CARE updates and progress on PET reclamation: Reclamation Report

By Darius Helm

A year ago, carpet collectors were drowning in PET carpet, with their businesses—and in fact the whole carpet recycling infrastructure—on the line, and with no clear idea of how to navigate this quagmire. Today, though conditions are at least as grim, significant efforts by Carpet America Recovery Effort (CARE) and its partners are starting to illuminate the issue. There may not be solutions yet, but there are answers.

The problem itself is fairly straightforward. Over the last several years, residential carpet mills have shifted a lot of production from nylon fiber to PET fiber, largely because of the cost advantages. Most of the PET carpet comes from Shaw, Mohawk, Engineered Floors, Beaulieu and Phenix, and it now accounts for over 50% of all residential carpet. When it comes to carpet recycling, the majority of the carpet diverted from landfills comes from the residential market, which means that carpet collectors are handling more PET and less nylon. Recycled nylon has value in the market, while recycled PET has very little value.

Collectors are finding themselves with 30% to 40% of their loads consisting of PET carpet, and most of them have absolutely no market for the material. So they’ve been paying to have it re-landfilled. The economics of the situation are dire. When the sellable yield (in this case, nylon) falls to 60% or so of total volume, that translates to much lower sales. And when 30% to 40% of volume is a liability, that translates to much lower profits.

With major expansions in PET manufacturing led by mills like Engineered Floors and Mohawk, and with plenty of demand from homeowners and property managers, it won’t be long before PET makes up over 50% of reclamation volumes. And the increase of PET carpet entering the waste cycle is accelerated by the fact that PET has a shorter lifecycle than nylon, particularly because so much of it goes into the multi-family market, where product turnover is high.

These conditions have damaged the entrepreneurs that operate in the reclamation market. One of the firms that went out of business last year, California-based Carpet Collectors, left in its wake 20 million pounds of carpet on a 15-acre lot in Sacramento.

Recyclers that don’t actually go and collect the carpet are in much better shape, because they’re only going to buy nylon carpet. Collectors reclaiming more than just carpet are also doing better. New Jersey based CarpetCycle, for instance, also reclaims ceiling tiles. It’s a smaller business for CarpetCycle, and the lifecycle of ceilings is twice as long as flooring’s lifecycle, but it has helped buoy the firm through these rough waters.

INDUSTRY RESPONSE
Last summer, CARE hired Marketing Collaborative LLC for a 12-month contract to look for solutions. Marketing Collaborative is headed by industry veteran Frank Endrenyi, who was formerly with Mohawk, where he ran the technical side of Mohawk’s sustainability initiatives. A major focus for Endrenyi was to identify and help cultivate high-value end use markets for reclaimed PET carpet.

A few years ago, the carpet reclamation went through a similar crisis, though on a smaller scale, when a lack of high-value uses for nylon 6,6 was putting recyclers under a lot of pressure. In fairly short order, relationships were developed, under CARE’s leadership, in the engineered resin market (including injection-molded car parts) and within a couple of years nylon 6,6 was a high value recycled material—an outcome that got a big boost from the rebound in vehicle sales.

Initially, there was hope within the industry that the engineered resin market would come to the rescue of PET as well, but Endrenyi quickly established that those end-use markets would not work for PET. While polypropylene and nylon are malleable, which allows for the construction of complex parts, PET is brittle and has little impact resistance. So that entire high-value market is unavailable to PET. Modifiers to improve the performance of PET were found to be both too expensive and not effective enough.

Endrenyi examined three market categories for PET: the fiber market, the pellet market and the fuel market. Fiber is a low value market for PET recycled from carpet because it can’t be turned into new fiber like PET recycled from clear bottles. Instead, it goes into applications like fiber pad. While rebond (bonded urethane foam) is the underlayment of choice in the residential carpet market, commercial and hospitality broadloom applications will use fiber pad. The market leader is California-based Reliance Carpet Cushion. The firm’s sister company, Los Angeles Fiber, collects and processes carpet, sending lower grade fiber, which is increasingly PET, to Reliance and channeling nylon to the engineered resin market. The problem with the fiber pad market is that it’s not that big. And as carpet tile takes increasing share in the commercial and hospitality markets, the market could well shrink.

The second category identified by Endrenyi, the pellet market, is far larger and uses well-established sources of recycled PET, so the task will be to compete effectively against those established sources. The other challenge is that the higher value pellet applications require using a process to raise the performance level (the intrinsic viscosity or IV) of the reclaimed PET, and that erodes the margin. So another goal is to find processes of increasing IV that cost less. Products derived from pellets include geotextiles, nonwoven fabrics and thermoformed products like food trays.

The third category, the fuel market, includes incineration in cement kilns as well as fuel conversion. While cement kilns are not a profitable option, fuel conversion offers hope. The process essentially breaks down polymers into usable fuel sources. The technology has been rolled out using a variety of mixed plastics, though not much in the way of carpet, at least so far.

Endrenyi investigated options with dozens of firms over the last year and identified some compelling opportunities. Last month, CARE renewed the contract with Marketing Collaborative for another year, and those involved are hopeful that their efforts will yield real market solutions.

However, it will still take time for the ball to get rolling, and meanwhile the recyclers are suffering. They’re asking for a commitment of bridge funding from the mills to stabilize them so that they’ll be around in 12 months or however long it takes to establish more end-use markets for PET carpet—because if PET takes down the recyclers, it’ll take down nylon reclamation as well.

Recyclers in general are more optimistic than they were this time last year. Even though PET volumes continue to rise, there’s a sense that the urgency is now shared by all stakeholders, and there’s a good deal of confidence in the ability of Marketing Collaborative to deliver solutions. CarpetCycle, which can harvest 99% pure mixed-color PET, reports that it has recently sold some sheared polyester to three different firms—and though it’s just for testing right now, it’s still a good sign.

Shaw Industries is investing in a solution by building a second Evergreen facility, this one in Ringgold, Georgia, that will be able to process all fiber types—the Evergreen Nylon Recycling facility in Augusta, Georgia only processes nylon 6. According to the firm, the process will be able to yield high-purity PET that it can either sell as fluff or turn into pellets. The facility is slated to begin operations next summer.

Also, Teijin, a massive Japanese chemical firm, has developed a process to take used PET, including material that has been dyed, and both purify it (including eliminating colorants) and increase its IV, making it functionally equivalent to virgin polyester.

In California, a $0.12 subsidy per pound of non-nylon fiber sold to high-value markets has had some positive impacts, according to CARE. Subsidy payouts have risen steadily over the last year: $147,000 in the third quarter of 2013, $165,000 in the fourth quarter, and $272,000 in the first quarter of 2014.

CARE UPDATE
The Carpet America Recovery Effort has been busy in other fronts as well. In May, Brendan McSheehy, vice president of innovation, sustainability and intellectual property at Universal Fibers, was elected chairman of the board of CARE. McSheehy is the first chairman who is not an officer of CRI. The recycling community lobbied heavily for McSheehy because they felt that he’d provide the sort of leadership more likely to find solutions to the PET issue.

With the help of Matthew Realff from Geogia Tech’s College of Engineering, CARE also changed the way it calculates all of the different channels for carpet diverted from landfills. It now uses the mass balance approach that looks at volumes of material entering and leaving a system. So rather than using front-end estimates of reported collections, the system uses the weight of goods shipped to customers as well as waste to energy, landfills, kilns, etc., then sums them to calculate gross collections.

CARE is confident that the numbers are much more reliable now, and they include additional details, like how much product ends up going back to landfill and how much is sold internationally. Using the mass balance approach, some numbers went up, like reuse, which more than doubled, as well as the total gross collections, which were up nearly 52% to 534 million pounds compared to 352 million pounds in 2012.

However, the results indicate that nearly 48% of all the product collected ended up going back into the landfill. And it’s a good bet that the vast majority of that is PET carpet, along with a good amount of polypropylene backing. (Polypropylene has established end-use markets, but its value is based on its extraction as the byproduct of a process—as a consequence of the extraction of another, higher value material.) CARE calculates that PET collection grew to 34% of total volume last year.

Also, the CARE report shows that the total recycling rate fell by a third in 2013, going from 299 million pounds to 197 million pounds. But while reduced recycling would be expected, given the shift from nylon to PET, year to year comparisons reflect both actual differences in volumes and the difference in how volumes are calculated. For instance, total gross collections clearly did not jump over 50% in one year. And on top of that, for 2012 and earlier there is no data on how much product went back to landfills.

Next year, when the 2014 CARE report is issued with a second set of numbers using the mass balance approach, it will be clear which way volumes are trending for different end uses. And hopefully, the results will show some key trend reversals in terms of re-landfilling and recycling, though significant change may not be evident until the 2015 report.

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