Aluminum Vs. Recycled Pet - The Debate Rages On

Building off the conversations I’ve had with the management teams of can makers and beverage companies, as well as internally at my company, I wanted to summarize some of the work I had been doing in trying to understand fact vs. fiction in the Aluminum vs. rPET conversation.

Bluf (Bottom Line Up Front)

It’s complicated. As a general rule, if it’s being created from scratch, PET likely has a lower overall footprint due to the energy intensity associated from smelting aluminum (e.g., much of global supply comes from coal-dominant grids such as China). On a longer-term basis, if the move to a circular economy comes to fruition, aluminum is superior and should win out absent a technological breakthrough in ‘enhanced/chemical’ recycling for plastics.

In terms of overall recyclability and economics, aluminum is superior. As emissions from aluminum smelting comes down with the move to renewable energy, Aluminum will be more competitive on a virgin material basis as well. Given demand for packaging is expected to be remain strong, there’s likely a spot for both Aluminum and rPET in the near- and medium-term futures since we won’t decarbonize China overnight and consumers will still desire plastic in some environments. On a longer-term basis, given the better economics, increasingly competitive carbon LCA
footprint, and better recycling infrastructure, aluminum may continue to take share. Of note, scrap prices for both aluminum and PET are rising as more companies focus on creating packaging from recycled content.

• What to pay attention to for Aluminum players: As China begins to curb emissions within the country and shut-in some smelting supply, we’re already seeing price impacts to global aluminum prices.
• What to pay attention to for rPET players: Nearly every major beverage company has an initiative around using rPET packaging and it’ll be interesting to track if there are any cost headwinds as a result of the recyclable material not being as readily available as other commodities (due to a lower recycling rate, collection rate, and the fact you downcycle plastic). It will be interesting to see the major players invest more capital into improving PET recycling infrastructure globally as well as in nascent enhanced/chemical recycling technologies.

Key Considerations:

• Carbon Footprint: On a lifecycle basis, Non-Carbonated PET is the least emissions intensive. Aluminum and PET for Carbonated Products depends on the study/region.
• On a new production basis, non-carbonated plastics has the lowest emissions (e.g., PET used for water beverages), but the data is conflicting beyond that as different studies come to different conclusions between Aluminum and PET packaging made for carbonated beverages (e.g., soft drinks).
• Carbon footprint and life cycle assessments (LCAs) are heavily dependent on the assumptions used (introduces some bias based on who commissions the report) but the conclusions are relatively consistent currently.

• There are also many assumptions to make and they vary by region: factors include materials, manufacturing, weight, transportation, recycling, reusability and end of life disposal; all of which can vary by the region you focus on.

• Sources: Ball Corp had Sphera conduct an analysis in June 2020, IBWA commissioned a study from Trayak in 2021, Imperial College of London did a study in September 2020, Coca Cola did a study from the IFEU which is at odds suggesting 50% rPET < 50% recycled Aluminum but uses different assumptions on collection rate; *note―the Coke study looks like the only one that does it on a recycled content basis.

Recycling Rates: Edge – Aluminum

• Consumer recycling rates (%) are reported to be in the high 40s for Aluminum and mid 20-low 30s for PET (only sources I could find were from two Aluminum-focused trade associations but both came up with similar numbers― #1 and #2)

• Hard to f ind a neutral source, the global repots commissioned are from Beverage Can trade associations

• Domestically, though, this appears to be true based on neutral data from the EPA, recycling rates in the US:

• Aluminum beer and soft drink cans—50.4%
• Polyethylene terephthalate (PET) plastic bottles and jars—29.1%
• High-density polyethylene (HDPE) plastic natural bottles—29.3%

Recycling Quality & Amount: Edge―Aluminum

• Plastic can be recycled one to 10 times, depending on the type (even things like color or printing on it can really impact the recyclability), although most can be recycled only once. Postconsumer plastic is often turned into synthetic fibers, plastic lumber, insulation, and containers—whatever it becomes, though, will inevitably be a lower-quality item than the original product, called "downcycling."

• There are increasing regulations around PET resin for food-grade packaging applications that need to be met so waste contamination is a huge concern here.
• There’s also a difference between mechanical recycling (lower footprint than virgin PET but much less yield) and ‘enhanced/chemical’ recycling (makes the packaging good as new but a higher carbon footprint given the increased energy intensity associated with it).

• Aluminum is one of the most valuable recyclable materials because there is no limit to how many times it can be recycled. *note―sometimes this can be impacted if it has an internal plastic liner

• The big thing about recycled aluminum from an emissions perspective is it takes ~90%+ less energy because you can run it a lower heat. This is also a big point because most virgin aluminum comes from smelters in China who typically often use coal power (which inflates their LCA on a new production basis) so the recycled aluminum’s footprint is far lower than virgin materials

Charts From The Above Sources: