Closed Loop Partners Launches Multi-Million Dollar Circular Plastics Fund with Dow, LyondellBasell, & NOVA Chemicals to Accelerate Investment in Plastics Recycling Infrastructure
May 26, 2021
This partnership represents an initial investment and an invitation to stakeholders across the plastics recycling value chain to join forces with this catalytic capital strategy
New York, May 26 – Today, three leading plastics and material science companies––Dow, LyondellBasell and NOVA Chemicals––announced the establishment of the Closed Loop Circular Plastics Fund to invest in scalable recycling technologies, equipment upgrades and infrastructure solutions. The Fund, managed by Closed Loop Partners, and with an initial $25 million investment, invites businesses across the plastics value chain to join in advancing the recovery and recycling of plastics in the U.S. and Canada. The goal of the catalytic fund is to grow to deploy $100 million, through a combination of the Fund’s founding investors, additional corporate investors and financial institutions, in order to attract additional capital beyond the Fund’s own commitments. At scale, the Fund’s investments aim to recycle over 500 million pounds of plastic over the Fund’s lifespan.
The Closed Loop Circular Plastics Fund will invest in three strategic areas to increase the amount of recycled plastic available to meet the growing demand for high-quality, recycled content in products and packaging:
- Access – Increasing the collection of targeted polyethylene (PE) and polypropylene (PP) plastics by advancing current and next-generation material collection systems, including transportation, logistics and recycling sortation technologies and infrastructure.
- Optimization – Upgrading recycling systems to more efficiently aggregate, classify and sort the targeted plastics to increase the total amount of high-quality plastic, including food-grade and medical-grade plastic, sent for remanufacturing.
- Manufacturing – Investing in facilities and equipment that manufacture ﬁnished products, packaging or related goods using recycled content, including recycled PE and PP.
Since its founding in 2014, Closed Loop Partners’ existing portfolio of more than 50 investments has diverted more than 4,600 million pounds of material from landfills and back into manufacturing supply chains.” Building on this, the Closed Loop Circular Plastics Fund will invest in technologies, companies and infrastructure projects that enhance the recovery and recycling of target materials including post-consumer and post-industrial PE and PP in the U.S. & Canada.
The Fund will deploy a flexible mix of debt and equity financing, and will also aim to stimulate mainstream co-investments, including those from financial institutions, into circular solutions for plastics to further accelerate impact at scale. With established facilities, extensive supply chain networks and markets, Dow, LyondellBasell and NOVA Chemicals are collectively well-positioned to help advance the transition to a new, more circular system. Together, they create a precedent for a sustainable future for the plastics industry, building a runway for further investments and synergies with other stakeholders in the plastics recovery and reuse value chain.
“The plastic resin manufacturers that create value for their shareholders now and in the future will be the ones that ensure that 100% of their products are safely recycled or reused, and never discarded in a landfill or elsewhere in our ecosystem. We look forward to investing in sustainable infrastructure and innovations that enable and encourage other companies, including investors in the Closed Loop Circular Plastics Fund, to deploy significantly more of their own capital to further scale these critical solutions,” says Ron Gonen, Founder & CEO of Closed Loop Partners. “Alongside championing scalable reusable packaging models and innovative new materials, growing recycling and circular economy infrastructure in the U.S. and Canada plays a critical role in eliminating plastic waste and reducing the need for the costly extraction of raw materials.”
The current supply of recycled plastics meets only 6% of demand for the most commonly used plastics in the U.S. and Canada. Systemic bottlenecks, misaligned incentives and policies, technological inefficiencies and outdated equipment across the plastics recovery system contribute to millions of tons of plastic going to waste in landfills and oceans. Increasing the recovery and recirculation of plastics could help meet an addressable market for plastics with potential revenue opportunities of $120 billion in the U.S. and Canada alone. Within this, significant opportunity exists to bolster the recovery of PE and PP, based on these materials’ market desirability and expected production amounts, as well as their wide variety of applications across industries, including healthcare and food and beverage.
“Dow is investing with Closed Loop Partners as another way to catalyze additional investment in recycling technology and infrastructure in the U.S. & Canada. Plastic materials are essential to a sustainable, low carbon economy and this fund, alongside other investments and collaborations we are engaged in, will help move society toward a circular economy, ensuring plastic is not lost to the environment,” says Jim Fitterling, Chairman and CEO of Dow. “But our commitment and capital alone are not enough to end plastic waste. We urge others, across all sectors of society, to join us and scale the technologies, partnerships and capital needed to build the circular plastics supply chains of the future.”
“Addressing the challenge of plastic waste in the environment requires collective action on multiple fronts. As a company, we have been executing a multi-pronged strategy that includes innovations in mechanical recycling, the advancement of molecular recycling technologies and the incorporation of renewable feedstocks into our manufacturing,” says Bob Patel, CEO of LyondellBasell. “In addition to our company’s efforts, further enhancements to recycling infrastructure are critical to capturing the value of used plastics and advancing the circular economy. We believe successful joint investment can transform the challenges of plastic waste into sustainable business opportunities.”
“NOVA Chemicals is eager to join forces with industry leaders who share our same commitment to building a circular economy for plastics,” says Luis Sierra, President and CEO of NOVA Chemicals. “Innovation is key to our collective success. If we can create plastic products that are easier to recycle, perform with less materials, incorporate more recycled content and invest in the recycling and recovery infrastructure, we will achieve a zero plastic waste future. We are ready to work across the value chain, developing new solutions that will shape a better tomorrow.”
About the Closed Loop Circular Plastics Fund at Closed Loop Partners
The Closed Loop Circular Plastics Fund provides catalytic financing to build circular economy infrastructure and improve the recovery of polypropylene and polyethylene plastic in the U.S. & Canada, returning plastics to more sustainable manufacturing supply chains for use as feedstock for future products and packaging. Learn more about the Fund’s investment criteria and apply for funding here.
The Fund’s goal of optimizing recovery infrastructure is one part of Closed Loop Partners’ broader initiative of Advancing Circular Systems for Plastics. This initiative prioritizes scaling reuse and refill models and reducing material usage in design, while bolstering the recovery infrastructure to address plastics waste.
About Closed Loop Partners
Closed Loop Partners is a New York-based investment firm comprised of venture capital, growth equity, private equity, project-based finance and an innovation center focused on building the circular economy. The firm has built an ecosystem that connects entrepreneurs, industry experts, global consumer goods companies, retailers, financial institutions and municipalities, bridging gaps and fostering synergies to scale the circular economy.
Dow (NYSE: DOW) combines global breadth, asset integration and scale, focused innovation and leading business positions to achieve profitable growth. The Company’s ambition is to become the most innovative, customer centric, inclusive and sustainable materials science company, with a purpose to deliver a sustainable future for the world through our materials science expertise and collaboration with our partners. Dow’s portfolio of plastics, industrial intermediates, coatings and silicones businesses delivers a broad range of differentiated science-based products and solutions for its customers in high-growth market segments, such as packaging, infrastructure, mobility and consumer care. Dow operates 106 manufacturing sites in 31 countries and employs approximately 35,700 people. Dow delivered sales of approximately $39 billion in 2020. References to Dow or the Company mean Dow Inc. and its subsidiaries. For more information, please visit www.dow.com or follow @DowNewsroom on Twitter.
LyondellBasell (NYSE: LYB) is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world’s largest producer of polypropylene compounds and the largest licensor of polyolefin technologies. In 2021, LyondellBasell was named to FORTUNE Magazine’s list of the “World’s Most Admired Companies” for the fourth consecutive year. More information about LyondellBasell can be found at www.lyondellbasell.com.
About NOVA Chemicals Corporation
NOVA Chemicals develops and manufactures chemicals and plastic resins that make everyday life safer, healthier and easier. Our employees work to ensure health, safety, security and environmental stewardship through our commitment to sustainability and Responsible Care®. NOVA Chemicals, headquartered in Calgary, Alberta, Canada, is wholly owned, ultimately by Mubadala Investment Company of the Emirate of Abu Dhabi, United Arab Emirates.
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