International Recycling Group cancels $300 million recycling plant in Erie. Why?
International Recycling Group cancels $300 million recycling plant in Erie. Why?
International Recycling Group founder Mitch Hecht describes Erie plans
The planned recycling facility is supported by some in the plastics industry but environmental concerns from local groups in Erie point out questions.
(This story was updated to accurately reflect the most current information.)
International Recycling Group Inc. has canceled its plans to develop a $300 million plastics recycling plant in Erie.
That plant, which was to built on 25 acres of the former Hammermill Paper Co. site, was the recipient of a combined $9 million investment from Erie Insurance and the Erie-based Plastek Group.
A $182 million conditional loan guarantee announced last summer by the Department of Energy’s Loan Programs Office seemed like the catalyst that company would need to complete fundraising.
But that loan was never finalized and the remainder of the money was not raised.
IRG cites Trump tariffs as a factor
In an announcement Thursday morning, IRG, led by CEO Mitch Hecht, cited challenges in raising the needed money, along with other factors that influenced the decision.
According to a statement on behalf of IRG, “Among these challenges are a hold of unspecified duration placed on funding commitments issued by the U.S. Department of Energy’s Loan Programs Office. Additional challenges include recently announced tariffs on materials and on equipment from Europe not made in the U.S., resulting in expectations of substantially higher project development costs than anticipated, as well as difficulties in securing long-term purchase agreements for recycled materials from plastics manufacturers and consumer product groups, many of whom are cutting back on sustainability pledges.”
What was the plant IRG wanted to build?
The plant, which was expected to create 300 jobs, was projected to convert 160,000 tons of post-consumer plastic a year into about 100,000 tons of recycled plastic materials.
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Hecht expressed his disappointment in a statement, saying that his goal had been to create good jobs and establish Erie as a leader in sustainability.
More: IRG has a plan for a $300 million recycling plant in Erie. Will it make money?
“I am personally devastated after 18 years of working to bring this vision to a reality that we have failed to overcome these challenges,” he said.
Regional Chamber hopes to keep RACP funds for other Erie projects
The Erie Regional Chamber and Growth Partnership expressed its disappointment in the news Thursday in a statement from CEO Brandon Mendoza.
“The Erie Regional Chamber is frustrated by the financial pressure building due to economic uncertainty at the federal level, which IRG cited as the reason to cancel plans for its Erie plastics recycling plant project,” he said. “We recognize the significant economic opportunities it could have brought to Erie.”
IRG said in its statement that the only government money used in the development of the project was a $300,000 loan from the Erie County Redevelopment Authority.
That loan was secured by a lien on IRG’s property at 1565 East Lake Road and is expected to be repaid in full, IRG said.
The project also was the recipient of a $5 million grant from the state Redevelopment Assistance Capital Program, often called RACP, but the money was never accessed.
According to the chamber, “The ERCGP will be reaching out to the Governor’s Office to talk about keeping that investment in Erie for other projects. The ERCGP is also in contact with local legislators regarding the project.”
IRG said that its newBin collection service in the Erie areas has been suspended. Some of the materials already collected have been used in research and development. The remainder of the material will either be recycled or placed in a landfill.
Contact Jim Martin at jmartin@timesnews.com.