CARE Report: Recycle rates and solutions for PET are on the rise - Jun 19

By Beth Miller

The Carpet America Recovery Effort (CARE) held its 17th annual meeting on May 1 to discuss the drivers and challenges for the U.S. recycling industry. Over the course of 17 years, collections have declined, as have the number of recyclers-now only 14. Of those 14, four remain in California. One of the biggest challenges the industry is facing is the glut of post-consumer PET carpet (which represents well over half of all residential carpet sold today) that has little or no value as a recycled material. Without subsidies to offset the cost of collection, recyclers can’t afford to handle PET carpet. Despite these headwinds, the carpet recycling industry continues to evolve and move forward.

CARE was established to minimize the amount of carpet that ends up in the nation’s landfills. As of 2018, the total amount of post-consumer carpet diverted from landfills topped 5.25 billion pounds. Of that total, 328 million pounds was diverted in 2018, down from 2017’s 394 million pounds and 2016’s 488 million pounds. While the collection rate is decreasing, the recycling rate is gradually increasing. California’s Carpet Stewardship Program’s recycling goal for 2016 was 16%. CARE fell short at 11%; however, for 2017, the rate rose to 14%, and in 2018, it climbed to 15.4%. Dr. Bob Peoples, executive director of CARE, says the organization is “collecting less, but yields are up, which means we are meeting the demand for the carpet that is needed by having a better yield of the product.”

Conversely, California’s state-wide recycling rate of all waste products is on the decline. This recycling statistic includes all products, such as batteries, mattresses, paint, electronics, etc. Peoples reports that California has historically experienced a 50% recycle rate each year for a number of years; however, in 2015, the rate dropped to 47%; in 2016, it was 44%; and in 2017, it fell to 42%. Peoples says, “While we’re going up, they’re going down. We’re all facing the same headwinds in the marketplace.”

Those headwinds Peoples is referring to include the cost of virgin materials compared to the cost of recycled materials, which relates in part to the cost of crude oil-the higher it goes, the more attractive recycled goods become. The cost of freight is another factor, as well as the logistics of collecting and sorting, and of course there need to be end-use markets for those recycled materials.

CARE continues to manage the California Carpet Stewardship Program, formalized under AB 2398, despite its tumultuous relationship with Cal Recycle, which has been attempting to fine CARE for millions of dollars for non-compliance.

AB 2398 allows the state to collect a fee when new carpet is sold. In 2011, at the start of the program, the fee was a nickel a yard, but today that rate has been increased to $0.35/yard. These funds are used to offset the cost of collecting and sorting the material as well as to incentivize companies to develop viable uses for used carpet. Cal Recycle is asking that CARE increase the recycling rate of post-consumer carpet in California in 2019 to 24%, from 2018’s 15.4% rate.

CARE'S ANNUAL AWARD RECIPIENTS
CARE named Rachel Palapoli, owner of Planet Recycling in Phoenix, Arizona, 2018 Person of the Year. Palapoli serves as an advisor to the CARE board and is chair of the California Carpet Council with over 25 years of experience in the waste management and recycling business.

Matthew Realff, Ph.D., David Wang Senior Faculty Fellow and professor in the School of Chemical and Biomolecular Engineering at the Georgia Institute of Technology, received a CARE 2018 Person of the Year award for his research concerning processes that minimize waste production. Realff serves as an advisor to the CARE board.

The Recycler of the Year Award went to Circular Polymers, located in Lincoln, California, which was founded in 2018 through a grant provided by CARE and has quickly become one of the fastest growing carpet recyclers in the U.S. The firm uses proprietary technology to produce high yields from processing and produces a clean material.

THE BOTTOM LINE
PET is the biggest strain on the carpet recycling industry currently. There is limited demand for post-consumer recycled PET carpet. Further compounding the issue is the decrease in the number of recyclers. Some are investing in technology that has the potential to make PET a viable resource; however, it still isn’t enough to offset the amount of polyester that is going into landfills. And finally, more time is needed to continue development of these entrepreneurial ideas and to meet CalRecycle’s recycle rate for CARE of 24% by January 2020-a requirement under the AB 1158 law.

The technology to turn recycled carpet PET, which is most commonly made into carpet underlayment padding, into a money-making solution doesn’t exist-yet. However, big chemical companies like Eastman and Loop are investing in depolymerization technology, as is Arropol, a company formed at the end of 2018 by Ralph Boe, former president of Beaulieu of America.

CARE awarded Arropol a grant in 2019 to boost its output capacity of polyester polyol derived from post-consumer PET carpet. The polyol will be used in polyurethane foam, artificial turf backing, hard surface underlayment and synthetic plywood. Boe predicts Arropol will have the capacity to recycle half of all of California’s post-consumer PET carpet waste into polyol.

The number breakdown is as follows: CARE has been mandated by CalRecycle to recycle approximately 100 million pounds of carpet per year. Roughly 50% will be polyester, which is 50 million pounds. Currently, Arropol is making three billion pounds of polyol. The company has purchased a new plant with two large reactors-required for the depolymerization process-with the capacity to create 22 to 23 million pounds of polyol annually, which requires 27 to 28 million pounds of polyester carpet.

Other companies, like Verdex Technologies out of North Chesterfield, Virginia, have developed processes that will make use of PET. Verdex’s process takes post-consumer products and reprocessed PET carpet fiber and spins it into nano-microfiber, high loft mat and sheet products. The company has identified three potential markets based on the samples it has produced: high efficiency air filters, thermal and acoustic barrier mats, and carpet backing material.

Fiberon, a composite decking manufacturer, makes its decking out of PET carpet. However, in August 2018, the company was acquired by Fortune Brands Home & Security and is no longer allowed to compete in the decking business. While this marks a significant setback in PET solutions, consultants for the recycling carpet business feel that the company will find a way to get back up and running.

CARE FINE UPDATE
CARE was fined by CalRecycle for lack of compliance for years 2013, 2014 and 2015 in meeting CalRecycle’s established recycling goals. The total fine assessed came to $3.25 million. The administrative law judge ruled that there was no evidence indicating that CARE was negligent. The fine was reduced to $82,250 by CalRecycle. CARE contested the fine and is still waiting for a hearing.

In 2016, CARE was fined for non-compliance to the tune of $8 million. Again, the judge ruled in favor of CARE, and the fine was reduced to $725,000. CARE rejected the fine and filed an appeal. CalRecycle rejected the judge’s ruling. Following a hearing in early May, a decision is pending.

One of the biggest success stories in carpet recycling is the construction of Aquafil’s two carpet recycling facilities in Phoenix, Arizona and Sacramento, California. While these two facilities can only process nylon 6 carpet, Aquafil is able to turn old carpet yarn into new carpet yarn sold under the Econyl brand. The cost to operate these two facilities is offset, in part, by funding from the AB 2398 fees, and this type of operation is exactly what the state had in mind when it passed the law.

The Voluntary Product Stewardship (VPS) Program, which uses funds to offset the costs incurred by carpet recyclers throughout the other 49 states, paid out a total of $2.1 million in 2018. The VPS program is funded by members of the Carpet and Rug Institute, which has $4.5 million set aside to offset these costs. With less than half of the budget being used, recyclers like Chad Chaffin, owner of Southeastern Recycling based in Knoxville, Tennessee, want to know why the money is not being spent.

Chaffin points to the many challenges that recyclers are facing: competing against traditional waste management companies; a collection industry selling carpet for pennies; the dynamics of operating a low-margin business; the disappearance of outlets for recycled material; retailers paying them to haul off carpet as long as it is less than landfill costs; and ultimately, the high cost of retrieving PET fiber. “We’ve seen the funding that’s allotted not being spent because it’s based on what we actually recycle,” says Chaffin. “We are asking [the VPS] to recommit the full amount of funds and find alternative uses for PET carpet, especially in alternative energy sources.”

As for the future of CARE, new legislation called AB 729 calls for a contingency plan in the event that the current carpet stewardship plan expires without approval of another, with a one-year escrow to facilitate a transition.

A MACRO LOOK AT THE RECYCLING BUSINESS
Additional challenges, according to Joe Pickard, chief economist and director of commodities for the Institute of Scrap Recycling Industries (ISRI), include China’s prohibition of the import of “solid waste with major environmental hazards by the end of 2017” in favor of increasing its domestic recycling. ISRI-“The Voice of the Recycling Industry”-reports that it currently has 1,300 members in 41 countries, and the U.S. recycling industry alone is a $117 billion industry. ISRI focuses on the recycling of ferrous and non-ferrous metals, paper, plastics, tire and rubber, textiles and electronics, and it indicates that 70% of the recyclables processed in the U.S. are also consumed within the U.S. Pickard’s outlook for the U.S. economy indicates that the economy may plateau, but a recession won’t come to fruition for several more years.

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