IRG cancels plans for Pennsylvania PRF

A planned $300 million plastics recycling facility (PRF) in Erie, Pennsylvania, has been canceled by Erie-based International Recycling Group Inc. (IRG), according to an Erie Times-News report.

Plans for IRG Erie were announced as a PRF project by investors in August 2020. In 2022, the company purchased 25 acres of land at the former Hammermill Paper site. When it announced the project, IRG said the 350,000-square-foot facility would mechanically recycle polyethylene terephthalate (PET), high-density polyethylene (HDPE) and polypropylene (PP) polymers, converting approximately 160,000 tons per year of postconsumer scrap into about 100,000 tons per year of recycled plastic materials.

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In 2022, IRG founder and CEO Mitch Hecht told Recycling Today all inventory management would occur under one roof. The facility was designed to accept all forms of postuse plastics, including cups, lids, tubs and other single-use plastics sourced primarily from material recovery facilities (MRFs). In addition to bale-breaking and sorting equipment, the site would utilize shredding, washing and pelletizing equipment.

IRG received financial backing from a number of sources to aid the facility’s construction. It received a combined $9 million investment from Erie Insurance and the Erie-based Plastek Group, and in 2022 was offered a $5 million Redevelopment Assistance Capital Program (RACP) grant and a $509,000 Rail Freight Assistance Program (RFAP) grant from the state. Also in 2022, the company reported receiving a $300,000 loan from the Erie County Redevelopment Authority (ECRDA).

In July 2024, IRG announced its selection for a conditional commitment for a loan guarantee of up to $192 million from the U.S. Department of Energy Loan Programs Office that would help finance the facility. According to the Erie Times-News report, the loan was never finalized and the remainder of the funds needed for construction were not raised.

In a statement on behalf of IRG summarized in the report, the company says it encountered fundraising challenges, among other factors, such as “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.”

In its own statement, the Erie Regional Chamber and Growth Partnership (ERCGP) says it is “frustrated” by the financial pressure building due to economic uncertainty at the federal level that factored into IRG’s decision not to move forward with the PRF.

“We recognize the significant economic opportunities it could have brought to Erie,” says ERCGP CEO Brandon Mendoza. “This project had significant support at the state and local level, across public and private sectors, and to see it pulled is a significant loss.

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“As always, we remain committed to advocating for sustainable investment and working to attract new business opportunities, but the opportunity cost to develop such an enormous project with all pieces aligned to end like this is a disappointing outcome.”

The ERCGP states that it plans to reach out to the Governor’s office to talk about keeping IRG’s $5 million RCAP investment in Erie for other projects. “The ERCGP is also in contact with local legislators regarding the project,” it says.