California's plastic bag ban could further tighten recycled PE supply

As California prepares to possibly implement a grocery store plastic bag ban, market sources voiced concerns this week over its impact on the supply of recycled plastic, which is coinciding with increasing demand for the material.

Many companies are racing to meet their upcoming sustainability commitments set for 2025, which is driving a consistent rise in demand for recycled materials. Platts, part of S&P Global Commodity Insights, last assessed recycled HDPE natural bales at 48 cents/lb FOB Chicago on Sept. 3, more than double from a year ago when prices for bales were assessed at 23 cents/lb.

As the supply of post-consumer high- and low-density polyethylene is already tight, concerns are growing that the upcoming plastic ban could further strain the availability of recycled plastics in the market.

To manage supply some of the major retail bag manufacturers established networks to collect plastic bags from stores in order to repurpose the material into new retail bags.

However, if their supply diminishes, they may reduce or even suspend their processing operations for returned plastic bags from stores, a source said.

"We are not fans of bans; we believe there can be effective capture programs both curbside and store returns," the same source said.

California state lawmakers successfully passed bills SB 1053 and AB 2236, aimed at banning the distribution of plastic bags at grocery store checkouts on Aug. 29.

The SB 1053 and AB 2236 bills aims to correct shortcomings in California's 2016 single-use plastic bag ban, which resulted in an increase of plastic being sent to landfills. Many consumers opted not to reuse the thicker plastic carryout bags, resulting in a surge of plastic waste.

According to CalRecycle, the disposal of grocery and merchandise bags in California rose from 157,385 metric tons in 2016 to 231,072 metric tons by 2022 -- a 47% increase.

Governor Gavin Newsom has until Sept. 30 to sign the new plastic bag ban legislation, which if he does, would be implemented Jan. 1, 2026.