Can Cullet ensure that glass remains a key and relevant packaging medium?
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1 Can Cullet ensure that glass remains a key and relevant packaging medium? By: Richard van Breda September
2 Richard van Breda Career in the packaging and beverage industry. Both commercial and technical. Glass, Plastics - rigid and flexible, PET, Papers, Cartons and Metal. He has operated as an independent consultant based out of Zug Switzerland and has recently joined forces with IS Engineering. Prior to this he was with SABMiller plc: Global Director for glass, paper and plastic packaging. Non Executive Director of The Glass Recycling Company in South Africa. His extensive commercial and business experience, as well as the technical grounding, provides deep packaging insights in a wide range of disciplines and aspects of the global packaging world. 2
3 Can cullet ensure that glass remains a key and relevant packaging medium? Glass has traditionally been the favoured packaging format for beverages and processed foods. Revered for its stability, inertness and the protective capabilities Exudes premium qualities Package of choice for top end products. One is unlikely to sell a 1000 bottle of whiskey in PET? In the mass market, glass has increasingly come under pressure from PET and cans. Both offer a lower cost packaging solution. To ensure survival, glass needs to evolve and make itself more relevant and competitive in the mass market. Cullet may well provide the solution But, the entire value chain needs to buy in and promote glass recycling. 3
4 Cullet is a vital enabler in the container glass industry. The Industry understands the benefits of using increased amounts of cullet. However, it is surprising to see that its use is globally relatively low. This paradox needs to be rectified if glass is going to remain an attractive packaging material, relevant to the demands of modern times and consumers. Glass and cullet is infinitely recyclable without any loss of mechanical properties. 4
5 Increased usage of cullet has significant advantages Advantages of increasing cullet usage: 1. Decreased energy usage between 2.5 to 3% energy reduction per 10% cullet 2. Reduction in the fusion losses - Typically between 15% to 17% saving of the virgin batch. 3. Increased furnace life due to reduced heat burden on the glass furnace. 4. Decreased carbon foot print Reduction of 5% less CO 2 per 10% cullet 5. Increase in the furnace draw As a result of decreased energy required for melting 6. Enhanced melting stability and quality of the glass 7. Leverage on raw material supplier prices cullet offers an alternative to virgin batch So, with all these benefits - why are the glass makers not maximising cullet levels and using predominantly cullet? 5
6 Globally, glass makers claim they are working intensely to increase the amount of cullet they use. In 2009, we set a goal of using a global average of 60 percent post- consumer cullet in our manufacturing process by O-I Sustainability Report O-I take cullet seriously and have not done a bad job under the circumstances In 2014, O-I reported that they had: made progress to 38% levels, purchased 4.7 million MT of cullet each year, a very long way to get to 60% in 3 years. So the obvious question is: why are they not able to make better progress? Why are they simply not just buying more cullet and achieving all their targets? 1. The cost factor, very quickly becomes an obstacle Cullet is a relatively low value commodity Transport is expensive 2. Availability: People are simply not separating used glass and making it available for recycling 6
7 Considerable variation in cullet collection levels across the world EU28 countries have an impressive average 73% cullet levels - Feve, in their Container Glass Collection for Recycling Rates in Europe Report North America is OI s lowest cullet usage region, with only 26% - OI Sustainability Report, % of cullet came from the 10 states that had deposit legislation. In Australia, the common view is that glass collection rates increase with the introduction of deposit legislation. Deposit legislation is being increasingly rolled out across Australia. Is a container deposit scheme the solution to increase the collection levels of of postconsumer cullet? Many see the deposit legislation as an additional tax, and as a hindrance. However it does increase collection rates. 7
8 Pressure coming from the Brand owners for increased cullet usage. Packaging normally accounts for the biggest single contribution to the carbon foot print. Brand owners have made big statements about reducing their carbon foot prints. Coke targeted a reduction in CO 2 footprint by 25% between 2010 and SABMiller, Diageo, Carlsberg, Heineken etc. also targeted a similar reductions. CO 2 saving on packaging can often be translated into a cost saving Non-returnable glass is the pack type with by far the biggest CO 2 footprint What better way to reduce the Carbon foot print than by increasing the amount of cullet used, and light weighting the containers? 8
9 Returnable glass may be one of the solutions. A returnable glass bottle refilled and reused more than 50 odd times. Returnable glass bottles offer: the lowest cost beverage packaging. a significantly lower carbon footprint. high usage rates, with very low loss rates per trip in well managed programs. high barriers to entry for competitors. Why then, are these returnable glass systems so successful? Clearly the monetary value of the deposit system appears to drive the system. Legislation, returnable bottles with deposits, or simple container legislation Dramatic increase in the rate of glass collections. 9
10 Should the glass and beverage supply chain lobby for deposits to increase the recycling rates? Big beverage owners tend to answer NO. Claim that other collection mechanisms which they support, work better. Brewers understand the effect of price elasticity on sales volumes The big end retailers are notoriously anti returnable packaging. They steer clear of: any returnable packing that requires deposits to be collected having to deal with the return of used glass bottles and deposit repayments 10
11 Economical separation of glass from the waste stream. Consumers need to recycle, rather than simply dumping glass into the household refuse. Curb-side collection of separated recycleble materials is the first step broken glass is difficult to separate it requires colour separation before it can be routed back into the process. Cullet is a difficult material to handle in the waste stream cullet cuts it is very abrasive glass containers have got lighter and thinner and get broken during the compaction in the collection process, increasing the difficulty in separation. Cullet has a relatively low value of cullet on a per tonne basis 11
12 Cullet is critical to the future of container glass! Increased cullet solves many issues for glass makers: reducing costs improving the process. Increased cullet solves many issues for brand owners: Addresses the carbon foot print issues. Reduces the relative cost of glass packaging relative to PET and cans and cartons. Cullet is critical to the future of container glass and keeping it relevant and economical Returnable glass may offer a solution; however, this requires the retailers to actively support the system. Consumer discipline is also paramount to prevent glass ending in the landfill dumps. All players in the value chain needs to play their part. All players need to align interests and expectations. To achieve this, legislation may be the only solution! 12
13 Questions 13
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