IRG Erie Secures $182 Million DOE Loan Commitment for Pennsylvania Plastics Recycling Facility

The U.S. Department of Energy’s Loan Programs Office (LPO) has announced a conditional commitment for a loan guarantee of up to $182.6 million to IRG Erie, Inc. (IRG Erie). This funding will finance the construction of a plastics recycling facility in Erie, Pennsylvania, and an injection system tower at a steel manufacturing facility in northwest Indiana. The new recycling facility will mechanically process polyethylene terephthalate (PET), high-density polyethylene (HDPE), and polypropylene (PP) polymers, converting approximately 160,000 tons of post-consumer waste plastic annually into about 100,000 tons of recycled plastic materials to replace virgin plastics. Additionally, the facility will produce around 20,000 tons of CleanRed™ from residual plastic output each year.

CleanRed™ can lower greenhouse gas (GHG) emissions in the steelmaking process by substituting for coking coal in blast furnaces or anthracite coal in electric arc furnaces. The CleanRed™ generated by the facility will be utilized by an integrated steel manufacturer (with a blast furnace) at its site in northwest Indiana. IRG Erie will become the first company in the United States to produce and market an iron reducing agent made from plastic waste to domestic steel manufacturers, bolstering America's leadership in low-carbon iron and steel production.

The U.S. steel production industry contributes 7% of the nation’s greenhouse gas (GHG) emissions. Reducing the use of coking coal in steelmaking can significantly decrease these emissions. By substituting 14% of the coking coal in blast furnaces with CleanRed™, GHG emissions from this process can be reduced by 24%, advancing the steel sector towards net-zero emissions.

Producing recycled plastic uses 50% less energy compared to manufacturing traditional plastic from fossil fuels. The higher recovery rate of plastics at this facility will also lead to a reduction in the production of virgin plastics. Currently, plastic production represents approximately 2% of total U.S. energy consumption. IRG Erie is projected to prevent up to 555,000 metric tons of CO2e emissions annually through avoided virgin plastic production and reduced emissions in the steelmaking process. This reduction is comparable to recycling around 190,000 tons of waste instead of sending it to landfills each year.

The LPO financing will be provided through the Title 17 Clean Energy Financing Program, which offers funding for innovative energy and supply chain projects, certain state-supported initiatives, and projects that reinvest in existing energy infrastructure.

The project aligns with President Biden’s Justice40 Initiative, which aims to ensure that 40% of the benefits from certain federal investments, including LPO financing, reach communities that are underserved and heavily impacted by pollution. The Erie plant is situated in a disadvantaged area, where 24.7% of residents live below the poverty line, according to census data. Similarly, the steel manufacturer is located in another disadvantaged community. IRG Erie maintains robust connections with the local community and the Erie chapter of the NAACP.