FAQ: Carpet Stewardship Assessment Increase
Effective April 1, 2016, all carpet sold and/or shipped in California is required to be assessed at $0.20 per square yard at the point of sale. Here are answers to frequently asked questions about the change.
Why is a carpet assessment increase necessary?
In 2015, a number of market developments made carpet recovery efforts in California more difficult than ever, resulting in unanticipated impacts on California’s carpet recycling infrastructure. This jeopardizes the state’s ability to reach the carpet recycling goals mandated by AB 2398, California’s extended producer responsibility (EPR) legislation for carpet. In response, CARE adopted a series of changes to provide additional financial support to collectors, recyclers and recycled product manufacturers, made possible by a carpet assessment increase. In addition, funds support increased education, outreach and assistance efforts for retailers and other stakeholders. Factors contributing to the challenge include:
- Massive drop in oil prices
The price of crude oil plummeted in 2015, causing prices to drop not only for transportation fuel but also chemical products made from oil, such as synthetic carpet fiber like Nylon and PET. Carpet recyclers had to lower prices to be able to compete with virgin fiber, resulting in economic hardship for many.
- Loss of domestic demand for Nylon 6 recycled carpet fiber
There was a significant decrease in the demand for Nylon 6 due to the shutdown of a major recycler. This made it difficult for Nylon 6 carpet recyclers to sell their feedstock. Replacement capacity has yet to come on line to absorb this loss.
- Slowdown in China’s economy, aggravated by west coast port labor disputes
China used to consume large amounts of recycled carpet fiber from California, but demand has almost halted with the slowdown of China’s economy. In addition, labor disputes at west coast ports impeded shipments to Asia, putting tremendous stress on west coast recyclers’ cash flow needs.
How will the additional funds help carpet recovery efforts in California?
CARE is paying out increased subsidies to qualifying carpet recyclers to make post-consumer carpet components more competitive in the marketplace compared to virgin materials and to ensure the survival of existing recycling infrastructure. CARE has also implemented a grants program to encourage investment in carpet recycling facilities and facilitate the development and marketing of products made from recycled carpet fiber. The carpet assessment increase is necessary to fund these efforts.
Are there any signs of market improvements?
As a result of new subsidies that went into effect beginning in fall 2015, CARE is already seeing several new recycled carpet fiber products undergoing development with plans for introduction in 2016. A catalog of such established products can be viewed here. In addition, new processing technologies are under development enabled by the recently launched grant program.
What is CARE doing to reach out to and support carpet retailers In California?
CARE is stepping up outreach to retailers. To date, CARE staff have visited face-to-face more than 250 retailers throughout the state and are working to increase this number dramatically by mid-year. In addition, CARE holds regular webinars and stakeholder workshops, and sends out regular email updates. Click here to RSVP for a webinar on Wednesday, February 10th at 1:00pm PST about the California carpet stewardship assessment change.