Carpet America Recovery Effort

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Q3 Results Show Progress but Challenges Remain

CARE Executive Director Bob Peoples presents California program results for Q3:

The third quarter of 2024 saw an increase in both gross collections and recycled output of 13% and 7.7%, respectively. The overall year-to-date Recycling Rate is 38%,  well ahead of our 34% target for 2024.

While Q3 is typically the strongest quarter, overall, markets remain challenging. Oil has dipped below $70 per barrel (WTI crude benchmark) and that, along with slowing auto sector demand, will continue to put pressure on outlets. As noted in the last two quarters, carpet pad markets, not covered by the carpet stewardship law, also continue to be depressed.

Sales in Q3 were 14.4 million square yards, essentially on budget for the first time in years. However, overall sales in 2024 are down versus the Plan budget. As a reminder, the new Plan reflects a 32% reduction in sales over the life of the Plan.

Overall, 80% of total expenses were paid out in the form of subsides and 78% of all those subsidies were paid to California recyclers. Revenue exceeded expenses and the fund balance ended the quarter at $6.7M, up by $1.7M (+16%) vs. the Q2 balance.

A final note: after considerable analysis, a flaw was found in the Gross Collections Calculation. The error was due to a formula error which double counted a small portion of reported Gross Collections. A full report is in preparation  and will include the correction and implications for past reporting.

Click on image to view the full presentation:

1st slide of presentation

CARE Names Person & Recycler of the Year for 2019 and 2020

Dalton, GA — CARE has announced winners of the Person and Recycler of the Year Awards for both 2019 and 2020 in conjunction with the organization’s 19th Annual Conference, August 31-September 1. CARE Executive Director Bob Peoples explained, “We had to cancel the 2020 Conference due to COVID but did not want to skip recognizing a year’s worth of carpet recycling successes. So at this year’s virtual conference, we are giving awards to the companies and individuals that have worked tirelessly to advance the carpet recycling industry in the face of recent economic and social challenges.”
The awardees are:

2019 Recycler of the Year: Circular Polymers

Circular polymers logoIn 2018 industry veterans David Bender and Nick Fiore joined forces with financial executives Jeff Kupets and Mark Babich to form Circular Polymers. A rising star in the chemical recycling world, Circular Polymers’ disruptive technology transforms post- consumer discarded carpet into new polymer raw materials for use by multiple industries. Their newly expanded facility in Lincoln, California can process some 45 million pounds of carpet per year, with plans to expand further. “Circular Polymers has grown from a small start-up to a major player in carpet recycling. This talented and aggressive organization has been a joy to work with in true partnership as we chart the next stage of carpet recycling in the U.S.” said Peoples.

2020 Recycler of the Year: RISE Composite Technologies

RISE logoFounded in 2017 by Doug Mancosh, Rise Composite Technologies has patented a manufacturing process, RISE TM Technology, that compresses carpet fibers and other synthetic materials into dense and durable wood replacement products, including RISE Siding and RISE Trim. In their state-of-the-art facility in Mankato, MN, RISE participates in the circular economy by recycling and re-purposing expensive polymers used in carpet fibers and other industrial fibers that would otherwise be sent to landfill. “This company has developed its technology and products to become one of the leading market outlets for post-consumer carpet fibers. We are excited by the growth potential and the important role RISE is playing in helping keep old carpet out of landfills,” said Bob Peoples.

2019 Person of the Year: Chad Chaffin, Southeastern Recycling

Chad Chaffin head shot“Chad has been a voice for the recycler community for many years. Since joining the CARE board, Chad has worked to support innovative relationships and programs to help move post-consumer carpet. Chad brings the intense focus and dedication of a race car driver, his former profession, to support the industry,” commented Peoples. Chad reacted, “Although I’ve been in this industry for 20 years, in 2019, I took on a role of leadership on behalf of the Collector/Sorter Entrepreneur (CSE) community. I am surprised but grateful that CARE, the CSEs, the manufactures, the processors, and industry experts recognized me as worthy of this distinct honor.”

2020 Person of the Year: Jeff Kupets, Circular Polymers

jeff kupetsJeff Kupets is Chief Financial Officer of 2019 Recycler of the Year Circular Polymers. For eight years prior to co-founding Circular Polymers, Jeff was Managing Partner of Mustang Trading, an index options trading firm in Chicago. His leadership of the company included risk management, model evaluation and implementation, and regulatory compliance. Bob Peoples stated, “Jeff exhibits the extreme dedication it takes to complete a mission. He has worked tirelessly throughout this pandemic to ensure his company would be able to survive and grow… and Circular Polymers have done just that.” Kupets said: “I am honored and truly humbled by this award. While I am the fortunate one to receive it, I need to recognize all of the work that got us to this point by the people at Circular Polymers, BGI, CARE and all of our partners, customers, and vendors. Every step has been a team effort.”

2020 Person of the Year, Special Recognition: Glenn Odom

glenn odomGlenn is a retired executive who has worked tirelessly in his state of South Carolina to facilitate recycling programs for years. Glenn was a CARE board member for many years and upon retirement was asked to stay on as an advisor, a request that is not uncommon of these gentlemen. Glenn brings a business person’s acumen and the passion of a true believer to his efforts. Bob Peoples noted, “Glenn has been a tireless advocate for CARE since the beginning. He has spearheaded a number of important initiatives that have benefited both CARE and more importantly, the whole recycling community.”
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New Flyer Highlights Progress of CA Program

CARE has published a four-page flyer that describes the California Carpet Stewardship Program and recent progress, aimed at informing retailers and increasing collection of carpet for recycling. It will be mailed in July to thousands of retailers and flooring contractors across the state. The flyer details CARE’s work with retailers, installers, manufacturers, processors and local government to increase the amount of carpet collected, kept out of landfill and made into useful new products. It introduces the carpet assessment and how it is used and details how CARE is working to increase recycling rate for carpet in California, which is showing excellent progress over the past five years.

CARE Program Highlights, Summer 2021

CARE Grantee Case Study: necoTech

Project Description

Delaware, OH-based necoTech is testing the addition of densified California post-consumer carpet (PCC) material to concrete and asphalt, a potentially huge market for this recycled carpet material. The company first learned about CARE and its support for carpet recycling research at plastic industry trade shows. A CARE grant then funded testing the California-sourced PCC material as a raw component in asphalt and concrete through the National Center for Asphalt Technology. Additional testing was conducted on carpet material as a binder in glue that holds pavement together, to replace virgin plastic. CEO Steve Flaherty noted that while others were also working on viable alternatives for reuse of carpet components, the infrastructure sector has a market size in the trillions and “large problems need large end markets.”  necoTech had been working with mixed plastic waste, but according to Flaherty, “Incorporating carpet into the mix allows for stabilization to the raw material supply, resulting in consistency and better overall quality control”. 

Location: Delaware, OH

Grant Amount:  $100,000; match $10,000

Total Cost of Project: $110,000

Project Timeline: August 31, 2020 – Sept 30, 2021

“The CARE grant gave us the kick-start to disrupt an industry; the grant was a market signal that a startup can be legitimate and have its technology validated.” Steve Flaherty, CEO, necoTech

Implementation Process

Flaherty noted that the CARE grant “gave us the kick-start to disrupt an industry; the grant was a market signal that a startup can be legitimate and have its technology validated.” The grant paid for tests and certifications. necoTech works with the Army Corps of Engineers on two contracts with the U.S. Air Force: an AFWERX Phase I contract to explore recycled polymer modified asphalt for use on air bases around the globe and a $500,000 Phase II contract using their asphalt patching solution.

Project Challenges

Challenges included how to make the recycled carpet material appreciated for its homogeneity and performance as an added value beyond sustainability. Flaherty notes, “Specs are written around virgin materials; having (recycled carpet material) accepted is a barrier – we’re getting there. Also important is testing with the right partners. By going to the Army Corps of Engineers, we are creating instant connections with profound engineers and voices in the community with the same interests.  Still, establishing those relationships is a challenge.”

Project Benefits and Outcomes

The testing shows success in producing a polymer-modified asphalt product that performs equal to or better than conventional pavement at a cost savings. Flaherty continued, “On concrete, we found promise in applications, where [our product] performed comparable to other methods and produced a cementitious product.”

The environmental benefit of recycled carpet material is that it replaces virgin materials, including natural materials like sand, that create significant greenhouse gas emissions.  As Flaherty notes, “Breaking rock into smaller pieces is neither cheap nor eco friendly.” Additionally, necoTech was able to create a recycled polymer modified binder (glue) that displaces the use of petroleum-based virgin polymers along with their environmental impact. necoTech is now testing the binder in pavement mix designs with promising results.

The positive testing results coupled with the prestige of the secured military contracts has necoTech positioned for impressive growth. necoTech has been able to leverage the momentum from the grant into a national partnership with The Pavement Group, a national asphalt contractor out of Pittsburgh, PA. Additionally, necoTech is working with the producers of Pave the Road, an award-winning documentary, to explore partnership opportunities for using plastic waste in road construction, as identified in the film.

necoTech CEO Steve Flaherty explains the sustainability aspects of the company’s products.

This is one of a series of case studies that illustrate the impact and logistics of grant funding on the carpet recycling industry in California.

Additional Case Studies

Grantee Case Study: 916 Floors

Grantee Case Study: CLEAR

Micro Grant Case Study: Florin Perkins

Grantee Case Study: GHD, Inc.

Grant Case Study: Moto’s Transportation

Micro Grant Case Study: Napa Recycling

CARE Grantee Case Study: Safepath Products

CARE Grantee Case Study: Sierra Mat & Rubber

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.

 

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