Carpet America Recovery Effort

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

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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.

 

CARE Releases 2019 Annual Report

Progress Made in Recycling Rates and Technological Advances;
Industry Faces Challenges in 2020 from COVID-19 and Economic Recession

Carpet America Recovery Effort (CARE) has released its 2019 Annual Report detailing the industry’s progress despite growing headwinds in 2020. In 2019 CARE administered a $35 million operational budget, comprising core operations to serve its members, along with the Voluntary Product Stewardship Program (VPS) and the California Carpet Stewardship Program. Progress in 2019 included:

VPS Program Highlights
  • More than $2 million was paid in VPS subsidies in 2019.
  • Total gross U.S. collections were 335 million pounds, up from 281 million pounds in 2018.
  • 98% of the post-consumer carpet collected was processed in the United States.
California Carpet Stewardship Program Highlights
  • 82.1 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 the 49.3 million pounds recycled in 2018).
  • The overall 2019 California recycling rate was 19.1%, up 25% versus 2018.

Positive news in 2019 included new members joining the recycling effort, new technology introduced, and new products being developed and brought to market. Of particular note is the advance of chemical recycling and the volume of recycled material it could command once fully implemented. As CARE Executive Director Bob Peoples noted: “Progress was strong in 2019, and there was optimism for the first time in a long time for carpet recycling.”

The Report includes a brief update on events in 2020: “Unfortunately, the carpet industry was not immune to the recession, which resulted in plant closures and more than 10,000 jobs lost or furloughed. A difficult decision was made by the carpet industry leadership to terminate the VPS program effective June 30, 2020 to help offset lost revenues. This challenge is compounded by the potential for additional Covid-19 impacts as the economy moves to restart in the later part of Q2. Of equal concern is the loss of carpet recyclers and associated infrastructure during this recession.”

About Carpet America Recovery Effort (CARE)
Carpet America Recovery Effort (CARE) is a voluntary, non-profit organization dedicated to increasing the landfill diversion, reuse, and recycling of waste carpet, through market-based solutions that benefit the economy as well as the environment.
Since 2002, CARE members have diverted more than 5.6 billion pounds of carpet from landfills in the United States and promoted the use and development of products containing materials derived from carpet. CARE members include independent carpet recyclers, carpet manufacturers, dealers, retailers and suppliers and non-governmental organizations. For more information about CARE, visit www.CarpetRecovery.org
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CRI Statement on VPS Program

cri logoStatement from CRI President Joe Yarbrough on Termination of Voluntary Product Stewardship Program

April 23, 2020 – Funded by CRI members, the Carpet America Recovery Effort (CARE) Voluntary Product Stewardship (VPS) program was created in 2014 as a voluntary, nationwide program to help fund sorters and recyclers that divert post-consumer carpet from landfills.

As dynamics rapidly evolve with the significant economic impacts brought about by COVID-19, CRI has made the difficult decision to terminate funding of the VPS program on June 30, 2020. A $2.5 million cap has been placed on the program to encompass funds paid from January 1, 2020 through the June 30 termination date.

The CARE VPS program was originally intended to be a one-year incentive to help maintain the financial viability of carpet recycling during a critical period when market pricing alone (due to oil pricing and other economic headwinds) would not have likely allowed most recyclers and sorters to operate. We were fortunate that through continued funding by CRI’s carpet industry members that the program was able to continue for four and a half years with $15.5 million paid directly to recyclers.

CRI and its members greatly value the critical role that sorters and recyclers play in making carpet recycling possible and appreciate the challenges these business owners are also facing during these unprecedented times. Earlier this month, VPS paid a one-time bonus to program participants based upon their average monthly pay-out over the past 12 months as we all prepared for the unknown impacts of COVID-19.

CRI members remain confident about the future of our industry, and will consider reinstituting some programs in the future. This is a necessary and prudent step we must take in the short-term.

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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
 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.

COVID-19 Update from CARE

CARE’s concern for our staff and all stakeholders is our top priority as we all respond to the COVID-19 pandemic. We will continue our operations in accord with health best practices and encourage our community members to do the same.

Carpet Collection

Given the rapidly changing situation, please contact individual CARE drop-off sites for updates on closures or service changes. (See National map here and California map here for contact information.)

2020 Conference Canceled
In consideration of the situation, I wanted to let you know that the CARE Conference, scheduled for May 12-13 in Portland, Oregon, has been canceled. Given the impact of COVID-19 and the need for containment, this decision was not difficult. All current registrants will be contacted about complete hotel and registration fee reimbursement. We hope to consider scheduling a meeting later this fall either as the annual entrepreneur meeting or a hybrid meeting, likely in late October.

 

We’re Here For You.

Our office staff is working from home and is available for email/phone communications. Email Bob Peoples or  Anthony Cline; see also the California team staff list.

To our Recyclers: rest assured that CARE plans to continue the reporting and subsidy system without interruption.

We continue to closely monitor and assess this fast-changing situation. Please check our website and follow us on Twitter for the latest news and announcements.

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