Tennessee-based Eastman has lost its $375 million federal grant, which previously had spurred the company to make a final investment decision on its second U.S. methanolysis plant, located in Texas.
On May 30, local media reported that the grant from the U.S. Department of Energy had been canceled as part of a $3 billion cutback on so-called green projects. Eastman announced it had been awarded the grant in March 2024.
Eastman did not respond to a request for comment by press time.
As recently as late last month, CEO Mark Costa had remained optimistic even as the recycling industry was hit by Trump administration cuts, saying during an investor call that “we’re not getting an indication that the project is at risk.” He added that the company had received $11 million in payments as of the first quarter of the year.
Even so, Eastman had learned as early as February that the grant was under review at the DOE, according to local media reports.
The total cost for the project is set at $1.2 billion, so the grant accounted for about one-third of the required funding. Eastman also is receiving about $70 million in state and local incentives, Costa has previously said.
Securing the grant enabled “expansion of the project scope to include the deployment of thermal heat batteries, on-site solar and our next-generation technology. This scope achieves a step-change improvement in decarbonizing PET production,” according to Eastman’s FAQ on the project.
The project is expected to have a yearly capacity of 110,000 metric tons of hard-to-recycle plastic waste, and PET “polymer production will be greater than this amount and dependent on the product mix,” according to the Eastman website.
In April the company said it was “moderating project spending” this year, including delaying $200 million toward the Texas plant, which originally was meant to be the last of its three planned projects. Nevertheless, the company had said it still planned to break ground in Texas in Q4 and continued to expect mechanical completion in 2028.
Eastman is the second-largest employer in Longview, with 1,510 employees, according to the Longview Economic Development Corporation. The East Texas city has a population of more than 83,000, according to U.S. Census data.
