Eastman selected by U.S. Department of Energy to Receive up to $375 million investment for its second U.S. molecular recycling project

Rhea-AI Summary

Eastman (EMN) announces the selection of Longview, Texas, as the location for its second U.S. molecular recycling facility. The investment includes operations to recycle mixed plastic waste, depolymerize waste, and create virgin-quality materials for packaging and textiles. The project is expected to bring over 200 full-time jobs and approximately 1,000 temporary construction jobs to the Longview community. Eastman has secured incentives from the U.S. Department of Energy and the State of Texas, totaling approximately $70 million in state and local tax incentives. The company's technology enables the recycling of hard-to-recycle plastic waste into virgin-quality material with lower greenhouse gas emissions than traditional methods.

Positive

• Eastman (EMN) announces the selection of Longview, Texas, as the location for its second U.S. molecular recycling facility.
• The investment includes operations to recycle mixed plastic waste, depolymerize waste, and create virgin-quality materials for packaging and textiles.
• The project is expected to bring over 200 full-time jobs and approximately 1,000 temporary construction jobs to the Longview community.
• Eastman has secured incentives from the U.S. Department of Energy and the State of Texas, totaling approximately $70 million in state and local tax incentives.
• The company's technology enables the recycling of hard-to-recycle plastic waste into virgin-quality material with lower greenhouse gas emissions than traditional methods.

Negative

• None.

Insights

Environmental Economist

The announcement of Eastman's investment in a new molecular recycling facility represents a significant stride in the circular economy, which is increasingly pertinent to businesses seeking sustainability. This facility, leveraging federal funding and state incentives, is poised to bolster the local economy through job creation and infrastructure development. The promise of over 200 full-time jobs, coupled with the temporary construction positions, may stimulate economic growth in Longview, Texas.

From an environmental economics standpoint, the facility's impact on reducing carbon emissions is noteworthy. Eastman's technology, which purports to significantly lower the carbon footprint of recycled PET, aligns with the broader industry goal of decarbonization. This initiative can be seen as a proactive response to both market demands for sustainable materials and potential regulatory pressures aimed at reducing greenhouse gas emissions.

Furthermore, the state and local tax incentives, totaling approximately $70 million, underscore the importance of governmental support in fostering green technology advancements. Such investments can lead to a multiplier effect, where the initial outlay by the government may be recouped through increased economic activity and tax revenues from a revitalized local industry.

Market Research Analyst

Eastman's announcement is likely to resonate positively with consumers and investors who are increasingly valuing corporate sustainability. The focus on producing virgin-quality materials from hard-to-recycle plastic waste could give Eastman a competitive edge in the packaging and textiles markets, where demand for sustainable materials is on the rise.

The company's previous success with a similar facility in Tennessee and plans for expansion in France suggest a strategic move to capitalize on the growing global push for circular economy models. The potential reduction of over 70 percent in carbon emissions for recycled PET, compared to traditional methods, is not only environmentally significant but could also serve as a unique selling proposition to attract partnerships with companies seeking greener supply chains.

However, investors should be attentive to the execution risks associated with scaling new technologies and the long-term viability of the incentives provided. While the short-term boost to Eastman's stock may be expected, the long-term performance will hinge on the company's ability to deliver on its environmental promises and to integrate this facility into its broader operational framework effectively.

Sustainability Analyst

The decision by Eastman to invest in a molecular recycling facility in Longview aligns with an increasing trend in the chemical industry towards sustainable practices. The facility's design, which includes onsite renewable energy and next-generation methanolysis technology, suggests a commitment to innovation in sustainable production processes.

Eastman's approach to molecular recycling, which converts plastic waste into virgin-quality material, could play a pivotal role in addressing the global plastic waste challenge. By enabling the potentially infinite use of materials, Eastman is contributing to the creation of a closed-loop system, which is a cornerstone of the circular economy.

It is also significant that Eastman plans to support community initiatives, which may improve their social license to operate and strengthen community relations. The engagement with the local community through workforce training and development initiatives could foster a more inclusive economic growth and enhance the company's reputation as a socially responsible entity.

Longview, Texas, named as the location of the facility

KINGSPORT, Tenn., March 25, 2024 /PRNewswire/ -- Eastman (NYSE: EMN) today announced significant progress towards its leadership in the circular economy.

• Selected by the Department of Energy as one of 33 companies for award negotiations to support Eastman's second U.S. molecular recycling facility
• Named Longview, Texas, as the location for its facility
• Finalized incentives with the State of Texas to assist with project funding

Eastman's second U.S. molecular recycling project has been selected by the Department of Energy (DOE) to begin award negotiations for up to $375 million in Bipartisan Infrastructure Law and Inflation Reduction Act funding as part of the Industrial Demonstrations Program (IDP). The DOE announcement led to Eastman announcing the intent to build a second U.S. molecular recycling facility at its location in Longview, Texas.

Investment in the Longview site
The company selected the Longview site due to synergies with existing infrastructure and operations, favorable energy supply and footprint, and access to western and central U.S. feedstock pools. The location also provides enough space for onsite renewable energy. The investment includes operations that will prepare mixed plastic waste for processing, Eastman's next-generation molecular recycling unit to depolymerize waste, and a polymer facility to create virgin-quality materials for packaging and textiles. The Longview molecular recycling facility will have the capacity to recycle approximately 110,000 metric tonnes of hard-to-recycle plastic waste.

The investment is expected to bring over 200 full-time, high-paying jobs to the Longview community in addition to approximately 1,000 temporary construction jobs during site development and building of the facility. Eastman has operated in the Longview community for over 70 years and currently has over 1,500 team members at the location.

"We are excited to build our second U.S. world-scale molecular recycling facility at our existing site in Texas," said Mark Costa, Board Chair and CEO. "The plant will remove significant waste from the region, enable true circularity and set a new benchmark for decarbonization. We have decades of history successfully operating in Longview, and this will be a great investment for the local community."

Incentives from the U.S. Department of Energy and the State of Texas 
The company was selected by the DOE to accelerate the demonstration of industry-leading low-carbon intensity recycled PET with this project. Reaching a collaborative agreement with the DOE enables expanding the project to include the deployment of thermal heat batteries and onsite solar power. This, combined with Eastman's next-generation methanolysis technology, achieves a step-change improvement in decarbonizing PET production resulting in recycled PET with greater than 70 percent reduced carbon emissions compared to fossil virgin production, and approximately 90 percent reduced carbon emissions when including avoided emissions.

Eastman's planned project in Longview is aligned with the DOE's goal of catalyzing industry-wide change to a low-carbon future. Also, as part of the award from the DOE, the company plans to support the renovation of a community center to be used as a hub for community outreach, workforce training and development, and other ongoing needs of its community partners.

"We are honored to be selected by the DOE to help fund this important project," Costa continued. "The commitment helps us to further invest in the local community with a comprehensive community benefits plan. The support of these partners is a testament to our technology and the difference we can make for future generations."

Eastman also obtained significant state and local tax incentives in support of the project totaling approximately $70 million.

"Texas is where businesses flourish and people prosper," said Texas Governor Greg Abbott. "With our highly skilled workforce, unmatched business climate, and reasonable regulations, it is no surprise businesses from around the globe continue to choose to grow in Texas. This additional facility by Eastman in Longview will bring hundreds of good-paying jobs to hardworking Texans and millions in capital investment to East Texas. I thank the members of the Texas Legislature and local leaders for their tireless work to attract world-class business investments to our great state. Together, we will continue to create a bigger, better Texas for generations to come."

"We also deeply appreciate the support of Governor Abbott and the State of Texas for its continued collaboration as we announce this large investment at our Longview facility," Costa added. 'We are excited to work with the state and local leaders to continue our legacy in Texas for generations to come."

Eastman's proven polyester renewal technology recycles hard-to-recycle plastic waste bound for landfill or incineration today. The company's technology allows this waste to be broken down into its molecular building blocks and then reassembled to become virgin-quality material without compromising performance. Eastman is enabling the potentially infinite use of materials by keeping these valuable molecules in production, in a material-to-material high-yield loop. Eastman can transform waste plastic into virgin quality food contact polyesters with lower greenhouse gas emissions than traditional methods.

In addition to this newly announced facility in Texas, Eastman has recently completed its first molecular recycling facility in Kingsport, Tennessee, and plans to invest in another location in France. For more on Eastman's circular economy strategy and initiatives, visit eastman.eco.

About Eastman
Founded in 1920, Eastman is a global specialty materials company that produces a broad range of products found in items people use every day. With the purpose of enhancing the quality of life in a material way, Eastman works with customers to deliver innovative products and solutions while maintaining a commitment to safety and sustainability. The company's innovation-driven growth model takes advantage of world-class technology platforms, deep customer engagement, and differentiated application development to grow its leading positions in attractive end markets such as transportation, building and construction, and consumables. As a globally inclusive and diverse company, Eastman employs approximately 14,000 people around the world and serves customers in more than 100 countries. The company had 2023 revenue of approximately $9.2 billion and is headquartered in Kingsport, Tennessee, USA. For more information, visit eastman.com.

Contacts: 
Investors: Greg Riddle / 1-212-835-1620 / griddle@eastman.com
Media: Kristin Parker / 1-423-229-2526 / kristin@eastman.com

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SOURCE Eastman

FAQ

Where is Eastman (EMN) building its second U.S. molecular recycling facility?

Eastman is building its second U.S. molecular recycling facility in Longview, Texas.

What are the key operations of Eastman's investment in Longview, Texas?

Eastman's investment includes operations to recycle mixed plastic waste, depolymerize waste, and create virgin-quality materials for packaging and textiles.

How many jobs are expected to be created by Eastman's project in Longview, Texas?

The project is expected to bring over 200 full-time jobs and approximately 1,000 temporary construction jobs to the Longview community.

What incentives has Eastman received for its project in Longview, Texas?

Eastman has secured incentives from the U.S. Department of Energy and the State of Texas, totaling approximately $70 million in state and local tax incentives.

How does Eastman's technology enable the recycling of plastic waste?

Eastman's technology allows the recycling of hard-to-recycle plastic waste into virgin-quality material with lower greenhouse gas emissions than traditional methods.