Carpet America Recovery Effort

Developing Market Based Solutions for the Recycling & Reuse of Post-Consumer Carpet

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CARE CA Program Q3 2020 Results Show Resilience

Despite the economic and operational disruptions caused by the pandemic, California’s carpet recycling rate rebounded to 20.5% in Q3 2020, up from 19.8% in the second quarter, according to CARE’s latest quarterly update for the California Carpet Stewardship Program. Residential carpet sales were up versus Q2, while commercial carpet sales lagged as employees worked from home and major projects were postponed.
The Program in Q3 saw:
  • 21.8 Million pounds of carpet collected (+31% vs. Q2)
  • 14.3 Million pounds of recycled output (+32% vs. Q2))
  • $5.27 Million in subsidy payouts.
Dramatic Difference
CARE continues to evaluate the pandemic impacts and review the Covid Action Plan on an on-going basis.The COVID-19 impact on both sales of new flooring as well as the carpet recycling community has been significant. According to direct feedback from a stakeholder, CARE’s COVID Action Plan “made a dramatic difference for all of us in the carpet recycling community. The industry stood on the precipice of imploding. The immediate and measured proactive initiatives undertaken by CARE… were not mere handouts, but tactical financial assistance measures that served to ensure market stability.”
View the complete presentation here:

Recycling Progress: CARE California Program 2019 Annual Report

annual report cover showing billboard promoting carpet recycling in SacramentoAt a time of immense strain on recycling efforts across the country, carpet recycling in California saw significant progress in 2019, according to the just-released California Carpet Stewardship Program 2019 Annual Report. While the overall California materials recycling rate has been on the decline since 2014, the California carpet recycling rate is up 58% in the same period. In addition, CARE’s prompt and multi-faceted COVID-19 Action Plan has provided critical support to the industry as it faces the economic and operational challenges of 2020.
According to the California Carpet Stewardship Program’s 2019 Annual Report:
  • The overall 2019 California recycling rate was 19%, up 27% over 2018. The national carpet recycling rate was 5%.
  • 82 million pounds of post-consumer carpet was collected before it could go to landfill.
  • 58 million pounds of recycled output was produced (up 18% from 2018).
  • Over 70% of all carpet collected was recycled, up from 53% in 2018.
The 70% recycling rate, or yield, has grown significantly over the life of the program due to investments in product testing and processing capacity, growth in markets for post-consumer carpet materials and various technological advances.

 

Through subsidies, grants and technical assistance, CARE supports increased collection and processing of carpet into products containing recycled carpet material. Twenty-five vendors currently incorporate carpet in 77 products for the automotive, construction and other industries.

 

CARE Executive Director Bob Peoples notes, “2019 was a banner year for the carpet recycling industry in California. Rising recycling rates, exciting technological innovations such as chemical recycling, growing markets and improved efficiency led to our most optimistic outlook in years. We are facing the challenges of 2020 with new determination and see encouraging signs. We actually did better in the second quarter – during maximum shelter-in-place orders – and now believe we are moving in the right direction for the second half of 2020. Feedback from the recycling community indicates the COVID-19 Action Plan has made a major difference in cash flow and their ability to continue to operate.”

 

Extensive COVID-19 Action Plan Preserves Recyclers
Beginning in March 2020, CARE’s oversight committee approved a series of emergency actions to support and assist the California carpet recycling industry as effects of the pandemic threatened the industry’s survival. Actions included extraordinary payments to recyclers in March and June, along with increased subsidy payments to recyclers, an accelerated payment schedule and relaxed reporting and proposed loan payment requirements. A total of $1.6 million has been provided to 15 recyclers, easing the pressure and allowing businesses to focus core efforts around collection and processing.

 

Capital and Testing Grantees Announced

September 2020 Update

CARE’s California Carpet Stewardship Program has awarded two additional Capital Improvement Grants under Cycle 4A, and three Micro Grants for Collection and Reuse, labeled Cycle 3M. (See previously awarded grants below.) The Cycle 4A grants total $334,952, and the Cycle 3M grants total $38,234. 
The capital projects are expected to result in an additional 12 million pounds of California PCC collections through September 30, 2021 and the micro projects are expected to result in an additional 900,000 pounds of California post-consumer carpet collection through June 30, 2021.
Cycle 4A
Green Waste Carpet Recycling, San Jose, CA: Investment in equipment to expand collection of new California-sourced PCC pounds. This project includes piloting a collection strategy for small retailers ($70,952).
Hayward Transfer Station, Hayward, CA: Investment in equipment to expand collection of new California-sourced PCC pounds ($264,000).
Cycle 3M
916 Floors, Roseville, CA: Funds the purchase of a specialized trailer that will allow flooring contractors to source-separate PCC at job sites and haul it directly to a recycler ($15,000).
Bay Counties SMaRT, Sunnyvale, CA: Funds the purchase of a 40-yard roll-off container with a lid for this CARE drop-off site to collect and keep PCC dry year-round for self-hauling to a recycler ($10,234).
Quality Floor Removal, Roseville, CA: Funds the purchase of a specialized trailer that will allow flooring contractors to source-separate PCC at job sites and haul it directly to a recycler ($13,000).
CARE may re-release grant funds for capital improvements and/or post-consumer carpet (PCC) collection projects during the fall. CARE’s Cycle 3M will remain open to California-based projects, which may apply for up to $15,000 through 2020.

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From August 2020:

CARE’s California Carpet Stewardship Program has awarded three capital improvement grants, under Cycle 4A, and three product testing grants, under Cycle 3B. The capital improvement grants total $1,260,000 and the testing grants total $240,000.

The grantees are:

Aquafil Group, Phoenix, AZ: Use of densifying system to recycle California-sourced polypropylene material. Awarded $260,000.

Los Angeles Fiber, Vernon, CA: Equipment to enable the processing of commercial broadloom California post-consumer carpet (PCC). Awarded $500,000.

Wellman Advanced Materials, Johnsonville, SC: Recycling of California PA66 commercial PCC using new technology. Awarded $500,000.

GC Products, Lincoln, CA: Testing replacement of silica aggregate with PC4 (carpet backing material) aggregate in architectural products for indoor and outdoor use. Awarded $40,000.

necoPlastics, Columbus, OH: Testing the addition of densified California PCC material to concrete and asphalt. Awarded $100,000.

ReFiber, Sacramento, CA: Continued testing of California PCC in stormwater filtration applications. Awarded $100,000.

The capital projects are expected to produce an additional 17.5 million pounds of recycled California PCC output through the grant term, which ends on September 30, 2021.

CARE expects to approve additional capital improvement grants this month and may re-release grant funds for capital improvements and/or PCC collection projects during the month of September. CARE’s Micro Grants for Collection and Reuse, labeled Cycle 3M, remain open to California-based projects, which may apply for up to $15,000 through 2020.

Learn more on our Grants page.

California Program’s Q1 Results Released

CARE opened 2020 with momentum and great anticipation for expending recycled output, new capacity coming online and new market opportunities for the California Carpet Stewardship Program. However, carpet sales were lower than expected so that the flow of used carpet to recyclers was more difficult to secure. Coupled with ongoing permit delays and the failure of PG&E to deliver on promises to supply power to a new recycling facility, recycled output was down from Q4 2019. The last few weeks of March also saw the initial impacts of the pandemic. Q1 marked the first time since 2015 that we did not see an on-going uptick in the recycling rate.

The full impact of the pandemic will be seen in Q2 and beyond. Efforts in the second quarter are focusing on continued support for recyclers and key stakeholders as they work to rebuild their capacity and move product. Given that demand for output remains strong in several sectors, and the expectation the auto sector will rebound, CARE is still optimistic 2020 will see renewed growth.

See details in the presentation below.

 

Pandemic Response Action Plan for California Carpet Recyclers

CARE Unveils Ambitious Action Plan to Support California Carpet Recyclers Affected by COVID-19 Pandemic
Industry Facing Unprecedented Challenges; Immediate Help Needed

UPDATES:

Update 3: December 2020
CARE’s Sustainable Plan Committee has updated the Plan:
  1. The early subsidy payment options currently set to expire will be continued through March 2021
  2. The additional 2 cents/pound temporary subsidy for collections will be continued through March 2021.
  3. The enhanced temporary Tier 1 and Tier 2 subsidies enacted in March will be continued through March 2021.

CARE continues to evaluate the pandemic impacts and review the Covid Action Plan on an on-going basis.The COVID-19 impact on both sales of new flooring as well as the carpet recycling community has been significant. According to direct feedback from a stakeholder, CARE’s COVID Action Plan “made a dramatic difference for all of us in the carpet recycling community. The industry stood on the precipice of imploding. The immediate and measured proactive initiatives undertaken by CARE… were not mere handouts, but tactical financial assistance measures that served to ensure market stability.”

COVID Action Plan Update Sent to CalRecycle, December 15, 2020

Update 2: September 2020
CARE’s Sustainable Plan Committee has taken the following additional steps to extend and support the carpet recycling industry during the pandemic:
  1. The early subsidy payment options currently set to expire will be continued through the end of 2020.
  2. The additional 2 cent/lb. subsidy for collections currently set to expire will be continued through the end of 2020.
  3. A subcommittee of the Sustainable Plan Committee has been formed to look at new ways to enable growing collections. CARE Executive Director Bob Peoples notes about the subcommittee’s work: “We know this will be bigger challenge and cost more, but is important as the program continues to expand. We hope to have many new ideas ready for implementation by year-end as we continue to monitor market dynamics.
Update 1: August 2020
Since the pandemic was first recognized, CARE has acted swiftly and decisively to take actions in support of recycling businesses and to ensure continued success of the program. CARE has continued to track developments associated with the pandemic and its impact on the carpet recycling community as well as the larger economy. Several factors have resulted in significant drops in the price of both virgin and post-industrial polymers, which are the primary competition for PCC materials.
In an effort to maintain competitiveness against these declines, CARE has instituted additional short-term, special COVID-19 related adjustments to some of the subsidies paid to recyclers for particular materials.
Effective Q3 and Q4 2020:
  • Nylon  6 Tier 2 will increase by 15 cents/lb.
  • Nylon 66 Tier 2 will increase by 3 cents/lb.
  • PET Tier 1 will increase by 5 cents/lb.
  • PP Tier 1 will increase by 5 cents/lb.
These actions were informed by CARE’s economic models and were updated according to the latest market intelligence and projections. The special COVID-19 subsidy increments are in effect for Q3 & Q4 only and are anticipated to return to the prior programmed levels in January 2021. The COVID-19 subsidy boost is not part of the regular base subsides listed in the approved Plan and thus not guaranteed.

 

First Announcement: March 2020 

Carpet America Recovery Effort (CARE) is taking a series of emergency actions to support and assist the California carpet recycling industry, as effects of the pandemic threaten the industry’s survival. Ten actions have been approved by CARE’s oversight committee and reviewed with CalRecycle. Actions (listed below) include a one-time payment to recyclers, a temporary 90-day increased subsidy payment, accelerated payment schedule and relaxed reporting and proposed loan payment requirements. See the letter to CalRecycle outlining the action plan here.

 

CARE Executive Director Bob Peoples notes, “Cash flow considerations for the recycling community were our primary concern in forming this action plan. The current crisis, precipitated by the COVID-19 pandemic and the plunge in oil prices, has seriously interrupted the supply chain for new carpet sales and the flow of post-consumer carpet (PCC) materials into new products. Additionally, the automotive sector, a major user of post-consumer nylon carpet material, has been shut down. The depth and duration of the impact to our industry is currently unknown and cannot yet be quantified.”
The following six actions will be taken by CARE within the authority provided to it via statute and CARE’s approved Five-Year Plan. CARE will:
  1. Issue a one-time payment to each qualified recycler, calculated as the average monthly subsidy received over last 12 months. CARE estimates the one-time payment will total approximately $1.13 million. This payment will not affect the cash reserve.
  2. Pay 80% of earned subsidies after initial reporting by recyclers (as opposed to the usual 40 to 45 days). The situation will be reassessed after 90 days.
  3. Monitor retail sales and PCC availability to aid recyclers in planning for dramatically reduced raw material flows.
  4. Institute an additional temporary $0.02/lb. subsidy for PCC collection for 90 days, effective April 1 (total $0.04/lb.) This adjustment will be in place for 90 days, through the end of June. CARE is not increasing the current approved Plan-based Collector Sorter Entrepreneur subsidy; it is providing a temporary collection incentive to address rapidly changing market conditions.
  5. Coordinate and communicate with other Product Stewardship groups to identify the best ways to tackle shared challenges.
  6. Suspend routine audits for 90 days. This applies to all recipients of California subsidy payments and does not suspend the requirement to comply with Agreed Upon Procedures (AUP). The AUP suspension does not apply to mills. CARE will revisit the status in 90 days to determine if a further delay is warranted.
In addition, CARE has requested that CalRecycle take the following actions:
  1. Designate Recycling as Essential Infrastructure and Essential Businesses.
  2. Suspend all Recycling Market Development Zone (RMDZ) loan payments(P&I) for 6 months. RMDZ loans are a major debt service requirement for many recyclers, including carpet. This would help with cash flow during the crisis.
  3. Support action to request that utilities not cut off service to any commercial enterprise for 90 days.
  4. Work with Governor Newsom’s staff to stop any commercial enterprise eviction actions for 90 days.
All qualified California subsidy recipients are eligible for these actions. The industry recycled more than 58 million pounds of post-consumer carpet in 2019.
CARE will be monitoring the situation carefully and considering if additional actions need to be taken.

See the letter to CalRecycle outlining the action plan here.

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