INSIGHT: US sustainability companies hit by two bankruptcies

HOUSTON (ICIS)–US sustainability companies are starting to buckle, with a chemical recycling plant and a bioplastic producer both going bankrupt.

• Brightmark’s Indiana operations filed for bankruptcy protection under Chapter 11, a move that will protect it from creditors while it tries to sell its underutilized chemical recycling plant. The bankruptcy will not affect the other operations of the parent company or its plans to build another chemical recycling plant in Georgia.
• Danimer Scientific is winding down operations at its plants in Bainbridge, Georgia, and Winchester, Kentucky. Danimer makes polyhydroxyalkanoates (PHA) and formulates polylactic acid (PLA).

DANIMER GOES BANKRUPT AFTER ANNOUNCING PLANT CLOSURE
Danimer had bet big on PHA, a renewable polyester made by fermenting natural oils.

It became the owner of the world’s first commercial scale PHA plant in 2022 after it expanded capacity at its site in Winchester, Kentucky, to 55 million lb/year (25,000 tonnes/year), said Frank Pometti, a partner of AlixPartners, the proposed financial advisor for the company. He made his comments in a court filing.

By then, Danimer had already broken ground on another plant in Bainbridge that would have produced another 125 million lb/year of PHA.

However, Danimer was increasing capacity faster than its customers were enacting sustainability initiatives. Since 2020, Danimer’s operating rates never exceeded 15% of capacity.

Moreover, Danimer was expanding capacity right when inflation was taking off. Companies like Phillips 66 were revising cost estimates for capital projects by 50%.

Danimer would later suspend work on the new PHA plant after a prospective customer indicated that it wasn’t ready to switch to the company’s bioplastics. To date, Danimer has sunk nearly $190 million into the project.

For years, Danimer had courted what it described as a new and significant customer that would have purchased the company’s bioplastic to supply an internationally recognized quick-service restaurant with cutlery for all of its locations in North America.

By 2025, securing a firm commitment from that customer became critical.

Danimer was facing liquidity challenges, and its shares were taken off the New York Stock Exchange (NYSE) in January 2025. A firm volume commitment from that customer could allow Danimer to attract fresh capital from a potential investor, from which the company received a non-binding indication of interest.

The customer would not provide the commitment.

In March, Danimer reached out to its lenders and another customer in a last-ditch effort to secure a deal to keep the business running. That effort also failed.

In mid-March, Danimer announced the shutdown of its operations in Bainbridge, home to the company’s corporate headquarters, its PHA demonstration plant and its PLA reactive extrusion plant. It also plans to wind down operations at its plant in Kentucky.

Days later, Danimer filed for bankruptcy protection in Delaware Bankruptcy Court. It plans to sell its plants and liquidate the uncompleted project in Bainbridge.

The case number is 25-10518.

BRIGHTMARK’S CHEM RECYCLING PLANT RUNS AT 5%
Brightmark’s chemical recycling plant in Indiana has required substantial re-engineering and re-design after starting up in 2023, said Craig Jalbert, chief restructuring officer. He made his comments in court filings.

The plant needs $800,000/week just to maintain operations and fund improvement projects – all while working under $172 million of senior debt.

To date, the plant’s upgrade system has not worked, according to Jalbert. That system was made up of a hydrotreater that cleaned the pyrolysis oil (pyoil) and a fractionator that separated the cleaned oil.

After starting up in 2023, the plant only managed to produce 10 million lb (4,500 tonnes ) of pyoil, or 5% of its 100,000 tonne/year capacity. So far, three petrochemical producers have bought its pyoil, which it sold under the brand name PyBright.

Pybright did command a premium, but it was not high enough to offset the low run rates and the capital needs of the company.

That plant will need more than $100 million in capital investments before it can operate at a high enough rate to be profitable, Jalbert said.

Brightmark’s parent company had been funding the plants operations and capital expenditures through equity contributions. These have totalled more than $210 million.

By February, the parent company determined that it could no longer make the contributions. A $12.9 million payment was due on 1 March. The recycling company defaulted on the payment and filled for Chapter 11 bankruptcy protection on 14 March.

Brightmark will continue to operate the Indiana plant while it tries to sell it. If necessary, Brightmark will hold an auction on 7 May.

Meanwhile, Brightmark continues to work on its second chemical recycling plant that it is developing in Thomaston, Georgia. The next step is to file for air permits, the company said. The Georgia plant will have a capacity of 400,000 tonnes/year. Brightmark has not said when operations will start.

Brightmark filed bankruptcy in Delaware. The case number is 25-10472.

Insight article by Al Greenwood