DOE Restores Eastman's $375 Million Chemical Recycling Grant — With a New Target

The U.S. Department of Energy has reinstated a $375 million award to Eastman Chemical Co. — but the money is no longer headed where it was originally assigned. The grant, first announced in 2024, terminated in 2025 and now revived, will not fund the previously indicated chemical recycling investment in Longview, Texas. Instead, Eastman says "the project scope has been adapted": the funds will expand output from its commercial-scale methanolysis facility in Kingsport, Tennessee by roughly 30 percent through debottlenecking and technology advancements.

The reinstated award comes with a deduction. Eastman will receive $375 million minus approximately $35 million it already holds under the previous agreement, putting the new money at about $340 million.

For practitioners in the PET and polyester recycling stream, the shift matters. Longview, Texas — where Eastman already runs chemicals and polymers production — is out, at least for this round of federal support. Kingsport, the company's home base and the site of its operating commercial-scale methanolysis plant, is in.

What changes at Kingsport?

The 30 percent capacity increase targets Eastman's methanolysis process, which treats PET scrap with methanol and catalysts at temperatures ranging from 350 to 530 degrees Fahrenheit, according to the Science Direct website. The output is virgin-quality recycled material from difficult-to-recycle polyester waste — the kind of stream that mechanical recycling struggles to absorb.

Eastman frames the investment in industrial terms: "reindustrializing existing American recycling assets and strengthening the critical recycled polyethylene terephthalate (PET) supply chain by restarting and repurposing underutilized U.S. recycling infrastructure." The company also says the project supports "the reindustrialization of a strategically important domestic recycled plastics supply chain."

CEO and Board Chair Mark Costa put it in supply-chain language his customers will recognize. "This partnership represents an opportunity to strengthen American manufacturing by building a more resilient domestic supply chain for recycled materials," Costa said. "Eastman is demonstrating that methanolysis technology can transform difficult-to-recycle polyester waste into virgin-quality materials at a commercial scale."

Assistant Secretary of Energy Audrey Robertson tied the award to the administration's manufacturing agenda. "The DOE is proud to support this strategic investment in American ingenuity, industrial competitiveness and the future of U.S. manufacturing," Robertson said. "By expanding its proven, American-made recycling technology and putting underutilized assets back to work, Eastman is demonstrating how innovation can strengthen domestic manufacturing, revitalize existing industrial infrastructure and build more resilient supply chains."

What does it mean for buyers and the second plant?

Two revenue numbers anchor the financial case. Eastman expects up to $100 million in incremental revenue growth in 2026 versus 2025 from the Kingsport facility, and more than $100 million in additional incremental growth again in 2027 — roughly $200 million in new annual revenue over two years from one site.

The award also keeps a second U.S. methanolysis facility alive as an option. Eastman says the funds give it "flexibility in the location and timing" for that potential plant — notably, the company no longer names Longview as the site.

Costa's message to downstream users was a pitch for offtake commitments. "For our customers, this creates an opportunity to act now," he said. "By partnering with Eastman, they can secure reliable domestic sources of high-quality recycled content while helping build responsible recycling end markets that convert more hard-to-recycle waste into valuable materials. Customer commitments are what will translate this proven technology into a stronger, more resilient U.S. circular economy."

Eastman, founded in 1920 and employing 13,000 people worldwide, produces chemicals, resins, fluids and polymers.

The milestone to watch now: whether the debottlenecking work at Kingsport delivers the promised 30 percent throughput gain — and whether customer offtake commitments follow the federal money fast enough to justify the second plant.