IRG of Pennsylvania could receive sizable federal loan

The U.S. Department of Energy Loan Programs Office has announced a conditional commitment for a loan guarantee of up to $182.6 million to International Recycling Group Erie Inc. (IRG Erie) to help finance its construction of a plastics recycling facility (PRF) in Erie, Pennsylvania.

Funds also would go toward an injection system tower at a steel mill in Indiana that would act as an end market for residuals emanating from the IRG Erie PRF.

IRG Erie was announced as a PRF project by investors in August 2020. In 2022, IRG Erie purchased land for its PRF and, later that year, received a grant from the state of Pennsylvania to improve rail access at the site.

The DOE news release makes it unclear whether the PRF is yet operating, writing, “The new recycling facility will mechanically recycle polyethylene terephthalate (PET), high-density polyethylene (HDPE), and polypropylene (PP) polymers, converting approximately 160,000 tons per year of postconsumer [scrap] plastic into approximately 100,000 tons per year of recycled plastic materials.”

The DOE also refers to IRG Erie’s intention to produce about 20,000 tons per year of what it calls CleanRed from the residuals output at its PRF.

CleanRed, the DOE says, can reduce greenhouse gas (GHG) emissions in the steelmaking process by replacing a portion of coking coal used in blast furnaces or anthracite coal used in electric arc furnaces.

The CleanRed produced in Erie will be used at a blast furnace-based mill in northwest Indiana.

“IRG Erie will be the first company in the U.S. to produce and sell a plastic-waste-based iron reducing agent to a domestic steel manufacturer, helping to solidify America’s position as the global leader in low-carbon iron and steel products,” the DOE says.

The IRG Erie project and CleanRed installation in Indiana will create more than 300 construction jobs in Erie plant and 30 another 30 to build the injection system at the mill in Indiana. The project also will create 221 operations jobs in Erie and northwest Indiana.

“Recycled plastic production uses 50 percent less energy than traditional plastic production from fossil fuels, and the increased recovery rate of the plastics at this facility will result in further avoided virgin plastics production," the DOE says. "Plastic production currently accounts for roughly 2 percent of total U.S. energy consumption.”

"In total, IRG Erie is expected to avoid up to 555,000 metric tons of CO₂-equivalent emissions annually as a result of avoided virgin plastics production and emissions reductions in the steel production process.”

Using CleanRed at a 14 percent replacement rate for coking coal used in the Indiana blast furnaces will result in a 24 percent reduction in GHG emissions at that location.

Regarding the conditional commitment status of the loan, the DOE says it signals its intent to finance the project, and the DOE and the company must satisfy certain technical, legal, environmental and financial conditions before the department enters into definitive financing documents and funds the loan.