Eastman Chemical Co. is delaying construction of its $1.2 billion Longview, Texas, plastics recycling plant due to the U.S. Department of Energy’s May announcement that it would cut $3.7 billion in clean-energy grants.
Eastman plans to appeal the Trump administration’s decision to cancel federal funding of the project, said company spokesperson Kristin Parker.
“While we continue to pursue an appeal for the DOE award revocation, it is clear this will not be a short process and significant uncertainties remain,” said Parker Aug. 6 in an email. “Therefore, we are reassessing the project scope and timing of our second U.S. methanolysis facility planned for Texas.”
Construction on the Texas plant will be delayed for at least two years. It was scheduled to open in 2028. The plant was part of Eastman's broader plans to expand its methanolysis process for plastics recycling currently in operation in Kingsport, Tennessee.
The company is exploring ways to scale methanolysis production at its other sites while it proceeds with the appeals process.
“Our ability to expand our Kingsport methanolysis facility and potentially add new capacity in creative ways affords us time and optionality to serve our specialty and packaging business models over the next couple of years as we explore these other capital-efficient models,” Parker said. “We expect this new path of scale-up will enable us to push out significant capital expenditures for the second plant by roughly two years.”
The company has worked through several construction issues at the Kingsport plant and undergone debottlenecking investments that show the potential of exceeding expected capacity, with ideas to potentially achieve even higher performance levels, said Eastman CEO Mark Costa during the company’s quarterly earnings call on Aug. 1.
“We have creative ideas of not just looking how to do it at Longview but looking at three other sites where we might have some better advantages and how to be efficient,” Costa said.
DOE canceled 24 awards, 16 of which had been signed by the Biden administration in the final weeks before the transition to the Trump administration. The canceled funding was primarily allocated for carbon capture and sequestration and decarbonization initiatives, the DOE stated.
