Closed Loop report calls for increased investment in chemical recycling
- A new report conducted by the Center for the Circular Economy, an arm of Closed Loop Partners, urges stakeholders to invest in new technologies around plastics recycling — an area with an estimated $120 billion worth of revenue potential in North America.
- According to the study, burgeoning public awareness around plastic pollution has spurred at least 60 technology providers to develop "innovative solutions" for plastics purification, decomposition or conversion — momentum that can only be sustained if investors, brands and industry "urgently invest to advance the recycling of plastics and bring these solutions to scale."
- In order to "build on the progress made thus far, the system must drive investment in these solution providers, build awareness to make this work more accessible and encourage collaboration across stakeholders," the report concludes.
The world is "at an inflection point," observes the report: global plastics demand is expected to triple by 2050, even while rising volumes of plastic waste (almost 90% of plastics worldwide ultimately end up in a landfill, incinerator or in oceans) have driven governments and consumers to frame plastic pollution as an increasingly urgent environmental issue.
Current recycling infrastructure, however, has proven inadequate in addressing the scale of this problem for many material types. The U.S. and Canada recover less than 10% of post-consumer plastics, while the present supply of recycled plastics meets just 6% of real demand. And while large corporations are making public commitments to use recycled plastics in their products and packaging, suppliers currently have limited options when it comes to meeting this rising demand: degradation or contamination issues often render recovered materials unusable, and it can be difficult to source certain types of plastic in efficient quantities.
Potential solutions exist, however. The study identifies 60 technology providers (more than 40 of which are operating early commercial scale plants in North America or opening plants in the next two years) developing transformational technologies around repurposing waste plastics into high-value feedstocks. Canada-based Loop Industries, for instance, depolymerizes no- or- low-value PET back into monomers, which are then filtered, purified and repolymerized into virgin-quality pellets suitable for use in food-grade packaging.
According to the authors, Loop's model also demonstrates the indispensability of industry support: the company has signed investment term sheets with Danone/Evian, Nestlé Waters and L'Oreal; secured offtake agreements with Gatorade, PepsiCo, Coca-Cola and other brands; and established key strategic partnerships with various other cross-industry stakeholders.
Existing technologies "all have the potential to scale, but their growth and commercialization needs to be accelerated in order to meet growing demand," the report asserts. "With better access to investment capital and increasing demand from brands and supply chain partners, technology providers may soon be able to accelerate the pace of growth."
The potential lucrativeness of these investments, notes the report, has already been proven. Providers are operating profitably with higher margins as they mature and scale, and more than 250 investors and strategic partners — including major brands, private investors, petrochemical companies and plastic manufacturers, and government and NGO partners, are already engaging with the companies profiled in the study. State-level proposals aimed at bolstering recycling systems have also advanced in recent months — legislation backed by the Texas recycling industry, for instance, would mandate research on the use of recyclables to make new products.
"There is a clear and achievable opportunity to expand the role of transformational technologies that return waste plastics to material supply chains in the United States and Canada," the report emphasizes. "Doing so will lead to a dramatic shift in plastics and chemicals supply chains over the next ten years — one that keeps plastics in play."
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