ISSUES PAPER \ \ Recyclability of takeaway coffee cups in Australia. (Polymer-coated Paperboard Working Group (PCPBWG) May 2017

Transcription

1 \ \ ISSUES PAPER in Australia (Polymer-coated Paperboard Working Group (PCPBWG) May 2017 Page 1 of 32

2 Table of Contents 1. Executive Summary Abstract Definitions Introduction Purpose of this Issues Paper Discussion Why the focus on polymer-coated coffee cups? Important role of packaging General assessment of biodegradation and compostability Key materials used in the manufacture of takeaway coffee cups Traditional lifecycle stages of a takeaway coffee cup Exclusions Assumptions Existing disposal options The recyclability of coffee cups in Australia Material characteristics and relevance to disposal and recyclability Polymer linings/coatings Polyethylene (PE) What is Polylactide (PLA) Paper fibre Plastic lids Practical Considerations Material Recovery Facility Collection Paper Sorting Pulp preparation, cleaning, screening and further treatment Misinformation Next Steps Conclusions Critical Review Who contributed to the peer-review findings Importance of this Issues Paper and Key Findings References Acknowledgments Page 2 of 32

3 The Australian Packaging Covenant Organisation s Polymer-coated Paperboard Working Group (PCPB) membership: Preface Information and further feedback has been sought by local government, recyclers, material recovery facilities and other key stakeholders which is outlined in the Appendices and Section 13 of this document. Future Issues Papers are planned to address solutions to challenges that exist towards a circular economy for takeaway coffee cups. This process will broaden the membership according to need and expertise. Issues Paper #2, focusing on solutions, will be published in quarter 1 of the 2017 / 2018 financial year. The opinions expressed in this paper are in good faith and while every care has been taken in preparing these documents, the Australian Packaging Covenant Organisation Ltd. ( APCO ) makes no representations and gives no warranties of whatever nature in respect of these documents, including but not limited to the accuracy or completeness of any information, facts and/or opinions contained therein. APCO, its directors, employees and agents cannot be held liable for the use of and reliance of the opinions and findings in these documents. APCO does not endorse any products or services which may be cited in this paper Australian Packaging Covenant Organisation Ltd. This work is copyright. Apart from any use as permitted under the Copyright Act 1968 no part may be reproduced by any process without permission from the Australian Packaging Covenant Organisation Ltd. Requests and inquiries concerning reproduction and rights should be addressed to the Manager, Communications, Australian Packaging Covenant Organisation Ltd., PO Box Q1523, Queen Victoria Building NSW Page 3 of 32

4 1. Executive Summary The circular economy is gaining increased focus from academia, government organisations and industry as a key way to reduce demand for virgin materials and mitigate the environmental and economic negative externalities associated with waste disposal. The Australian Packaging Covenant Organisation (APCO) is taking the lead on resource efficiency in packaging by linking stakeholders, thought-leaders and experts to create true circular economies. As such, the APCO recently (March 2017) initiated a Polymer-coated Paperboard (PCPB) Working Group as part of implementing its strategic priorities, seeking shared insights into the most appropriate initiatives and measures to tackle takeaway coffee cup waste management in Australia. The PCPB Working Group was established to gain industry collaboration and expertise to understand the recyclability of takeaway coffee cups and the complex supply chain interactions that are associated with this highly convenient, pervasive and often misunderstood packaging item. These experts gave their time readily to contribute to a national debate on resource efficiency in packaging to create a true takeaway coffee cup circular economy for Australia. The participation of the Packaging Council of New Zealand (PAC.NZ) in this group recognises that the major supplies of the takeaway coffee cups and service providers for end-of-life waste management options operate Trans-Tasman. Whilst the impact in each market varies slightly, taking a harmonised approach to identifying the issues and opportunities is considered beneficial for the larger Australasian market and in alignment with the intent of the formalised agreement between APCO and PAC.NZ, signed in March This Issues Paper is only the first step. Understanding the disposal, aggregation, recovery and recycling stages for takeaway coffee cups is important as it will allow the PCPB Working Group, the APC and its stakeholders more generally to understand where our focus for improvement and innovation best lies. The PCPB Working Group has established that the common takeaway coffee cup is recyclable under prevailing collection and recovery systems and infrastructure. However, issues do exist with regard to the commerciality of the recovered material and this may play a role in the relatively low levels of recovery and potential resistance to accepting the material from various stakeholders. There is strong evidence from within Australia and internationally that polymer coated paperboard with polyethylene or polylactide coatings can be recycled into new products from the various disposal options that exist, be it kerbside, street bins or commercial collection. In this Issues Paper, we explore questions associated with the recyclability of takeaway coffee cups. In the coming months, a follow up Issues Paper will focus on solutions to identified challenges including how innovation, collaboration and technology can overcome barriers and provide opportunities towards systematic changes required for a circular economy. I would also like to thank our experts and contributors for their time, valuable insights and willingness to share. Benjamin Reay General Manager, Innovation and Circular Economics Australian Packaging Covenant Organisation Page 4 of 32

5 2. Abstract The Australian Packaging Covenant Organisation (APCO) is working to achieve the goals of its recently released five-year Covenant and Strategic Plan through a collaborative supply chain approach. The Polymer-coated Paperboard Working Group (PCPB Working Group) includes representatives from coffee cup manufacturers, brand owners and recyclers that convene regularly to investigate the issue. Subsequent to future investigation of potential solutions to challenges identified, the membership will be broadened accordingly. Industry acknowledges the vast amount of takeaway coffee cups ending up in Australian landfill, irrespective of their relatively small proportion of total waste paper. Accordingly, there is a serious need to address the lack of education and appropriate systems necessary to effectively recover and recycle such materials. Due to the significant information available around the recovery and recyclability of coffee cups and other PCP packaging, APCO and the PCPB Working Group determined an Issues Paper was required to assess the status of the current situation. The Issues Paper will identify gaps in knowledge and data, and facilitate and coordinate an industry-led effort to incorporate closed loop approaches to the economics of disposable coffee cups. The PCPB Working Group is establishing a unified position on the recyclability of coffee cups, and will use it to guide the discussion and investigation around implementing viable solutions in Australia. This work will assist to inform the APCO communications with membership, and provide clarity for future focus areas. These cups usually contain a mix of different materials including Polyethylene (PE), Polylactide (PLA), and paperboard. This Issues Paper outlines assumed knowledge that has been made to focus the review and discussion of the PCP Working Group. Polyethylene (PE) and Polylactic Acid (PLA) packaging will be explored in more detail, assessing what is currently known about their recyclability, biodegradability and compostability. The current acceptance and recyclability of takeaway coffee cups is displayed in an infographic (Figure 5). This visualisation shows that the acceptance of coffee cups and liquid paperboard products across Australia is established, contrary to much of the prevailing information publicly available. APCO and the PCPB Working Group have sought input from a wide variety of stakeholders to understand the challenges that exist for particular products and regions. APCO acknowledge that a single solution is unlikely; however, unified efforts will yield solutions. Page 5 of 32

6 3. Definitions Aseptic containers Biodegradability (21) Composting (21) Commercial Composting Facility (21) Disintegration (21) Gable top containers Home compost system (21) Home compost (21) Hot cups (e.g. takeaway coffee cups) Material Recovery Facilities (MRF) Out-throws (1) Plastic (21) Polylactide (PLA) (16) Polymer-coated paperboard Cartons for liquids that can be fabricated from laminates of liquid paperboard, foil and polyethylene. The ability of organic substances to be broken down by microorganisms in the presence of oxygen (aerobic) to carbon dioxide, water, biomass and mineral salts or any other elements that are present (mineralisation). The aerobic degradation of organic matter to make compost. A facility that aerobically degrades plastics via chemical and biological means at a rate and quality of naturally biodegraded materials. The physical breakdown of material into very small fragments (ISO 20200). Thermoplastic coated container (e.g. milk cartons) with controllably enhanced sealing and opening characteristics includes at least one stiffening fillet attached to the panels which form the spout. A system to produce home compost. Not suitable for packaging certified to commercial compostable. The product of privately or home generated organic waste, such as food, garden and paper product waste, which has been subject to composting, and which product is applied to private property soils without any commercial transaction. Beverage containers manufactured out of paper and often lined or coated with plastic provide a barrier for liquid leakage and increased wet-strength. A materials recovery facility is a specialised plant that receives, separates and prepares recyclable materials for recyclers and other enduse markets. All paper that is manufactured or treated or in such a form as to be unsuitable for the consumption as the grade specified. A material that contains large molecular weight organic polymeric substances as an essential ingredient. A biodegradable and bioactive thermoplastic aliphatic (non-aromatic) polyester derived from renewable resources, such as corn starch, tapioca roots, chips or starch or sugarcane (in Australian production). Paper which has been coated by a compound or polymer to impart certain qualities to the paper, including weight, surface gloss, smoothness or reduced ink absorbency and increased wet-strength. Polyethylene (PE) (IUPAC polyethylene) Various partially crystalline lightweight thermoplastics (CH 2CH 2)x that are resistant to chemicals and moisture, have good insulating properties, and are used especially in packaging. Prohibitive materials (1) : Problematic Packaging Materials Recyclable (1) Recyclate (plural recyclates) (1) Any materials that may be considered to create an occupational health and safety, engineering or environmental risk. It includes, but is not limited to, medical waste, explosive material and chemicals. As defined in the Australian Packaging Covenant Organisation s Strategic Plan Collected materials, including product packaging that are compatible with existing recycling facilities and systems. Raw material sent to, and processed in, a waste recycling plant or materials recovery facility. Page 6 of 32

7 4. Introduction The APCO has developed a five-year Covenant Strategic Plan (The Plan) to outline how it will support businesses to improve packaging sustainability performance, thereby reducing the environmental impacts of packaging in Australia. The Plan has been endorsed by the Minister for Environment, and APCO reports annually on progress. The Plan sets aspirational goals that will require all of industry, governments and community collaboration. However, the onus is on industry, through APCO, to lead the way. APCO commits to: the strategic direction outlined in The Plan; continuously looking for improvements and sharing information and lessons learned; working collaboratively to deliver the desired outcomes; championing and advocating for the purpose of the Covenant; and transparently reporting performance in delivering the Covenant s goals. In support of the above commitments and more specifically, to achieve the goal of industry-led product stewardship and shared responsibility, the APCO recognises that it must work with industry to provide a great capacity to influence the desired outcomes. This arises in the Strategic Plan, Pillar 3, Knowledge exchange, learn, share and innovate. To achieve the outcomes of this pillar, the APCO will hold regular networking and knowledge sharing events. The practical implementation of this includes the development of focused Working Groups beginning with identified problematic materials associated with packaging. These will include: Polymer-coated takeaway coffee cups and similar materials (e.g. milk cartons); Soft plastics; Life Cycle Assessment (LCA) and Impacts Measurements; Expanded Polystyrene; and Takeaway packaging. The Australian Packaging Covenant Organisation Strategic Plan can be viewed online at Figure 1: Photo of the first PCPB Working Group convening at the APCO Head Office and by teleconference. Page 7 of 32

8 The APCO Working Groups aim to convene industry leaders and stakeholders in small and effective teams to recommend and validate the APCO s operational response to the Strategic directives. It is recognised that without industry partnerships, the chance of success is limited. To date, the priority has been the establishment of the Polymer-coated Paperboard Working Group (PCPB Working Group). The first meeting of the PCPB Working Group was conducted on Friday 3 March 2017 comprising representatives from manufacturing, distribution, recycling and recovery, and the APCO. Subsequently, the PCPB Working Group has convened on five occasions to discuss the development of this Issues Paper in addition to continuous ongoing review and improvement efforts. Current Membership of the PCPB Working Group can be found in Appendix 1. Further engagement with other stakeholders is a priority moving forward to ensure the credibility, accuracy and reputation of APCO initiatives that are developed resulting from the findings of the PCPB Working Group and other stakeholders, as shown in Section Purpose of this Issues Paper The purpose of the PCPB Working Group is to: Ensure that the APCO and its stakeholders have access to accurate information to facilitate improvement and collaboration efforts towards reducing waste of resources associated with takeaway coffee cups and other PCPB products; Work with the participants in the takeaway coffee cup supply chain to ensure cups are designed, used, disposed of and collected to maximise rates of recycling in Australia; and Identify future project and innovation efforts to improve collaboration and environmental outcomes of problematic materials. The purpose of this Issues Paper is to: Determine the status of the recyclability of coffee cups and inform future work on other polymer-coated paperboard products; Identify gaps in knowledge and data; and Determine and validate the barriers and constraints associated with recycling takeaway coffee cups with broader industry stakeholders. Following on from this Issues Paper, subsequent investigations and published work will focus on ways the APCO and its stakeholders, including the PCPB Working Group, can: Identify the actions that can directly implement or indirectly influence improvement in the sustainable outcomes of takeaway coffee cups; Communicate to industry, government and broader community on matters pertaining to problematic materials such as takeaway coffee cups; Inform future project and implementation efforts within the APCO; and Facilitate and coordinate an industry led effort to incorporate closed loop approaches to the economics of takeaway coffee cups. Page 8 of 32

9 6. Discussion Each year, 28% (15,900 tonnes) of polymer-coated paperboard consumed in Australia is recovered, 86% of which is post-consumer, of which only 1,057 tonnes are hot cups. Takeaway coffee cups make up the majority of the hot cups category. (12) This represents approximately 1.1 billion coffee cups that end up in landfill 1 in Australia every year based on an implied 92% landfill rate. (12) With the lack of awareness around takeaway coffee cup recyclability, and negative financial impacts on MRF operators receiving this material (See Section 7), this number is likely to have increased since 2013 / 14 when this information was collated. (12) Coffee consumption is a massive business globally (See Table 1), therefore the recovery pathway of takeaway coffee cups for each location is likely to be different. According to a report commissioned by the APCO in 2015, Australia s consumption of Polymer-coated fibre packaging was 56,492 tonnes. (12) As shown in Table 2, PCP recovery and reprocessing already occurs in Australia and comprises four types of packaging: Gable top containers (e.g. milk cartons); Aseptic containers; Hot cups (e.g. takeaway coffee cups); and Cold cups. Broken down, the annual national consumption of hot cups (including takeaway coffee cups) represents approximately 12,955 tonnes or 22.9% of total. (12) Table 1: Consumption of coffee per year (per capita) (10) 6.1. Why the focus on polymer-coated coffee cups? Takeaway coffee cups are emblematic of the wider issues that can arise from the consumption of problematic packaging materials. The APCO has identified a number of problem packaging materials in its Strategic Plan (The Plan) on pp. 17. The Plan identified problem packaging types or materials in the waste stream including, but not limited to: Soft plastics; Takeaway coffee cups; and Expanded polystyrene. Packaging has its place and an important role in protecting products during transportation and commerce, however in the quest for low-cost high-volume takeaway food and beverage packaging, problems can arise with recyclability and beneficial waste management outcomes. The essential problem with takeaway coffee cups (used ubiquitously for all polymer-coated products in this Issues Paper) is that they are a mixture of at least three (3) different materials: I. A plastic lid that can be removed and recycled conventionally in a recycling bin; II. Cardboard / liquid paperboard cup; and III. Polymer-coated lining that maintains waterproofing and cup structure integrity. 1 Based on 11,936 tonnes sent to landfill at an average of 11g per cup. Page 9 of 32

10 These are important components to ensure that the consumer can purchase a hot drink (e.g. coffee) and consume that drink without the cup leaking, deforming or collapsing and can be held without burning the holder s hand. In Australian cities and towns, the takeaway coffee cup is a very common sight, be it walking the streets in peoples hands, overflowing in bins or as litter. The Australian Packaging Covenant Organisation (APCO) acknowledges that there is confusion in the market about what can be done to reduce the environmental impact of this packaging whilst recognising a need for a takeaway option. The major sources of polymer linings on takeaway coffee cups in Australia is either polyethylene (PE) or polylactide (PLA). Polyethylene represents approximately 90% of all takeaway coffee cups linings sold in Australia 2 and will be a focus of this report, however alternative lining materials that are in the market will also be discussed. PCPB - WHO IS SENDING IT TO LANDFILL? Brand Owners / Fillers Consumers Retailers Paperboard reprocessors Figure 2: PCP Landfill Volumes by Source Proportional Contribution (12) Important role of packaging Packaging provides an important role in society. Its purpose is to support the product contained, and in doing so, delivers a wider benefit - reducing food waste, protecting products over long logistic networks, ensuring safety of goods to protect health and preventing theft. 3 Regarding takeaway coffee cups, the value proposition of the packaging is multifaceted. Firstly, and probably most notably for the average consumer, is convenience. The ability to order and takeaway a coffee in an easy and timely manner is very attractive. The takeaway coffee cup also offers a hygienic option for those on the move or away from home where suitable and sterile washing facilities are often not available. That is not to say that reusable coffee cups don t have a role in reducing waste and resource consumption. APCO acknowledges the variety of options available to consumers who want to take responsibility for their environmental impacts, however it is unrealistic to suggest that all takeaway coffee cups will be avoided in this way. Therefore, this takeaway packaging option for coffee consumers is an important matter to investigate particularly in aiming to increase diversion of these resources from landfill. The industry, more generally, is highly innovative and history has proven this. The progression of more environmentally harmful packaging to Polymer-coated Paperboard (PCP) alternatives, different linings, creative recovery and recycling technologies are all a testament to the packaging industry. APCO anticipates this trend will continue and will focus investigations on the practical and innovative options available in Australia and internationally as solutions to a closed loop economy for takeaway coffee cups in future PCPB Working Group efforts. 2 Pers. comm. Thornthwaite, J., Huhtamaki Australia Food Services 3 Marsh, K & Bugusu, B 2007, Food Packaging - Roles, Materials and Environmental Issues, Journal of Food Science, vol 72, no. 3 Page 10 of 32

11 6.3. General assessment of biodegradation and compostability Australia has two (2) compost certified standards. (21) The first published Standard in 2006 relates to commercial and industrial composting operations (AS ) and the second to home compostability (AS ). These Standards are verified by the Australasian Bioplastics Association (ABA) and if certified, can be endorsed with the relevant compost logos and branding. Packaging that is certified to these Standards has been independently tested and verified to comply, and will completely biodegrade within a specific timeframe and appropriate environmental conditions (i.e. home or commercial). There are currently no equivalent Standards for products that claim to be biodegradable with no defined timeline. Products that are not certified compostable should not be composted. The determination of the constituents of plastics in takeaway coffee cups is important as [they] can be harmful to the environment. (21) An example of home compostability requirements from the Standard dictate that the plastics be identified and characterised as follows: Information about each plastic identified and recorded (e.g. thickness) including volatile contents; The presence of heavy metals and other toxic and hazardous substances shall be determined and concentrations of any constituent present in plastics shall not exceed [published] values; (21) and Colour constituents of the plastics shall be determined and recorded. Much of the information pertaining to each of the polymer lining in Section 8 can be obtained from publicly available Material Safety Data Sheets (SDS). The review and conformity of polymer-coated paperboard products in Australia is beyond the scope of this Issues Paper, however the criteria are useful in determining what is important for compostability and biodegradation. The focus of this Issues Paper is to identify what issues result in low recycling and recovery rates of takeaway coffee cups. The primary issue based on industry collaboration and other research indicates the disposal and aggregation options and the polymer coating type represent the biggest barrier to successful mainstream recycling of takeaway coffee cups in existing kerbside and municipal recycling systems. The PCPB Working Group is interested in all types of material formats and effective recycling solutions, including compostable alternatives, and are recognised as a potential part of this solution. However, these formats must also arrive at the right reprocessing facility or they do not break down in the intended way. This again points to the importance of correct recovery and reprocessing at end-of-life. At present, there is a significant lack of collection infrastructure and a limited number of processing facilities that can accept compostable packaging. Data on the availability of commercial composting facilities is not consistent across sources. The NSW Environment Protection Authority (EPA) lists 71 facilities currently licenced to produce compost under the protection of the Environment Operations (POEO) Act. The data does not enable identification of which facilities would accept the compostable packaging materials, and under which standards. Unverified information provided to the APCO by the Working Group indicates that Figure 3 data may be underestimating the number of facilities in operation (+43) 4 particularly when including vessel composting units. Figure 3: Survey of licenced composting processors by technology type (2). 4 Pers. comm. Fine, R., BioPak, 18 May 2017 Page 11 of 32

12 7. Key materials used in the manufacture of takeaway coffee cups Takeaway coffee cups are primarily constructed of virgin paperboard with a polymer coating on the inside of the cup to prevent leaking of contained liquids (e.g. coffee) and maintain the structural integrity of the cup during use. These cups are generally used for a short period of time between purchase and disposal. (24) When assessing the impacts of coffee cups and other Polymer-coated Paperboard (PCP) products, it is important to understand the stages of each lifecycle of the packaging. The first major cycle begins with the extraction of natural resources that are used to produce the basic materials. This includes petroleum-based plastics (petro-plastics), biologically sourced plastics (bio-plastics) and paperboard. Manufacturers in Australia use these raw materials to produce the takeaway coffee cups. The product(s) are transported at various stages throughout the lifecycle however this component will not be assessed as regardless of the product design and construction, transport of the packaging is required for all types of takeaway coffee cups and is therefore a common denominator. Once the product has been purchased and used by the consumer, the takeaway coffee cup is then disposed of and processed. Most takeaway coffee cups are disposed of in away from home locations such as street bins and office waste facilities, both recycling and general waste bins. (12) In Australia, there are two major pathways for this product, namely landfill or recovery and recycling. The focus of this Issues Paper is to assess the viability and accessibility of recovery and recycling options and the impact design and material choice have on the economics and practicality of recycling efforts in Australia. Furthermore, a review of the status of other waste processing options will be discussed, including incineration and composting Traditional lifecycle stages of a takeaway coffee cup The PCPB Working Group agreed that a review of the various life cycle stages of the production and disposal of takeaway coffee cups would be conducted to determine where the material impacts of the packaging format and type are most significant. Takeaway coffee cups require the extraction of resources to be used in the manufacture of the packaging. The major constituents and stages in a takeaway coffee cup are: Wood growth and harvesting; Production of chemicals and secondary packaging materials; Transportation at various stages; Pulp and cardboard production; Production of coating materials (polymer linings); Manufacturer of coffee cups; and Disposal and recycling activities. Figure 4: A 2009 review of various lifecycle assessments (22 ) Research reviewing ten (10) lifecycle assessments of disposable cups (22) indicates that the materials used to manufacture, and the disposal options of the polymer coated coffee cups, are the areas that the PCPB Working Group should focus on. Put another way, the environmental impacts of disposable cups (e.g. petro-plastics, PLA and paperboard) reveal that much of the lifecycle impacts are very similar and that opportunities to improve environmental outcomes are most applicable to the material choices and subsequent disposal options. (22) Page 12 of 32

13 Consequently, this Issues Paper will focus on paper fibre and polymer coatings and disposal options. Future updates to this Issues Paper via the PCPB Working Group will identify opportunities to improve the environmental impacts of the packaging type, including the solutions to identified challenges Exclusions Stages that are assumed equivalent in terms of environmental impact for all takeaway coffee cups, and are therefore excluded from the scope of this Issues Paper, include: Chemical production; Manufacture, maintenance and decommissioning of capital equipment; Secondary packaging; Transport; and Pulp and cardboard production (excluding recycled paper / pulp). Removal of these items for this Issues Paper is a decision that has been taken to streamline the discussion on recyclability in context of the assumptions at Section 6.3. Future investigations will validate this decision to ensure that any opportunities for improvement are not overlooked Assumptions The following assumptions have been made to focus the review and discussion of the PCPB Working Group: PCPB Working Group recognises the need for a convenient takeaway packaging option for hot beverages such as takeaway coffee cups. A review of alternative options such as more durable and reusable packaging (e.g. KeepCups ) is not in the scope of this Issues Paper however will be reviewed in subsequent work; Most of the lifecycle stages outlined in Section 7.1 have been reviewed in the literature for materiality and relevance to the purpose of this Issues Paper. (21) Only those stages that vary between the types of takeaway coffee cups have been included in the Issues Paper; Virgin fibreboard material 5 is required for the manufacture of all takeaway coffee cups and needs to be in compliance with the Illegal Logging Prohibition Act 2012; Takeaway coffee cups (including lids) must be manufactured in accordance with Australian and New Zealand Food Standards Codes; Polymer linings / coatings used in takeaway coffee cups are made from either Polyethylene (PE) or Polylactide (PLA), with PE making up to 90% of the market; Disposal in landfill of coffee cups results in 100% anoxic degradation conditions; No pre-treatment for composting occurs; and Where disposal information does not exist (or is unclear), a takeaway coffee cup is assumed to be landfilled. As such, this Issues Paper will focus on the end-of-life waste management options for the two (2) major polymer linings and reclaimed paper fibre contained within takeaway coffee cups in Australia. 5 It is understood that it is possible to produce takeaway coffee cups with up to 15% post-consumer recycled content. This will be verified in forthcoming PCPB Working Group activities. Page 13 of 32

14 All PCP formats are able to be recycled. Moreover, 96% of PCPs recovered in Australia are either recycled or diverted from landfill into energy, compost and other alternatives. (12) 7.4. Existing disposal options Various disposal options exist for takeaway coffee cups in Australia. These include kerbside recycling and general waste bins, commercial recycling and waste contractor collection bins, public place waste infrastructure and road-side bins. What is evident from research and investigations conducted by the PCPB Working Group is that once recovered, a significant proportion of the polymer-coated takeaway coffee cups can be recycled within existing infrastructure. According to APCO commissioned research (12) 90% of Gable Top and 80% of Aseptic containers are consumed in the home, collection for reprocessing is most concentrated via kerbside recycling collections, and is invariably co-mingled. That is, once recovered and supplied to a paperboard reprocessing facility 90% of a Hot or Cold Cup will be recovered to fibre. Page 14 of 32

15 8. The recyclability of coffee cups in Australia So, are takeaway coffee cups recyclable? The answer is yes; it is already happening in Australia and overseas along with many other polymer-coated paperboard materials such as gable top milk cartons, magazines, TetraPaks (juice containers), etc. Cups are recyclable, even from residents recycling bins 6 However, the commerciality of the recycling process is complicated and needs further investigation. The issue of recyclability of takeaway coffee cups and other polymer-coated paperboard products is one of significant confusion, misinformation and lack of clarity. Something that is recyclable is not necessarily recycled. Representatives from the PCPB Working Group have spent significant effort trying to determine what polymer-coated paperboard products can be recycled, where, and under what pre-treatment or aggregation scenarios. Despite significant information in the public domain indicating that takeaway coffee cups are not recyclable, the evidence and experience of the PCPB Working Group membership indicates otherwise. It is worth noting that the acceptance of coffee cups in the paper recycling stream varies across councils. Some accept them whilst others specifically request that they are disposed of in the general waste stream. Increasingly there is pressure on waste processors, manufacturers and re-sellers to be clear about their recycling messaging. A recent APCO project report revealed that: most people are not aware that coffee cups are made of paper and plastic. Consumers see the paper outer of the cup and assume it is recyclable. (12) Consumers contributed to 96% of all polymer-coated paperboard landfilled in 2013/2014. (12) This is the equivalent of 39,670 of the 41,252 tonnes of recorded polymer-coated paperboard that ended up in landfill that year; the remaining proportion was attributed to brand owners/fillers, retailers, and paperboard re-processors. These findings demonstrate that opportunity for improvement lies at consumption and/or post-consumption of takeaway coffee cups including improvements to the end-of-life value and consumer education. The APCO s PCPB Working Group makes the point that: No technical barrier(s) have been validated to prevent takeaway coffee cups from being recycled in existing infrastructure; however Reductions in rebates may occur for Material Recovery Facilities (MRFs) where increased quantities of polymers (e.g. linings) are received in the waste paper recovery streams; Major recyclers are already recycling similar packaging materials (gable top milk cartons, magazines) which can have polymer constituents at more than double the percentage found in the common takeaway coffee cup; Education and accurate, easy to understand messaging is vital to ensuring correct disposal; and Solutions to existing failures in the aggregation, recycling and recovery of polymer-coated paperboard products (e.g. takeaway coffee cups) will be identified and analysed in future PCPB Working Group reports. 6 Richard Kirkman, the technical director at waste specialist Veolia UK and Ireland. Page 15 of 32

16 The PCPB Working Group has contacted approximately thirty-five (35) Material Recovery Facilities (MRFs) and many local governments throughout Australia to seek information on the recovery and recyclability of polymer- coated paperboard products with specific focus on takeaway coffee cups (See Appendix 2). once recovered, 95.8% of PCP container volumes are recycled. (12) The info-graphic (left) outlines the publicly available data on locations where these materials are known to be accepted and recycled. APCO will use this information in future collaboration efforts and seek to update the coverage and resolution of this data as the PCPB Working Group seeks solutions to major challenges. Figure 5: Acceptance of coffee cup and liquid paperboard products across Australia (Industry and Local Government data May 2017) If it was possible to recover all of Australia s polymercoated paperboard, it would represent approximately 0.5% of total fibre. (12) Furthermore, a recent study found that aseptic PCPs were easily able to be recycled when comingled with both mixed fibre and cardboard fibre, under reportedly normal conditions, recovering approximately 87% of the fibre. (12) It is important to recognise that although a very visual and topical waste issue, takeaway coffee cups are already being recovered and reprocessed as shown in Table 2. Re-processed to Paperboard (tonnes) Table 2: Gable Top Aseptic Hot Cups Cold Cups Total 1,062 2, ,878 Estimated PCP re-processing to Paperboard in Australia, by Type (tonnes) Page 16 of 32

17 9. Material characteristics and relevance to disposal and recyclability 9.1. Polymer linings/coatings As outlined in Section 7.3, the assumption this Issues Paper makes is that all takeaway coffee cups have a lining that consists of either polylactide (PLA) or polyethylene (PE). The overwhelming proportion of linings in the market are made of polyethylene (PE). These PE linings are the primary complaint of Material Recovery Facilities (MRFs) and recyclers due to the difficulty in separation of the polymers that are considered (by them) as contaminates in the waste paper streams. This claim will be discussed further in Section Polyethylene (PE) Polyethylene (PE) or (IUPAC polyethylene) is the most common type of plastic and is used as a liner in takeaway coffee cups to maintain the waterproofing and structural integrity of the paperboard cup. However, there are many types of polyethylene plastics manufactured for takeaway coffee cups; the primary type is low-density polyethylene (LDPE). I. Recyclability of Polyethylene (PE) The recyclability of the paper fibre component of the coffee cups is outlined in Section 7. Paper fibre represents 90-95% of the takeaway cup by mass. Whilst recovery of the lining is important, the recovery of the paper fibres is the focus given that the majority of the cup is paper. The recyclability of polyethylene is well established due to the high percentage of material in current waste streams in Australia. (12) A common challenge regarding takeaway coffee cups is the requirement to separate the polyethylene from the paperboard material to facilitate recycling. The current understanding of the PCPB Working Group is that although operators of some Material Recovery Facilities (MRFs) are accepting and recycling coffee cups with polyethylene linings, these linings are communicated to the public as contaminates in the paper recycling stream. II. Biodegradability and Compostability (9) (25) Studies have shown that polyethylene can be degraded biologically by some strains of bacteria however, under normal disposal conditions, the biodegradability of polyethylene in takeaway coffee cups is poor. As such, compostability and biodegradability are not considered a viable option for polyethylene-coated takeaway coffee cups with current or emerging technologies. Only products that are certified compostable should be considered suitable for composting as a viable end-of-life option What is Polylactide (PLA) In 2010, PLA had the second highest consumption volume of any bioplastic in the world. (17) PLA bioplastic is currently produced from plant starches; it is more sustainable and has a lower carbon footprint compared to alternative plastics made from fossil petrochemical resources. It is unclear if the industrial composting facilities could upscale to respond to large increases in PLA recovery, which primarily enters the Australian market as an imported material. Further investigation will be conducted on this issue in future Working Group activities. I. Recyclability of PLA PLA can be recycled back to a monomer state by thermal depolymerisation or by the addition of ph amended water (hydrolysis). When purified, the monomer can be used for the manufacturing of virgin PLA with no loss of original properties. Investigations have revealed that PLA is currently only recycled in the USA and Belgium. (4) Page 17 of 32

18 Various international studies and industry trials have shown that PLA coated paperboard products, (the most common alternative to PE for takeaway coffee cups) pose no significant problem when included in existing paper recycling streams II. Biodegradability and Compostability PLA is biodegradable under aerobic (presence of oxygen) conditions where heat generated in a compost pile will split the polymer chains apart resulting in increasingly smaller polymers and lactic acid remains. Microbial action is then able to metabolise the remaining lactic acid and polymer fragments as nutrients, resulting in by-products of carbon dioxide, water and biological material. The process is temperature and humidity dependant, as is the case of all composting processes. It is important to note that PLA will not satisfactorily degrade in landfill, as the heat required to split the polymer is not present in landfills. PLA behaves similarly to lignin and other polyesters in wellengineered landfill operations. (19) According to published data, PLA will begin to degrade after 11 months in water at a temperature of 25 o C and is fully biodegradable in commercial operations with temperatures of 60 o C or above. (14) Perhaps the biggest barrier for the biodegradable plastics industry in Australia is the shortage of commercial composting facilities. 10 Commercial composting operations are finely tuned for temperature, humidity and moisture content and can degrade a PLA liner between days. (14) A home or backyard composting setup can take more than two (2) years (14) which is non-conforming to the AS The Standard requires that at least 90% of the material (e.g. PLA) shall degrade within 12 months. (21) Therefore, for the purposes of this Issues Paper, PLA lined takeaway coffee cups are not considered biodegradable under home composting scenarios. Figure 6: An industry standard polymer coated paper cup retrieved from over a year in a residential compost. (26) Where commercial operations exist in each market, the takeaway coffee cup can be composted, however to date, limited penetration of PLA composting infrastructure exists in Australia. (1) However, in addition to being commercially compostable, PLA coated paper cups can also be recycled with regular PE coated paper cups in areas where cups are accepted for recycling. 7 Mississippi River Pulp and Starbucks, 2006, 8 International Paper Foodservice Business, 9 TAPPI British Disintegration Test 10 Australasian Bioplastics Association Page 18 of 32

19 While all PCP formats are technically recyclable, only 8% of cups are currently recycled - primarily offshore Paper fibre The paper fibre component represents 90% (7) of the takeaway cup by mass. Whilst recovery of the lining is important, the recovery of the paper fibres should remain the focus given that the majority of the cup is paper. The process of recycling packaging containing PCP is considered more complex than recycling regular paper and cardboard. (4) Takeaway coffee cups must be soaked to separate the PCP and other impurities before it can be transferred to a recycling facility, where the material is then refined and dried for reuse. (7) According to the Australian Recovered Paper Specifications (1), the presence of polymer coatings means that polymer-coated paperboard, such as takeaway coffee cups, are not included in the regular grades of paper stock. Research conducted and the findings of this working group is that takeaway coffee cups with polymer linings are recyclable within existing Material Recovery Facility (MRF) and recycling infrastructure. This is currently being undertaken at various sites throughout Australia (See Figure 5) and is supported by major MRF and recycling representatives. (6) 9.3. Plastic lids Takeaway coffee cup lids are predominantly made from plastic and can be recycled if they have a Plastics Identification Code (PIC) stamp (1 6). However, it is often recommended to remove the lid from the cup prior to disposing of the packaging in the recycling bin. Regional specific acceptance of any given plastic in kerbside or commercial recycling schemes should be checked however these plastics are very commonly accepted. These plastic lids still require the consumer to separate the polymer-coated paperboard coffee cup from the lid at disposal. This should be considered when developing labelling and messaging for correct disposal. APCO is dedicated to identifying and supporting measures to improve the commercial viability and recycling rates of polymer-coated paperboard, specifically takeaway coffee cups. Ben Reay, General Manager, Innovation and Circular Economics (APCO) 11 Huhtamaki Australia Food Services, pers. comms. May 2017 Page 19 of 32

20 10. Practical Considerations As outlined above, the existing recycling processes used to recycle paper in Australia s infrastructure can be used to recycle takeaway coffee cups Material Recovery Facility Many types of polymer-coated paperboard (PCP) products such as milk cartons are currently recycled. The PCPB Working Group has discussed the following considerations that support this claim Collection Each year, 28% (15,900 tonnes) of PCP consumed in Australia is recovered, 86% of which is postconsumer. (12) The recovery pathway of each PCP format is different. By their very nature, takeaway coffee cups are more likely to be disposed of away from home; however, this is not the case for many other liquid paperboard packaging formats such as polymer-coated milk cartons, which are commonly sourced from kerbside recycling. (12) The Australian Recovered Paper Specifications (1) outline the specifications required for liquid carton board as commonly found in milk cartons sorted from domestic kerbside collections at MRFs. These cartons are specified to have a maximum of 10% mechanical fibre and total fibre content of not less than 50%... (1). According to Cleanaway (6), coffee cups contain less polymer coatings than milk cartons specified above, with estimates that the currently recycled milk cartons have double the amount of polymer percentage by weight. equipment and machinery is currently available to treat and utilise large qualities of these paper grades. These specialty grades are accepted by many paper mills around the world. (1) Where polymer-coated paperboard is collected and enters a paper recycling stream, it is classified as an out-throw unless it is part of a single stream recycling program. Out-throws are not considered contamination per se; however, they influence paper grading and therefore rebate returns for the recycled paper. Consequently, recycling of takeaway coffee cups and other liquid paperboard (e.g. gable top containers such as milk cartons) are not considered a technological challenge, but a commercial decision. Both ACOR and the International (ISRI) Paper Stock Recycling Standard for (1) (20) mixed paper recycling allow for up to 3% out-throws in mixed paper recycling Paper Sorting Recovered paper fibre that arrives at the Material Recovery Facility (MRF) is classified based on weight, colour, usage and raw materials. (1) The sorting process is an important step in ensuring that quality and end-use characteristics are achieved in the production of the recyclate. Dependant on the supply of waste paper and the contamination levels, grading and sorting will determine the commercial return (rebate) of the recyclates produced Pulp preparation, cleaning, screening and further treatment According to ACOR s Australian Recovered Paper Specifications (1), once sorting and grading is completed, the recovered paper is broken down to fibres through the addition of large quantities of water to produce a slurry. This slurry is then cleaned to remove contaminants such as clay, metal and glues. With contaminants removed, the paper is screened and other unwanted materials are removed by floatation or further washing. Dependant on the end use, the pulp can be bleached (where white paper is the product). This slurry is then formed, pressed and dried prior to being made into new paper products. Page 20 of 32

21 10.2. Misinformation A proportion of takeaway coffee cups end up in landfill primarily due to a basic lack of understanding and unreliable information being communicated to consumers as to how to correctly dispose of the packaging. An inner barrier / coating of PE or PLA is applied to takeaway coffee cups to make them waterproof, but this is not common knowledge. (12) Research conducted in 2013/2014 showed that 52% of consumers disposed of their used takeaway coffee cups in the recycling bin and over 40% believe that they are recyclable. (12) A finding of this Issues Paper is that recycling of takeaway coffee cups is achievable within the existing recycling collection system. This research and the PCPB Working Group findings establish behavioural and factual support for broadening takeaway coffee cup recycling in existing infrastructure. Further research will be conducted over the coming months and published by the PCPB Working Group. It is important to note, however, that when takeaway coffee cups are disposed of in paper recycling bins, the plastic linings reduce the potential value of the paper stream. Often this results in this material being sent to landfill. If takeaway coffee cups are thrown in the general waste bins, they too end up in landfill. (12) Notwithstanding this, it is the view of the PCPB Working Group that takeaway coffee cups are recyclable and even in the event that the polymer is landfilled, the recovery and recycling of the paper fibre is preferable to landfill. The PCPB Working Group is not aware of any technical challenge to the recovery and recycling of takeaway coffee cups, although it does recognise the commercial practicalities as outlined in Section According to a study commissioned by the APCO in 2015 (12) : if PCPs (polymer-coated paperboards) were the only contaminant entering recovered paper streams they would constitute no issue. In addition, the report states: PCPs will typically break down, to some extent in the pulping process. There is potentially an opportunity for improving the collection and ultimately the recycling of takeaway cups. Consistent end-of-life disposal messaging (e.g. labelling) across different product technologies is critical in ensuring consumers are not confused and maximum recovery rates are achieved in the recycling stream. Consideration should be given to the ACCC Green Marketing Guidelines. An important opportunity lies in educating consumers more thoroughly when it comes to the correct disposal of biodegradable and compostable coffee cups so that businesses manufacturing, supplying and selling these products are not doing so without the intended positive effect. In tandem with further education, appropriate recovery processes need to be made more widely available and accessible for biodegradable and compostable products. Page 21 of 32

22 11. Next Steps Over the coming months, the Australian Packaging Covenant Organisation (APCO) and the PCPB Working Group will be broadening the review of potential solutions to the issues and challenges identified in this Issues Paper. As a part of this Issues Paper, we have sought to engage and seek input from a wide variety of perspectives and stakeholders as outlined in Section 13 and the Appendices. Understanding these perspectives is a critical first step in separating fact from factoids, or clarifying the extent to which challenges exist for a stakeholder or region. APCO acknowledges that it is very likely that no one single solution will be fit for purpose for all markets and end-uses, however a unified effort and identification of potential solutions is the goal. "In an ideal setting, you'd have a takeaway coffee cup manufactured from recycled material with an 80 95% recovery rate and then you can start creating a circular model for those materials." Conclusions The Australian Packaging Covenant Organisation s Polymer Coated Paperboard Working Group has preliminarily concluded that: 1. Takeaway coffee cups are recyclable via many existing Material Recovery Facilities (MRFs) and recycling systems irrespective of the polymer coatings they contain. 2. Compostable options exist in the market however, there is uncertainty as to the exact availability of commercial-scale composting facilities. Further research is to be conducted by the PCPB Working Group. 3. Standardised education and messaging (including labelling) is critical to ensure consumers recycle takeaway coffee cups and to prevent this material ending up in landfill. Messaging needs to be consistent across product formats and technologies to maximise recycling rates. 4. Environmental impacts between all types of polymer-coated takeaway coffee cups are similar where composting options are not available. As such, a focus on recycling polymercoated paperboard packaging is a priority. 5. Future research and investigations are needed to improve the circular economics and incentives for Material Recovery Facilities (MRFs) to broadly and openly accept takeaway coffee cups to be recycled. These preliminary conclusions will be further investigated to identify initiatives and activities that will increase the recycling of takeaway coffee cups in Australia, whilst supporting the various supply chain participants to overcome economic, and other, challenges. This work will be published in quarter one of the 2017 / 2018 financial year. 12 Take 3 A Clean Beach Initiative, Page 22 of 32

23 13. Critical Review The APCO would like to thank and acknowledge the individuals and organisations that contributed to the peer review of the PCPB Working Group Issues Paper #1 in Australia. APCO recognises the importance of collaboration and evidence-based discussion in resolving challenges associated with moving towards a circular economy for this packaging format. The PCPB Working recognises that representative engagement from Material Recovery Facilities (MRFs) and recyclers is a significant weakness to any discussion on the recyclability of problematic materials such as takeaway coffee cups. Although significant efforts were made over several months by APCO to engage these important stakeholders there is an apparent resistance in the industry to engage. Regardless of this, the APCO is committed to facilitating meaningful engagement and sustainable solutions that are cognisant of the challenges for this sector and the industry more broadly. During the development of the next Issues Paper #2, which will investigate practically focused solutions to the issues presented in this paper, APCO will continue to work hard to broaden the scope of engagement and collaboration participants. The relative lack of engagement from the sectors of the waste management industry that ultimately must deal with decisions relating to consumption, design and disposal of takeaway coffee cups should not overshadow the fact that polymer-coated paperboard packaging is currently being recycled in Australia. This includes a large range of products including magazines, TetraPaks (juice containers etc.) and gable top milk cartons which are accepted at, and recycled by, MRFs and other recyclers. It should also be noted that there is a lack of reliable data related to polymer coated paperboard packaging and assumptions have been made. The peer review process undertaken for the Issue Paper was conducted to broaden and seek evidence to support or (possibly more importantly) reject the conclusions presented by the PCPB Working Group. The final draft version (9.3) of the Issues Paper #2 was disseminated to key stakeholders identified in the APCO Membership and others identified by the PCPB Working Group. Organisations that have provided feedback to the development of the final publication (version 10) of this Issues Paper are shown on Page 2. An aggregated summary of the peer review findings is shown at Section Who contributed to the peer-review findings Figure 7: Industry Representation in Peer Review Waste Management / Recyclers Brand Owner Consultant / Industry Expert Packaging Manufacturer Distributer / Retailer Other 44% 4% 4% 9% Industry representation in peer review 17% 22% The peer review cohort covered a broad range of industry sectors (noting Section 13 engagement concerns) as shown in Figure 7. These industry categories were selfdefined. Packaging manufactures represent the largest group of respondents in the peer review cohort at 44% with further industry sectors represented by brand owners and consultants / industry experts at 22% and 17% respectively. The other category consisted of marketeers of polymer-coated paperboard products. Page 23 of 32

24 13.2. Importance of this Issues Paper and Key Findings All respondents (100%) of the peer-review cohort indicated that the issue of determining the recyclability of takeaway coffee cups in Australia is a timely area of focus. This is supported by its inclusion in the APCO s Strategic Plan ( ) as a problematic material for investigation. This Issues Paper concludes that takeaway coffee cups made of polymer-coated paperboard are currently recyclable in Australia. Over 80% of all respondents in the peer review cohort agreed with this position and that major recyclers are already recycling similar materials with a greater proportion of polymer (73%). It is important however, to provide context to this conclusion. Of all the information provided by respondents, more than 95% of agreed that the commerciality of the recycling process is complicated with nearly half of all respondents indicating that there are technical barriers that need to be overcome. Interestingly, when prompted to agree or disagree that the major barrier associated with takeaway coffee cup recycling is the reduced value of recovered materials, there was less than 23% support for this position. It is possible then, that challenges may not be associated with reductions in rebates for MRFs. This again highlights the importance of validating these findings with MRFs and recyclers. This will be a key objective in future APCO and PCPB Working Group efforts. Other findings indicated that discussion in the Issues Paper on the collection of polymer-coated paperboard was accurate (>95% agreed). Although there was relatively strong support (>77%) for the characteristics presented in the sorting and pulping processes for this material, it is recognised by the PCPB Working Group that these are key considerations when developing potential solutions into the future. This work will be comprehensively discussed in Issues Paper #2. Somewhat unsurprisingly, greater than 90% of respondents agreed that a greater focus is required on consumer education. APCO is currently in the later stages of developing a labelling system for packaging that will go some way towards clarifying these issues. Various other comments were made as a part of the peer review process which will be included in future investigations (related to solutions). Summarised support for the conclusions in this Issues Paper are shown below in Figure 8. SUPPORT FOR CONCLUSIONS MADE IN ISSUES PAPER 82% 86% 91% 86% 55% Takeaway coffee cups are recyclable Compostable options are available - more research needed Education and consistent messages are critical Takeaway coffee cups (irrespective of coating) currently have similar environmental impacts Future research and support of MRFs and recyclers is required to accept takeaway coffee cups is needed Figure 8: Percentage of respondent support for conclusions in the Issues Paper. Page 24 of 32