A polyester polyol comprising recurring units of a glycol-digested polyethylene terephthalate (PET) or glycol-modified polyethylene terephthalate (PETG) and an unsaturated dimer fatty acid, wherein the glycol is selected from the group consisting of sorbitol, neopentyl glycol, glycerol, 2,2,4,4-tetramethyl-1,3-cyclobutanediol, 3-methyl-1,5-pentanediol, 1,4-cyclohexanedimethanol, 1,3-cyclohexanedimethanol, bisphenol A ethoxylates, 1,6-hexanediol, block or random copolymers of ethylene oxide and propylene oxide, and mixtures thereof, the molar ratio of dimer fatty acid to PET or PETG is within the range of 0.1 to 0.5, the molar ratio of glycol to PET or PETG is within the range of 2.5 to 4.5, and the polyol has a hydroxyl number within the range of 40 to 400 mg KOH/g.