04/12/2023 01:00 PM House RESOURCES

            HB 143-ADVANCED RECYCLING AND FACILITIES                                                                        
                                                                                                                                
2:02:16 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY announced  that the final order of  business would be                                                               
HOUSE  BILL  NO. 143,  "An  Act  relating  to the  Department  of                                                               
Environmental  Conservation; relating  to advanced  recycling and                                                               
advanced recycling  facilities; relating to waste;  and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
CHAIR  MCKAY explained  that  HB 143  would  create a  regulatory                                                               
framework around  a new industry  known as  "advanced recycling."                                                               
This would take  plastics which are not  suitable for traditional                                                               
recycling  and  convert them  into  high  value products  through                                                               
various chemical  processes.   Without some  regulatory processes                                                               
governing  the  industry, these  manufacturers  are  not able  to                                                               
evaluate the profitability of investing  in Alaska.  He mentioned                                                               
that 23 other  states have passed bipartisan  legislation like HB
, and  this allows these  emerging technologies to  operate in                                                               
their states.  He stated  that the proposed legislation would add                                                               
Alaska to the  list of states for manufacturers  to consider when                                                               
investing millions of dollars in advanced recycling.                                                                            
                                                                                                                                
2:04:07 PM                                                                                                                    
                                                                                                                                
TREVOR JEPSEN,  Staff, Representative McKay, presented  HB 143 on                                                               
behalf  of  the  bill  sponsor,   the  House  Resources  Standing                                                               
Committee, on  which Representative  McKay serves  as chair.   He                                                               
began  a  PowerPoint  presentation, titled  "Advanced  Recycling"                                                               
[hard  copy  included in  the  committee  packet].   He  directed                                                               
attention to slide  2 and detailed that  advanced recycling, also                                                               
referred to as  chemical recycling, is a  relatively new industry                                                               
that  has been  around for  10 years.   He  stated that  advanced                                                               
recycling takes  discarded plastic  and turns it  into petroleum-                                                               
based products.   He mentioned  that advanced recycling  has been                                                               
used in  large scale commercial  operations in the last  5 years.                                                               
He  reiterated that  legislation like  HB  143 has  passed in  23                                                               
other states.                                                                                                                   
                                                                                                                                
MR. JEPSEN  described the  flowchart pictured  on slide  3, which                                                               
related  that,   using  chemistry,   post-use  plastics   can  be                                                               
converted  to valuable  products, and  this extends  the life  of                                                               
plastic.   He suggested that  using the basic building  blocks of                                                               
new  chemicals,   plastic  feedstocks,  and   plastic  additives,                                                               
outputs can be asphalt roads, roofing, waxes, and lubricants.                                                                   
                                                                                                                                
2:06:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER asked  if  HB 143  would allow  recycling                                                               
centers  to break  down plastic  to  return it  to its  component                                                               
parts.                                                                                                                          
                                                                                                                                
MR.  JEPSEN  confirmed plastics  can  be  broken down  through  a                                                               
process   called   depolymerization   and  rebuilt   into   other                                                               
materials.                                                                                                                      
                                                                                                                                
2:07:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER,  referring to slide 3,  questioned which                                                               
states  are  currently  utilizing plastic  additives  to  asphalt                                                               
roads.                                                                                                                          
                                                                                                                                
MR. JEPSEN deferred to Prapti Muhuri.                                                                                           
                                                                                                                                
2:08:21 PM                                                                                                                    
                                                                                                                                
PRAPTI  MUHURI,  Manager  of  Recycling  and  Recovery,  American                                                               
Chemistry  Council, answered  that  advanced  recycling is  being                                                               
used  to produce  additives  in asphalt  roads  in other  states,                                                               
including Missouri.                                                                                                             
                                                                                                                                
REPRESENTATIVE  RAUSCHER asked  whether  asphalt requires  higher                                                               
temperatures to lay.                                                                                                            
                                                                                                                                
MR. JEPSEN  responded that  many different  products can  be made                                                               
from plastics through advanced recycling.                                                                                       
                                                                                                                                
2:09:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MEARS  mentioned  that,  because  of  a  lack  of                                                               
critical  mass  and  low  population,   recycling  in  Alaska  is                                                               
difficult to  manage in remote  communities.  She  questioned the                                                               
minimum  critical mass  needed  to be  recovered  from the  waste                                                               
stream to make advanced recycling practical in Alaska.                                                                          
                                                                                                                                
MR.  JEPSEN   stated  that  an   economic  model  later   in  the                                                               
presentation  would  address  the  question.   He  continued  his                                                               
presentation  with slide  4, addressing  the process  of advanced                                                               
recycling.  He stated that  there are different processes used to                                                               
break down  plastic polymers into base  chemical components, such                                                               
as gasification, pyrolysis, and  solvolysis.  He further detailed                                                               
that  advanced  recycling is  non-combustive  and  should not  be                                                               
confused  with incineration.   He  said that  there are  some air                                                               
emissions  associated  with  advanced   recycling,  and  this  is                                                               
regulated in  accordance with the Clean  Air Act.  It  would also                                                               
be   subject   to   the  Alaska   Department   of   Environmental                                                               
Conservation (DEC), just like any other manufacturing plant.                                                                    
                                                                                                                                
2:12:02 PM                                                                                                                    
                                                                                                                                
MR. JEPSEN moved  to slide 5 and detailed  the advanced recycling                                                               
processes.  He stated that  the primary product from gasification                                                               
is synthetic gas  or syngas.  The primary  product from pyrolysis                                                               
is petroleum  liquids, diesel, and  naphtha.  He pointed  out the                                                               
flowchart on slide 6 and  said that plastics are first collected,                                                               
washed, sorted,  and shipped to  an advanced  recycling facility.                                                               
He continued that  naphtha is a precursor to plastics,  and it is                                                               
produced through pyrolysis.   This can then be sent  to a cracker                                                               
producer or  plastic resin producer  to be thermally  broken down                                                               
into  components  which can  be  sent  to various  manufacturers.                                                               
These manufacturers  will eventually  produce this  into consumer                                                               
goods.                                                                                                                          
                                                                                                                                
2:13:53 PM                                                                                                                    
                                                                                                                                
MR.  JEPSEN,  in  response  to  a  question  from  Representative                                                               
Armstrong,  explained  that  "cracker producers"  are  facilities                                                               
which thermally break down naphtha.                                                                                             
                                                                                                                                
2:14:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DIBERT asked  where the  nearest manufacturer  is                                                               
located.                                                                                                                        
                                                                                                                                
CHAIR   MCKAY,  in   continuation   of  Representative   Dibert's                                                               
question, asked whether all the  steps pictured in the flow chart                                                               
on slide 6 are meant to take place within Alaska.                                                                               
                                                                                                                                
MR. JEPSEN  answered that  slide 6  displays only  a hypothetical                                                               
example.   He said this  would depend on the  economic activities                                                               
that transpire as a result of the legislation.                                                                                  
                                                                                                                                
MR. JEPSEN advanced to slide  7, which addressed whether advanced                                                               
recycling  is necessary.   He  pointed out  that it  is estimated                                                               
that as little as 8.7 percent  of recycled plastic is reused.  He                                                               
stated that  China is no  longer taking plastic recyclables.   He                                                               
remarked that, if  the committee is concerned  with efficiency in                                                               
recycling,  conserving landfill  space,  and creating  relatively                                                               
low greenhouse gas emissions [GHG],  then it should be in support                                                               
of advanced recycling.                                                                                                          
                                                                                                                                
2:16:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER noticed a discrepancy on slide 7.                                                                        
                                                                                                                                
MR.  JEPSEN   clarified  that   slide  7   is  from   a  previous                                                               
presentation and  mentioned that some  of the figures may  not be                                                               
precisely accurate;  however, the estimates demonstrate  that the                                                               
amount of plastic currently being recycled is relatively low.                                                                   
                                                                                                                                
MR. JEPSEN described  the concept of a circular  economy on slide                                                               
8.   He  pointed out  that advanced  recycling would  incentivize                                                               
markets to reuse products and  allow plastic waste to be returned                                                               
to the  economy to be  used more  efficiently.  He  expressed the                                                               
opinion that  the issue of  conserving space for waste  and using                                                               
resources  more efficiently  transcends  party lines.   He  added                                                               
that the industry is  economically sustainable without government                                                               
subsidies,  and advanced  recycling  would complement  mechanical                                                               
recycling, not replace it.                                                                                                      
                                                                                                                                
MR.  JEPSEN  moved  to  slide 9,  which  addressed  the  economic                                                               
benefits of advanced recycling and  recovery.  He stated that one                                                               
advanced  recycling  facility  in  the  state  could  process  50                                                               
percent  of the  59,700 metric  tons  of landfill  plastics.   He                                                               
stated that  these figures  resulted from the  use of  the Impact                                                               
Analysis for  Planning (IMPLAN) economic  modeling software.   He                                                               
explained that the 59,700 metric  ton figure was calculated using                                                               
2020 census data with a weighing  factor of 8.7 percent, which is                                                               
the estimated recycling rate.                                                                                                   
                                                                                                                                
2:20:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  asked  to  clarify  whether  the  nearly                                                               
60,000 metric  tons is calculated  or a  real figure of  how much                                                               
plastic waste is produced.                                                                                                      
                                                                                                                                
MR.  JEPSEN, in  response, confirmed  that the  figure is  just a                                                               
calculated estimate, not a total measurement.                                                                                   
                                                                                                                                
MR.  JEPSEN,  in response  to  Chair  McKay, stated  that  Alaska                                                               
currently  does not  have an  advanced recycling  center and  the                                                               
figures are based on IMPLAN.   He continued, explaining the table                                                               
on slide 9  and said that should an advanced  recycling center be                                                               
implemented in  Alaska, the IMPLAN modeling  analysis shows there                                                               
is a potential  for 100 new jobs with a  total economic output of                                                               
$34.2 million.   He explained that the  downstream employment, or                                                               
as seen on the chart  as the "Indirect Effect," through business-                                                               
to-business purchases  within the  supply chain would  create [90                                                               
more  jobs with  $6.7 million  in  payroll and  $24.7 million  in                                                               
output].  He explained that the  "Induced Effect" on the chart is                                                               
the value stemming  from household spending [and  is projected to                                                               
create 60  jobs with a payroll  of $3.8 million and  an output of                                                               
$11.3 million].                                                                                                                 
                                                                                                                                
MR. JEPSEN addressed the earlier  question concerning the minimum                                                               
critical mass  in Alaska and said  it would be difficult  for the                                                               
House  Resources  Standing  Committee   to  fully  calculate  the                                                               
critical mass  and doing  so would  be outside  the scope  of the                                                               
bill.   He  said  that HB  143  would only  set  up a  regulatory                                                               
framework,  and the  creation of  an advanced  recycling facility                                                               
would involve a private enterprise  which would conduct their own                                                               
feasibility  studies.   He  concluded  that HB  143  sets up  the                                                               
regulatory  framework for  investors  who may  wish  to start  an                                                               
advanced recycling facility within Alaska.                                                                                      
                                                                                                                                
2:23:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER asked  about  the  primary components  of                                                               
recycled plastics.                                                                                                              
                                                                                                                                
MR.  JEPSEN   responded  that  plastics  are   separated  into  7                                                               
different  categories.    Types  1  and  2  can  be  mechanically                                                               
recycled.   The remaining 3-7  types of  plastics can be  used in                                                               
advanced  recycling.    He  offered, for  clarity,  to  create  a                                                               
written document with  information about the 7  types of plastic.                                                               
In response to a follow-up  question, stated that because plastic                                                               
bottles are made from types 1  and 2 plastics, they are preferred                                                               
for mechanical recycling.                                                                                                       
                                                                                                                                
2:25:15 PM                                                                                                                    
                                                                                                                                
MR.  JEPSEN,   in  response  to   a  series  of   questions  from                                                               
Representative  Armstrong, stated  that  the  59,700 metric  tons                                                               
figure on  slide 9  assumes Alaska's  share of  landfill plastics                                                               
throughout  the country.   He  responded that  plastics could  be                                                               
retrieved from a landfill, or  diverted from going to a landfill,                                                               
and  brought to  an advanced  recycling facility  for processing.                                                               
In  response to  whether  the success  of  an advanced  recycling                                                               
program   would  necessitate   better   consumer  and   corporate                                                               
recycling  programs,  he  expressed the  belief  that  monetizing                                                               
plastics would increase plastic recycling.                                                                                      
                                                                                                                                
2:27:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MEARS asked about  the program's feasibility.  She                                                               
gave her  professional expertise  in recycling and  mentioned the                                                               
possibility  of a  more practical  method  of diverting  plastics                                                               
from landfills in Alaska.  She voiced concerns about the bill.                                                                  
                                                                                                                                
CHAIR  MCKAY replied  that HB  143 is  only a  discussion of  the                                                               
regulatory framework  of advanced  recycling.  He  continued that                                                               
private entities  interested in  investing in  advanced recycling                                                               
would need to decide if it was economically feasible.                                                                           
                                                                                                                                
REPRESENTATIVE  MEARS expressed  her  concern that  HB 143  could                                                               
harm existing industries.                                                                                                       
                                                                                                                                
2:29:48 PM                                                                                                                    
                                                                                                                                
MR.  JEPSEN, pointing  out  the value  of  advanced recycling  on                                                               
slide  10,  stated it  would  be  a  low  GHG process  to  create                                                               
petroleum-based  products, decrease  landfill space  taken up  by                                                               
plastics, greatly  increase the percentage of  recycled plastics,                                                               
and bring economic benefits to  Alaska.  He reiterated that these                                                               
benefits are  contingent on  the passage of  HB 143.   Concluding                                                               
the presentation, he  further outlined the contents of  HB 143 on                                                               
slide 11, which read as follows [original punctuation provided]:                                                                
                                                                                                                                
          • Delegates authority to the DEC to develop                                                                           
     manufacturing regulations related to air emissions and                                                                     
     water discharges from advanced recycling facilities                                                                        
                                                                                                                                
     • Clarifies that advanced  recycling facilities will be                                                                    
     regulated  as  manufacturing  facilities not  as  waste                                                                    
     disposal facilities                                                                                                        
                                                                                                                                
     • Clarifies  that plastic  feedstock and  products will                                                                    
     not be classified as industrial, solid, or other waste                                                                     
                                                                                                                                
       Defines terms                                                                                                            
                                                                                                                                
2:31:18 PM                                                                                                                    
                                                                                                                                
MR. JEPSEN  gave the  sectional analysis of  HB 143  [included in                                                               
the   committee  packet],   which  read   as  follows   [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Sec.  1  Designates  the  Department  of  Environmental                                                                    
     Conservation  with the  power to  develop manufacturing                                                                    
     regulations related to advanced recycling.                                                                                 
                                                                                                                                
     Sec.  2   -  6  Provides  clarification   that  certain                                                                    
     definitions  currently  in  statute  do  not  apply  to                                                                    
     advanced    recycling    materials,    products,    and                                                                    
     facilities.                                                                                                                
                                                                                                                                
     Sec.  7 Provides  new  definitions  to define  advanced                                                                    
     recycling  and the  chemical processes  associated with                                                                    
     it.                                                                                                                        
                                                                                                                                
     Sec. 8 Provides for an effective date.                                                                                     
                                                                                                                                
2:32:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ARMSTRONG   questioned  the   difference  between                                                               
managing  the   regulations  for   a  waste  facility   versus  a                                                               
manufacturing facility.   She questioned whether  there are other                                                               
advanced  recycling   facilities  classified  as  both   a  waste                                                               
facility and a manufacturing facility.                                                                                          
                                                                                                                                
MR.  JEPSEN  expressed  the   opinion  that  regulating  advanced                                                               
recycling as a  manufacturing facility would make  more sense, as                                                               
this would be consistent with  the regulation of these facilities                                                               
in other states.                                                                                                                
                                                                                                                                
CHAIR MCKAY  acknowledged Representative Mears' expertise  on the                                                               
topics presented  in HB  143 and  invited her  to testify  at the                                                               
next meeting.                                                                                                                   
                                                                                                                                
2:33:30 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY announced that HB 143 was held over.