Dive Brief:

• Recycled polyethylene terephthalate (rPET) producer Circularix recently began production at its inaugural plant, located in Hatfield, Pennsylvania. The plant will have the capacity to produce 55 million pounds of food-grade, post-consumer rPET pellets per year.
• Circularix has ordered equipment for four other 55-million-pound capacity plants — in Arizona, Florida, Texas and the Pacific Northwest — that it plans to open by Q1 2025. 
• Circularix is a joint venture from Macquarie Group and HPC Industries that launched last year. The company is led by Leon Farahnik, who previously was CEO of CarbonLITE, an HPC subsidiary that filed for Chapter 11 bankruptcy two years ago.

Dive Insight:

Increased demand for recycled material is prompting domestic PET recycling facility launches and expansions, including recent announcements from Phoenix Technologies, D&W Fine Pack and German company Revalyu Resources.

Prior to its bankruptcy and selling its manufacturing equipment at auctions — which the company attributed to pandemic-related pressures, including temporary production slow-downs and low resin prices —  CarbonLITE was one of the most prominent U.S.-based rPET manufacturers at 250 million pounds of annual production capacity. 

Whereas CarbonLITE shredded and washed baled PET before pelletizing it, Farahnik says Circularix will purchase PET flakes to transform into rPET pellets. He says the United States has about 1.4 billion pounds of PET flakes available annually as a source material for processors, and an additional 2 billion pounds is available internationally. Circularix already has lined up some undisclosed end-use customers, including beverage brands that will use the rPET pellets to manufacture new bottles and meet sustainability commitments. 

“Brands — I mean beverage companies like Coke, Pepsi, Nestle, all of them — when you look at it, they have a lot of demand for the postconsumer, food grade-material for their beverage industry,” Farahnik said. “The demand is huge in the marketplace.”

The National Association for PET Container Resources’ 2021 recycling report shows the highest annual amount of PET bottles ever collected domestically: 1.9 billion pounds. 

But Farahnik echoes the sentiment of others in plastics recycling who say PET bottle collection rates still need to improve so processors have access to more material supply, otherwise brands will fall short on their commitments to use more recycled content in their packaging. The Ellen MacArthur Foundation’s Global Commitment 2022 progress report notes that “many businesses will face difficulty reaching their PCR targets,” and only 23% of brands and retailers are on track to achieve their 2025 goals.