The International Recycling Group (IRG) has scrapped plans for a recycling plant in Erie, Pennsylvania. The company had planned to recycle 160,000 tons of plastic waste a year and turn about 20,000 tons of it into a new product to be used in the steel-making process, at the site it purchased on the east side of Erie.
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In a statement, the company cited several challenges that prevented it from raising the $300 million financing needed for the project, including the hold-up of a $182.6 million loan guarantee from the U.S. Department of Energy (DOE), secured last summer through the Inflation Reduction Act, then-President Biden’s landmark climate law.
“I am personally devastated after 18 years of working to bring this vision to a reality that we have failed to overcome these challenges,” said Mitch Hecht, the company’s founder and CEO.
The IRG also blames the recent tariff increases for raising project development costs and difficulty securing purchase agreements for its recycled products, as many companies have backed away from sustainability pledges, according to IRG.
“I think it’s unfortunate for Erie and the region,” said Andre Horton, a member of the Erie County Council. He called the IRG plant an “excellent economic development opportunity.”
The local business community, including Erie Insurance and the local plastics industry, supported the project, which promised more than 200 jobs.
But environmental groups, and some local residents, opposed it. They were concerned about local pollution from the plant, and the steelmaking process it would support.
IRG planned to truck in plastic waste from communities within a 750-mile radius. Faran Savitz, an advocate with the non-profit PennEnvironment, said that plastic waste could get into Lake Erie.
“Ultimately, IRG canceling their plans in Erie is a good thing for the lake, and it’s good for the air, the water, and the climate,” said Savitz.
His group, and others, sent a letter to the DOE last summer, asking it to revoke the IRG loan guarantee, in part because they don’t want the government to support the use of plastics to make steel.
“The process of chemical recycling is often dirty, it’s polluting,” Savitz said. “Then they’d be using it in the steelmaking process, so combusting it, which again, dirty, polluting there’d be carbon pollution, air pollution.”
IRG’s project qualified for the DOE loan guarantee because the agency considered IRG’s recycled plastic product a climate solution. DOE told The Allegheny Front in an email last fall that its analysis found a 24% reduction in greenhouse gas emissions using the company’s product in steelmaking in place of coal.
Gary Horton, president of the Erie chapter of the NAACP and CEO and president of the Urban Erie Community Development Corporation considers himself an environmentalist. But in his neighborhood, he sees high unemployment and violence, and many of the businesses are vape shops and liquor stores, “in a neighborhood that’s almost 50% children,” he said.
“How can I sit here and say that the plastic thing was the worst thing in the world that could happen to us when I got all these other things happening to us and don’t nobody even care and that are real,” he said.
He supported the recycling plant and signed what’s called a “community benefits agreement” with IRG because it promised training and more than 200 jobs for residents.
“I knew then it may not happen. At least they were saying ‘If it happens, you guys are going to benefit from it,’” he said.
