Carpet Recycling Report: Carpet industry experts report that a new California bill could derail years of progress – August/September 2024

By Darius Helm

While carpet is the only flooring category with an industry-wide reclamation and recycling infrastructure in the U.S., you’d be hard-pressed to find anyone among the carpet recycling stakeholders to say that the existing system is ideal, but a new bill being developed in California, AB863, is poised to throw a wrench into the works, threatening to undo 22 years of nationwide efforts by CARE (Carpet America Recovery Effort) and over a dozen years of work in California with CalRecycle.

Carpet recycling is a messy business, often looking like it’s coming apart at the seams, but despite severe and unrelenting challenges, CARE has made great progress and in just the last few years has started hitting its goals in California, where the bulk of recycling takes place. However, the bill California is working on, AB863, first introduced last year by California state representative Cecilia Aguiar-Curry and heavily amended this summer, is attempting to expand recycling to other flooring types. While everyone agrees that recycling should be expanded, industry experts contend that the way it is being put together is doomed to fail.

EARLY STRUGGLES
CARE was launched in January 2002 as a facilitator to help develop market-based solutions for recycled materials and to function as a network to bring together all the stakeholders. Its original goal was to divert 40% of all carpet nationwide from landfills by 2012. It missed that goal-its 2012 national diversion rate was 10%-but the real story was how the carpet market transformed over the course of those years. When CARE started up, the carpet business, both residential and commercial, was dominated by nylon 6 and 6,6, accounting for close to two-thirds of the market. The value of recycled nylon helped offset the cost to collect it. By 2012, PET filament was the leading residential face fiber by volume, and nylon’s share of the total market had fallen under 50%. Also, California’s new law, AB2398, had gone into effect-with CARE selected to administer the program-and it was already causing turbulence in the network.

When PET carpet started to dominate collections and no post-consumer end use markets for reclaimed fiber, the entire carpet recycling network felt the impact. Collectors found themselves buried under carpet they could do nothing with. Businesses started to go under. CARE rushed to come up with viable uses for PET. In California, a recycling fee of $0.05 per square yard was instituted for carpet sold in the state to drive funding for carpet recycling technologies and end-use markets.

For several years, carpet recycling teetered on the brink. CalRecycle and CARE butted heads. CARE was fined for non-compliance. The recycling network continued to shrink. But grants were dispensed and fees on California carpet were increased to keep up, even as carpet lost share in the state faster than the national rate. Subsidies were broadened to include almost every ingredient in carpet, including calcium carbonate. These subsidies helped establish California as the recycling hub, but it also hampered collection and diversion rates in other states, with recyclers nationwide relying on volume and subsidies from California collections. (In the last few years, a few other states have moved toward establishing fee-and-subsidy systems akin to California’s, but the only one that’s moving forward right now is New York, which is scheduled to start a program for collections by July 2026-and there are a lot of issues with this legislation, as well.) In New York, the cost to recycle the carpet will be paid by the producers, not the consumers.

It wasn’t until around 2021 that California carpet recycling started hitting (and exceeding) its targets. At the same time, collection sites crossed the 300 mark, chemical recycling of PET started to look attainable and gross collections in California finally crossed the one-billion-pound threshold. And having exceeded its targets for two years running, the recycling rate in the first quarter of 2024 hit an all-time high of 42%, already well ahead of the mandated target of 34% for the year-and, significantly, exceeding California’s overall recycling rate. It’s by far the highest carpet recycling rate in the world.

ISSUES WITH AB863
According to Russ DeLozier, president of the Carpet & Rug Institute, “AB863 is unnecessary and destructive legislation for the current California carpet recycling program, which has increased the carpet recycling rate in California from 4% in 2011 to 41% in Q1 2024.” DeLozier also notes that the proposed assessment fee system would essentially hide the cost of recycling, shifting from a consumer tax to a producer tax. Notably, it expands the scope beyond carpet to possibly include products like resilient flooring, laminate, carpet cushion and ceramic tile. DeLozier adds that the bill is in the California Senate for now and will come back to the House.

One of the biggest issues is that there’s no infrastructure for the recycling of these additional floorcoverings, and those involved in carpet recycling understand how long and hard a journey it is to establish functional networks-and they all remember what occurred when all that PET carpet hit the California market, for instance how Carpet Collectors abandoned 20 million pounds of carpet in its 15-acre Sacramento lot. As Bob Peoples, executive director of CARE, points out, there need to be markets for these recycled materials. Post-consumer vinyl products, which will be the biggest addition to the recycling network, currently have no market value, and a lot of them, particularly vinyl over a decade old, come with problematic additives.

That leads to the other big issue: How will all this be paid for? What level of subsidies will be required? That original nickel a yard carpet fee from 2011 has since ballooned to $0.70 for broadloom and $0.99 for carpet tile. And carpet sales in California have fallen from nearly $100 million in 2011 to about $54 million last year, according to CARE, mostly driven by homebuilders and multifamily developers turning to hard surface. Other flooring categories will likely face similar fees and possibly similar issues with deselection.

That brings up yet another troubling issue. A provision in the proposed legislation would shift fees from consumers to manufacturers, and Peoples is concerned that this could end up hiding the fee from consumers, and consumer awareness helps elevate the importance of recycling and building a circular economy-and he reports that for this reason and others, manufacturers are against this provision. Also, there’s an argument to be made that public-facing fees, reinforcing the value of recycling, could be viewed favorably by consumers.

In addition, in its current form, the legislation would establish a producer responsibility organization to oversee programs across all flooring categories, which could effectively end the CARE program. The CARE board has created a new committee, the Market-Based Solutions Committee, which is tasked with understanding this complex new space and charting a course forward for CARE.

An infusion of public money, like the funding semiconductors and other recycling get from the government, would make a significant difference. (It’s worth noting that CARE has never received grant money.) For instance, in March of this year, the U.S. Department of Energy announced that it will award up to $4 million “to competitors to substantially increase the production and use of critical materials recovered from electronic scrap.”

ADDITIONAL CHALLENGES
While all this is going on, carpet recycling still faces the steady stream of hurdles it has always faced. Among them is the recent construction of five new caprolactam facilities in Asia-caprolactam is mostly used to make nylon 6-dumping cheap caprolactam and nylon in the market, reducing demand for recycled nylon 6.

Chemical recycling has so far not delivered to expectations. To get started, Eastman Chemical bought a huge volume clean bottle flake on the open market instead of recycled PET carpet fiber, because it’s dirty and requires processing. But that clean PET could be as much as two years’ worth of feedstock, delaying its use of recycled fiber. Another processor is only consuming a small fraction of the feedstock it claimed it would use. CARE has pushed a lot of grant money toward chemical recycling innovations, and it has high hopes for these initiatives as a long-term, sustainable solution for post-consumer PET. The next couple of years will likely reveal the viability of these efforts.

Copyright 2024 Floor Focus 

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