Eastman delaying recycling facility construction

Specialty materials company Eastman’s planned $1.2 billion chemical recycling facility in Longview, Texas, will be on hold for two years, according to a company spokesperson.

The decision comes after Kingsport, Tennessee-based Eastman lost a $375 million U.S. Department of Energy (DOE) grant in May as part of the termination of a number of similar awards totaling $3.7 billion. Eastman looked to use the funding to help in the construction of its second plastics recycling facility, including an expansion of its scope to include more decarbonization technology.

The facility has been designed to use methanolysis technology to break down mixed and hard-to-recycle plastics for use in new products.

Eastman previously said the site would have the capacity to process about 110,000 metric tons of material annually and would create more than 200 full-time jobs, as well as 1,000 temporary construction jobs. The company also obtained about $70 million in state and local tax incentives in support of the project.

Now, the company is taking another look at the project to determine a path forward.

“While we continue to pursue an appeal for the DOE award revocation, it is clear this will not be a short process, and significant uncertainties remain," Eastman spokeswoman Kristin Parker says in a statement provided to the Longview News-Journal. "Therefore, we are reassessing the project scope and timing of our second U.S. methanolysis facility planned for Texas.”

During the company’s recent second quarter earnings call, CEO Mark Costa reiterated that while there’s disappointment in losing the DOE grant, the company is “highly engaged” in trying to get it back while looking for other ways to lower the project’s cost.

“That’s a highly uncertain process,” he said. “And so, we’re focusing on what else we can do. … We have creative ideas of not just looking at how to do it at Longview but looking at three other sites where we might have some better advantages and how to be efficient.”

Additionally, Costa said the company could increase capacity at its first methanolysis facility in Kingsport to as high as 130 percent by “debottlenecking.” He noted that the facility already has reached 105 percent of its capacity.

“We’re pretty excited about the potential to sort of optimize the footprint and find ways to actually pull forward some benefits that we would have had to wait for with the second plant,” he said.