Carpet Recycling Report: It’s not an easy road, but carpet recycling continues to make gains – Aug/Sept 2023

By Jennifer Bardoner and Darius Helm

When carpet recycling began in earnest in the U.S. with the launch of the Carpet America Recovery Effort (CARE) in 2002, carpet had a 55% to 60% share of the flooring market, compared to 30% today. The effort has faced huge headwinds in the intervening years, most notably, the fact that PET has replaced nylon in the residential market at the lower and middle price points-and most of the recycling volume comes from residential carpet.

When PET started to show up in the carpet reclamation stream, nobody knew what to do with it. It had little to no value in end-use markets compared to nylon 6 and 6,6. By 2013, ten years ago and a couple of years into California’s EPR (extended producer responsibility) program, PET was already flooding the market. Collectors and processors started to fail. Notably, an operation called Carpet Collectors went under, buried by about 20 million pounds of PET carpet in a 15-acre lot in Sacramento.

Ultimately, dozens of recyclers went out of business. And for a while, it looked like CARE’s endeavor would end in failure. Yet, somehow, with a funding stream from fees placed on carpet sold in California and paid out through subsidies for various recaptured and processed carpet components (right down to the largely valueless and excessively abundant calcium carbonate), as well as through grants for innovations to drive the development of end-use markets, the reclamation and recycling infrastructure has held. And in just the last few years, as innovations have started to impact the market, CARE has started hitting its goals.

Also, from 2015 to early 2020, a mill-funded voluntary product stewardship program supported those not positioned for the California subsidies to the tune of about $4 million annually, offering two cents per pound, which helped defray freight costs, according to one recycler.

That’s not to say that it’s a model of a recycling industry. The fact that, at least for now, California is the only state with an EPR, has created a lot of instability, making it hard for recyclers from outside of the state to effectively compete and driving upward pressure on those California carpet fees.

CARE UPDATE
Last year, CARE met all of the benchmarks set out in its five-year plan for the first time, and even exceeded its target carpet recycling rate by roughly 7%. But challenges remain as the organization seeks to maintain that momentum amid loftier new goals, tier two reclamation sources, dwindling carpet sales and increasing costs. However, there are some bright spots as well, most notably the emerging chemical recycling market, which stands to become a major consumer of recycled carpet materials.

The purchase rate of new carpet in California for Q1 2023 was down 15% year over year, nearly twice as big a drop as CARE expected, reports executive director Bob Peoples-the California decrease was slightly steeper than the nationwide average-and preliminary Q2 numbers look to be similarly down. With the program’s funding coming from fees on new carpet purchases, expenses exceeded those collected assessments as wages, workman’s comp and transportation prices climbed. And that is causing the assessment fees to ratchet up as well.

“Now that the assessment is as high as it is, it’s not only having a big impact in the builder market, but also in the lower-end residential market,” Peoples says.

The assessment jumped in April of this year to $0.56 per square yard for broadloom with at least 10% post-consumer content, up from $0.33 per square yard; $0.58 per square yard for broadloom with less than 10% post-consumer recycled material, versus the previous $0.35 per square yard; $0.71 per square yard for carpet tile with 10% or more recycled content, up from $0.48 per square yard; and $0.73 per square yard for all other carpet tile, formerly $0.50 per square yard.

“When we started this program, the assessment people paid was $0.05 per square yard,” Peoples notes. “If you’re doing a whole house in the lower end of the market, that assessment now becomes a factor. The builder that wants to buy 10,000 square yards of carpet…is now paying $5,800 in environmental fees, whereas they can buy LVT for the same price, with no environmental fee, and they can get two to three more turns. Forty percent of all carpet sold in California is sold into builders’ basic condos and apartments.”

Though the industry is seeing a return to seasonal buying trends after two years of strong sales, current sales are still “nowhere near as robust as we expected,” says Peoples. CARE projects that California carpet sales will decrease 32% between 2022 and 2027, at a rate of approximately 7% per year.

CARE’s new five-year plan, adopted in April, mandates that the organization maintain a six-month financial reserve, which it must attain by the end of 2025. CARE has been operating with a two-month reserve, which took a hit when sales started to slip in 2022, he reports. Peoples expects the assessment to increase again next year.

“I think we can get there,” he says of hitting all of the plan’s new targets, “but people have to accept that there are a lot of things going on that we don’t control that could influence this.”

As the carpet market constricts, recyclers face financial instability, especially those outside of California, which is currently the only state with a carpet recycling mandate in effect. Though New York passed similar legislation last year, that program won’t go into effect until 2026. “Recyclers outside California are hit with a double whammy,” says Peoples. “Number one, they’re having to compete in the marketplace, and number two, they’re having to compete against California recyclers to get pretty substantial subsidies to help them achieve financial stability. At the high point of CARE, we probably had 64 or so registered recyclers around the whole U.S. At this point in time, we barely have two dozen.”

In July 2021, CARE celebrated one billion pounds of carpet diverted from landfills since the organization’s founding in 2002. Getting to the next milestone will likely be a slower slog. “All the low-hanging fruit has been picked,” Peoples says, explaining that major retailers like Lowe’s, Home Depot and Menards are already serving as collection sites. “The next tranche of carpet will be much more expensive to collect and at a slower pace, because now you’re talking about smaller sources of material.” Adding to the challenge is the fact that virgin materials are currently more attractive due to competitive pricing, the result of low oil prices and a saturation in the market of virgin nylon polymer, coupled with such materials’ enhanced quality and ease of use.

CARE is working to find incentives to bring more carpet collection sites online and is trying to intercept discarded carpet at landfills and transfer stations before it gets commingled with other refuse or exposed to weather. The newly adopted plan also proposes aggregation centers, diversifying haulers and container types, additional grants and new pilot programs, broader outreach and operational offerings for commercial and multifamily properties, and piloting financial incentives for new collection sites and sorting mixed loads.

Meanwhile, discussion is ongoing about a potential new California law that could expand recycling to all flooring types-including carpet padding, which CARE is already processing but does not count toward its goals. Peoples says the best-case scenario could see legislation introduced for a vote in 2024.

While post-consumer carpet is seen as “the feedstock of the future,” the theme of CARE’s annual convention this year, the amount of calcium carbonate it contains is a hurdle that costs CARE money. “Somewhere around 30% to 40% of carpet is calcium carbonate, and it has no value in the marketplace and can be difficult to deal with in the recycling operation,” Peoples reports. “We actually pay somebody $0.17 per pound to take it and reuse it, and we are struggling to use all the calcium carbonate coming from subsidized carpet in California. We’ve got to come up with a way to reduce or eliminate calcium carbonate in the carpet of the future.” To that end, CARE’s new plan will target strengthening and expanding the material’s markets through grants.

HIGHLIGHTS OF CARE'S 2023-2027 PLAN
• Achieve a 45% recycling rate for post-consumer carpet by December 31, 2027. The previous goal was 27% by 2022.
• Achieve a collection rate of 60% by December 31, 2027. The previous goal was 33% of private drop-off sites.
• Achieve a recycling efficiency rate of 75% annually, compared to the previous 60%.
• Increase public access to drop-off sites to one site per 375,000 residents, up from one site per 500,000 residents, with a minimum of one per county by December 31, 2027.
• Increase flooring professional proximity such that 90% of residents are within 15 miles of a public drop-off site by December 31, 2027.
• Issue two Innovation & Design grants annually to spur further development of recyclable fibers in various carpet types, a brand-new goal.

RECYCLING DEVELOPMENTS
A promising emerging market for reclaimed carpet is chemical manufacturers looking to offset the use of plastics and CARE is already in discussion with several, Peoples reports.

“The implementation of chemical recycling, I’m very optimistic, is going to make a huge change in the supply/demand equation,” he says, noting that such plants need 150+ million pounds of feedstock, and the 20+ million pounds of post-consumer carpet collected annually in California has already been qualified as a key source by many of the operators. Peoples adds, “I think Ascend Performance Materials sent a big strategic message to the marketplace when it acquired Circular Polymers in California as a carpet recycler.”

Frank Endrenyi, an industry veteran with tenures at Tandus and Mohawk, which, in recent years, has focused on sustainability work, agrees that there’s a shift toward chemical recycling strategies for PET, adding, “Everything now rests with the big guys in terms of chemical recycling,” although he notes that there’s a lot of controversy surrounding the approach, in part because of the energy needs of chemical processes. According to Endrenyi, giant corporations like Shell and Exxon have their own technologies that break down the molecule, but Eastman, located in Tennessee, is further along than the rest of the field. Eastman is a year behind schedule, but the start-up is anticipated this fall.

In addition to his consulting business, Endrenyi also launched Sustainable Polymer Systems in 2018, working with many of the big mills to take the yarn off spinner tubes, which he then sells for processing into pellets, and he’ll even salvage the usable tubes and sell them back to the mills. He notes that business doubled from 2021 to 2022, but, so far this year it has been underperforming.

Endenyi points out that a challenge for the carpet industry is that, even though Eastman will offer a lot of capacity, there are so many sources of product to feed the facility that the pricing may not be sufficient for carpet recyclers without the California subsidies remaining high. On the nylon side, the pricing problem is largely coming from the fact that Invista is still dumping huge volumes of virgin nylon in the market, which depresses post-industrial nylon pricing, and that, in turn, drives down post-consumer pricing. It could be a year before pricing normalizes.

One firm in the middle of all the action is Circular Polymers, which was acquired by Ascend, the carpet fiber producer, at the end of last year. Circular Polymers collects the full range of carpet, then separates them by fiber type and uses rotary impact separator units to create a high-quality, consistent feedstock, branded Cerene, with some sold to end-use markets where it’s turned into new products and some sold for chemical recycling.

The firm, with has a 150,000-square-foot processing facility in Lincoln, California, also sells its feedstock to Ascend itself, which uses it to create a high-quality post-consumer streams of polymers-PET, polypropylene, nylon 6 and nylon 6,6-as well as calcium carbonate. According to Ascend, Cerene can be used for a range of applications, including molding and compounding.

DC Foam Recycling, which has a dozen locations mostly in the East, used to be owned by Wellman, a major recycler that was sold to China’s Pret Industries in 2015. Pret is a Shanghai company that supplies a range of polymer resins to the automotive industry. DC Foam only collects nylon and polypropylene, which it ships to Pret’s South Carolina plant for centrifuge processing-one of only two processors on the East Coast-yielding nylon with a 92% purity level.

Also in the East is Carpet Cycle, which is located in New Jersey. The firm originally started in 1999 by recycling residential carpet, but the wave of PET carpet lowered its usable yield until it was no longer cost-effective, and in 2017 the firm shifted its focus to the commercial market. Carpet Cycle does commercial demolition, reclaiming and recycling not just carpet but also ceiling tiles and other interior elements. The firm recycles carpet into an acoustic insulation called Quiet-Tech.

Founder Sean Ragiel reports that business is down about 50% year over year, largely because the bulk of his market is New York City, which is experiencing a lot of commercial volatility-many leases are not being renewed-as it struggles for equilibrium following the pandemic’s impact. Ragiel is hopeful that the New York EPR, which goes into effect in July 2026, will power up recycling in the New York metro market.

Like Carpet Cycle, Los Angeles Fiber is also largely fiber-agnostic. The firm, which is celebrating its 40th anniversary this year, recently hit another milestone: a billion pounds of recycled material.

LA Fiber started out in 1983 as a textile recycler, but the passage of NAFTA in the 1990s dried up its sources, and, in 1999, it shifted to carpet. The firm’s recycled carpet goes to a range of clients, including both fiber and filling material producers, with the bulk going to its sister business, Reliance Carpet Cushion. President Ron Greitzer notes that, to maintain growth, he is always pursuing new technologies and markets, as well as new suppliers.

Reflecting on how challenging the business can be, Greitzer points out, “Carpet is made for endurance. It’s made to last, and it’s made really well. It’s not made to be broken down into parts to be reprocessed into different components. So, it’s not an easy undertaking.”

THE VINYL DILEMMA
While carpet continues to lose flooring marketshare, though at a diminishing rate, resilient flooring, driven by rigid LVT, has seen meteoric share gains over the last decade, and just this year surpassed carpet as the largest flooring category in the U.S. market (in dollar value). However, there has been very little progress developing a reclamation and recycling infrastructure for resilient flooring. Most of what is sold into the U.S. market is made of virgin PVC. Some producers offer modest post-industrial recycled PVC content or recycled calcium carbonate filler.

The challenges for vinyl flooring recycling are compounded by the fact that most vinyl flooring has historically used orthophthalates, implicated as endocrine disruptors, as plasticizers, along with some unsavory heavy metal stabilizers. About a decade ago, the industry, largely en masse, moved away from orthophthalates and heavy metals, but the waste stream is still polluted from them-and most manufacturers cite the tainted products as a key reason why they avoid post-consumer recycling.

Now that the first wave of phthalate-free vinyl flooring is starting to enter the waste stream, manufacturers are finding themselves behind the eight ball, and pressure is mounting for a comprehensive reclamation strategy. Shaw, for instance, recently announced that it has added its LVT and SPC to its ReTurn takeback program, which should translate into a substantial volume, considering its marketshare.

However, one sustainability expert notes that if manufacturers don’t start working together to provide solutions, the category itself will suffer. Whether they will or not remains to be seen.

Bill Blackstock, president and CEO of the Resilient Floor Covering Institute (RFCI), contends that the wave of recent investments in domestic resilient flooring production positions the industry to make inroads into reclamation and recycling. Blackstock says, “Though the resilient sector is global in scope, the continued investment in domestic infrastructure provides key recycling options.” He notes that recycling options beyond the flooring industry are essential components for effective recycling, adding, “Two keys in any effective recycling system are that it is composed of multiple avenues and is attentive to geographical issues.”

Both RFCI and the Vinyl Institute, which represents the full breadth of vinyl products, have been working to address the growing volume of PVC products entering the waste stream. The Vinyl Institute’s Viability grant program offers millions of dollars for grants in support of the expansion of vinyl recycling. For its part, RFCI has been engaging with other industries to identify broader waste streams.


Copyright 2023 Floor Focus 


Related Topics:Mohawk Industries, Fuse Alliance, Shaw Industries Group, Inc., Fuse, Lumber Liquidators