Can Cullet ensure that glass remains a key and relevant packaging medium? By: Richard van Breda September 2017 1
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
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
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
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
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 2017 ” . O-I - 2014 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
Considerable variation in cullet collection levels across the world • EU28 countries have an impressive average 73% cullet levels - Feve, in their “Container Glass – 2013 - Collection for Recycling Rates in Europe Report” • North America is OI’s lowest cullet usage region, with only 26% - OI Sustainability Report, 2014. • 80% 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 post- consumer cullet? • Many see the deposit legislation as an additional tax, and as a hindrance. • However it does increase collection rates. 7
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 2020. • 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
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. Dramatic increase in the rate of glass Legislation, returnable bottles with collections. deposits, or simple container legislation 9
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
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
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
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