Revocation of HQ H322641; Classification of a plastic recycling plant

H336949 July 25, 2025 OT:RR:CTF:EMAIN H336949 PF CATEGORY: Classification TARIFF NOs.: 8419.40.00; 8419.89.95 H. Michael Leightman Partner, Global Trade Practice Ernst & Young LLP 5 Houston Center, Suite 2400 1401 McKinney Street Houston, TX 77010 RE: Revocation of HQ H322641; Classification of a plastic recycling plant Dear Mr. Leightman: This letter is to inform you that U.S. Customs and Border Protection (CBP) has reconsidered Headquarters Ruling (HQ) H322641, dated November 9, 2023, in response to your request on behalf of Eastman Chemical Company. In HQ H322641, CBP classified a plastics recycling plant under subheading 8419.89.95, HTSUS, which provides for “Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof: Other machinery, plant or equipment: Other: Other: Other.” We have reviewed HQ H322641 and found it to be in error based on the revised facts set forth in the request for reconsideration, a meeting held on May 22, 2024, and supplemental information received on June 13, 2024. Accordingly, for the reasons set forth below, CBP is revoking HQ H322641. You have asked that certain information submitted in connection with this request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The specified items will not be released to the public and will be withheld from the published version of this decision. Pursuant to Section 625(c)(1), Tariff Act of 1930 (19 U.S.C. § 1625(c)(1)), as amended by Section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed action was published on October 30, 2024, in Volume 58, Number 43, of the Customs Bulletin. No comments were received in response to this notice. FACTS: In HQ H322641, CBP described the subject plant as follows: The subject plastic recycling plant is an integrated combination of twelve units consisting of individual components connected by piping, wiring and structural steel and operate in a continuous flow. You state that the Plant would not function if any of the units were to be disconnected from the whole and that each individual unit is unable to operate independently. The twelve units are a Mixed Plastics Feed Unit, Dissolver Unit, Methanolysis Unit, Spray Tower Unit, Crystallization Unit, Filtration Unit, DMT Refining Unit, Methanol Refining Unit, Low Boiler Column Unit, EG Refining Unit, Methanol Storage Unit and Heavy Co-Product Handling System. The entire plant operation and flow was outlined by Eastman as follows: - Trucks from Eastman’s preprocessing facility carry pellets, flakes, and shredded chunks of plastic (the “Raw Materials”) to the Plant, where those Raw Materials are dumped onto a conveyor belt feeding into the Mixed Plastics Feed Unit’s metering device. The metering device regulates the flow of Raw Materials into the Dissolver and provides holdup for a truck’s inventory, allowing the next truck time to unload its Raw Materials onto the conveyor. This allows the Plant to have a continuous feed of Raw Materials flowing through the Plant. - The Mixed Plastics Feed Unit feeds Raw Materials into the Dissolver Unit via an airvey system, which consists of a blower and series of rotary airlocks that moves the materials with high pressure ambient air and filters out organic materials and other impurities. - In the Dissolver Unit, the Raw Materials melt into a molten liquid that is drained from the bottom of the agitation vessel and pumped via piping into the Dissolver Decanter. - As the feed is pumped into the decanter, the lighter polyolefins float to the top and rest on the heavier PET. The olefins are removed by suctioning off the top layer while allowing the heavier layer to drain into piping that pumps the feed to the Methanolysis Unit. - In addition to the PET feed from the Dissolver, recycled methanol (in liquid form) is pumped from the Methanol Storage Unit through a preheater and into the Methanolysis Unit, where the methanol is mixed with the molten PET and a catalyst. - At this point, the PET breaks down to mostly DMT and EG vapors, which flow out the top of the reactor into the Methanolysis rectifier. The rectifier is used to remove oligomers from the composite stream and does not perform any additional separation. The chemical reaction uses an endothermic reaction in which heat is absorbed during mixing to cause the PET to break down. A sludge of heavy co-products is pumped out of the bottom of the reactor and sent to the Heavy Co-Product Handling System and solidified. 2 - The feed, composed now of vapors of EG, DMT, methanol, and byproducts, enters the Spray Tower Unit and cools as it rises through the tower. The Spray Tower Unit removes a concentrated stream of components with a boiling point less than Methanol feeding the stream to the Methanol Refining unit. The Spray Tower further refines the stream to control the Crystallizer feed composition by removing refined Methanol to the Methanol Storage Unit as the vapor overhead of the distillation tower. The DMT and EG leave the tower as liquid (still containing some methanol and byproducts) and flow into the Crystallization Unit, while a portion of the methanol remains vapor and is sent back to the Methanolysis Unit. - In the Crystallization Unit, the liquids are cooled before being drained into the Filtration Unit as a crude slurry of DMT crystals, liquid EG and methanol, and other byproducts. This process is accomplished by changes in temperature and pressure, which cause DMT crystals to form. The pressure is rapidly reduce using vacuum pumps, causing accelerated crystallization of much of the remaining liquid DMT. The vapor methanol is condensed in a condenser and routed back to the Methanolysis Unit. The remaining liquids from the spray tower, along with the crystallized DMT, are drained from the crystallizer and fed into the filtration unit where the DMT is separated from the liquid. - The molten crude DMT then is pumped into the DMT Refining Unit, where it is distilled into polymer-grade DMT. - The DMT is sent to the distillation tower, a melter agitates and heats the slurry which causes the remaining methanol and other lower boiling point contaminants to evaporate. The vapors emitted from the liquid rise through the tower where a reboiler heats the liquid causing it to evaporate. The vapors condense on a series of trays as they cool. The vapor overhead is routed to a scrubber system to distill any remaining useful products. The liquid condensing on the tower trays is liquid, polymer-grade DMT. It is sent to storage vessels to await polymerization. The liquid bottoms are pumped to the Heavy Co-Product Handing System and solidified. The purified recycled DMT content is sent to the DMT storage tanks to be used to create recycle content polymers at a separate facility. - The liquid discharge from the Filtration Unit flows into the Methanol Refining Unit, which is a distillation column where methanol is separated from the EG as vapor and is fed back to the Methanol Storage Unit. The liquid from the Methanol Refining Unit continues to the Low Boiler Column and is further distilled, producing concentrated, crude EG as the liquid bottoms and “low boilers” as the vapor overhead. - The liquid bottoms flow into the EG Refining Unit, which is another distillation column with multiple trays. The crude EG enters the column and is heated with a reboiler. The portion that condenses at a certain tray is the polymer-grade EG product, which is passed through Adsorption sieves for additional purification. The remaining liquid bottoms is pumped to the Heavy Co-Product Handling System. The refined EG product is sent to an additional distillation column to create refined grade EG product. An additional adsorption step creates the polymer grade EG product to be solidified and disposed. The purified EG is pumped to Storage tank for future use in the creation of recycled content polymers at a separate facility. In your June 13, 2024 supplement to your reconsideration request, you stated the following about the crystallization unit: 3 The crystallizer functions to remove impurities from within the stream that cannot be separated out using the various distillation columns in the plant. The plant is designed to recycle a wide variety of used plastics, which can have a large number of impurities present based on how each plastic was made. Because the boiling points of some of those impurities can be so similar (and in the case of DMI [1,3-dimethyl-2-imidazolidinone], exactly the same) to the DMT, using distillation processes alone would be economically impractical (and for DMI, impossible) to completely purify the DMT created in the methanolysis unit. The crystallizer uses a change in temperature to render the DMT into crystals while leaving these impurities in liquid that can be filtered out. The crystals themselves can then be distilled in subsequent columns to produce pure DMT. ISSUE: Are the units of the subject plant classified under subheading 8419.40.00, HTSUS or 8419.89.95, HTSUS? LAW AND ANALYSIS: Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. The HTSUS subheadings under consideration are as follows: 8419 Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof: 8419.40.00 Distilling or rectifying plant -------------------------------------------------------------- Other machinery, plant or equipment: 8419.89 Other. Other 8419.89.95 Other Because there is no dispute that the subject plant is described by heading 8419, HTSUS, the instant matter is governed by GRI 6, which states that: For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes 4 and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires. Note 4 of Section XVI, HTSUS, in which heading 8419 falls, state: Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function. In HQ H322641, CBP determined that the entire plant was classified in subheading 8419.89.95, HTSUS. In your request for reconsideration, you request that CBP classify the methanolysis unit of the subject plant under subheading 8419.89.95, HTSUS, and the stages subsequent to the methanolysis unit, including the spray tower unit, crystallization unit, filtration unit, DMT refining unit, methanol refining unit, low boiler column unit, and EG refining unit under subheading 8419.40, HTSUS, as fractionation or distillation machines. Pursuant to Note 4, the spray tower unit, crystallization unit, filtration unit, DMT refining unit, methanol refining unit, low boiler column unit, and EG refining unit are properly classified under subheading 8419.40.00, HTSUS, if the components contribute together to perform the clearly defined function of distillation. We agree with you that the that the methanolysis unit is classified in subheading 8419.89.95, HTSUS. There is also no dispute that the mixed plastics feed unit and the dissolver unit are classified in subheading 8419.89.95, HTSUS. However, the spray tower unit, crystallization unit, and filtration unit are also classifiable under subheading 8419.89.95, HTSUS, because they contribute to a function other than distillation. The spray tower unit removes methanol from the stream coming from the methanolysis unit and therefore does not perform or contribute to distillation. The main function of the crystallization unit, which includes the filtration unit, is to use a crystallization process, where liquids are cooled before being drained into the filtration unit as a crude slurry of DMT crystals, liquid EG and methanol, and other byproducts. This process is accomplished by changes in temperature and pressure, which cause DMT crystals to form. The pressure is rapidly reduced using vacuum pumps, causing accelerated crystallization of much of the remaining liquid DMT. The vapor methanol is condensed in a condenser and routed back to the methanolysis unit. The remaining liquids from the spray tower, along with the crystallized DMT, are drained from the crystallizer and fed into the filtration unit where the DMT is separated from the liquid. Moreover, the supplemental submission noted that the crystallizer “removes impurities from within the stream that cannot be separated out using the various distillation columns in the plants… [and] the crystals themselves then be distilled in subsequent columns to product pure DMT.” Therefore, it is apparent that the crystallization unit (along with the spray tower and filtration unit) do not perform or contribute to a distillation function. As a result, the spray tower unit, crystallization unit, and filtration unit are provided for in subheading 8419.89.95, HTSUS. 5 The DMT refining unit, methanol refining unit, low boiler column unit, and EG refining unit contribute together to the function of distillation. The DMT refining unit distills crude DMT into polymer-grade DMT. The methanol refining unit is a distillation column where methanol is separated from the EG as vapor and fed back to the methanol storage unit. Moreover, the EG refining unit distills the concentrated crude EG to produce polymer-grade EG. The liquid bottoms from the lower boiler column unit flow into a distillation column with multiple trays. As the DMT refining unit, methanol refining unit, the lower boiler column unit, and the EG refining unit contribute to the function of distillation, they are classifiable under subheading 8419.40, HTSUS. HOLDING: By application of GRIs 1 and 6 (Note 4 to Section XVI), the DMT refining unit, methanol refining unit, low boiler column unit, and EG refining unit are classified under subheading 8419.40.00, HTSUS which provides for “Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof: Distilling or rectifying plant.” The column one, general rate of duty is free. By application of GRIs 1 and 6 (Note 4 to Section XVI) of the HTSUS, the mixed plastics feed unit, dissolver unit, methanolysis unit, spray tower unit, crystallization unit, and filtration unit, are classified in heading 8419, specifically subheading 8419.89.95, HTSUS, which provides for: Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof: Other machinery, plant or equipment: Other: Other: Other. The general column one, rate of duty is 4.2% ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/. A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction. 6 EFFECT ON OTHER RULINGS: HQ H322641, dated November 9, 2023, is hereby REVOKED. In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin. Sincerely, Yuliya A. Gulis, Director Commercial and Trade Facilitation Division 7