PCR Alarm Rings: Another PET Recycler in the United States (US) Goes Bankrupt!

rPlanet Earth, a California-based PET plastic recycler and food and beverage packaging manufacturer, has gone bankrupt.

The factory located in Vernon is the second PET plastic recycling company in California to close this year. The company claims to be a vertically integrated recycling and packaging enterprise, primarily producing food-grade packaging products, including PET bottles, thermoformed containers, and cold drink cups.

This factory, covering an area of 302,000 square feet, was built in 2018 and reportedly cost $100 million to construct, with an annual production capacity of approximately 36,287 tons of packaging products.

The specific reasons for the closure of the factory are still unclear, but the decision was made after Evergreen Recycling partially shut down its PET bottle recycling business in February, citing "economic factors." In August, Republic Services' joint venture Blue Polymers acquired the assets of the factory. Now, there are only four recycling companies in the state that are still purchasing PET bottle waste.

The Association of Plastic Recyclers (APR) stated that the recent closure of rPlanet Earth should serve as a "wake-up call" for policymakers in California and across the country.

The report indicates that the rPlanet Earth factory accounts for only about 4% of the country's total PET production capacity, yet it is responsible for supplying a variety of key products—including thermoformed trays and PET bottle materials. Currently, the production of these products is under significant pressure.

Bottles and thermoformed products

According to the company's official website, rPlanet Earth is responsible for receiving and sorting bottles and thermoformed products made from rPET plastic, processing them into food-grade PET pellets, and directly producing corresponding preforms and thermoformed products in the factory.

This factory is a large regional recycling enterprise mainly responsible for processing grade B waste paper bales, which usually come from curbside collected waste paper.

The company received several rounds of funding from public and private sources in its early stages, including a $4 million loan from a California recycling agency in 2018, a $3 million government grant in 2017, and a $1.5 million investment from the "Closed Loop Fund" in 2018.

Sally Houghton, the executive director of the California PET Recycling Company (PRCC), stated that with the disappearance of "rPlanet Earth," related businesses have had to seek new markets to sell those B-grade recycled materials. "Although there are still some export channels, the prices in these markets are usually lower, and the transaction volumes are also small," she said.

Since July, PRCC has primarily been storing Grade B plastic waste while also looking for buyers. Houghton added that the persistently sluggish market environment over the past two to three years has put significant pressure on PET recycling companies.

Paul Bahou, the president of Global Plastics Recycling Company, stated that competition from low-cost imported virgin resins and recycled plastics has always been the main challenge faced by the company. This company specializes in recovering plastic fragments from bottles and conducting thermoforming processing.

Its subsidiary Global Plastics uses this material to produce sheets and thermoformed products. Due to the continuous improvement of recycling capabilities in Mexico, the prices of related products once rose steadily. However, by May, local buyers began to reduce their purchases, leading to a significant drop in the prices of both A-grade and B-grade products.

Cheap imported goods have put pressure on the market.

Even though the prices of waste materials have declined, domestic recycling companies still find it difficult to compete with cheap imported recycled resins and virgin resins.

"It's really hard to make money now," Bahou said. "The real cost of competing with these imported products is that you have to sell your own products at very low prices."

The American Plastics Recycling Association stated: "The unfortunate reality is that this closure event once again demonstrates that the plastic recycling industry is indeed facing numerous challenges. Unless the profits from plastic recycling can be comparable to or even exceed those from producing new plastics, the United States will not make any substantial progress in reducing plastic pollution."

California mandates that, under the state's bottle recycling law, beverage containers must contain at least 25% recycled material. However, Houghton stated that this requirement has not significantly increased the demand for products made from recycled materials.

Bahou pointed out that although summer is usually the peak season for the recycling business, the existing recycling facilities in the state are still not operating at full capacity, which is another reason for the continuous decline in waste paper prices. "The current market situation is really very weak," he added.

Recyclers are also paying attention to whether the state's "Plastic Market Development Subsidy Program" will be extended—currently, the program is set to expire on December 31. The program aims to provide financial support to facilities that are responsible for cleaning used plastic bottles and converting them into resin or plastic sheet.

Meanwhile, California is implementing SB 54—an extended producer responsibility regulation for packaging products. This regulation will increase the requirements for the use of recycled materials in products starting from 2027 and introduce other related regulatory measures.

In the short term, recyclers are also closely monitoring the potential impact of tariffs on market dynamics. The Trump administration announced on September 8 that PET resin products would be added to its list of reciprocal tariffs, but Houghton and Bahou believe it is still difficult to predict what consequences this move will bring.