By Paul Salach
As interest in circularity grows, more and more brands are procuring materials that claim to be made with 100% recycled content, yet are these products truly as they seem? In some cases, the material could be produced through a process known as mass balance. Under mass balance programs, manufacturers are allowed to strategically allocate a fixed amount of reclaimed waste material toward a specific set of products. For instance, rather than claim that 100% of their products are made with 25% recycled content, mass balance allows manufacturers to instead say that 25% of their products are made with 100% recycled content. While this may seem like greenwashing, the approach does have merits that even a staunch environmentalist can support.
To start with the downsides, some materials are not able to be fully made of recycled content and still maintain a high level of quality. Products such as cardboard, paper, and plastic degrade each time they are recycled due to the shortening of the natural fibers or monomer chains that make up the products. While waste can be reincorporated into the manufacturing process, oftentimes virgin materials need to be added for the finished product to meet performance standards. Since true 100% recycled content versions of these products cannot currently meet the needs of the market, allowing the use of mass balance for marketing claims would be misleading to consumers and inaccurate in terms of current material science. On the other hand, products like aluminum and glass can be infinitely recycled without significant changes to product quality. Yet even in these cases, under mass balance the consumer is buying something that is not necessarily what the marketing claim states.
Traditional Manufacturing – All Containers with 25% Recycled Content:
Mass Balance – ¼ 100% Recycled Content Containers & ¾ 0% Recycled Content Containers
Despite these concerns, mass balance can create opportunities for both corporations and the public to benefit. In many cases, incorporating waste into the manufacturing process adds cost. This can be caused by the increased supply chain complexity of having to procure materials from hundreds of recycling centers scattered across the country versus a single supplier or the need to install treatment equipment to ensure high input quality. In order to recoup these costs, manufacturers must be able to charge some level of premium.
Say a company makes 5 million bottles a year and needs to invest $1 million to achieve 25% recycled content. The company also takes on a $0.10/bottle increase in raw material costs when procuring waste versus virgin materials. Under traditional manufacturing practices the firm would need to increase the price $0.20/unit to all customers to pay back their investment in two years. Some existing consumers may find value in the 25% recycled content however others may refuse to pay the necessary premium making the business case for investment challenging.
Under mass balance, the producer could instead claim 100% recycled content on 25% of the bottles they make. To recoup their initial investment the firm would now need to charge $0.80/bottle to 25% of their customer base to achieve a two-year payback. The firm could then begin conversations with customers with strong sustainability goals to test willingness to pay for 100% recycled content bottles. If they have enough demand from this circularity focused segment they can proceed with the investment. Through mass balance, the bottle producer can move forward with incorporating waste back into their products meaning less waste to landfill for the public and sustainability focused customers can move closer to their goals through the use of packaging with 100% recycled content versus the original 25%.
At first glance, mass balance may seem like a convenient way for corporations to oversell the impacts of their sustainability efforts. However, the ability to strategically service sustainability leaders first provides industry a place to start. As interest in sustainable products grows, manufacturers can then gradually bring more and more waste back into their facility and move closer to a fully circular operation. While the approach is imperfect, mass balance can be a useful economic tool to kickstart circularity investments and ultimately reduce the amount of waste going to landfills.
Reader Question:
Do the benefits of mass balance outweigh the risks, or should corporations be held to a higher standard when making recycled content claims?
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The Institute for Climate and Sustainable Growth is a collaborator of the UChicago Sustainability Dialogue, but is not responsible for the content.