Scott Ballard is President of Eastman’s Plastics Division. He has responsibility for the global strategy, operations, and profit from polyester and cellulosic plastics, their integrated monomers, and molecular recycling investments.

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John: Welcome to another edition of the Impact Podcast. I’m John Shegerian and I’m so excited to have with us today, Scott Ballard. He’s the president of Plastics at Eastman. Welcome Scott to the Impact Podcast.

Scott Ballard: Hey John, glad to be here.

John: Hey, listen, it’s an honor to have you. I thank you for your time today. I know this is going to be a really important show. Plastics has always been a hot topic when it comes to the environment and sustainability. But before we get talking about everything plastics that you’re doing at Eastman with your colleagues, can you share a little bit about your background, Scott? Where’d you grow up and how’d you get on this very important and fascinating journey that you’re on?

Scott: Well, I grew up in a small town in West Tennessee, John, and it is so small that we got our first McDonald’s when I was a senior in high school.

John: Come on. Wow.

Scott: Yeah.

John: That’s awesome.

Scott: I went away to college, University of Tennessee and studied chemical engineering. This was back in the early ’90s, and I didn’t really know what a chemical engineer did, but by the time I graduated, I knew I didn’t want to be so technical in my career. I wanted to use the technology stuff that I’d learned, but I didn’t want to be so technical. I was able to find a job right out of university with Eastman that enabled me to go into more of a sales and marketing type role, but it’s a more technical sales and marketing. So we were selling materials and chemicals to different applications and different industries. So I started with Eastman in 1995 in a commercial sales marketing role with a technical background. And I’ve been here now 29 years. I don’t know when it happened. I viewed myself as one of the younger people around. I’m not anymore. So I’m 29 years. I’ve had the opportunity to get out of that small town with one McDonald’s. I’ve been all over the world at this point, had lots of different jobs. I got to live in Switzerland for about five years with my family. And so the career at Eastman has offered me lots of opportunity to develop not only as a professional, but as a person. Just to understand the world better, to understand people and diversity and all those types of things. It’s just been a great place to work for a lot of people, but definitely for me personally.

John: So what was that town called that you grew up in?

Scott: It’s called Camden, Tennessee.

John: Camden, Tennessee. A little bit like you, I grew up in Queens, New York, but I grew up in a town called Little Neck. And Little Neck was really little. And I remember the McDonald’s being built there. Well, it wasn’t when I was a senior in high school. It was a little bit before then. But when you get the chance to be with a great company like Eastman and like you say, have a whole another education and a a whole another life there that broadens your perspectives, it’s a fascinating journey. What a journey. You just have to pinch yourself sometimes, huh?

Scott: It really is. I had never been on an airplane, at least been paid the ticket, right?

John: Oh, wow. That’s awesome.

Scott: It’s amazing what I’ve been able to do through the work and the experience I’ve been given.

John: Now Scott, I grew up in New York, and I’m 61 years old. So my reference to the name Eastman, of course, was Rochester, Eastman Kodak, Linda Eastman, Paul McCartney’s first wife. Explain to our audience a little bit what Eastman is today, and was it some version thereof of a spinoff of what was originally Eastman Kodak and what it is today. So our audience understands the size and scope and context of what Eastman that you are the president of the plastics division is today.

Scott: So Eastman Kodak, George Eastman was the founder of Eastman Kodak, one of the great industrialists in American history, right?

John: Sure.

Scott: His supply of photographic chemicals was disrupted from a little world war that was happening in the beginning of the century here. Or in the beginning of the 20th century. And he chose to backward integrate into chemicals. And when he did that, he bought a little plant in northeast Tennessee where I’m currently sitting right now. And Eastman was the chemical division of Kodak from 1921 until 1994. And in 1994, we were spun off from Eastman Kodak to become an independent publicly traded company, EMN, on the New York Stock Exchange. And we’ve been independent since. We went from being a company that was solely focused on supplying materials to Rochester and the needs across Kodak, to using those chemistries that we learned as part of their needs to plant them in a lot of different types of areas. And what we’re going to talk about today around recycling actually roots back to Kodak and our heritage in polyester, which is the material that X-ray films and many of the other films that Kodak used were made of and that we happen to be expert in. And that technology helped us become what we are today and helped us bring forth new innovative ways to recycle.

John: Scott, so Eastman Kodak, if I’m not mistaken, was headquartered in Rochester, right?

Scott: Right.

John: So then George, why did he then choose where you sit today to do that spinoff? Was there geographic purposes in terms of certain materials that were indigenous to that area? Or was there some other reasons that the geography was important or that it seems like a far away, away from Rochester?

Scott: John, did you research all of this? Because he came down here because one of the main chemicals he needed was something called methanol. And at the time, the most common way to make methanol around 1920 was the destructive distillation of wood. And so there was a plant in northeast Tennessee where I’m sitting right now in Kingsport that was surrounded by forest. And that was the raw material source for the methanol plant that he acquired.

John: Wow.

Scott: And then it was small at the time, but that methanol was used to make cellulosic film, which was in movie film and all the different stuff he was making. It was a key input to that. So that’s what brought him to this facility, was basically the raw materials that were around here, the forest that was here.

John: Wow. And for our listeners and viewers just so you can find Eastman, and all the important things they’re doing with regards to sustainability and plastics, you can go to eastman.eco. Eastman.eco is is the place to find Scott and all the great work they’re doing in sustainability and plastics. And Eastman does over $9 billion a year in revenue, over 14,000 employees. And they touch clients and have people around the world in over 100 countries around the world. It’s a big venture. So talk a little bit about your role as president of Plastics. 29 years, you’ve had a fascinating journey as you said, got to see the world, lived in Switzerland for some time. When did you take over this role as the president of Plastics and what does that mean in terms of day-to-day, week-to-week, quarter-to-quarter, year-to-year duties and responsibilities and mission?

Scott: I was given the opportunity to lead our Plastics division in 2019. So five years ago at this point. And what I was charged to do is to evolve to our next stage of strategy with us. That strategy be focused on sustainability and circularity. Our CEO who’s quite committed to those two issues. We had some technologies that had been rooted in our history with Kodak that we felt were applicable, and we had the opportunity to show the world what’s possible in terms of advancing recycling, and being able to transition our raw material base that we use to make the plastics that we currently sell, transition from a fossil feedstock to plastic waste as the feedstock. Thanks to some of these technologies.

John: Wow.

Scott: So we’ve been working at that now for five years. We’ve made tremendous progress. It’s actually moved much faster than we planned. We started up the first, what we call molecular recycling facility in March of this year. It took a long time to build and was difficult as we started that project during COVID. But we forgot it started up this year. And it’s got the capacity, John, to process over 110,000 metric tons of plastic waste. That’s plastic. It’s hard to recycle plastic waste that’s currently going to landfill. Instead of sending that to landfill, we’re paying people to bring that to us. That’s money that could have previously been spent on fossil feedstock. We’re paying people to divert from landfill, send that plastic waste to us where we break the material down into its key raw materials and we reassemble it into first class, first quality, old virgin quality material that it’s really not anything like this been done before, or at least not recently.

John: Scott, let’s do a little bit of plastics 101, though. Because when the general public at large turns on CNN, Bloomberg, CNBC, or they read USA today, or the New York Times or Wall Street Journal, plastics are typically vilified as the boogeyman of the environment. They show the oceans, they show the beaches, they show the dolphins that are choking, et cetera, et cetera. But as you know and I know, all plastics are not created equally. So what kind of plastics are we talking about with regards to your molecular recycling facility? And it’s fascinating that you’re able to take them back and create a circular economy with them, but explain what are you taking in as feedstock? Where are you getting it? Is it from industrial sources, retail sources, or is it from the public at large? And then what plastic are you creating and what are the uses for that new circular plastic that you’ve created on the other end?

Scott: Before we get into, that’s a big question.

John: I know. Sorry.

Scott: Let’s start from the beginning. Let’s start with the role of plastics in society, right? And so if you really look at what we’re trying to do to improve the environment, there’s three challenges that you’re trying to balance. First of all, you need to care for society, right? So you got emerging needs for society, that people need healthcare, they need food, they need all that kind of stuff. So you need to do that, but you need to do it in a way that has the least possible impact to the environment or negative impact to the environment. And when you talk about impacting the environment, you have to talk about two things. You have to talk about carbon impact or climate impact, and you have to think about waste that is being created. And so the way plastics are vilified today and often appropriately is the waste for portion of things. Because if we’re using any material, be it plastic or anything else unnecessarily, you are creating a burden on the planet. And especially if you make it unnecessarily, the whole process of making and using has a carbon impact. And then if you don’t take care of disposing it appropriately, it has a waste impact. And so how do you do those two things, right? And so plastics often are overused. You and I grew up without the concept of a water bottle, a single-use water bottle. We drank from the water hose when we were kids.

John: Exactly.

Scott: And so that’s a new thing that society’s brought on. It’s often been a great benefit to giving hydration to places where it’s needed. Then it’s also been used when it’s not needed. And so things like this, these reusable hydration vessels, there’s a couple more back here behind me. Other brands. These are the type of things that our plastics are going into today. This is one of our lead applications because a lot of what we make is durability. So these products reduce the consumption of plastics. So if you look at trying to deal with circularity or sustainability, the first thing that should be done is the reduction of consumption. Now that can get you a long way, that’s your biggest bang for the buck on helping the environment. Do that wherever possible. Then there’s lots of places where it’s not possible. So then you look at it, step into what are the right material choices for any application and how do you deliver that in the lowest carbon? And so plastic is almost always, not always, but almost always the lowest carbon material to be able to serve any purpose. So if you look at anything like this, right? So you put this in a aluminum bottle, you’re going to have a increased recycling rate. But you’re also going to have an increased carbon impact, of course. And so if you’re really trying to solve this triple challenge of caring for a society, reducing waste, reducing climate impact, what you’re really trying to do is get the lowest carbon material, but then also reduce the waste. That’s at the root of our strategy today. And what we’re trying to show the world, what’s possible about is much of the plastic that’s going to waste today doesn’t have to be waste. So much plastic today is made from barge fossil feedstock extracted from the ground, 10 steps of refining, made it into plastic, used once, thrown away, ends up mishandled. It doesn’t have to be that way. Those molecules, once they’re made, are valuable. They don’t have to be thrown away. They can be the new feedstock. We have a traditional recycling system or recycling technologies that try to capture those clear bottles and chop them up and wash them and reuse them. And that’s a very effective technology where it works, but it doesn’t work enough places. The bin that we in America are used to putting these plastics in, and it’s been a quite a bit of failed promise. Much of what goes in that bin has to be sorted away, and then it ends up not being used because it’s too dirty, or not the right makeup or something like that. They sort out the clear bottles, they sort out the milk jugs and those get recycled. And much of it doesn’t, but that doesn’t mean it’s not possible to do those things. It just means it’s not done today. And so you go back long enough, choosing to get an electronic vehicle wasn’t a viable choice.

John: Right.

Scott: It took visionary leadership, it took innovation to make getting in, the Tesla that I get in every morning, it’s a very easy car to choose because it’s awesome. I’m not making a sacrifice to do what’s best for the planet. I’m getting into an awesome car and I enjoy driving, right?

John: Right.

Scott: That concept can be applied so many places, including recycling. So we’ve got innovative technology that can take materials that today can’t be recycled, and all we need is collection, which is not easy. It’s easier said than done. But collection of this stuff, brought to us, and then we break it down, depolymerize it, get a little technical here on you, into the monomers that the polymer was made out of. Clean it up, get any contaminants out, and then reassemble it into something that’s no different or often even better than what it was before.

John: And that whole process is called molecular recycling.

Scott: Molecular recycling. Here’s a fun-like connection for you, John, get you back to Rochester. Methanol which was George Eastman’s first molecule, the reason he did it.

John: Why keep to Tennessee?

Scott: Yeah. We’ve got a statue of a hand out front of our building, a marionette with a methanol molecule because not only is it the beginning of our company’s history, it’s also our future. The technical version of molecular recycling is called methanolysis because it’s the key solvent that we’re using to help depolymerize this stuff. So that same connection through George Eastman, the technology we’re using was first practiced in Rochester, started being used in the late ’70s through the ’80s and into the ’90s with x-ray film. So I don’t know how much you’re a student of the circular economy. If you learn about a circular economy, what you’re trying to do is just things go through its end of life and it comes back to a beginning of life and materials never leave society. One of the first examples of circular economy, let’s call it circular, before circular was cool. Kodak supplied x-ray film to doctor’s offices all over the country.

John: Sure.

Scott: Right? What x-rays are, are a polyester or plastic substrate with precious metals scattered on it for the purposes of the filmmaking part of it.

John: Sure.

Scott: Those things were expensive, particularly the metals. So they would pay doctors to return that used film to Rochester, New York, where they would clean off the silver and different metals that were being used so that they could reuse it. And when they did, they were left with just large amounts of this plastic film with nothing to do with it.

John: Right.

Scott: So they developed a recycling technology where instead of, they started using that film, breaking it down, using methanol as the key solvent, and then breaking, making brand new x-ray film out of it where they would reapply the metals that they recovered onto it, and then resell to the doctors, pay the doctors, come back, do that kind of thing. And that technology is the exact technology, it’s the base technology. We’ve improved it since then. Here’s what we’ve done. This technology was practiced for over three decades in Rochester, New York, and improved. We’ve improved it more since, but that’s the basis for what we’re doing today where we’re bringing in shampoo bottles, we’re bringing in polyester carpet, we’re bringing in various types of films. We’re bringing in rejects and colored-in opaque PET from different recyclers that can’t handle that thing. We’re bringing that stuff in using that same technology that was initially used with x-ray film in Rochester, New York to create something brand new, including this type of thing here. So that is reducing single-use plastic, [inaudible] is our product. That is the reason that’s made out of here. This the camelback. This is one of our first adopters of this. A company that’s very much around taking around the environment. Their consumers value this, and they were very quick to say, yes, I want to have my plastic made from waste plastic.

John: And what’s the name of that brand?

Scott: Camelback. The particular one’s Camelback.

John: Yeah, sure. I know that brand well. That’s awesome.

Scott: And Nalgene was another one. We’ve got a lot of different hydration companies. There’s a lot of different applications that we are selling plastic into. We’ve got partners all over the world that have adopted a lot of cosmetics. P&G is a big partner of ours. We’ve got a lot of companies that are looking to the technology to help them create circularity for their packaging.

John: So Scott, so for our listeners and viewers who’ve just joined us, we’ve got Scott Ballard with us today. He’s the president of the Plastics at Eastman. To find Scott and his colleagues and all the great work they’re doing in circularity and sustainability, please go to eastman.eco, eastman.eco. So wait a second, I want to go back. So you’re really saying Eastman Kodak as a company was really way, like you said, way before it was cool to be sustainable or circular, or whatever you want to call it, whatever is now the modern trend to call these things. It is part of your DNA to be circular because they were doing it as just part of their business model back in the day when they were supplying these x-rays.

Scott: Well, the concepts of sustainability, there is a large perception in industry that sustainability costs money and it does. It does to get started, right? So we’ve had to invest a lot of capital to build this plant, and we need our customers to help us get a return on it, that stuff. But sustainability, when done right, actually costs less. You’re conserving energy, you’re conserving material, all that stuff. And when Kodak did this original implementation, this is the late ’70s, John, they weren’t thinking sustainability. They were doing it to save cost.

John: Well, but as you said, sustainability up until just recent times when the C-suite heard the word sustainability, when I started the show back in 2007. If a C-suite heard about the word sustainability, they thought like you said, not only was it going to cost them money, but that was dead money. Now, they understand that when done right, even though as you need to make an upfront investment, there’s an ROI to it, there’s a resiliency to it. It’s a recruitment tool, it’s a retention tool. It’s really where people want to be now in terms of, that we all get a chance to work for sustainable brands. Like what you’re doing at Eastman, you get to every day, Scott, with your colleagues, not only make a paycheck, but make a difference. And that’s where we are.

Scott: It is really a motivating thing for our team. It’s really helped us with recruiting and that thing too. This is a fun thing to work on. We literally are showing the world what’s possible. There are organizations and there are people out there saying that what we’re doing can’t be done.

John: Well, let me just say this.

Scott: When we started this plan up, we hit a daily record on Monday where we hit, we fed 550,000 pounds of waste plastic into our process to be converted to new material. That was in one day. And we are showing things that we cannot wait to be able to say more and more about the success we’re having and help regulation. We need regulations to be written to help drive, the invisible hand of economics needs to sweep plastic out of landfill and into recycling. And we need regulations to change. Our country’s recycling infrastructure is not effective today, but it can be.

John: A 100%. So wait a second. Now I’ve done this show, I’ve had a couple thousand guests, some of the greatest brands on this planet. Never, all kidding aside, have we ever talked about molecular recycling? So first of all, that’s the first time I’ve ever heard from you that term ever. Secondarily, people shrug their shoulders when you talk about single-use plastics. Everyone seems to have given up to some degree. So you’re saying for the most part, with the technology that you’ve created, there is now a mechanism for what was considered the single, one of the greatest problems of the environment, which is the single-use post-consumer plastic problem.

Scott: We can create an ecosystem for like the single-use packaging bottles, for instance. There’s mechanical recycling to data that is great for many of those types of bottles. But it is not sufficient. It will not solve the problem in its totality. So after we’ve started developing and talking more and more about this, companies and governments have come to us and said, “Hey, we’d like to have one of your facilities here.” So we have two additional projects in addition to the one we started here in Kingsport. One of them is in France where the government of France approached us about doing an investment there because they wanted to create more and more circularity inside their country. They knew they had had to recycle waste that they were currently incinerating, that they wanted to find something to do with. They’ve worked with us to change laws, to help enable it. They’ve worked to us to have incentives. And we’ve got an active project there. Another leading brands, a lot of brands take a lot of heat for the amount of plastics they consume and use. One of those is Pepsi. They use a lot of plastic, right?

John: Right.

Scott: Here to Ford, their options are limited and how are they going to package their products and get them to consumers who want to buy them. And so they actually came to us also with the idea of they needed more of this type of material, virgin quality plastic with recycled content. And they were courageous enough to sign a very large offtake agreement with us that said, “If Eastman, you’re willing to build a third facility, then we are willing to buy at a defined price and a defined margin for you that will help support your investment. So we now have three projects to deploy over two and a half billion dollars of capital that had been underwritten. Innovation can give people option for solutions. And Pepsi’s one of those that had been courageous enough to come forward and say, “I’m willing to take some risks with you Eastman, because I think we can make the world a better place.” Here’s a really cool thing, John. Triple challenge, right? So you’re trying to solve plastic waste, and that’s what we’ve been talking a lot about. But carbon impact also, right?

John: Right.

Scott: So we moved forward with this project with Pepsi as the majority offtake, this third plant in the US.

John: Sure.

Scott: At the same time, US government’s working on decarbonization investment and trying to incent it. So the inflation reduction action comes on and they come do a big program where you can apply for funds to decarbonize materials, decarbonize a lot of things in society. We applied for and have been granted, still in final negotiations, but $375 million that will fund additional decarbonization of that plant that we’re building with the partnership with Pepsi. These are technologies that are still being in development, working with startups that are doing it, that are basically able to create, process energy or thermal energy and heat that is necessary to make products that you can’t just use a renewable electricity today to create that kind of heat. With this investment from the Department of Energy, we will be making the lowest carbon PET on planet Earth when that plant starts up. And we didn’t even envision that when we started it. So innovation and leadership can have a bigger impact than even what you said or you thought at the time you were doing it. Because we didn’t know that the Inflation Reduction Act was coming and there were going to be a trillion dollars available for applying for this. So we are now having a bigger impact in that triple challenge. So we’ll have the lowest carbon materials available, approaching net zero materials made from waste plastic that was headed for landfill, recovering those molecules. And it’s just so inspiring to be able to work on that myself, our team, the amount of effort we’re putting into it. The people that have constructed and started up this plant, they are putting their souls into this thing. And it’s just a great thing to be a part of.

John: Well, I want to deconstruct this a little bit. And first of all, I want to say thank you again to Janet Granholm, Granholm and Jigar Shah for all the great leadership over the DOE. No matter where we are, no matter where anybody is politically, the race to decarbonize is real and it’s necessary and needed as we all know. And to support great, great visionaries like you and Eastman and folks like you who’ve broken the code of very complex and difficult problems that people said couldn’t be done. Well, that’s at least good government and good work. And that should be applauded and we need more of that, frankly speaking. We need a lot more of that. But I want to understand this from a couple perspectives. First of all, let’s go back and deconstruct what you’ve just done here. How many people, Eastman, as we talked about at the top of the show, has about 14 and a half thousand people. How big is your team? You run plastics, this is a plastic steel. So this is your baby. Do you have 50 people on your team or do you have 500 people on your team? How big is your team?

Scott: We have over a thousand people working on this.

John: A thousand people. Okay.

Scott: This is one of the things that, I couldn’t imagine trying to accomplish what we’ve accomplished as a part of a small company startup. A lot of times that gives you a lot of freedom. A lot of freedom of bureaucracy, freedom to quick decision making, all that stuff, which are all great. But what Eastman’s tried to do is elevate the importance of this so that we are behaving as a startup and being quick in our decision-making. But we’re applying the resource and capability of a big company in a way to challenge it.

John: Well, that’s classic behavior. That’s entrepreneurship. And that actually works when done well and you’ve done it well, obviously.

Scott: But we’ve still got ways to go to keep delivering on this. But Eastman’s really been going well far.

John: A thousand people now, you got this position five years ago. Did you literally kick it off 60 months ago or was it kicked off three years ago in the middle of COVID? Or when did you envision this with your leadership from Eastman and when did you start this and to be able to actually take in this old plastic and make new circular products out of it?

Scott: So that technology that I’ve mentioned that was part of Kodak, we’ve had it at in our portfolio since the ’90s when we were part of Kodak.

John: Yeah, sure.

Scott: And every so often we would test the marketplace for acceptance. And usually what we found was the market would tell you, I’d love to have recycled plastic as long as it’s less expensive than virgin. And so we would not do the project. And so we felt like, and leading into 2019 was, we felt like that was the right time. So starting the second half of 2019, we started engaging the market more to say, “Hey, if we could hypothetically offer these things to you, would you value it?” And it was actually in August of 19, we had a customer in here that was arguing with us about price, honestly, saying they were threatening to move to another material from another supplier. And we had done enough of this work that we felt confident that we might be able to, in a pilot way, offer them some material in six to nine months. So we hypothetically offered to them and they said, “Yeah, if you can supply that to us with recycled content, we’d be happy. Our customers would love that value proposition, and we’ll not move away from you.” And that’s what we did. And it was less than a year from ideation to first supply of material. We had to use some existing equipment and we were limited on capacity and it had a high cost and it wasn’t the best way to do it. But it proved the business concept. So by having that ability to do it that way, we were able to go out to a lot of customers in different applications, cosmetics, this type of stuff. Camelback, as I said, was one of the early adopters where they were able to go out and test market with their customers and find that, you know what? There are consumers out there that are willing to pay a premium for sustainability. And we just had to be intelligent enough to find the markets that did care about it enough to pay a little bit for it. And so that helped us build our business case to make the investment for the first plant. And I’m very glad that we had that bridging technology that helped us test the market. I’m also very glad to not be using it anymore, to be using the full scale as designed plant to be able to operate at capacity. But if you think about the scale of this, I don’t think John mentioned this. So we’re about an hour and a half from Knoxville, Tennessee. I went to the University of Tennessee, big volunteer fan. Neyland stadium’s one of the biggest, 105,000 people, one of the biggest stadiums in the country. We process enough plastic waste in a year to start piling that on the 50 yard-line, fill it all the way up to the jumbotron three times in a year.

John: Come on.

Scott: That’s how much waste we’re pulling out of landfill at just this plant here in Kingsport. We’ll do that again with our second plant in France. And yet again with that third plant that’s actually in Longview, Texas is where it’s [inaudible].

John: First of all, Bravo to France. But France, again, Europe, as you and I know we’ve traveled to Europe on business, and you talked about that at the top of the show. We know Europe’s been ahead of us pretty much on sustainability a couple generations, but that’s in their DNA going back a couple generations. We are just catching up here. Unfortunately, we have so many great things about this country. But one of the bad things is that sustainability, because we’re so big, we were able to just keep digging landfills because we’re the bigger the land of the free, and we just go, “Hey, just keep tossing in the landfills.” So sustainability wasn’t a thing when you were growing up and when I was growing up. So we’re trying to catch up fast. When does the France facility open up?

Scott: The next two are going to be in the 2027/2028 timeframe.

John: Okay. So those are 2027/2028?

Scott: Yeah. These things are not easy or quick to build.

John: Well, obviously, but we’re taking the long view here. We’re trying to, as you say, we’re playing catch up and trying to decarbonize the world and take this, we’re shifting the world from a linear to circular economy. These are seismic shifts that, generational shifts that are not going to be easy. You are leading the way.

Scott: It cannot be done honestly without government intervention. I’m a big low regulation type person, personal freedom. Let people choose what they want to do type of person. But these types of changes cannot happen that way.

John: Agreed.

Scott: We need the federal government, or at minimum state governments to get more involved in requiring recycling investments and requiring consumer behaviors differently. It still drives me crazy to go into an airport and there’s nowhere to recycle. Given my job, I’m pretty committed to recycling. It’s just not always possible. And it should always be possible, especially in commercial things like airports, stadiums, places of business, all that stuff. Those things need to be required. If you look at recycling in places like New York where you have the bottle bills, that stuff, recycling rates are dramatically higher than states where they’re not.

John: Here’s a shocking statistic in the middle of 2024, Scott. How many states have bottle bills right now? Do you have any idea?

Scott: I’m going to let you tell me because I don’t like being wrong about that.

John: Yeah, there’s a number I learned and you can’t forget it because it’s just so ridiculous. It’s 11. How could we be in the middle of 2024 with 11 states with a return bottle bill? It makes no sense, whatsoever as a smart country.

Scott: There’s different regulatory ways to handle it. And there’s more states that are in the process of trying to pass what they call extended producer responsibility acts, which are another way to address the bottle bill thing. But a lot of them are getting stuck because these do need to be intelligently designed. So one of the things we get into is like, there’ll be an NGO that wants to argue that advanced recycling, like what we’re talking about, that shouldn’t count as recycling. And that comes from a place of good intent, but misinformation. And so they’ll have a perception of an old technology that maybe has a worse carbon footprint or a more toxic profile that they’ll have that perception that that’s what they’re basing their opinion off of, instead of taking a principled approach of what does it require for something to be good, right? It needs to be material to material. So waste of fuel shouldn’t count as recycling. If you’re using plastic waste to create fuel, it may not be bad but it’s not circular, right? And so don’t count that. Needs to be material to material. The carbon footprint needs to be lower than virgin. This should be an improvement on carbon, whatever we do. And just apply certain set of principles to the regulatory framework in terms of what counts. And then how are you going to incent brands to make good choices around designing for recyclability? How are you going to incent back to that? When we first started talking, we were talking about what are ways that you reduce the consumption of plastic? How does that become one of the top things that we’re pushing for, right? So it gets complicated, it gets argumentative.

John: Let’s talk about solutions. So state by state, yes. Because in a similar industry as yours. Plastics are the fastest single-use post-consumer plastic is a single second fastest-growing solid waste stream in the world. First, the fastest growing solid waste stream is electronics. And that’s the business I’m in. And again, same thing. I walk through an airport like, come on man. And same thing, legislation, but patchwork quilt on a state-by-state basis, you end up with a patchwork quilt. Why couldn’t we come up with some federal legislation that can do this elegantly and create some sweeping opportunity to push plastics to great solutions like yours?

Scott: Listen, people like me would love to have a federal solution, right? The biggest risk I have is you’re dealing with California. It takes one way. New York takes another, Maine does another.

John: I know.

Scott: Washington State does another, New Jersey does another. And then not only that, I’ve got to have a team doing advocacy in all these different states. I will say this, I think the federal government is more open to anything like this than they’ve ever been before.

John: A 100%.

Scott: I also think that the problems of the states is you’re looking at a lot of the consortia of brands that have been difficult to corral. They’re now faced with so many problems of having to face all these different state issues that they just like to have a level playing field that’s intelligently designed and go straight to the source, go straight to the federal government to help define that playing field for the country. I think you get more and more support for that type of thing to happen.

John: Scott, do you have a lot of competitors? Are there others that have successfully broken the code on this molecular recycling? Are you truly the market mover in this?

Scott: So there are some slightly different technologies that are tech. So our technology deals with PET, so polyester, PET. Which is mainly things like that and carpet and textiles and some different things.

John: Yeah. [inaudible] Bottles, all that stuff.

Scott: Polyolefin, so polyethylene. But there are other technologies that address those types of polymers. And there are some investments for polyolefins. We are the first investment in the US. There are some similar technologies that they’re using in China. The [inaudible] that are using different types of waste, but that’s a very different situation in China. What we really need is regional circularity inside. We don’t need to be shipping things across the world. The carbon impact of that, the threat of Chinese waste becoming imported into [inaudible] Europe.

John: Where it’s used is where it should be recycled.

Scott: Exactly. And so that’s where we’re after the investments. The one we’ve started up here, it’s the largest chemical or advanced recycling plant on planet Earth, so today.

John: I spend a lot of time in Asian business with my partners, in Japan, in South Korea and Singapore, our countries. Now that France has approached you and you’ve started working with them, are other countries on the other side of the world also approaching you for similar opportunities?

Scott: Well, countries, your companies do. Right now I think we’ve got personally enough work on our plate and so we’re trying to focus on these [inaudible] and making them successful. At the same time, it’s tough sometimes. Because you get into this with, there was an article in the Wall Street Journal yesterday about companies potentially kicking their plastic pledges down the road from 2025 goals becoming 2030 goals. And that’s happened a lot historically. And so we’ve got to continue as a society, hold each other accountable for being able to make the environment a better place and make these investments work. And innovation requires capital. Capital requires a return. It’s got to come from somewhere. And so continuing to try to do that as a business leader takes a lot of innovation, I have a lot of good days, I have a lot of frustrating days. And then you just have to get up and try to take inspiration from the team. We’ve got a great team of people that’s out there trying to make changes. Great team of people out in the plant trying to make this technology work better and better. It’s that’s where we have to take inspiration a lot of times.

John: Well, but it also comes from relentless behavior, resilient behavior, not letting things get you down. Obviously you have all that. You’ve been there now 60 months, five years, and you’ve made these massive strides. Scott, now that you’ve proven this works, and now you got three places, two under construction, one already working. Your beta plant, so to speak, right where you are, making it happen every day. Something you could show people. What do you envision the next couple years or even the next 60 months look like? You have so much you can do. How do you do this?

Scott: I’ll be real clear with you about it because we just started this thing up and we need to make it run well and run work like continuing to hit those daily production target records, that needs to happen. We need to share that with people when we do so that they believe that this is real and possible. Once you believe this is real impossible, you can write more regulatory requirements around it. So that’s a big part. We use the word showing the world what’s possible, catalyzing change bigger than ourselves. We need to do that. Now, the the other two projects, they’re not under construction yet. They’re in the engineering phase. And one of the things we need out of that is we need more off-take contracts, like the one I described that Pepsi courageously signed up for. We need more contracts from brands. And we need them to step up. We need some more regulatory clarity that all of this is going to be accepted and pushed and all that stuff. So those are the two things on these other projects. So the next couple of years, that’s what we’re going to be about. Is trying to turn these projects from an engineering phase into a construction phase into this. But to do that, we need more than just choices that are under our own control. We need partners in terms of brands. We need regulatory partners. We need courageous regulators to write laws that appropriately support innovation.

John: Makes total sense. So from our regulators out there that are watching and listening, please, let’s get this going. And we need more off-take agreements like the Pepsi one. Contact Scott, let’s get that going. Scott, help me out here. Where do you get all the feedstock today for this, as you say, beginnings of taking it from a engineering perspective and making it into a real scalable commercial venture? Where’s that feedstock coming from now and where do you foresee it coming from in the next 12 to 24 months?

Scott: Well, I talked about the capacity of our plant, has 110,000 metric tons and filling up Neyland Stadium three times. That sounds like a lot of material.

John: It does.

Scott: But it is a drop in the ocean, in the [inaudible] this country. And so we are mostly targeting within two or 300 miles of where our plant exists in northeast Tennessee.

John: Sure.

Scott: And we’re targeting things like, if there’s a mechanical recycler today, they have a lot of yield loss. They’re bringing in bales of plastic and chopping it up and washing it, and then they have stuff that doesn’t meet the quality spec that has to be screened away. And they don’t have a good use for that. We’re buying that off of the existing recyclers today. We’re buying a lot of mixed-color bales. If you think about a lot of the bottles in your household today, if it’s colored PET, it’s more difficult to recycle than clear. And so we’re buying bales of that type of material. We’re bringing some carpet back, some carpet fibers that aren’t being used, bringing it back and doing that. We do have some post-industrial type applications where there’s plants that aren’t able to use their material and they’re currently sending to landfill. We’ll divert it back from landfill. That’s a small portion of our overall use, but we have a lot of different smaller streams. In Europe, it’s a lot easier actually because it’s got a more mature infrastructure where we’re able to go to a few bigger companies and be able to source the type of stuff a lot easier. I’ve got a team of people here that gets up every morning to go buy waste plastic that’s headed for a landfill.

John: That’s awesome. That’s so good.

Scott: So try to find somebody that’s throwing waste plastic away and then give them money.

John: I love it.

Scott: And that’s a pretty cool job to have, honestly. And that’s a pretty motivated creative team that’s out there doing it.

John: Hell yeah, it is. Hey, listen your Eastman’s been named on Fortunes Change the World List in 2023. It’s also on the three BL list of top corporate citizens, number two in the material sector. You’re getting all these awards, you’re getting a lot of attention now for all this great work, and thank you for coming on the show today. Scott, how do you stay leading a thousand people and staying resilient and staying relentless to the mission and to the goal and the greater good. Isn’t an easy thing for us human beings. We all have up and down days, and we all take it on the chin and react differently. What or who inspires you today to keep up the great work you’re doing?

Scott: Personally, it’s the people that I work with here. If I’m going to lose sleep over something, it’s really going to be, is my team here waiting on me? Are they waiting on me to do something? Because they’re out working their heart. They’re giving their soul into this, trying to make something impactful happen. And it’s pretty easy when you’re this close to a group of people that’s this passionate, to be able to find yourself to a little more energy to do a little bit more.

John: That’s awesome. And I think going back to what you just said about kicking goals of corporations and organizations, kicking goals from 2025 plastic goals, 2025 to 2030. I think it’s because people have thrown up their arms because they feel hopeless, because they’re inundated with so much negative publicity about plastics. And I just hope this show gets in enough people’s ears and hands and eyes to understand there is hope. And Eastman and Scott and your team are leading the way on that hope. And I’m so grateful for your sharing this story today. I’ve never heard this story before, didn’t even know this molecular recycling existed. And I’m just so thankful for you taking the time to share your mission and your vision and your success already in making this happen, Scott. For our listeners and viewers, to find Scott and his colleagues and all the great work they’re doing in circular and sustainable plastic recycling at Eastman, please go to eastman.eco, eastman.eco. Scott Ballard, it’s been a joy and a pleasure having you on the Impact Podcast. And thank you and all your colleagues at Eastman for making the world a more sustainable and better place.

Scott: Thanks, John. Great time.

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