PLA in bottles could significantly undermine recycling's economics by disrupting successful PET recovery programs and by losing the high value in the PET bottles it displaces.

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Recyclers 10/20/06 Letter to NatureWorks

►What are bio-based plastics?

►What end-of-life benefits does NatureWorks claim for PLA?

►Are NatureWorks' composting claims correct?

►Are NatureWorks' recycling claims correct?

►What are the problems to recycling from PLA in bottles?

     • Lower on hierarchy

      • Loss of PET revenues to recycling programs

      • Contaminate PET stream  

      • Major impediments to economically recycling PLA

►Does NatureWorks' offer to buy back PLA bottles resolve recyclers' concerns?

►Are NatureWorks' other assurances about PLA's trace presence adequate to protect recycling?

      •The threshold of concern

      •The growth prospects for PLA

      •The impact on recyclers

►What is the best outcome to constructively resolve the present controversy?

► Should these issues be decided by the free market or by moratoriums?

► How can I help convince NatureWorks to make PLA recyclable before introducing it in more bottles?

►Who can I contact for more information about bio-plastics and recycling?
 

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Q What are bio-based plastics?

A   Bio-based plastics are polymers, or long chains of molecules, but made from plants instead of from petroleum. After fitful early attempts with Biopol, the first example to enter the commercial marketplace was polylactic acid, or PLA, which is made from corn. It was developed by NatureWorks, which is owned by Cargill.

     PLA is a clear plastic suitable for still water and some juices, which can substitute for polyethylene terephthalate, or PET. That is the clear bottle currently used for these applications and also for soft drinks. However, PLA is not suitable for the more demanding carbonated applications that requires PET's superior barrier performance.

    Biota Spring Water, one of the handful of product companies using PLA bottles, recently began major marketing of a PLA bottle (shown above).

    Another form of bio-plastics in active development by Metabolix is polyhydroxyakanates, or PHA.
 
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Q What end-of-life benefits does NatureWorks claim for PLA?

A   NatureWorks originally asserted the PLA could be both composted and recycled, but more recently has qualified those representations. Today it says that "PLA products can be composted in industrial composting facilities, thereby providing an alternative means of managing municipal solid waste." In one of its major package launches with Biota spring water, the company stated that the bottles "are completely compostable," and included a large label on the bottle, "BIODEGRADABLE," shown on the photograph above. As regards recycling, the company has modified its statement to be that PLA "is a neutral contributor to the existing recycling stream."

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Q Are NatureWorks' composting claims correct?

A  Theoretically, PLA bottles can be composted. However, there are practical constraints that, in the real world, make it unlikely that composting will actually occur. These need to be understood before turning to the recycling issue in the following Q&As.

     For one thing, there are only a limited number of the qualified industrial-scale compost facilities that the company mentions. But, more important, unfavorable economics place nearly insurmountable roadblocks in front of PLA's actually being composted.

    A material recovery facility, or MRF, is where commingled recyclables, including many PLA bottles, are sorted. MRFs usually will only incur the cost to bale and ship any sorted PLA bottles to such a facility if it expects to receive adequate revenues in return to justify the expense. However, the few industrial composting sites that exist would typically be far away. They would be expensive to ship to, and, in the end, compost facilities charge rather than pay feedstock. This would be even more the case for PLA, which appears to primarily break down into carbon dioxide and water, but not leave any nutrient value to return to the soil. In most cases, landfilling the PLA bottles, along with the other rejects and residuals, would be less expensive for the MRF.

    It is difficult to conceive of any real world circumstance, other than possibly at a few large controlled events where dedicated collection bins are provided, in which any PLA bottles that were separated would not be landfilled, instead of being composted. Composting PLA bottles may be an admirable goal when compared to landfilling, but it is an abstraction not likely to become a significant reality for PLA bottles. It is also, as discussed below, not as desirable as reducing, reusing or recycling.

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Q Are NatureWorks' recycling claims correct ?

A   Most recyclers who work with curbside programs believe that PLA when used in bottles is not "neutral," but rather will soon have negative effects on recycling. They are concerned that PLA in bottles could cause a major disruption in successful PET recovery programs and lose the high value in the PET bottles it displaces as its market presence increases above trace levels. In the end, they feel that unless NatureWorks develops a new and effective recovery system, PLA bottles will be neither recycled nor composted. Instead, PLA in bottles will degrade other existing recycling efforts, while the PLA bottles, themselves, will wind up in landfills or burned.

      In addition to the Plastic Redesign Project, the Container Recycling Institute, Eco-Cycle, the Ecology Center, Eureka Recycling, the Grassroots Recycling Network, and the Institute for Local Self Reliance, have joined together to call for a moratorium on PLA in bottles until the major recycling problems, which are detailed below, can first be resolved.

      On the other hand, the recycling groups have no problem with PLA in other applications like food service ware, which have no existing recycling infrastructure that would be disrupted, and believe that there could major benefits from a shift to a carbohydrate economy if the transition properly managed.

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Q What are the problems to recycling from PLA in bottles?

A  Recyclers have no issues with PLA in food service ware, for which there is no existing recycling infrastructure that would be implicated.

      However, when PLA is used in bottles, it would displace bottles made from PET, and there is a thriving recycling system for PET that could be disrupted. Yet there is, as yet, no known economically based system to recycle PLA bottles.

     This means that there are four ways that PLA bottles, which cannot presently be recycled, are less sustainable than PET bottles: (1) composting, even if it were feasible, is lower on the waste hierarchy, (2) PLA bottles will lose the high value of the PET bottles it displaces, (3) PLA in volume will contaminate the PET bales, even if optically sorted, and (4) there are many impediments to being able to recycle sorted PLA bottles, even if successfully sorted –

    (1) Lower on hierarchy
     As a practical matter, few discarded PLA bottles will actually wind up being composted. More important, at the present time, there is no economic way to recycle PLA. Therefore, the use of PLA in bottles would displace an existing resin, PET, that is currently being recycled with a new resin for which there is no existing system to recycle it, and, in regard to which, NatureWorks has yet to propose one that would work. In any event, even if it were feasible to compost PLA, recycling is higher on the Integrated Waste Management Hierarchy because it recovers the energy and other inputs that went into making the original package. While composting, were it feasible in this case, is a good thing, that would only be the preferred option after every effort has first been made to reduce, reuse and recycle.

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    (2) Loss of PET revenues to recycling programs
      PET recycling is one of the more successful elements of today's recovery efforts, commanding upwards of 20 cents per pound, or more, from the markets. This translates into about $120 million in badly needed positive revenues received by the 9,000 recycling programs. In turn, they use those revenues to offset the costs of running a second fleet of recycling trucks to collect recyclables separately from garbage. Since there is no known way to commercially recycle PLA today, those revenues would be lost in direct proportion to the number of PLA bottles that replace PET unless something entirely new is developed in the future.

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    (3) Contamination of PET stream
      After PLA bottles become established in the marketplace, NatureWorks' own tests indicate that they will threaten to contaminate the bales of recovered PET bottles, which is where they will probably wind up. After all, to the consumer they will look just like any other clear plastic bottle that they toss into their recycle bin. Any education effort asking participants to examine the bottom of each plastic water and juice bottle for a SPI code number 7 (for non-PET and HDPE bottles) is not likely to be more than marginally effective. Therefore, a practical means of separating PLA out from PET will soon be necessary to prevent the PLA from undermining today's successful PET recycling efforts.

      Separating PLA bottles from the PET bottles, with sufficient accuracy for the high value end markets, has not yet been demonstrated when present above trace levels, and the hurdles to practically doing so in the future will not be overcome easily.

      First, like PET, PLA is clear, which makes visual identification impossible. Some have proposed that updating recycle codes to recognize PLA could resolve this problem, but that is not likely to be the case. In most states, each plastic bottle that is larger than 8 ounces is required to have a number code from 1 to 7 stamped onto the bottom, which is a system that was developed by the Society of Plastic Industries (SPI) in order to designate which bottle is high density polyethylene (HDPE), PET, polypropylene (PP) and so on. Creating a new SPI number for PLA would not be much use since neither MRF's, nor intermediate processors who upgrade sorted bottles, identify resin by having sorters lift up each bottle to look at the number on the base. The bottles literally fly by on conveyor belts too fast for detailed inspection often at more than 1,000 bottles each minute.

      Then, simple, low cost, automated sorting methods, which are based upon the fact that some resins sink in water while others float, also are not an option here. Water based sink-float tanks can inexpensively separate lighter-than-water plastics, such as the HDPE used in milk jugs, from heavier PET, which sinks. But PLA, like PET, is also heavier than water, which means that they would both sink in the tanks.

     For this reason, expensive and complicated optical sortation systems will almost certainly be necessary, Optical sorters work by using specific wave lengths of light that excite or absorb electrons of different resins differently, and thereby reflect the light in unique patterns that can be distinguished by diodes. PLA has been found to have a distinct "signature" from PET under near infra-red light(IR), which should make optical sorting possible.

     But, there are four obstacles to its realization, including [i] the existing system will be inadequate, [ii] some processors do not presently use any optical sorters, [iii] those that do usually use X-ray, not infra-red, systems, and [iv] even if a conversion to an adequately improved IR system is accomplished, the recycling infrastructure will have to bear an additional sorting cost–

     [i] Inadequate system. For one thing, so far current IR designs have been unable to remove sufficient amounts of PLA for the PET to meet market specifications once PLA bottles become more prevalent in the market. This will leave the PET too contaminated for high-end PET markets, confining it to ones that pay poorly. Presumably, this problem might be rectified with further research, but that will take commitment and funding to achieve.

     [ii] Not used by all processors. For another, no optical systems are used by some intermediate processors, where MRFs send their baled plastic to be upgraded for end markets. It is true that optical sorting is widely used by many processors to remove polyvinyl chloride (PVC) from PET bales. (PVC, which is also clear and resembles PET, it is an even worse contaminant for recyclers than PLA. Also, PVC has been linked with environmental and human impacts due to the chlorine used in its production. That is why PVC has been the subject of consumer campaigns to discourage consumers from using packages made of it.) But, some upgraders restrict their purchases to recovered PET bottles from "bottle-bill," also known as "deposit-law," states. In these states that add deposits of 5 or 10 cents onto the purchase price of certain beverage containers, consumers usually bring their used beverage bottles back to the store or redemption center to get their deposit back. That produces a far cleaner stream of recovered beverage bottles than all plastic bottles collected from the curb, which includes PVC bottles. Those bottle-bill states have had no PVC in their deposit bales, and most processors that only buy bales from bottle-bill states have often not found it necessity to install optical systems to date. However, PLA would be sold in bottles that are used for drinking water and fruit drinks, which are containers included in several bottle bill states, and thus that would contaminate loads destined for processors who buy those states' deposit bales.

     [iii] Most processors use other systems. Of those processors that source their feedstock from states that collect all clear plastic bottles curbside and drop-off, they have long had to cope with PVC, and usually have already moved into optical sorting to remove it. But, more often they have selected X-ray detection systems, not ones based on the opposite infra-red part of the spectrum, in order to pull PVC, because X-ray systems are simpler and have lower costs. Installing an IR head in addition to the X-ray unit would involve significant expense and technology, which would be an especially questionable investment unless and until the IR systems for PLA can be sufficiently improved to meet PET market specifications.

     [iv] New cost. At best, even if the necessary improvements are made to the IR systems, there will remain a new expense that will have to be incurred by the current processing systems, which PLA's end-of-life market value will have to offset.

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    (4) Major impediments to economically recycling PLA
      Even if PLA could be practically separated into its own stream after it reaches sufficient volume to be sorted, it is not immediately evident that PLA itself could be recycled. There remain two issues that have to be confronted first, involving [i] balkanization of the PET market and [ii] finding markets for PLA –

          [i] Balkanization. If the market for clear plastic bottles, now met by PET, were to expand to include bio-resins, that would multiply the number of different resins now provided by PET alone. It is important to recognize that PLA is just the first of many bio-plastics that can be expected out of the chemist's pipeline. For PLA, while clear, is not able to provide the superior barrier capabilities of PET necessary to provide shelf life for carbonated beverages. Other bio-plastics, like PHA, are in development aimed at meeting these more demanding applications. But, unless an entirely new all-in-one bio-resin were later to be developed that economically could do everything, the current PET market would be fractured amongst many different plastics. Each would have to be separated from the others, at accumulating and ever increasing costs. In addition, because the same market is being divided among more resins, few if any of them may ever be able to attain sufficient volumes to support the infrastructure that makes recycling possible.

          [ii] Market development problems. Although solid data is not yet available, there appear to be significant problems in finding a market that would work for PLA's characteristics– even assuming it could be separated and used in sufficient volume to justify setting up the necessary recycling infrastructure. Low end uses of PET in fibers may not be open to PLA because PLA melts at about 100̊ F less than PET. Clothing, a major fiber application, typically goes through many high temperature cycles in the dryer, and PLA's lower melt temperature may not be dryer-safe. In the high-paying bottle-to-bottle applications, which are largely for beverages, it appears that NatureWorks has not yet been able to get essential FDA approval for food contact for recycled PLA. Concern exists that this might be because that the higher temperatures and/or residence times needed to destroy pathogens for food applications degrades the plant-based polymer.

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Q Does NatureWorks' offer to buy back PLA bottles resolve recyclers' concerns?

A  Two assurances have been provided in response to recyclers' concerns. First, NatureWorks has proposed to set up a guaranteed buy back program for PLA bales.

       However, inasmuch as there is presently no market for recovered PLA, there is no economic value underlying the plan, even if someone were to collect, separate and aggregate enough bottles to ship. More important, neither are there any promising ideas on the table for creating a viable program in the future that would economically support the offer.

      There is a key distinction among these sorts of buy-back rates that must be understood to evaluate their utility. On the one hand, in the best case, there may be offers that provide a kick-start to leap over a short-term transition to a future-world where PLA will make economic sense after a carefully developed plan is fully implemented.

     On the other hand, there are offers that are essentially "teaser rates," which do not have an sustainable economic rationale. A well-known example are the offers for three month no-interest credit cards that revert to high rates immediately afterwards. These only last until their short term purpose of winning a customer, or, in this case, facilitating market entry among "green" consumers, is served. Afterwards, they are quickly withdrawn. For there are not many profit-making enterprises that willingly chose to lose money for very long. Examples of this teaser-rate type of buy back offer include Oxychem's offer to purchase recovered PVC bales in the early 1990s, which was cancelled after the threat of legislative PVC bans had passed. In 2002, Continental PET Technologies offered to buy back its barrier enhanced plastic beer bottles. That offer was cancelled a year after the bottle entered the market but stalled out.   

       A buy-back program cannot substitute for the absence of any strategy to develop an ultimately economically sustainable system. Meaningful buy-back offers only serve as a short term transition to a valid one that has been proposed. To the extent that offers without any economic basis lull consumers into thinking something constructive is being done, they can actually undermine efforts to encourage real progress.

       At present, NatureWorks is still in the process of developing a plan, but does not yet have any specific proposal to present to recyclers to evaluate.

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Q Are NatureWorks' other assurances about PLA's trace presence adequate to protect recycling?

A  The second assurance that NatureWorks has offered is its contention that, today, PLA bottles occupy too tiny a part of the market to concern anyone.

        There are three issues involved in answering this question. The initial one is (1) how small a concentration of PLA in PET bottles creates problems for recycling the PET. The second is (2) how likely are we to cross that threshold in the foreseeable future. Lastly, (3) what will be the impact on recyclers when that threshold is crossed.

        (1)The threshold of concern  
          Actually, not that many PLA amidst the PET bottles will create obstacles for bottle-to-bottle recycling programs. NatureWorks' own tests indicate just one-tenth of 1% of PLA remaining in PET bales will contaminate the load, while others suggest even less.

         Even if a major investment is made in new optical sorting equipment in an attempt to remove enough PLA bottles to bring the residual PLA in PET bales below one in one-thousand, that will soon still not be enough. At the 97.5% accuracy rate that NatureWorks reports infra-red sorters achieves in careful trials, PET bales would be rejected by bottle markets when there is just 4% of the clear plastic bottles made from PLA(see table below). 

         Furthermore, in practice, the national average percent of PLA in bottles will not drive the result. Instead, the actual threshold to cross where PLA unacceptably contaminates PET will vary in different parts of the county. And since most bottles are marketed nationally, the conditions in the area of the country with the greatest sensitivity will define the limiting condition – not the average for the U.S.

         Water and fruit drink bottles, which is where PLA would be found, will be sold and collected in different proportions to PET bottles in different regions. In states with expanded deposit laws that cover these non-carbonated bottles, PLA would wind up in the recycling stream at far higher rates than in deposit law states limited to soda bottles. Similarly, regions where people are more health conscious and affluent will consume far greater proportions of water bottles, where PLA will be far more concentrated, than elsewhere where PET for soda bottles will be more prevalent. Thus, projections of average saturation levels have the potential to seriously disguise far greater localized impacts that will arise and effectively determine maximum acceptable PLA volumes.

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       (2) The growth prospects for PLA  
          While it is nominally true that the number of PLA in bottles today are below the levels of concern, the intent and marketing plan for the company is to dramatically expand PLA bottles far beyond the first few entrants as changing economic conditions in the energy markets permit.

         For that reason, recyclers need to look to the market that will later be occupied by PLA to understand the impacts it will face in the future, and then ask what systems can handle the full saturation levels that we may see tomorrow.

       At present, PLA is more expensive than PET, and it is largely limited to niche markets appealing to “green” consumers. These are the 5%-20% of the population who are willing to pay more for products or services that they believe will have less impact on the environment. However, if petroleum prices rise dramatically, similar to what happened in the summer of 2006, then PLA would presumably become less expensive than PET bottles.  The graph along side demonstrates how substantial an impact the 2006 gas run up had on ethanol production.

       The similarly overwhelming influence of energy prices on PLA's prospects can be seen by the fact NatureWorks manufacturing facility in Blair, Nebraska, sat woefully underutilized following its opening in 2002 until the dramatic increase in oil prices during the summer of 2006. Prior to that time, NatureWorks was reported to be close to shutting its doors. Since then, the plant has been reported to be oversubscribed, with more demand than it can meet, notwithstanding the subsidence in oil prices later in that year.

          With the next sustained price hike for oil, one would anticipate a very rapid conversion of PET to PLA for those applications where it provides suitable performance characteristics. This dramatic shift in growth rates is often represented by the called “S-Curve” that is used to describe the pathway of new products into the market. In the beginning, the initial purchasers are few, being limited to early adapters and niche markets. But that is followed by a second phase of high growth as the product becomes cheaper and gains widespread acceptance. Later, the product saturates its market and moves onto a slow growth mature phase, completing the top of the "S" (see the graph along side showing how saturation increases on the y-axis at different rates over time on the x-axis). We have all seen this in the past in such things as the seemingly overnight conversion from glass to plastic 2 liter soda bottles or from vinyl to CDs, as we will, in the near future, in the conversion from cathode ray tube to flat screen television.

         Thus, the fact that current demand for PLA in bottles is too small to be of concern is seriously misleading. Today's trace levels are completely unrelated to PLA's enormous growth prospects when the oil markets surge once again.

         Depending upon when the next run up in petroleum prices occurs, recyclers will almost certainly then suddenly find themselves with large volumes of the new incompatible bottle on their sorting lines – and in volumes that are significantly larger than the initial trace amounts found today. That would both contaminate the PET that the MRF wants to recycle, and also lose the high value of the PET bottles that are displaced by PLA.

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         (3) The impact on recyclers  
          A new expense would then have to be incurred for optical sorters in an attempt to reduce the PLA slipping through with the PET bottles at levels that would cause the PET bales to be rejected. Even if recyclers somehow absorbed the large expense needed to purchase costly new optical sorting equipment, it has not yet been shown that this equipment can be sufficiently improved to remove enough PLA to prevent hazing of the PET. At present, the equipment is not adequate when PLA exists at more than trace amounts. Also, additional sorting systems would also not address the lost PET revenues for bottles now made from PLA.

         But, then, while too large to be ignored as a contaminant in the PET bales, the PLA volumes may not be large enough to sustain a recovery infrastructure of its own. Because PLA has not yet been enhanced to retain carbonation, it might have an inherent constraint on its maximum share in the market. That could prevent it from ever reaching the necessary threshold to be recycled at all.

         And even if it did reach that critical mass, no recycle market has yet been found to sell PLA into. Finally, even if one were, it is not apparent whether such a new recycle market for PLA would pay anything like the handsome prices returned by the PET markets. At best, even if all of these hurdles were overcome, that could still lead to substantial revenue shortfalls that would require new unpopular taxes to meet.

         Thus, in the absence of a moratorium, after PLA has gone into full bottle production, recyclers could then be confronted with the fact that doing so severely disrupts recycling markets. But, by that time, so many investments and commitments to support that bottle will have been made that, it could be too late to "put the genie back in the bottle."

         This is not meant in any way to imply that the problems that PLA bottles currently pose for recyclers cannot be overcome. They may well be. But the hurdles are not insignificant. Clearly, a concerted effort will be needed to find that pathway to success. Removing the pressure to devote the requisite resources to the task by prematurely rushing bottles to market does not appear to be the best way to constructively focus the company's energy on the major problem-solving work ahead.

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Q What is the best outcome to constructively resolve the present controversy?

A  In theory, a shift away from petroleum holds many potential benefits for society. But, that may not be the case in practice if existing recycling programs are disrupted in the process. This is especially a concern with corn-based bio-plastics such as PLA, which also consume petroleum, create pollution and lose topsoil in their production. Though these impacts are less than those from petroleum exploration, extraction, transportation and refining, the magnitude of how much less is hotly debated.

     Thus, of course, cellulosic based bio-plastics should be encouraged. Then, a workaround should be developed to enable bio-plastics to be introduced into bottles without impairing the economics of today's recycling programs, which depend upon the high prices received for petroleum based plastic bottles.

     But, for that workaround to be constructively pursued, NatureWorks, and other manufacturers of bio-based resins, ought not introduce their resins into the bottle market until after these problems have been resolved.

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Q Should these issues be decided by the free market or by moratoriums?

A Some consumer product and package companies have acted as if they are entitled to introduce any new package into the marketplace that maximizes their sales objectives, and recyclers will just have to find a way by themselves to deal with any ensuing problems.

  Not only is that misguided belief no longer acceptable to recyclers, but also, it is fundamentally incompatible with the very free market principles that they espouse to support their laissez-faire beliefs.

  Free markets are said to be the best way to balance the supply with demand for the things that people want. Using the marketplace to neutrally arbitrate between buyers and sellers in this way is thought to optimize overall human happiness.

  However, for that to actually happen, the price of making something needs to reflect all of the costs that go into making it. Otherwise, its price will appear artificially cheap, and more people will buy it than they otherwise would if it were priced higher in order to capture all of the costs associated with its production.

  Too often, the price we see only reflects the costs on the books of the manufacturer. Ignored are costs the company may impose on society-at-large, such as when pollutants are emitted from the smokestack at the factory where the product is made that causes the neighbors to become sick and die prematurely. If the company is allowed to continue polluting, it will be able to sell more goods because of its artificially low price. That will inflict more pain on the firm's neighbors than would have been the case if the goods reflected all of the costs its production caused.

  When government passes regulations to protect innocent members of the public from being harmed by the production of things other people want, it does not violate economic principles. To the contrary, it makes it possible for the free market to function as intended by sending the correct price signal about how much things really cost.

    In this case, some companies do not want their package branded as non-recyclable, because that might adversely affect sales, but they do want someone else, which winds up being the taxpayer, to pay the additional costs to recycle their especially hard-to-recycle packages. That warped view of the world bears no relationship to proper market principles, under which this sort of subsidization would not occur.

     Absent a moratorium, today’s vibrant plastic recycling markets could be seriously disrupted by PLA bottles, and that would undermine the economics of curbside recycling programs. That would leave the taxpayer to subsidize new ill-considered packages, which fail to contemplate how their end-of-life can be sustainably handled.

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Q How can I help convince NatureWorks to make PLA recyclable before introducing it in more bottles?

A You can click here to sign onto the Petition to NatureWorks and join with many other organization who are urging the company for a moratorium on any more PLA bottles until these recycling issues have been resolved.

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Q Who can I contact for more information about bio-plastics and recycling?

A You can contact either:

Peter Anderson
Plastic Redesign Project
anderson@recycleworlds.net
608-231-1100

or

Brenda Platt
Institute for Local Self Reliance
bplatt@ilsr.org
202-898-1610 x230

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