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What California’s New Plastic Bottle Law Means for Beverage Manufacturers

Dec. 30, 2020
What post-consumer resin requirements beginning in 2022 mean for beverage manufacturers.

Throughout all industries, there has been a gradual shift to become more sustainable. Now it appears this is reaching the packaging industry as well. California recently passed a new law, AB 793, that is going to change the way packaging is handled. Signed into law by Gov. Gavin Newsom, all plastic beverage containers must contain an increased amount of recycled material, also known as post-consumer resin (PCR).

Under the law, companies that produce anything from bottled water to soda and sports drinks must use 15% recycled plastic in their bottles by 2022, 25% recycled plastic by the year 2025, and 50% of their bottles must come from recycled plastic by 2030. Obviously, the goal is to reduce the amount of plastic litter that is filling up our landfills.

Why should plastic bottle manufacturers care?

With massive trends toward consumer packaging becoming more common, this is just the latest example. Consumers are more cognizant of where and how they spend their money. They want to give their business to companies that are sustainable, so companies that meet these demands will endear themselves to their customers. Under the law, companies that miss the targets will face penalties of 20 cents for every pound of post-consumer resin they fall short.

Assembly Bill 793 (AB 793) will be applied to all containers that are currently covered by the state’s deposit system. Current disclosures show that a majority of beverage companies that sell in California use almost zero recycled plastic at all. Companies that currently use PCR use a very small amount.

AB 793 also will force companies to report their PCR usage. In the past, companies could simply write “unknown” for PCR usage on their reports. Now, companies are required to report it accurately. This means that regulatory agencies and consumers will be able to see exactly how much PCR companies are using in their packaging, making it easier for customers to give their money to businesses following the requirements.

In addition to forcing companies to change their manufacturing practices and report their data, this law is the first statewide recycling mandate in the U.S. when it comes to manufacturers. About 30 years ago, Oregon passed a similar law but allowed for manufacturers to avoid adhering to it if consumers achieved a better recycling rate on their own. AB 793 provides no such out. Manufacturers will be forced to comply or face steep penalties.

Even though most companies currently use no recycled plastic, some companies already have taken it upon themselves with their sustainability initiatives. One notable example is that Coca-Cola uses 19% recycled content. Another example is that Nestle uses 36%. Given that California may be setting a precedent for other states, along with the growing trend toward sustainable packaging, other states may follow suit.

In the past, the only reason for companies to use PCR was that it had a lower cost feedstock than virgin resin. In recent years, virgin plastic (specifically wide spec resin) has fallen below the price of PCR. Therefore, companies haven’t had any financial incentive to switch from virgin resin to PCR. With California applying penalties for companies that do not comply with the mandate, companies need to compare the cost of using recycled plastic, including natural HDPE and PCR, to see what is most beneficial to them.

Some of the main benefits of using more PCR in packaging include:

  • Consumer Awareness: Consumers are becoming increasingly more aware of their carbon footprint. When companies use more PCR in packaging, they reduce their carbon footprint and build consumer loyalty.
  • Eliminating Raw Materials: When companies do not use virgin plastics, they reduce fossil fuel consumption and petroleum use at manufacturing plants. With fossil fuels becoming harder to find, this reduces the overhead expenses of the company.
  • Reduce Microplastics: By reducing the development of microplastics, the planet’s waterways are protected, preserving valuable marine life, improving water quality and reducing the amount of money spent cleaning up our waterways.

As more companies use PCRs, these benefits will continue to grow and expand.

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