Closed Loop Partners Releases First-of-its-Kind Report Evaluating the Role of Molecular Recycling Technologies in Addressing Plastic Waste
November 17, 2021
New report examines economic, environmental and human health impacts of diverse recycling technologies, assessing where they fit in a circular plastics economy
November 17, New York – Today, Closed Loop Partners’ Center for the Circular Economy released its latest report, Transitioning to a Circular System for Plastics: Assessing Molecular Recycling Technologies in the United States and Canada. This research fits into the firm’s broader Advancing Circular Systems for Plastics & Packaging Initiative, which tackles plastic waste through innovation and investment; prioritizing design innovation and reuse models to reduce the overall volume of plastics produced, while also strengthening recycling infrastructure to recover existing plastics after use. This new report focuses specifically on one part of the recycling system: “molecular” or “advanced” recycling technologies. It examines their potential role in a circular and safe future for plastics, and the policy, market, and environmental and human health impact conditions needed to achieve this optimal future state.
The sheer diversity and volume of plastics in our system today, from textiles to packaging to electronics, means that no single sector, technology or approach can solve the plastics waste challenge entirely or quickly enough. Plastics production is set to triple by 2050; to move the needle on the 9% of plastics currently recycled globally, a suite of solutions must be deployed, first emphasizing reduction and reuse, and also acknowledging the role of recycling in keeping valuable plastics in play for longer and reducing the need for fossil fuel extraction.
Molecular recycling, also commonly referred to as advanced recycling or chemical recycling, refers to a diverse sector, which encompasses dozens of technologies that use solvents, heat, enzymes, and even sound waves to purify or transform plastics at the molecular level. While these technologies require more energy than traditional mechanical recycling, they can process a wider range of plastic waste into like-new materials. Their various outputs can be looped back into manufacturing supply chains without compromising quality or being downcycled.
Collectively, molecular recycling technologies have the potential to expand the scope of plastics we can recycle, help preserve the value of resources in our economy, and help meet the demand for high-quality, recycled plastics, even food grade plastic. However, to date, there is a scarcity of comparative analysis among the different technologies and a lack of systems-level analysis of their potential financial, environmental, and human health opportunities and risks.
In Assessing Molecular Recycling Technologies in the United States and Canada, Closed Loop Partners goes deeper into many of the unanswered questions regarding these technologies, committing to support data-backed decision-making in this early-stage sector. Together with its technical partner Anthesis Group, Closed Loop Partners worked with nine companies – APK AG, PureCycle Technologies, Carbios, GreenMantra, JEPLAN, gr3n, Brightmark, Plastic Energy, and Enerkem – across the sector’s three molecular recycling technology categories: purification, depolymerization and conversion. The report shares insights drawn from the evaluation of the nine datasets, with the goal of educating investors, brands, retailers, policymakers and nonprofit organizations that seek actionable information on the sector.
“To close the loop on plastic waste we will need to deploy multiple strategies and harness innovation in reduction and reuse alongside a diversity of recycling technologies. It’s imperative that we recover all kinds of plastic, including and beyond single-use plastic packaging. Two-thirds of plastics used in the U.S. today are for applications like wind turbines, textiles, car parts and healthcare devices––which are viable feedstock for different advanced recycling technologies,” says Kate Daly, Managing Director of the Center for the Circular Economy at Closed Loop Partners. “This report should serve as a guide to investors, policymakers, and anyone who cares about the plastic waste crisis and would like to explore what must be true in order for new and established technologies to play a safe and viable role in a circular system for plastics, without creating unintended consequences.”
The report includes 10 key takeaways and calls to action for stakeholders to advance safe and circular solutions to address the urgent plastic waste crisis. Key insights from the report include:
- Overall, the average carbon emissions from producing plastic through all three molecular recycling technology categories showed an improvement compared to corresponding virgin plastics systems, with environmental impacts varying within and across the technology categories
- A greener grid will play a critical role in decreasing the environmental impact of these technologies and renewable energy inputs should be integral to any commercialization strategy of technologies looking to link to the circular plastics economy
- Molecular recycling technologies can complement existing mechanical recycling infrastructure by processing plastic waste that mechanical recyclers would otherwise have to pay to discard; integrating a mix of all three molecular recycling technologies into the broader recycling system in the United States and Canada could double the amount of plastic packaging recycled, compared to 2019 recycling rates, and generate up to $970 million dollars (USD) annually for the existing recycling system
- Policymakers, investors, and businesses, among other key stakeholders, will determine the degree of environmental, human health, and financial success of this sector; they are responsible for ensuring that the most circular solutions are scaled, incentives are established to support circular outcomes, and policies and regulations maintain and protect human health, worker safety, and climate change mitigation
This report includes over 100 questions to supplement an investor’s due diligence of molecular recycling technologies, as well as links to nine case studies that outline best-practices in the market today. To download Closed Loop Partners’ latest report and sign up for educational webinars on the topic, please visit the Closed Loop Partners website here.
About Closed Loop Partners
Closed Loop Partners is a New York-based investment firm comprised of venture capital, growth equity, private equity and project finance, as well as 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. Investments align capitalism with positive social and environmental impact by reducing waste and greenhouse gas emissions via materials innovation, advanced recycling technologies, supply chain optimization and landfill diversion. Learn more here.
About Advancing Circular Systems for Plastics and Packaging Initiative
At Closed Loop Partners, we envision a waste-free future for plastics. We launched our Advancing Circular System for Plastics and Packaging Initiative understanding that there is no silver bullet solution to solve complex global waste challenges. Ending plastics waste will require a combination of approaches such as design innovation, reuse and molecular recycling to accelerate the transition to a circular economy for plastics. Learn more about our investments, collaboration and research here.
This report, Transitioning to a Circular System for Plastics: Assessing Molecular Recycling Technologies in the United States and Canada, focuses on one part of a circular plastics system: molecular recycling technologies. Our Center for the Circular Economy created this report with the support of nine molecular recycling technology companies, more than 75 peer reviewers and advisors, NGO partners and contributing partners Target Corporation, Bank of America Foundation, Colgate-Palmolive Company, the American Chemistry Council, 3M & Sealed Air Corporation.
We Can Accelerate Solutions for Plastics & Circular Supply Chains
New Report Shows Tremendous Value to be Captured…. When We Stop Throwing Plastics in the Trash
The U.S. and Canada send over 34 million tons of plastics to landfills or incinerators each year. Following current trends, global plastics demand is forecasted to triple by 2050. And even more troubling, mismanaged waste leaks into our environment – there may be more plastics than fish (by weight) in our oceans by 2050.
But what if we could change that? What if we could use innovative chemical recycling technologies to purify, decompose, or convert waste plastics into the building blocks for renewed raw materials instead of discarding them after one use?
What if we could also reduce the world’s reliance on fossil fuel extraction, reduce landfill disposal costs for municipalities, decrease marine pollution, and generate billions in new revenue?
We can.
Investors and brands have an opportunity to influence and accelerate transformational technology solutions that repurpose plastics waste and keep materials in play in circular supply chains.
There are at least 60 technology providers developing these transformational technologies that purify, decompose, or convert waste plastics into renewed raw materials. This report proposes accessible, shared language to use to define and talk about each of these processes going forward:
Purification involves dissolving plastic in a solvent, then separating and purifying the mixture to extract additives and dyes to ultimately obtain a “purified” plastic. Purification processes make it possible to safely transform carpet into yogurt cups — greatly increasing the value of plastics waste. PureCycle Technologies will do just that when it opens its Ohio facility in the next year.
Decomposition is a process that involves breaking molecular bonds of the plastic to recover the simple molecules (“monomers” or “intermediates”) from which the plastic is made. In other words, plastic doesn’t just have to go back to plastic – it can become a valuable raw material to be used again. Loop Industries decomposes PET into its monomers and, with its partners, aims to produce a Loop-branded recycled PET pellet.
Conversion is similar to decomposition in that the process involves breaking the molecular bonds of the plastic. A key difference is that the output products from conversion processes are often liquid or gaseous hydrocarbons similar to the products derived from petroleum refining. These raw materials may enter different supply chains, such as fuels for combustion, and/or petrochemicals that can be made into intermediates and monomers for new plastics. Agilyx, based in Oregon, uses both decomposition and conversion technologies that can produce a variety of products, including naphtha, jet fuel, synthetic crude oil and styrene monomer, depending on the feedstock.
Through these technologies, it’s possible to recycle plastic back into plastic, AND to create valuable upstream products that keep materials in play.
The technology is possible. The question now is: How fast and how far can we go?
Every sector of society is engaged in the broad challenges of climate change and the visible problem of plastics waste. Many of the world’s largest and most influential brands are taking ownership of the problem and looking at their own supply chains. The Center for the Circular Economy at Closed Loop Partners is creating a roadmap for how to build on this momentum by unifying the diverse actors in this space and accelerating collaborative investment to bring solutions to scale.
Demand for plastics is strong and growing, yet the supply of recycled plastics available to meet demand is stuck at 6%. Options for recycling plastics today don’t capture the full opportunity: with current infrastructure, a small portion – less than 10% – of plastics waste from many consumer packages and products is recovered and recycled. Current mechanical processes and infrastructure aren’t enough to support the publicly stated goals of many global brands who have committed to use more recycled plastics in their products and packaging, or to achieve the zero waste goals of our major cities.
We surveyed more than 60 technology providers – broadly categorized as using one (or more) of three processes described above – nearly all of them at least at the lab stage of maturity, with significant potential to grow and scale. More than 40 of these solution providers are operating commercial scale plants in the U.S. and Canada today, or have plans to do so within the next two years.
But of the technology providers surveyed, it has taken them 17 years on average to reach growth scale. That’s not fast enough. More investment is needed now to accelerate these solutions – to go from “possible” to “probable”.
That’s why we are calling on investors, brands, and industry to join us in: investing to bring solutions to scale; increasing awareness of how these technologies apply to different supply chains and waste streams, including adopting the shared language from this research; and collaborating on partnerships with technology providers.
If these technologies are understood more broadly – and are more widely adopted and scaled – tremendous economic value can be realized. According to our analysis, if these technologies can meet market demands for plastics and petrochemicals, they have a potential addressable market of $120 billion ($47 billion for polymers) in the U.S. and Canada alone.
We need to stop thinking of plastics as waste, and start treating it as a resource. Until we do this, we are taking tons of value – and throwing it in the trash.
We hope you will take the time to read the full report: “Accelerating Circular Supply Chains for Plastics”. You can also see the overview of our key findings and recommendations for next steps here.
Join us: If you are interested in participating in our ongoing research, convening, and investment in this area, we encourage you to introduce yourself to the Center for the Circular Economy: [email protected].
We look forward to working together to accelerate solutions to plastics waste and circular supply chains.