Evergreen Plastics bullish on PET recycling, investing to handle more bottles

Austin, Texas — Improvements at Evergreen Plastics Inc.’s Riverside, Calif., PET recycling facility will allow for the wider use of curbside collected material as the company looks to expand the facility’s reach.

Former owner CarbonLite Holdings LLC originally designed Evergreen’s plant to focus on the ultra-clean PET stream created through California’s bottle deposit scheme.

But improvements at the facility will allow Evergreen to soon also accept and process PET bottles sourced from out-of-state curbside collection programs that typically contain more contamination than bales created from bottle deposit containers.

“Ninety-six percent, 97 percent of what we’re running there is Grade A deposit bales. Occasionally if we get really high-quality curbside we can run it there. We just don’t have the redundancy built into the system,” said Scott MacLaren, a partner at private equity firm Sterling Group, controlling shareholder of the company.

California grades plastic bales based on how the material is sourced, with Grade A only including bottles collected through state certified recyclers and considered the best available.

“It wasn’t us that built the plant. Let’s be clear about that. When we bought the plant we had done the analysis and wanted to upgrade the front end. That’s been our plan from the very beginning,” MacLaren said at the Resource Recycling Conference in Austin.

Evergreen acquired the Riverside plant in 2021 after CarbonLite sought bankruptcy protection.

“We will be able to run selectively some curbside bales there because we do have a desire to bring in some curbside if we can from Arizona, from Nevada, from Utah,” MacLaren said. “We are upgrading our entire front-end system there. Everything prior to wash will be upgraded.

“It’s a pretty significant investment for us to do that. To run curbside you need significant redundancy in your system just because you have the contaminants. It’s a challenge, for sure,” he said.

Curbside collection chiefly relies on a single-stream recycling approach where recyclables such as plastics, glass, paper and metal are commingled in one cart. That approach makes it easier for residents to recycle but puts more of a burden on material recovery facilities that then have to sort those materials, cross-contamination of recyclables is much higher in bales created by MRFs handling single-stream materials, but the trade-off has been that much more material gets diverted from landfill disposal because of consumer ease of use.

But Evergreen is familiar with challenges created by single-stream recycling systems as the company also operates a recently expanded PET recycling plant in Ohio where there is no beverage container deposit system. The Clyde site, which recently underwent its own expansion, sources PET bales from around the country.

MacLaren explained that upgrading the California plant to be able to handle PET bales from western states makes more sense than transporting them to Ohio.

Evergreen also has PET recycling plants in Albany, N.Y., and Amherst, Nova Scotia, acquired earlier this year that both rely on bales from bottle deposit states.

Some 90 percent of Evergreen’s overall output consists of pellets and 9 percent is flake. The remaining 1 percent includes both caps, primarily made of high density polyethylene, and labels that the company sells to other processors.

The company also has desires to expand beyond its current footprint, but no decisions about where have been made. “We have this debate every day,” MacLaren said. “We’re just not sure where.”

An area where Evergreen sees less potential to expand, he did say, is the Southeast, where much of the existing PET supply is locked down by polyester fiber makers in both the textile and carpet industries.

Evergreen is so bullish on the recycled PET because of state-level laws now requiring minimum recycled content in packaging as well as general market conditions.

“We see where the market is going to hit these minimum content requirements. It’s not just legislation, it’s also the brands. We’re seeing a legitimate desire from the brands to increase recycled content. They get it. Consumers are looking at their bottles, they are looking at their packaging and are making a choice,” MacLaren said.

“I think that only increases. I think the brands, think that only increases and in order to get to where they need to be, we’re going to need more capacity in the U.S., that’s for sure. For us, we’re happy to be the player that can help do that,” he said.

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