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NR#2009-06
March 16, 2009                                                                                                          

Contact: Ed Wilson
             Mark Oldfield
             916.323.1886

SACRAMENTO – With global economic troubles hurting markets for recycled plastic, the state Department of Conservation (DOC) has taken steps to help California’s recycling industry endure the downturn.  Beginning April 1, DOC will increase a key subsidy that helps beverage container recyclers offset the cost of processing empty plastic bottles that are remanufactured into new products. 

“As with many businesses these days, the recycling industry is feeling the strain of weakened demand,” said Bridgett Luther, director of the DOC, which oversees California’s beverage container recycling program.  “Global market prices for recycled plastic bottles have fallen, and the department has exercised its statutory authority to adjust the processing payments it makes to recyclers.  These payments bridge the gap that may occur when the cost of recycling a certain material is greater than its market value, and allow California to ensure the ongoing viability of its recycling infrastructure.”

The processing payment will increase by about $770,000 per month, bringing overall monthly payments to more than $3.7 million allocated among operators of approximately 2,000 recycling centers in the state. Allocations are based on the volume of plastic bottles recycled, with higher volumes resulting in higher allocations. Funding for the processing payment comes via a fee beverage manufacturers pay on beverages sold in California, at no cost to the state’s general fund.

“The current adjustment being made to the processing payment by the Department of Conservation is welcomed by our industry and is a better reflection of the market during these very difficult economic times,” said Jason Young, vice president of The Allan Company, a recycling firm serving a number of southern California cities.

Beverage container recyclers sell the plastic, glass and aluminum they collect to processors, who in turn sell the material to businesses that further facilitate their remanufacture into new products.  Particularly with plastics, these resale markets are often overseas, and in recent months demand for plastics has dwindled as the global economy weakened.  This has driven down the price paid to processors, and thus the price they are able to pay recyclers. Increasing the processing payment to recyclers provides near-term economic relief in an industry that employs an estimated 14,000 Californians. 

Longer-term solutions are also in the pipeline.  For the past several years, the DOC has promoted development of recycled-materials markets in California through annual Market Development and Expansion Grants. These grants seek to provide a stronger and more diverse demand within California for the state’s recycled materials. By strengthening California’s markets and infrastructure, the impact of international market volatility can be reduced. The grants are funded through unclaimed refunds on California Refund Value (CRV) beverage containers. 

Regardless of the economy, Californians continue to recycle record numbers of CRV beverage containers – 7.6 billion in the first half of 2008, for a recycling rate of 76 percent.  Recycling saves energy, thus reducing emissions that contribute to climate change.  Recycling 7.6 billion beverage containers is equivalent to removing nearly 300,000 cars from the road for a year.  

CRV is five cents on containers less than 24 ounces, 10 cents on containers 24 ounces or larger. Most beverages packaged in aluminum, glass and plastic are included in the program. Notable exceptions are milk, wine, and distilled spirits. Consumer information and a recycling center locator are available at www.bottlesandcans.com or by calling toll-free 1-800-RECYCLE.

Most recycled aluminum and glass is used to manufacture new cans and bottles, resulting in significant energy savings when compared to the mining, transportation and processing required of raw materials.  Plastic bottles, made from petroleum, are recycled into fiber for clothing and carpet, pellets that can be made into items such as packaging or landscape materials, and many other products, often at significant energy savings.

About the California Department of Conservation: In addition to promoting beverage container recycling, DOC studies and maps geologic phenomena such as earthquakes; categorizes mineral resources; administers agricultural and open-space land conservation programs; ensures the reclamation of land used for mining; and regulates oil, gas and geothermal wells. 

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