Reclamation Report 2013 - Aug/Sep 2013

By Darius Helm

Since its establishment in 2002, CARE, the Carpet American Recovery Effort, has been guiding the carpet reclamation business. And over the years it has helped find solutions to recycling challenges, like end-use markets for nylon, and has done its best to build momentum in a volume-based, low-margin industry. Now the post-consumer waste stream is being flooded with PET carpet, and there’s almost no demand for it because there are insufficient end use markets.

In California, struggles with PET have had a direct impact on the recycling network, with two of the state’s four recyclers going under in the last year. The developments have hampered the success of California’s Carpet Stewardship Program, AB 2398, which puts a $0.05 fee on every yard of carpet sold in California. Mills send the funds to CARE, which is tasked with doling it out to recyclers that verify sales of recycled material to end use markets. 

CARE’s original carpet stewardship plan was only conditionally approved, and the revised plan, resubmitted at the end of May, is currently under review by CalRecycle, the California Department of Resources, Recycling and Recovery. The concern among all parties is that there are no real solutions to the PET problem, and the viability of California’s initiative may be at risk.

THE RISE OF POLYESTER CARPET
A decade ago, Mohawk and Beaulieu were doing a good business with their polyester carpet, which had a niche in the residential market, with staple fiber made of 100% post-consumer drink bottles. But over the last few years, at the same time that the residential market was languishing and consumers were running on much tighter budgets, new filament technologies began to transform the polyester business. 

In short order, the major mills had both switched from staple to filament yarn and increased their polyester programs, driven in part by the favorable cost of PET compared to nylon. All the major mills launched PET programs. New players, like Engineered Floors and Phenix/Looptex, entered the market as PET specialists. Engineered Floors, with its massive state-of-the-art facilities, grew remarkably, and today it’s the fifth largest mill in the U.S., with sales over $300 million.

A big market for PET is the cost-driven multi-family sector, which has been very active for the last few years. Carpet in rental apartments is switched out more frequently than carpet in condos and single-family homes, so that first wave of polyester sales to the multi-family market is already finding its way into the waste stream.

PET carpet has been driving residential carpet sales for a couple of years now, and there’s every reason to believe that it will continue to grow and take share from nylon. Floor Focus estimates that polyester already accounts for close to 40% of residential carpet sales.

Back in 2008, polyester accounted for less than 10% of the carpet waste stream. Now it’s more like 30% and that number, tracking a few years behind production numbers, is going to keep climbing.

These days, when collectors retrieve container loads of carpet, they have to pay to dump nearly a third of the load, yet somehow they have to run their business and cover those additional dumping costs with a reduced load of content (nylon) that has value in the market. Collectors are already going out of business, and processors who do their own collection are also struggling. The only entities in the recycling market that are surviving are those that recycle processed material, since they don’t have to deal with the PET problem. However, if the situation deteriorates and there aren’t enough collectors, everyone in the reclamation network will be impacted.

The entire commercial carpet market uses nylon face fiber, but the reclaimed commercial carpet has far less value than residential carpet. For one thing, commercial carpet is glued down, and that adhesive is a big problem in processing. But, more importantly, there’s more face fiber in residential carpet and the cut pile constructions make it much easier to shear off the fiber. In the recycling market, 70% to 80% of the volume comes from residential carpet.

After reclaimed carpets are sheared, what remains—called the carcass—has little value and will generally end up landfilled or going for waste to energy. It’s made up of polypropylene backing layers, latex and fillers like calcium carbonate—nothing of much value. However, that carcass has a lot of face fiber trapped in the primary backing, but existing technologies have not been able to extract those fibers and deal with all of the latex and calcium carbonate crud in a cost-efficient manner.

Machinery that could pull clean fiber out of carcasses would help recyclers increase their margins. Currently, a machine called the Tornado—modified from paper and pulp equipment by Environmental Recycling Carpet Services (ERCS) and a Tennessee partner—is being trialed by a Georgia recycler, LaGrange’s Recom Technologies LLC, in combination with other equipment. The process is designed to separate the face fiber from the woven polypropylene backings and at the same time clean the fiber and remove the latex and filler waste. Cleaning up the fiber can add 50% to the value of the material.

CONDITIONS IN CALIFORNIA
There’s a 15-acre lot in Sacramento piled with something like 20 million pounds of waste PET carpet, along with some sheared carcasses. It’s a mountain of carpet, the result of a poorly executed plan and insufficient oversight. That’s what’s left of Carpet Collectors. Back in 2011, the firm went to CARE claiming that it had identified a process to reuse polyester fiber as a rock substitute, which it called CARS—Carpet as Alternative Rock Substitute.

In California, CARE pays a subsidy to recyclers, $0.06 for high value recycled content and $0.03 for low value material, once the recycler proves that product has been shipped and sold to an end user. However, Carpet Collectors somehow managed to secure funds from CARE without doing any of that. The firm claimed it had a process, (CARS), which turned out not to be viable. And it said it had a buyer of the material—the town of Elk Grove. The firm received some funds, but it never turned product into a rock alternative, and it never sold its product to Elk Grove.

Another California recycler, Carpet Recyclers, has also shut its doors, and subsidy payments from CARE have been put in escrow following a dispute between the management and the investor. With a business model focused on nylon, the firm invested in a system that was designed to both shear the fiber and process the carcass, but was unable to achieve the level of purity required. At the same time, the firm had problems capturing waste carpet, and it looks like a lot of that was due to the hoarding going on at Carpet Collectors.

One result of all these problems is that, instead of four recyclers, California now has only two—Los Angeles Fiber and Carpet Solutions. And with the liability of PET eating away at already thin margins, it’s not exactly the type of business environment entrepreneurs are looking for, subsidy or no subsidy.

Carpet Solutions takes all carpet types. It separates fiber types using hand-held spectrometers and processes nylon carpet into bales that it ships to customers. Polyester carpet, along with carpet tile, is sent to waste-to-energy facilities.

LA Fiber also collects and processes carpet. It sends fiber—mostly nylon 6, nylon 6,6—to engineered resin markets, and it also sends fiber, including a growing amount of PET, to its sister company, Reliance Carpet Cushion, to make fiber pad. The carpet pad utilizes all the waste polymers. Because of its lower melting point, the polypropylene captured in the shredding and combing process melts into the pad during its manufacture, acting as part of the glue.

LA Fiber’s Ron Greitzer has been very vocal over the years about fiber pad as a solutions provider, and his case is stronger than ever now that Reliance Carpet Cushion offers the only significant end use market for reclaimed PET carpet. Greitzer’s fiber pads have a long lifecycle and are essentially cradle-to-cradle materials. They go under carpet for the life of carpet—say seven to ten years—at which point they can be fully recycled into new fiber pad.

The challenge for Reliance Carpet Cushion is demand. Traditionally, fiber pad has gone down under hospitality and commercial broadloom, as well as thicker residential carpet, like berbers. However, berbers and thick shags are not in as much demand, and the hospitality sector is the biggest market for Reliance Carpet Cushion. It’s a large market, with a fairly high carpet turnover rate, but it’s not large enough to accommodate the huge volumes of PET hitting the market right now.

CARE EFFORTS
In 2012, CARE members diverted 351 million pounds of carpet, up 5% from 2011’s 333 million pound diversion. Of that 351 million pound total, 294 million pounds were recycled, up 17% from the previous year, and most of that went to high value end uses. Waste-to-energy and cement kiln incineration accounted for another 53 million pounds.

To deal with the PET issue, CARE, under the leadership of executive director Bob Peoples, put out an RFP (request for proposals) earlier this summer and ended up hiring Marketing Collaborative LLC, which is headed up by Frank Endrenyi, who used to run Mohawk’s sustainability operations and has always been a very active CARE member.

Endrenyi’s most critical role will be in identifying and developing high value markets for post-consumer PET. It will also be critical for Endrenyi to engage all the stakeholders in seeking out solutions. Technologies that can recapture higher yields from carpet (by, for instance, making better use of the carcass) and produce cleaner fibers will also be critical to the health of the carpet reclamation infrastructure.

Currently, a lot of PET from carpet fiber that can’t be resold (which is most of it) is landfilled, but some recyclers send it to waste-to-energy facilities or cement kilns to recapture its embodied energy. 

CARE is also trying to add incentives for recyclers and end use markets, though this only applies to material reclaimed in California. In addition the $0.03 and $0.06 per pound subsidy to recyclers for low value and high value end uses, CARE is adding a $0.12 per pound subsidy for “type 1 non-nylon” (which is another way of saying PET) that is made into higher value products to be paid to the manufacturer of the recycled product—and that manufacturer doesn’t have to be in California. This means that for every pound of recycled PET that goes into a high value use, CARE would pay out $0.18—$0.06 to the recycler and $0.12 to the material producer.

From July 2011 through March 2013, CARE received total fees of $8.6 million and paid out $3.5 million to processors. The fund balance stands at approximately $4.3 million.

SOLUTION SCENARIOS
The recycling community is very vocal about ways in which the system can be improved. To solve the imminent problem of collectors going out of business, they must find a way to sort product by fiber type. A $15,000 spectrometer can help, but nothing would help more than mills simply labeling the back of the product with the fiber type. This would immediately improve efficiencies, and would simplify the process with or without end uses for PET.

Also, many recyclers and industry experts express frustration over the influence of manufacturers in CARE votes—manufacturers, by paying an additional fee to be “sustainable” members, have two votes, compared to single votes for other members (mills essentially have 17 of the 26 votes). While this does not necessarily mean that votes would go in a different direction in a one-vote-per-member scenario—which was how it was originally set up at CARE—it does enable manufacturers to drive the dialogue. 

For their part, manufacturers assert that they’re the members providing the bulk of the funding, so they deserve a bigger voice. But while it’s true that their support is invaluable, it’s really the entrepreneurs that are assuming all the risk, and it’s undeniable that the entrepreneurs are giving more as a percentage of their net worth.

Also, most recyclers and other stakeholders feel that legislation, properly developed, could help sustain the recycling chain. Most of the resistance against other states following the California model and developing extended producer responsibility programs has come from the mills. Minnesota made a go of it and was shot down, but other states are considering their options, including New York, Delaware and Connecticut. As landfill issues become more prominent, it’s likely that more and more states will develop legislation to alleviate the problem.

While CARE and its carpet mill partners are actively engaged in finding solutions, these efforts have not yet moved the needle. However, this is likely to change. After all, the problem is only in its infancy, so it will be much more prominent in a few years, when, without solutions and with polyester volume closing in on nylon, collectors will be either running on fumes or running for the door, landfills will be draped in PET carpet, and the entire reclamation infrastructure will be in jeopardy.

Most of these mills are also significant players in the commercial market, where there is actual demand for sustainable products and processes, and where the green reputation of a manufacturer can be a game-changer. These mills are going to have to weigh the competitive advantage of taking a leadership role and resolving the issue—and at the same time lowering their firm’s environmental profile and boosting their green credentials.

The fact is that the big mills are extremely well positioned to lead the way in addressing the PET challenge. Most of them have take-back and recycling programs, largely for commercial carpet tile, so they understand the logistics of making carpet that can be separated and recycled, as well as how to recover material and reuse it. And they know how to tackle big problems. 

But most of all, they could invest in the technologies required to make PET carpet recyclable. The best long-term solution for PET carpet is depolymerization, but for it to be cost effective, depolymerization facilities will likely need at least 35,000 tons of feedstock annually, according to David Cornell, former technical director of the Association of Plastics Recyclers, and they’ll also need it at a low price.

Like nylon, PET is a condensation polymer, which means that the chemical reactions used to create it from monomers can be reversed. And if it’s reversed yet another step, all those troublesome dyes that make recycled PET carpet a low value material can be eliminated.

Solutions, from making PET carpet fully recyclable to finding high value end uses with long lifecycles, are not likely to be easy or cheap, but for those committed to sustainability they are undeniably necessary. 

Related Topics:Beaulieu International Group, Mohawk Industries, Shaw Industries Group, Inc., Engineered Floors, LLC