your carbon impact or environmental impact or the water you use,” he said. “EPR attempts to put a valuation on that so you can lock that into your business model.”

Dominion added that establishing consistent standards among the emerging extended producer responsibility schemes for packaging would significantly assist adoption of traceability systems.

Regardless of whether a company chooses to invest in traceability systems, Robberson said, “it’s really very important that every single one of us tell our story…. But if you want to make sure no one can attack you for it, use traceability.”